Both Bangladesh and Nepal are taking significant strides to address the fiscal impacts of climate change. As we pointed out in last month’s Climate Debt Reports 2023, they face extreme vulnerability to these risks. Both countries, located in South Asia, face significant threats from climate-related events, prompting them to explore innovative financial solutions to mitigate potential crises.
Our latest report highlighted the alarming levels of climate debt risk in Bangladesh and Nepal. It is these nations that are most vulnerable to the region’s growing instability. Climate change puts their economies and livelihoods in jeopardy. Bangladesh just recently announced plans to issue green and blue bonds. These bonds would ramp up financing for protective environmental restoration, watershed management and sustainable development projects.
Back in Kathmandu, there’s an effort afoot to bring the private sector into the fold and encourage environmentally-minded business ventures. This new joint effort aims to maximize private investment for climate-focused resilience and adaptation projects that are creating economic opportunity at the same time. The government should focus on producing the conditions where sustainable, climate-resilient practices will thrive, even under the constant threat of climate change.
This year, Bangladesh was hit by catastrophic flooding in its capital, Dhaka, after torrential rains inundated the South Asian country. The torrential rain inundated the stormwater system, plunging city neighborhoods into darkness while stranding drivers in knee-high water on rickshaws. This event helped make tangible how instantly climate change impacts our day to day life. It underscored the long-overdue need for both nations to increase their resilience to such events.
This most recent flooding incident garnered international attention, even from groups like Reuters, highlighting the critical status of flooding in Dhaka. Climate-related disasters are hitting at an unprecedented rate. Bangladesh and Nepal particularly need to urgently find debt-neutral financing solutions.
As exciting as these opportunities are, both nations understand what is set to come. Now, Bangladesh and Nepal are leading the charge on climate finance to defend their precarious economic ascendancy. They want to reduce the risk of municipalities slipping into unsustainable debt cycles, all while addressing the pressing issue of climate change.