The urgency of climate change demands innovative solutions, and green building practices are emerging as a powerful force in mitigating carbon emissions. However, the potential of green buildings extends beyond simply reducing a building's carbon footprint. By implementing sustainable design and construction techniques, carbon trading opportunities can be unlocked, creating a financial incentive for environmentally responsible development.  This article focuses on the prospects of green building in Bangladesh that generates carbon credits, explores the different carbon trading mechanisms available, and ultimately showcases the exciting possibilities of leveraging sustainable building for a cleaner, more profitable future. What Is a Green Building? A green building is a structure that is designed, constructed, and operated in an environmentally responsible and resource-efficient manner. It focuses on sustainability by reducing the negative impact on the environment while enhancing the well-being of its occupants. Read more: Top 3 Books in English on the Bangladesh Sundarbans Key Features of Green Buildings Energy Efficiency: Uses renewable energy sources (like solar or wind), energy-efficient lighting, and smart building technologies. Water Conservation: Incorporates water-efficient fixtures, rainwater harvesting, and wastewater recycling. Sustainable Materials: Uses eco-friendly, recycled, or locally sourced materials to minimize environmental impact. Indoor Environmental Quality: Ensures proper ventilation, natural lighting, and non-toxic building materials for better air quality. Waste Reduction: Promotes recycling, composting, and sustainable construction waste management. Site Sustainability: Minimizes land disturbance, promotes green roofs, and supports biodiversity. Low Carbon Footprint: Reduces greenhouse gas emissions through efficient design and operation. Read more: What is Carbon Trading? How does it work? International Certifications for Green Buildings LEED (Leadership in Energy and Environmental Design): A widely recognized certification by the U.S. Green Building Council (USGBC).BREEAM (Building Research Establishment Environmental Assessment Method): A UK-based certification.WELL Certification: Focuses on human health and well-being.Green Star: Used in Australia.EDGE (Excellence in Design for Greater Efficiencies): Popular in developing countries. Green buildings help combat climate change, reduce utility costs, and create healthier spaces for people to live and work.  What Is Carbon Credit? A carbon credit is a permit or certificate that represents the right to emit one metric tonne of carbon dioxide (CO₂) or an equivalent amount of another greenhouse gas (GHG). These credits are used as part of efforts to reduce global emissions and combat climate change. Companies or entities that emit less CO₂ than their allocated limit can sell their unused credits to others that exceed their limits. Read more: Top Strategies to Enhance Fire Resilience in Dhaka City What Is Carbon Trading? Carbon trading, also known as emissions trading, is the process of buying and selling carbon credits to control greenhouse gas emissions. It is part of a cap-and-trade system, where governments or regulatory bodies set a limit (cap) on total emissions and issue credits accordingly. How Green Buildings Create Potential for Carbon Trading Green buildings contribute to carbon trading by reducing greenhouse gas (GHG) emissions, making them eligible to generate and trade carbon credits. Here’s how: Energy Efficiency & Lower Emissions Green buildings use energy-efficient HVAC systems, LED lighting, and smart building technology, reducing carbon emissions from electricity consumption. By cutting fossil fuel-based energy use, buildings emit less CO₂, allowing them to earn carbon credits under emission reduction programs. Renewable Energy Integration Many green buildings install solar panels, wind turbines, or geothermal energy systems, reducing reliance on grid electricity generated from fossil fuels. Excess renewable energy can be fed into the grid, generating renewable energy credits (RECs) that can be sold in carbon markets. Read more: Organizational strategies to minimize earthquake damages in Dhaka City Sustainable Materials & Low Carbon Construction Using low-carbon concrete, recycled steel, and timber reduces the embodied carbon in construction. Buildings that incorporate carbon capture materials (like CO₂-absorbing cement) can qualify for carbon offset programs. Water & Waste Management Rainwater harvesting, greywater recycling, and water-efficient fixtures reduce the energy required for water treatment and supply. Waste reduction through composting and recycling lowers methane emissions from landfills, allowing buildings to claim waste management carbon credits. Green Certifications & Carbon Credit Eligibility Certified green buildings (e.g., LEED, BREEAM, EDGE) may qualify for carbon offset projects, making them eligible for trading in voluntary carbon markets. Large property developers can sell carbon credits for portfolio-wide emissions reductions, making green buildings a financial asset in carbon trading. Smart Building Technology & Carbon Monitoring AI and IoT-based energy monitoring systems help track and reduce carbon