Bangladesh could earn a few billion US dollars from global carbon trading each year if carbon reduction projects are properly implemented in the country, according to speakers at a discussion.

The global carbon trading market was worth $4.5 trillion in 2022 and may reach $8.98 trillion by 2050, they said.

However, Bangladesh is not ready to tap into this market as it lacks the adequate information, legal framework and expertise required from both the public and private sectors, they added.

Carbon trade is the buying and selling of credits that permit a company or other entity to emit a certain amount of carbon dioxide and other greenhouse gases.

In case a company or entity does not need their excess credits, then they can sell it to another company or entity for actual money.

Each carbon credit is measured as 1 tonne of carbon dioxide, with the International Monetary Fund having proposed an average price of $75 per unit.

However, the unit price varies in different parts of the world depending on the demand.

So far, Bangladesh has only earned a few hundred million US dollars from carbon markets.

But as the country is one of the lowest carbon emitters in the world, accounting for only 0.5 percent of global emissions, it has the potential to earn significantly more.

In the proposed Bangladesh Green Growth Framework of the World Bank, Eun Joo Allison Yi, senior environment specialist of the multilateral lender, urged for strengthening environmental governance and accounting systems.

Additionally, YI stressed the need for enabling energy independence through energy efficiency and trade in renewable energy, and to promote inclusive connectivity through green transport and logistic systems.

She also suggested investing in new green industries and human capital to promote job creation and green innovation, fostering liveable green cities through urban regeneration and building new smart cities.

Yi was speaking as a panellist at a discussion on the "Application of Carbon Financing: Challenges and Policy Options for Bangladesh" at the Bangladesh Institute of International and Strategic Studies (BIISS) in Dhaka yesterday.

Shams Mahmud, director of the Bangladesh Garment Manufacturers and Exporters Association, said garment factories can be run with green energy but fabric production requires fossil fuel.

He said many special economic zones (SEZs) are not yet ready for industrial units even though the central bank already said the setting up of new industries will not be allowed outside of SEZs.

State Minister for Finance Waseqa Ayesha Khan said the government aims to generate 40 percent of the country's energy requirement from renewable sources by 2041.

Mahfuz Kabir, research director of the BIISS, presented the keynote paper, titled "Pathways of Carbon Financing: Imperatives for Bangladesh".

In his presentation, Kabir said the existing buyers of carbon credits include Microsoft, Shell, BP, Nestle, Amazon, Delta Airlines, United Airlines, Coca-Cola, JP Morgan, and Goldman Sachs.

Some countries that buy carbon credits include Canada, the US, China, South Korea, New Zealand, Kazakhstan, the UK, Norway, Sweden, Spain, Portugal, France, Ireland, Italy, Greece and Iceland.

Besides, garment exporters in Bangladesh are also potential buyers of carbon credits, he added.