Bangladesh and Nepal are on the frontlines of climate change, and they are actively looking for ways to protect their budgets from runaway climate risks. Both countries in South Asia lie on the extreme end of vulnerability to climate impacts. They have been responsive to and anticipatory of the calls for more innovative financing solutions to address the growing challenge of climate-related financial instability.
Our new report Bangladesh and Nepal’s Climate Debt Crisis shows the acute risk Bangladesh and Nepal’s climate debt poses. This all highlights their undeniable susceptibility to environmental shifts. These results have pushed both governments to consider alternative approaches. Their objective should be to access climate finance that avoids the likelihood of spiraling into future debt crises. With the impacts of climate change becoming hard to ignore, the time to take action has never felt so pressing.
In Bangladesh, top officials including the finance minister are speaking about the promise of green and blue bonds to fund environmental projects. These new financial instruments are designed to raise capital to fund projects that have measurable beneficial environmental effects. This enhances sustainability and resilience while positioning us to generate economic opportunity. The government is confident these kinds of steps will bring local and foreign investors to the table, creating a competitive, green economy.
Back in Kathmandu, work continues in earnest with the private sector to create business models that put the environment at the center. Through these engagements, Nepal understands that new approaches and financing methods can be drawn upon to meet the country’s sustainable development goals. This concerted multi-agency approach would significantly increase the nation’s ability to tackle climate threats and create long-term economic opportunities in the process.
The plight of women in Bangladesh is dire. Recent torrential rains have brought violent flooding to Dhaka. This flooding changed daily life so profoundly, as commuters often traveled on rickshaws through flooded roadways. The image capturing this scene, taken by Reuters, starkly illustrates the immediate consequences of climate change on urban infrastructure and public transport.
Yet as the catastrophic flooding in Dhaka reminds us, these challenges are right at hand for both Bangladesh and Nepal. As climate-related disasters start happening more often and with greater destructive power, the danger to financial stability grows. The governments of both countries are striving to implement proactive measures aimed at mitigating climate-related financial risks and ensuring a sustainable future for their populations.