emissions. Verified reductions can be certified as carbon credits and sold in compliance or voluntary carbon markets. Read more: Flood Control and How to Minimise Losses How Green Buildings in Bangladesh Can Contribute to Carbon Trading Bangladesh has been making significant strides in sustainable architecture and green building development due to growing environmental concerns, energy efficiency needs, and compliance with international sustainability standards. The country is one of the global leaders in green industrial buildings, particularly in the textile and garment sector. With the right implementation of carbon reduction initiatives in Bangladesh, the nation might earn billions of US dollars annually from global carbon trading. In 2022, the global carbon trading market was valued at $4.5 trillion, and it may grow to $8.98 trillion. The International Monetary Fund (IMF) suggested an average price of $75 per unit, with each carbon credit equivalent to one tonne of carbon dioxide. Carbon markets have only brought in a few hundred million US dollars for Bangladesh thus far. Bangladesh could make much more, though, because the nation is among the lowest carbon polluters in the world, contributing only 0.5% of global emissions. Growth of Green Buildings in Bangladesh In Bangladesh, over 200+ factories in the ready-made garments (RMG) sector are certified by LEED (Leadership in Energy and Environmental Design) by the U.S. Green Building Council (USGBC). The trend of green commercial, residential, and industrial buildings is increasing in Dhaka, Chattogram, Gazipur, and Narayanganj. Read more: Can a Sponge City Tackle Flooding in Dhaka? Green Building Certifications & Policies in Bangladesh LEED Certification (USGBC): The most recognized certification in Bangladesh.Bangladesh Green Building Guidelines: Developed by the Bangladesh Green Building Council (BGBC).EDGE Certification: Promoted by the International Finance Corporation (IFC).Sustainable & Renewable Energy Development Authority (SREDA): Encourages energy-efficient buildings. Benefits of Green Buildings in Bangladesh Lower Energy Costs: Reduces electricity bills through solar energy and energy-efficient appliances.Water Conservation: Rainwater harvesting and wastewater recycling.Healthier Indoor Air Quality: Improves well-being by reducing pollution.Carbon Credit Trading: Potential to earn revenue by reducing CO₂ emissions.Global Market Competitiveness: Many eco-friendly garment factories attract international buyers. Read more: How to Build Dhaka as a Water Wise City How Bangladesh Can Sell Carbon Credits First, identification of green industry projects. Then, get certified by Carbon Standards. The green industry projects must be verified and registered under recognized carbon credit standards such as the Gold Standard (GS), Verified Carbon Standard (VCS), Clean Development Mechanism (CDM) of UNFCCC, etc. After that, emission reductions will be verified. Certified auditors measure CO₂ reduction to validate the credits. Finally, engaging in the global carbon trading markets. There are two types of carbon trading markets: Compliance Carbon Market: Sell credits to companies in regulated markets like the EU Emissions Trading System (ETS). Voluntary Carbon Market (VCM): Sell credits to international companies looking to offset emissions voluntarily. Read more: Green Roofs in Dhaka City: Pathway to Smart Urban Agriculture Challenges for Bangladesh in Carbon Trading and Probable Solutions A lack of awareness and expertise in carbon trading has limited the scope of Bangladesh's earnings from selling carbon credits in the international markets. High initial costs for certification are another bar. Furthermore, the country have a limited policy and regulatory framework that can support the carbon trading process. Verification and monitoring issues are also required to enhance the potential of Bangladesh in this sector. To overcome these limitations, essential training and capacity-building programs on carbon trading can be helpful. Government incentives and subsidies can encourage commercial projects, industrial establishments, and residential owners to opt for green buildings.  Therefore, a national carbon trading policy should be developed and a national carbon credit registry should be introduced to streamline the process in Bangladesh. Public-private partnerships (PPP) can drive large-scale green building projects in different districts. Moreover, foreign investments in green building and associated carbon offset projects should be encouraged to enhance the country’s carbon trading scope. Expanding the carbon market to SMEs and rural green industries can boost economic benefits. Besides these, by partnering with international carbon credit certifiers, Bangladesh can go a long way in carbon trading. Read more: What Can Dhaka Learn from the Smart City Singapore Final Thoughts Green buildings reduce carbon emissions and create financial opportunities through carbon trading, encouraging real estate developers, corporations, and governments to invest in sustainable construction. Bangladesh has been leading the way in green industrial buildings, especially in the garment sector, and is gradually expanding to commercial and residential areas. The country have huge potential to earn from carbon trading by promoting green industries and green building projects. With the right policies, international partnerships, and investments, Bangladesh can turn carbon reduction into a financial asset while combating climate change. Read more: Plastic Pollution: Harmful effects on human health and environment

