Bangladesh has undergone swift industrial growth in the last thirty years, resulting in considerable environmental harm. Recent reports from the World Bank highlight severe water pollution issues, largely attributed to heavy metals and chemicals, which have detrimental effects on agriculture and public health. As the nation grapples with these challenges, it is also striving to enhance compliance with environmental regulations.
Despite advancements in regulatory frameworks, the enforcement of environmental laws remains inconsistent. In 2020, alarming figures revealed that over 5.7 million gallons of untreated waste were being dumped into Dhaka’s rivers, rendering them biologically dead for months. While compliance has improved somewhat, the overwhelming number of polluters exposes the weaknesses within the regulatory institutions.
Remarkably, Bangladesh is home to some of the greenest factories worldwide, with 214 facilities certified by the Leadership in Energy and Environmental Design (LEED) program. This paradox—high levels of pollution alongside numerous certified green factories—raises critical questions about the effectiveness of environmental governance.
A recent study published in the Journal for Cleaner Production by Nabil Haque and co-author Sungida Rashid examines the relationship between regulatory agency attributes, market factors, and environmental compliance in Bangladesh. Utilizing Structural Equation Modeling (SEM) to analyze data from the Department of Environment (DoE) and other sources, the research reveals key insights.
The study found that access to green finance plays a significant role in encouraging factories to adopt wastewater treatment plants and pursue voluntary certifications like LEED. In contrast, fines for non-compliance have little impact, primarily due to weak enforcement and the capacity of large polluting entities to influence regulatory outcomes.
The DoE implemented mandatory regulations for wastewater treatment in 1997, targeting major polluting sectors such as textiles and pharmaceuticals. However, many factories fail to comply, largely due to insufficient regulatory oversight, financial constraints, and a lack of technical knowledge. The ineffectiveness of financial penalties further compounds the problem, as fines often do not reflect the severity of the violations and are poorly enforced.
To address these issues, the research advocates for enhancing the capacity of the DoE, both in terms of human resources and technical capabilities. Two significant initiatives aim to bolster environmental governance in Bangladesh:
These initiatives are vital milestones, yet their long-term effectiveness will rely on the ongoing capacity of regulatory agencies beyond the project's duration.
The expansion of green finance is vital for promoting environmental compliance. While access to financing for environmentally friendly projects is improving, weak enforcement limits the incentive for industries to invest in sustainable practices. To bolster green investments, strategies such as providing credit guarantees or insurance for smaller factories could prove beneficial.
Additionally, enhancing knowledge and skills related to green financing across various sectors—government, financial institutions, and the private sector—will strengthen overall institutional capabilities.
As Bangladesh continues to confront the dual challenges of industrial growth and environmental degradation, the interplay between green finance and regulatory compliance will be crucial. By prioritizing the strengthening of regulatory institutions and expanding access to green finance, the nation can pave the way for a more sustainable future. Addressing these issues holistically will not only improve compliance with environmental regulations but also foster a healthier environment for all Bangladeshis.
Reference: Boston University Global Development Policy Center
