What's missing from the FY2026-27 climate budget

The climate budget proposed for FY2026-2027 seems good on paper but, at the same time, confusing, and has missed some obvious opportunities. As the budget debate in parliament approaches its culmination, let me tell you why we should already start talking about the budget of FY2027-2028.

First, the proposed climate budget (Tk 51,746 crore, or $4.24 billion) is 25.57 percent higher than the FY2025-26 budget. The figure makes up 5.52 percent of the overall national budget (up from 5.2 percent in FY2025-26) and 11.03 percent of the combined budget for the 25 relevant ministries and divisions, an increase from 10.07 percent. Despite the rises, the total allocation is still very low since to fully fund its current climate action plans—spanning everything from basic adaptation to a nationwide green energy transition—Bangladesh requires an estimated $30 billion every single year.

Second, the Bangladesh Climate Change Strategy and Action Plan (BCCSAP, 2009) has six themes related to food security, disaster, infrastructure, mitigation, research, capacity, etc. In the budget document, all 25 government agencies are grouped under these themes, which is novel, but it gives the wrong message. The thematic grouping of ministries is highly inconsistent. The Local Government Division (LGD), for example, is placed under the infrastructure theme despite having a similarly sized budget for food security. Even more confusingly, some ministries are assigned to categories where they have zero funding. The Ministry of Textiles and Jute is listed under mitigation, while the Technical and Madrasah Education Division is grouped under research and knowledge management—yet neither received any money for these sectors.

Third, the climate budget failed to capitalise on some of our recent achievements. Under the recently finished LoGIC project of LGD and UNDP, a Climate Vulnerability Index (CVI) was developed, and CVI values were assigned to all 64 districts, 495 upazilas, 4581 unions, 12 city corporations, and 329 pourasavas of Bangladesh. On September 26, 2024, an LGD circular instructed to allocate 15-30 percent of local government budgets based on CVIs. But the new climate budget mentioned nothing about local-level allocations despite these vulnerability-based practices.

To address the above and other gaps, we need a culture change towards the climate budget. From July 2026, the Finance Division needs to lead collaborations with relevant NGOs, think tanks, and private entities on the climate budget for FY2027-28. The division can start with three specific actions.

First, the Finance Division should break the misconception that only 25 ministries and divisions are climate-relevant. Several relevant ministries, such as information, religious affairs and youth and sports, were never included; while ministries of defence, industries, land, and textile and jute are receiving less than 0.15 percent of the total climate budget. The division should analyse the FY2026-27 ADP allocations of all ministries and agencies, and revise the list of 25. This should be done immediately.

Second, by engaging with relevant public and private institutions, the Finance Division should urgently calculate how much money individual households of Bangladesh spend to fight climate change. In 2021, the University of Liberal Arts Bangladesh showed that, after a disaster, a rural household may face up to $1054 loss and damage, despite taking adaptation measures. Household-level adaptation investments and recovery from frequent disasters must be calculated to get Bangladesh’s real climate-relevant expenditure. These numbers and an expansion of climate-relevant ministries will show the real climate expenditure against our $30 billion annual needs.

The new climate budget document ends with several reform priorities on budget utilisation, source diversification, and expense monitoring. But the Finance Division should restructure the climate budget too. My recent analysis of the National Adaptation Plan (NAP) shows that the biodiversity conservation interventions are to be led by 12 different government agencies, not only by the Forest Department and Department of Environment, with support from 26 other government agencies. Therefore, the climate budget of FY2028 should have new thematic areas, reflecting the whole-of-government and other globally recognised approaches. Locally Led Adaptation (LLA) should be a new theme covering governance aspects of all adaptation interventions in all sectors, in rural and urban contexts. The National Framework and Action Plan for Locally Led Adaptation in Bangladesh (2025) can be a good guide for that. The Loss and Damage (L&D) theme should include climate risk management, despite our adaptation efforts in different sectors. It should cover both economic and non-economic aspects. The 43 key L&D activities outlined in Bangladesh’s third Nationally Determined Contribution (NDC 3.0) are a valuable guideline.

The Nature-based Solutions (NbS) theme should cover conservation, protection, sustainable management, restoration and creation activities in natural and modified ecosystems, in canals, forests, hills, and municipalities, for example. IUCN’s Global Standard for NbS can be used to identify budgetary elements in NbS. Our mitigation actions would fall under the Just Energy Transition (JET) theme. The NDC3.0 is a useful document in this regard. Gender Equality, Disability, and Social Inclusion (GEDSI), research, innovation, knowledge, capacity, and institutions should not be separate themes, rather integrated into all themes.

NGOs and think tanks arrange consultations on the climate budget and climate finance every year in April-June, when it has no impact on actual budget decisions. The Finance Division should collaborate with relevant stakeholders to arrange public consultations on the above issues now and create a momentum towards the next climate budget.

Dr Haseeb Md. Irfanullah is an independent environment and climate change consultant and visiting research fellow at the University of Liberal Arts Bangladesh (ULAB). He can be reached at hmirfanullah@outlook.com.

Views expressed in this article are the author's own. 

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