Legal Readiness for Climate Finance: The case of Bangladesh towards a transition to climate resilience

Even though the Paris Agreement posits the need to align overall financial flows with low-carbon and climate-resilient development in the heart of its objectives, developing countries face ample constraints in mitigating and adapting to climate change, while concomitantly embarking on reconciling the curbing of climate change with development concerns. Climate finance constitutes an enabling means not only for assisting developing countries in building capacities and enabling environments to address climate change in compliance with their commitments under the Paris Agreement, but most importantly for ushering a long-term development shift towards sustainability. This article furthers the discourse on what it means to be ‘legally ready’ for climate finance. It argues that legal reforms present a means to overcome legal barriers undermining climate finance effectiveness in developing countries, aimed at mainstreaming climate change considerations across all sectors and national policies, stimulating climate-related flows from all sources of finance, and instituting a paradigm shift towards climate-resilient development. First, it elaborates on the role of law in building climate finance readiness, the key legal barriers encountered in developing countries, and the main legal approaches and regulatory tools likely to enhance the four main capacities required to be ready for climate finance. Second, it illustrates the laws and policies currently implemented in Bangladesh concerning the country’s readiness for climate finance. The article concludes premised on the case study of Bangladesh that legal reforms are essential in developing countries, in order to ensure long-term climate finance effectiveness steering transformative changes.