Bangladesh has sold a total of 2.53 million carbon credits, amounting to $16.25 million, since 2006 and sees huge potential for future sales, mainly through projects in areas like improved cook stoves, afforestation and reforestation, and waste management, Indian news source The Business Standard reported.
The sales were realized through government-owned Infrastructure Development Company Limited (Idcol), which generates carbon credits, or Certified Emission Reductions (CERs), by funding renewable energy projects.
Most of the revenue came from improved cook stoves and the remainder — from solar home systems, both of which are Idcol initiatives registered as Clean Development Mechanism projects under the UN Framework Convention on Climate Change (UNFCCC).
If Idcol can double the number of improved cook stoves to 80 lakh (8 million) over the next five years and install 300 megawatts of rooftop solar within three years, revenue from carbon credits could skyrocket, CEO Alamgir Morshed was quoted as saying.
With the proceeds from CER sales Idcol plans to set up a sustainable fund for new renewable energy initiatives to build on Bangladesh’s Sustainable Development Goals.
Although the revenue achieved so far is impressive, this is just the tip of the iceberg for Bangladesh, The Business Standard said.
Bangladesh, which is highly susceptible to the impacts of climate change, also has significant potential to earn carbon credits through projects aimed at reducing greenhouse gas (GHG) emissions.
The South Asian country aims to increase the share of renewable energy in its total electricity generation to 10% by 2030 from 3% currently.
Potential challenges when it comes to the country’s carbon credit potential include a lack of awareness and capacity among stakeholders, insufficient funding, and a shortage of skilled manpower, according to sector officials, who talked to The Business Standard.
However, Idcol’s CEO believes that Bangladeshi apparel makers could soon emerge as potential buyers of carbon credits due to increasing demands from their global clients for mechanisms to offset carbon emissions from their factories.