Climate Finance Should Prioritize Vulnerable Communities

Bangladesh’s newly formed National Committee on Climate Finance (NCCF) should focus on transparent funding, stronger community participation and independent oversight to ensure climate finance reaches communities most exposed to climate risks, according to climate policy expert M Zakir Hossain Khan.

Khan, co-founder and managing director of Change Initiative and a civil society observer at the Climate Investment Funds, made the observations in an interview with The Climate Watch.

He said Bangladesh’s climate finance system faces challenges including fragmented institutions, weak coordination, limited access to international financing, monitoring gaps and concerns over financial integrity.

According to Khan, the NCCF has been established to improve coordination and strengthen Bangladesh’s ability to mobilise and manage climate finance. Its responsibilities include national climate finance policy and strategy, policy reform, international resource mobilisation, monitoring, carbon markets and resolving policy disputes between ministries.

Transparency remains a key concern

Khan said the committee’s notification includes provisions for high-level coordination, policy reform, international resource mobilisation and oversight. However, he pointed to gaps in mandatory public disclosure, guaranteed participation of independent experts and communities, vulnerability-based funding criteria and independent performance audits.

He argued that climate finance decisions should be based primarily on the level of climate vulnerability rather than political influence.

“Climate finance should follow vulnerability, not political visibility,” Khan said.

He proposed publicly accessible information showing which communities receive climate funding, the amount allocated, the purpose of each project, implementing organisations and the results achieved.

Call for greater community participation

Khan also highlighted the need for climate-vulnerable communities to have a meaningful role in decisions affecting them.

He recommended participation from vulnerable communities, women, young people, local governments, Indigenous and traditional communities, civil society organisations and independent climate finance experts.

He said community participation should begin during priority-setting and project design and continue through monitoring and evaluation, rather than being limited to consultation after projects have already been designed.

Focus on grants for adaptation and loss and damage

The expert also called for greater emphasis on grant-based financing for adaptation and loss and damage.

He said Bangladesh’s National Adaptation Plan estimates a financing requirement of about $230 billion for 2023–2050, while international adaptation finance remains far below the country's needs.

Khan suggested that Bangladesh could aim to secure an additional $500 million to $1 billion by mid-2027. However, he stressed that this is his proposed benchmark rather than an official government forecast.

He also said commitments should be clearly distinguished from actual disbursements.

According to Khan, adaptation and loss-and-damage financing should mainly come through grants, while public-sector financing should preferably involve grants or highly concessional loans. He cautioned against using commercial debt to finance unavoidable climate-related losses.

Carbon markets should not replace adaptation finance

Khan said carbon markets could provide opportunities for Bangladesh but should not become the central mechanism for climate finance.

He stressed that carbon finance depends on credible measurement, reporting and verification, a strong pipeline of projects and reliable buyers.

He also argued that carbon credits cannot fully address climate-related losses such as displacement, damage to ecosystems or the loss of access to safe water.

He proposed maintaining separate financing windows for adaptation, loss and damage, ecosystem restoration and mitigation, including carbon-market activities.

Calls for independent oversight

Khan said climate finance should be subject to independent monitoring rather than relying solely on internal assessments.

He recommended annual reviews covering financial management, procurement, field verification, beneficiaries and environmental outcomes.

He also called for a protected grievance and whistleblowing mechanism, with suspected corruption referred to the appropriate statutory authorities.

“Accountability must examine the results: have people’s lives been protected? Has nature been restored? Have vulnerable communities become safer?” he said.

Proposed priorities for the NCCF

For the committee’s first 100 days, Khan recommended publishing a national baseline covering existing climate projects, financing sources, funding instruments, disbursements and geographical distribution of benefits.

He also proposed establishing vulnerability-based project selection criteria, developing a financing pipeline, introducing monitoring and integrity systems, setting disclosure and grievance procedures, and bringing independent and community representatives into the process.

He said the committee should ultimately be judged not only by the amount of money it mobilises but also by how effectively that financing reaches vulnerable communities and produces measurable improvements in climate resilience.

The recommendations come as Bangladesh seeks to strengthen coordination of climate finance and increase access to international funding for adaptation, resilience and other climate-related priorities.

Source: The Climate Watch interview with M Zakir Hossain Khan.