Carbon emissions, primarily in the form of carbon dioxide (CO₂) and methane (CH₄), contribute to global warming, climate change,  and sea-level rising which in turn increase the frequency and intensity of natural phenomena, and disasters like cyclones, floods, wildfire, drought, heatwave, etc. Reduction of carbon emissions has multifarious environmental, economic, social, and health benefits. Carbon trading is both a benefit and a mechanism for reducing carbon emissions. Here’s how it works and why it can be beneficial.  What is Carbon Trading Carbon trading, also known as carbon emissions trading, is a market-based approach to reducing greenhouse gas (GHG) emissions. It allows countries, companies, or organizations to buy and sell permits that represent the right to emit a certain amount of carbon dioxide or other greenhouse gases. By putting a price on carbon emissions, it incentivizes participants to lower their emissions and invest in cleaner technologies. Carbon emissions trading operates under a cap-and-trade system where governments or organizations set a limit (cap) on total emissions. Companies receive or buy carbon credits, which allow them to emit a certain amount of CO₂. If a company emits less than its allowance, it can sell its excess credits to others. If a company exceeds its limit, it must buy more credits or face penalties. Carbon trading is a benefit of reducing emissions because it creates financial incentives for businesses to go green. However, it works best when proper regulations and transparency ensure that actual emission reductions occur. Read more: Plastic Pollution: Harmful effects on human health and environment What Is the Process of Carbon Credit Sale? The process of selling carbon credits involves several steps, from generating the credits to finding buyers and completing the transaction. Here’s a step-by-step breakdown: Carbon Credit Generation A company or project must first reduce or remove greenhouse gas (GHG) emissions through activities like reforestation, renewable energy projects, or carbon capture. The emission reduction must be measured, verified, and certified by an independent third party. Verification & Certification The project must be validated by recognized carbon standards such as: Verified Carbon Standard (VCS), Gold Standard, Clean Development Mechanism (CDM), Climate Action Reserve (CAR), etc. These standards ensure that each credit represents one metric ton of CO₂ reduced or removed. Registration on a Carbon Registry Verified carbon credits are registered on platforms like: Verra, American Carbon Registry (ACR), Gold Standard Registry, etc. Each credit receives a unique serial number to prevent double counting. Read more: How Can One Person Reduce Environmental Pollution? Finding Buyers There are two main types of carbon markets: Compliance or Regulated Markets are created by government regulations to limit carbon emissions. Companies must buy carbon credits if they exceed their allowed emissions cap. In the Cap-and-Trade system, governments set a maximum emission limit (cap). Companies emitting less than their limit can sell excess credits to others exceeding their cap. Some countries impose a carbon tax, but companies can reduce their tax burden by purchasing credits. Major Compliance Markets include the European Union Emissions Trading System (EU ETS), California Cap-and-Trade Program, China’s National ETS, Regional Greenhouse Gas Initiative (RGGI), etc. In the Voluntary Carbon Markets (VCM) markets, companies and individuals buy carbon credits voluntarily to offset their emissions. These credits come from projects that remove or reduce CO₂ emissions, such as reforestation, renewable energy, and carbon capture. Read more: Effects of Air Pollution on Unborn Children, Neonates, Infants

Experts say that the European Union’s Carbon Border Adjustment Mechanism (CBAM) through supply chain regulations and trade measures would be a game changer in tackling emissions. The EU is set to introduce the CBAM, which in effect will make use of trade policy in an unprecedented manner to tackle carbon emissions, they said. Dr Mohammad Abdur Razzaque, Chairman of Research and Policy Integration for Development (RAPID), told UNB the EU has been maintaining an emission trading system (ETS) to reduce greenhouse gas emissions of high carbon-emitting sectors. Also read: Power Division, USAID sign agreement to cut carbon emissions. Carbon price under the EU-ETS reached a record high at EUR 98 per tonne of CO2 on 18 August 2022. Since then it has somewhat fallen and fluctuates around EUR 70, which will be effective in trade in the EU market after 2026, he said. Dr Razzaque, also an international trade expert, said the embedded carbon content in imports will be priced equivalent to the price of CO2 faced by EU domestic firms under ETS. The transition phase is 2023-2025 -in this period importers will have to report emissions embedded in their goods without paying any charge, he