Building Climate Resiliency to Secure Bangladesh’s Economic Future

Many long-standing structural issues affect Bangladesh’s overall economic position and outlook. First, the country’s industrialization was heavily concentrated only on ready-made garments, which make up around 80% of its exports. Second, the country ranks poorly in global rankings of governance. Weak governance and regulatory quality constrain the country’s ability to deliver on its climate agenda. Third, digital and physical infrastructures are inadequate and not robust to disaster. Lastly, the country has a largely unskilled and poor population, making it a challenge to find the talent to address issues.

Over the past 3 decades, Bangladesh has made strides toward climate action. It has reduced the number of deaths from natural hazards by a hundredfold and invested more than $10 billion in adaptation and mitigation actions, among others. However, further reforms need to be done to tackle critical crosscutting binding constraints that include a lack of a holistic institutional framework and climate-responsive planning and policies.

Rapid industrialization has pushed up Bangladesh’s economy. While its per-capita income grew at average of 4.0% over the past 3 decades, this has been powered largely by polluting fossil fuels, posing long-term public health and climate risks.

To secure its economic future, Bangladesh will need to strengthen its focus on climate adaptation and mitigation through institutional measures. Creating an enabling environment for climate-related actions and embedding climate considerations in public-sector programs and plans are essential to moving forward.

Bangladesh has launched a variety of initiatives to increase climate resiliency, including the National Adaptation Plan (2023–2050), the Updated Nationally-Determined Contributions (2021), and the Bangladesh Delta Plan 2100. A key challenge is to coordinate the efforts of stakeholders to maximize programmatic coherence and efficiency.

ADB has worked closely with both the previous and interim Governments of Bangladesh to invigorate public and private investment in climate strategies, facilitate climate actions through technological innovation and protective policies, and start a shift away from fossil fuel usage. From 2022 to 2025, ADB’s work on the Climate Resilient Inclusive Development program committed $800 million in concessional financing toward these efforts, in coordination with an additional $1.2 billion of cofinancing from other development partners (Agence Française de Développement and Asian Infrastructure Investment Bank).

Whole-of-government approach

ADB worked with the government, led by the Prime Minister, to convene the National Committee for Environment and Climate Change in 2023, which gathered into a single committee every ministry involved in climate change. Under this Committee, the Bangladesh Climate Development Partnership was established in 2024 as a cross-sector, multi-stakeholder partnership to drive effective climate action through coordination, planning and investment. It brings together key government agencies and nongovernment stakeholders, such as the private sector, civil society, and development partners. To enhance the government’s capacity to collect and use information for decision-making, the following actions were taken:

• The Ministry of Planning began collecting climate indicators with district-level granularity, and plans to implement sub-district granularity in the near future.
• The government tagged climate-related expenditures in the budget.
• Bangladesh Bank (the central bank) mandated climate risk disclosures for financial institutions and issued guidelines for climate risk management in order to direct private investment toward climate-resilient projects.

Strategic coordination outcome

The Climate Resilient Inclusive Development program established a foundation to enhance coordination and collaboration among government and development partners, thus aligning policy actions to create synergies among these initiatives. Development partners—including ADB, Agence Française de Développement, Asian Infrastructure Investment Bank, International Monetary Fund, Japan International Cooperation Agency, and the World Bank—demonstrated strong coordination in their support, effectively minimizing duplication across implementing agencies. Furthermore, key bilateral donors and United Nations agencies provided complementary assistance for reinforcing a harmonized and efficient approach to development cooperation.

• The Local Government Engineering Department under the Ministry of Local Government, Rural Development, and Co-operatives established the Climate Resilient Local Infrastructure Centre. Co-financed by the German Development Bank and the Green Climate Fund, this permanent office aims to strengthen climate-resilient infrastructure planning and implementation.
• The National Urban Policy was supported by the United Nations Development Programme (UNDP) and the Foreign, Commonwealth & Development Office of the UK Government.
• The Locally Led Adaptation Framework was supported by ADB, UNDP, and the World Bank for amplifying local voices in climate related decision-making process.
• The Ministry of Disaster Management and Relief adopted the Disaster Risk Financing Strategy supported by multi-development partners.
• The Local Government Division developed the Climate Vulnerability Index, a collaborative initiative involving UNDP, UN Capital Development Fund, Governments of Sweden and Denmark, and the European Union. It is now being used to guide budget allocation at the Union Parishad (local government institutions).

Precedent for climate-conscious growth

The Integrated Energy and Policy Master Plan was implemented, focusing on shifting irrigation in agriculture from diesel to solar power. Other efficiency enhancements initiated include: (i) Strategic Transport Master Plan for Dhaka (2025–2041) to reduce road congestion, improve walkways for pedestrians, and shift passenger transport to the metro rail system; (ii) new policies to promote energy and operational efficiency in rail lines; and (iii) guidelines for rating a building’s environmental footprint and enforcement for building energy audit regulations.

Robust adaptation in a changing world

The Climate Resilient Inclusive Development program coordinates climate adaptation solutions, with a drive to incorporate local voices into the goals of preserving vital wetlands, fortifying infrastructure, and prioritizing nature-based solutions.

Using the Locally Led Adaptation Framework, a holistic and inclusive approach that involved consultations with marginalized groups, the program’s adaptation component reached cities and rural areas. In the villages, agricultural extension services focused on women farmers, and encouraged dialogue and knowledge sharing of best practices for climate resiliency. Meanwhile, for cities, the program implemented four targeted climate-resilient urban action plans, including the Climate Vulnerability Index, a criterion for resource allocations for the prioritization of climate-resilient investments. It also crafted the National Urban Policy, which promotes integrated urban drainage management and eco-engineered waste management; climate-resilient water, sanitation, and hygiene facilities; and urban wetlands and biodiversity conservation.

Further, the Climate Resilient Inclusive Development’s Haor Area Master Plan improved flood management, coastal erosion management, and irrigation in wetlands and enhanced early warning systems in flood-prone (often agricultural) areas.

The Climate Resilient Inclusive Development program is expected to positively impact lives in Bangladesh in two main ways.

In the short to medium term, improving energy efficiency and providing technical assistance to farmers, particularly historically underserved women, can increase employment opportunities and productivity, thereby creating jobs. Favorable credit policies also encourage entrepreneurs in sustainable finance, helping construct a culture of green enterprise.

In the long-term, the establishment of government bodies, strengthening of policies and programs, and promotion of climate-related goals are expected to yield large-scale benefits in terms of water and food security, and economic growth. In small ways, these may also help by protecting livelihoods with flood warning systems and decreasing commute times in congested cities.

The Climate Resilient Inclusive Development program’s philosophy is rooted in the idea that conflicting voices are valuable only if they are able to reach each other and work together for a better result. Prior to program implementation, the disparate voices around climate action led to inefficiencies and undesired results. Multiple ministries developed frameworks and regulations for the same issues; businesses and financial institutions did not have a clear understanding of how they should optimally direct capital in a constantly shifting regulatory environment; and local voices were often lost in the noise.

The program’s governance reforms bring the conflicting voices together to improve coherence in policymaking and amplify voices of those most impacted by any reforms decided by government and industry to ensure their needs are met as well. Not only were stakeholders brought together by Climate Resilient Inclusive Development program, but it additionally harmonized and streamlined many of the large undertakings and master plans previously created by separate bodies.

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