May 28, 2025: Bangladesh has the potential to earn up to $1 billion annually from the global carbon market, according to analysts speaking at recent discussions and round-tables. However, this potential remains largely untapped due to the absence of a clear and comprehensive national policy on carbon trading, which limits investment in the sector.
Since 2006, Bangladesh has earned about $17 million through carbon-related projects such as improved cooking stoves and solar home systems, indicating some progress but still far from the full potential.
Experts emphasize the need for stronger policy frameworks, enhanced public-private cooperation, and adherence to international best practices to unlock this opportunity. The government has set ambitious climate goals, including producing 16% of energy from renewable sources by 2030 and reducing annual carbon emissions by 89.47 million metric tonnes of CO₂ equivalent, which align with leveraging carbon market benefits.
The discussions also highlighted the importance of innovative financing models and strong banking sector support to mobilize capital for a low-carbon, inclusive economy. Implementation of Article 6 under the Paris Agreement is seen as a key pathway for Bangladesh to participate effectively in carbon markets.
In summary, Bangladesh could earn around $1 billion annually from carbon trading if it establishes clear policies and mobilizes investment, thereby supporting sustainable agriculture, water management, economic growth, and climate change mitigation efforts.