pointed out. Also read: IFC-led PaCT helped factories cut carbon and water footprints: BGMEA The EU and EU parliament is working on such regulation to bring about execution by 2026, which may be shifted to 2027. Once in operation, the importers will have to pay for embedded emissions, buying CBAM certificates, Dr Razzaque said. If a non-EU exporter establishes a carbon market, the corresponding cost will be deducted from total CBAM charges, he said. According to the European Commission, the CBAM will initially apply only to a select number of goods at a high risk of carbon leakage, viz., cement, iron and steel, aluminum, fertilizers, and electricity, and will be operational from January 2023, said Md Jillur Rahman, Assistant Professor, Economics Department, Jagannath University. Read Summit, JERA to collaborate for developing a carbon neutral roadmap He said that both the European Council and Parliament have adopted their positions on the Commission's proposal for a CBAM. “The European Parliament proposes a gradual implementation of the CBAM beginning in 2027, and full implementation beginning in 2032 when the free allowances are completely phased out,” Jillur added, who is doing research on CBAM.  The Parliament proposes to broaden the scope of sectoral coverage to include organic chemicals, plastics, hydrogen, and ammonia. Gradually the coverage should be extended to cover all sectors under the EU ETS, he said. Read MVCs' CSOs demand end to carbon emission instead of 'net-zero' target Jillur said, the European Parliament, Council, and Commission will now engage in a trialogue (three-way dialogue) and discuss the differing viewpoints of the three institutions. The political process may be completed by the end of 2022 to adopt the final CBAM regulation for the Union. Professor Abu Eusuf, department of development studies, Dhaka University, said many countries, including India, Vietnam, and China are taking measures to reduce carbon emissions to address the negative impact of climate change in line with the Paris Agreement. “Bangladesh in its updated Nationally Determined Contribution (NDC) commits to unconditionally reduce greenhouse gas emissions by 6.73 percent (27.56 MtCO2e) from the business-as-usual scenario by 2030,” he said. Read Climate change to ultimately cost $100,000 per ton of carbon Prof Eusuf said that subject to technology and know-how transfer, and finance and investment support from the international community, Bangladesh intends to reduce GHS emissions by an additional 15.12 percent (61.9 MtCO2e). “Bangladesh’s NDC commitments and actions for reducing carbon emissions appear to be much less ambitious compared to other comparable countries. China commits to reducing carbon dioxide emissions per unit of GDP by 60 to 65 percent (from the 2005 level) by 2030, while India intends to do the same from 33 to 35 percent,” he added. The experts said Bangladesh’s major competitors have either already established or are in the process of developing carbon markets locally. Read Environmental degradation is a burning issue, but its impact is not yet measured: Statistics Secretary China launched its carbon market in 2021; Vietnam and India are in the process of establishing their internal carbon market. Vietnam wants to formally launch its carbon market in 2028. The 8th Five Year Plan of Bangladesh aims to introduce green taxation on the consumption of fossil fuels, but it is not clear yet how this will be implemented. However, no progress has been made so far. Therefore, the CBAM can disproportionately affect Bangladesh relative to other competitors. Read Govt committed to protect ozone layer: Environment Minister

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has said the International Finance Corporation (IFC)-led Advisory Partnership for Cleaner Textile (PaCT) has helped participating factories cut carbon and water footprints. PaCT is a holistic programme that supports the entire textile value chain – spinning, weaving, wet processing and garment factories in adopting cleaner production practices and engages with brands, technology suppliers, industrial associations, financial institutions, government to bring about systemic and positive environmental change for the Bangladesh textile sector and contribute to the sector's long-term competitiveness and environmental sustainability. BGMEA President Faruque Hassan thanked the IFC for its continued support for the apparel industry over the past few decades. Read: Bangladesh, Indonesia need to work together as partners: BGMEA chief Nishat Chowdhury, programme manager of PaCT, paid a visit to Faruque in Dhaka Sunday. They had discussions about the progress of the ongoing projects which are being implemented by the BGMEA with the financial support of IFC for the development of the RMG industry. IFC, a member of the World Bank Group, has already funded several studies for the apparel sector to explore its opportunities and ways to realise them. One of the studies aims to identify the potential scope of non-cotton textile and apparel for Bangladesh in the global apparel market and formulate a strategy to develop the country's overall competitiveness and strength in the area.  Another study is being conducted on the readymade garment (RMG) sector's recovery roadmap.

