Unfulfilled climate finance deepens debt burden 

Bangladesh's total per-capita cumulative climate debt is 79.61 USD, more than 3 times higher LDC average of 23.12 USD. Growing risks of substantial long-term financial burden on its population.

The world's largest greenhouse gas (GHG) emitters continue to fall short of their long-standing commitment to provide adequate climate finance for vulnerable nations such as Bangladesh. Despite repeated pledges, developed countries have failed to deliver the grants needed to support adaptation and mitigation efforts, leaving many least developed countries (LDCs) increasingly vulnerable and financially strained.

Since the concept of "Loss and Damage" entered the global climate agenda, climate finance has largely been defined by three major milestones. The first is the $100 billion annual pledge made by developed countries in 2009 to support developing nations through 2025. The second is the new target of $300 billion annually for the period 2025-2035, accompanied by a broader ambition to mobilise $1.3 trillion each year. The third is the Climate Policy Initiative's (CPI) Global Landscape of Climate Finance 2026, which reported that global climate finance exceeded $2 trillion in 2024 for the first time.

However, these impressive global figures conceal a troubling reality. Actual financial flows from developed to developing countries amounted to only $58.7 billion in 2024-well below the commitments repeatedly made by wealthy nations. The global narrative of progress should not overshadow this significant shortfall.

Although Bangladesh contributes only 0.56 per cent of global GHG emissions, it ranks seventh among the countries most affected by long-term climate risks. Climate-related disasters cause an estimated $3 billion in economic losses each year, while climate-induced displacement continues to rise.

Recognising the growing threat, Bangladesh established the Bangladesh Climate Change Trust Fund (BCCTF) in 2009, becoming one of the first developing countries to finance climate adaptation and mitigation initiatives largely from its national budget. Initially receiving an annual allocation of Tk 700 crore, the fund has supported more than 700 projects, including climate-resilient housing, cyclone preparedness, embankment strengthening, early warning systems and community-based adaptation programmes. The initiative demonstrated Bangladesh's commitment to addressing climate change without waiting for international assistance.

However, domestic efforts alone cannot meet the enormous financial demands created by worsening climate impacts. Bangladesh finalised its National Adaptation Plan (NAP) 2023-2050 in 2022, identifying 113 priority interventions across 11 climate-stressed regions. Implementing these measures will require an estimated $230 billion, far beyond the country's financial capacity.

According to the Dhaka-based research organisation Change Initiative, Bangladesh accumulated approximately $12.78 billion in climate-related debt between 2009 and 2022. As a result, the per capita climate debt for every Bangladeshi rose from just over $2 in 2009 to nearly $80-around Tk 9,500-by 2022. This growing debt reflects the increasing cost of financing climate resilience projects through borrowing rather than grants.

The imbalance becomes even more striking when compared with international support. Between 2009 and 2022, Bangladesh received only $268 million in grants from the Green Climate Fund (GCF), Adaptation Fund and the Least Developed Countries (LDC) Fund. These resources fall far short of the country's adaptation needs and have forced Bangladesh to rely heavily on debt-financed investments.

The growing gap between climate finance commitments and actual disbursements has significantly increased Bangladesh's per capita climate debt burden. As highlighted in the report, Climate Debt Trap Risks for Bangladesh and Other LDC States, the country faces an elevated risk of falling into a long-term debt cycle unless developed nations fulfil their obligations through predictable, adequate and grant-based climate finance.

Currently, Bangladesh allocates approximately 6-7 per cent of its annual national budget to climate adaptation, with nearly 75 per cent of that financing coming from domestic resources. Experts estimate that achieving the goals outlined in the National Adaptation Plan will require adaptation spending to increase sevenfold, underscoring the widening financing gap.

Recognising these challenges, Bangladesh has consistently called for grant-based climate finance instead of loans. Government officials have stressed that public funding from developed countries should remain the primary source of adaptation finance and have urged wealthier nations to honour their commitments, including the pledge to double adaptation financing by 2025. Bangladesh has also advocated for the rapid operationalisation of the Loss and Damage Fund, agreed upon at COP28 but not yet fully functional.

Climate justice demands that developed countries fulfil both their financial and moral obligations through timely, transparent and unconditional support. For Bangladesh, the issue extends beyond funding; it concerns fairness, accountability and the right of vulnerable nations to pursue development without being trapped in debt for a crisis they did little to create.