A government report indicates that Bangladesh could earn nearly 1 billion USD annually by selling carbon credits generated from the nationwide 25 crore tree plantation program. Prime Minister Tareq Rahman officially launched this five-year initiative on June 13, aimed at enhancing environmental protection and mitigating the adverse effects of climate change.
Carbon Credit Potential
The Climate Finance Budget Report highlights that one of the key aspects of this initiative is the potential to generate carbon credits through large-scale afforestation. Under the international carbon credit system, designated plantation areas must be registered and reported to relevant international organizations and participating countries.
The report notes that this initiative could contribute to carbon sequestration and net greenhouse gas emission reduction, thereby generating financial benefits through carbon credit trading. Citing World Bank data, the report states that if the program is successfully implemented, Bangladesh could earn approximately 1 billion USD annually from selling carbon credits generated solely through tree plantation.
Environmental and Economic Benefits
In addition to economic gains, the initiative is expected to yield significant environmental benefits, including temperature reduction, improved rainfall patterns, enhanced soil quality, and increased ecosystem resilience. The report suggests that this program will advance sustainable development and climate action, creating new opportunities for green economic growth.
Global Carbon Market Context
In 2025, global carbon pricing market revenue stood at 107 billion USD, a 2% increase from 2024 in real terms. The current market capacity is approximately 250 billion USD, projected to reach 1 trillion USD by 2050, with major investments coming from the private sector. The report emphasizes that countries must demonstrate verifiable progress in implementing such projects to attract additional investment.
Challenges and Recommendations
Despite the potential, the report indicates that Bangladesh is not yet fully prepared to participate in the international carbon market. Key deficiencies include limited technical knowledge of Article 6 mechanisms, weak legal and regulatory frameworks for carbon credit issuance and trading, and insufficient capacity in the government and private sectors for MRV (Monitoring, Reporting, and Verification) and project certification. The report recommends regulatory reforms, capacity building, and strategic prioritization of institutional investments to address these gaps.
Bangladesh's Carbon Market Experience
Bangladesh has prior experience in the carbon market. In 2006, the Infrastructure Development Company Limited (IDCOL) registered Bangladesh's first Clean Development Mechanism (CDM) project with the United Nations Framework Convention on Climate Change. Since then, IDCOL has sold 2.53 million carbon credits, earning 16.25 million USD (approximately 170 crore BDT at current exchange rates) from solar power and improved stove projects. This experience demonstrates Bangladesh's technical capability in carbon project development and provides a credible foundation for expanding participation in the carbon market.