Summit Power International Limited and JERA Asia Pte. Ltd. a subsidiary of JERA Corporation of Japan, will collaborate on developing a carbon neutral roadmap for Summit while supporting Bangladesh’s continued socio-economic development. The two companies signed a Memorandum of Understanding (MoU) in this regard on Monday, said a press release. To accelerate adoption of renewable power generation in Bangladesh and support its Paris Agreement goals, the MOU includes pathways for establishing zero emissions targets for Summit, said the release from the Summit group. It also includes outlining a roadmap to achieve the targets and identifying opportunities to deploy greener fuels such as hydrogen or ammonia in support of decarbonization efforts. Also read: MVCs' CSOs demand end to carbon emission instead of 'net-zero' target The MoU was signed between Nicholas Padgalskas, Chief Financial Officer (CFO) of Summit Power International and Toshiro Kudama, CEO of JERA Asia, in the presence of senior officials of the Government of Japan at the Asian Green Growth Partnership Ministerial (AGGPM) Meeting in Tokyo. On the occasion Ayesha Aziz Khan, CEO and MD of Summit Power International remarked, “As a member of the Climate Vulnerability Forum (CVF), Bangladesh has the ambition to supply 40 percent of its energy needs from renewable sources by 2041. In line with this Summit, along with our partner JERA, are aspiring to implement the best practices and adaptation knowledge to reach our zero emissions targets.” Toshiro Kudama said, “JERA Asia is pleased to have the opportunity to work with Summit on its decarbonization efforts in Bangladesh as it too is striving to reduce its carbon footprints from domestic and overseas operations, with the announced goal of zero CO2 emissions by 2050. We believe we can draw on the experiences of JERA and Japan to support Summit and Bangladesh. The demand for electricity in Bangladesh is expected to continue to increase in line with the country’s economic growth. Also read: Globe bounces back to nearly 2019 carbon pollution levels While supporting this growth and meeting the increased demand of electricity, Bangladesh is at the same time seeking to contribute to the Paris Agreement goals by diversifying fuel sources for power generation, improving generation efficiency, and developing renewable energy, said the press release.

Leaders of civil society organisations (CSOs) from most vulnerable countries (MVCs) Friday called for an end to carbon emission instead of pursuing the "net-zero target by 2050." They also demanded that developed countries ensure adequate finance and appropriate tools that will support effective climate action for MVCs and least developed countries (LDCs). The CSO leaders were speaking at the press conference titled "LDC & MVC Peoples' expectations and COP26" in Glasgow. READ: MVC civil society leaders for actions for 1.5 degree temp goal Representatives of different CSOs, including Md Ziaul Hoque Mukta of Center for Sustainable Rural Livelihood, Md Shamsuddoha of Centre for Participatory Research and Development, Shamim Arfeen of AOSED from Bangladesh; and Soumya Datta from Peoples Forum from India joined the press conference. "The 2021 United Nations Climate Change Conference (COP26) is being held at a transitional stage in the context of past failure of its commitments, but we are hopeful for the future as the developed countries have pledged to keep cutting global warming and supporting MVCs to fight climate change impacts," Aminul Hoque of EquityBD from Bangladesh said while presenting the keynote address on civil society expectations. "Developed countries must change their theory of 'net-zero target. They will have to revise their nationally determined contributions (NDC) to the "zero-carbon emission' target by 2050. Also, the countries will have to ensure adequate climate finance for LDCs and MVCs through Green Climate Fund (GCF) and public sources. And they will need to provide support for the establishment and full operationalisation of the proposed loss and damage mechanism with separate financial allocation," he added. "Net-zero is a phrase that represents magical thinking rooted in our obsession for future technology. Collectively, net-zero climate targets allow developed countries to continue increasing their levels of greenhouse gas emissions instead of cutting them directly," Soumya said. "So, it is a false solution proposal, and all parties must stop the discussion on such vague 'net-zero emission' and start the discussion on 'zero-emission target' through offsetting the use of fossil fuels and ending carbon emissions." "The revised NDCs of developed countries and their full implementation will increase the global temperature above 0.2 degree, which is unacceptable," Shamsuddoha said. "Every year, millions of people are displaced due to the loss of all their livelihood options. Rich countries have the responsibility to address the issue and ensure finance and technology support accordingly," Shamim said. READ: Multinational companies plan to cut suppliers who fail to curb carbon emission "The proposed mechanism of 'Santiago Network for Loss and Damage' should be supported by them to make it fully operationalise with proper financing."

Two geoscientists and a philosopher from the University of Chicago (UChicago) estimated that an "ultimate cost of carbon" to humanity comes out closer to 100,000 dollars per ton, a thousand times higher than the 100 dollars or less routinely calculated for the cost to our generation.