Reviving Dhaka’s wetlands: A blueprint for climate resilience and economic prosperity

Dhaka, a sprawling and vibrant megacity, is grappling with the triple challenges of unbridled urbanisation, climate change, and loss of biodiversity. Among the most alarming casualties of this development and growth saga are the city's wetlands — natural ecosystems that have long been the lifeblood of Dhaka's ecological balance.

These wetlands, once abundant and essential for flood management, biodiversity, and livelihoods, have been systematically drained, filled, and built upon at the cost of Dhaka's resilience. 

Restoring these wetlands is not just an environmental necessity; it represents a transformative opportunity to weave together the threads of economic prosperity, ecological harmony, and social equity.

Making nature's intrinsic values visible

Wetlands are often invisible in the calculus of modern real estate investment, reduced to empty spaces ripe for housing, construction, or industrial use. However, wetlands are vast reservoirs of ecological and economic wealth. 

A primary economic analysis and ecosystem services valuation report prepared by Re-WET project partners and a leading environmental consultant in 2025 shows the total economic value (TEV) for Gulshan-Banani (Korail) Lake stands at Tk10,600 crore annually and Tk300,000 crore in 20 years (equivalent to $25.108 billion).

A global consortium, ReWET is a research-to-action initiative for developing an urban wetland stewardship program in Dhaka, Bangladesh.

This report is an effort to show the broader stakeholders the value for money (VfM) of investing in nature-based interventions. Wetlands naturally mitigate flooding, reduce heat stress, store water, capture carbon emissions, nurture biodiversity, and nurture personal and community health and well-being — services that, if monetised, would be valued in the billions.

By rethinking how nature's contributions are valued and integrated into decision-making, Dhaka can unlock the full potential of these overlooked ecosystems, creating a ripple effect that benefits its people, nature, and economy.

From extractive to just finance and economics

Traditional economic measures like GDP have long failed to capture the interconnected value of ecosystems. They exclude the vital connection of nature, people, and climate. They exclude contributions of wetlands to sustainable livelihoods and climate adaptation. This has led to development choices that prioritise immediate gains while ignoring the hidden costs of degraded ecosystems.

After the July Uprising 2024 in Bangladesh, we are in an opportune moment to pivot toward a more inclusive and sustainable urban development model. The moment calls for a vision of progress that values stewardship, justice, and resilience over-exploitation. 

Re-WET is providing a model to fight against environmental destruction, unemployment, and inequality, echoing the new economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions as proposed by Prof. Muhammad Yunus.

Wetlands: A nexus of benefits

Restoring Dhaka's wetlands is not merely an exercise in ecological recovery. It is a chance to rebuild the city's capacity to thrive under pressure from climate change and urbanisation. Wetlands are dynamic systems, offering overlapping benefits across several domains.

Here are some more findings from the ReWET report on livelihoods, water supply, carbon sequestration, flood and heat mitigation, biodiversity and land value, knowledge, and well-being benefits of Gulshan-Banani's restored wetlands. Climate-smart agriculture and aquaculture by the marginal and climate-vulnerable people utilising the lake and lake edge can generate an annual income of over Tk21.14 crore per year. 

Besides, green entrepreneurial and livelihood opportunities and access to adjacent markets of Gulshan-Banani have multiplier effects, from ensuring food security to acting as social protection in combating poverty.

Restored wetlands could sequester up to Tk84 crore worth of CO2 annually. This includes both carbon absorbed by wetland trees and algae in water bodies. Wetlands store vast quantities of water, reducing reliance on costly municipal water systems. Gulshan-Banani wetland ecosystems could replace Tk18.75 crore worth of water supply annually through natural filtration and storage.

With their ability to absorb and retain water, wetlands act as natural reservoirs, reducing the risk of urban flooding. Dhaka could avoid property damage valued at Tk420 crore annually while saving an additional Tk43.24 crore through enhanced water retention capabilities as well as avoided costs from flood-related diseases, which stand around Tk20 crore per year.

Wetlands mitigate the urban heat island effect, reducing temperatures and energy demands. In Dhaka's context, this could translate to annual energy savings of Tk50 crore and also prevent productivity losses and health costs related to heat stress, amounting to Tk1,773 crore each year. 

Wetlands provide habitats for countless species of fish, birds, and plants, with biodiversity gains valued at Tk37 crore per year in the Gulshan-Banani wetland system. It also amounts to an appreciation in land price, valued at a staggering Tk5,000 crore each year.

The aesthetic and recreational value of restored Gulshan-Banani wetlands would be significant, generating Tk200 crore annually. These spaces foster community well-being and opportunities for civic and climate pedagogy and provide mental health benefits valued at Tk3,002 crore each year.

A tale of two investment futures: Disruptive vs inclusive development

Dhaka's urban history is predominant with examples of development that have disregarded nature and marginalised people. For instance, the plan for Mohakhali ICT Village for the digital future of Bangladesh, evacuating Korail slum dwellers, is a glaring example where economic gains were prioritised over social and ecological considerations. 

By contrast, nature-based investment futures, like Re-WET, present a vision of stewardship over extraction. It prioritises the rights of climate migrants, advocates for inclusive urban planning, and embraces nature as a central pillar of development. 

The nature-based investment also includes a vibrant nature reserve in the heart of Dhaka city, a symbol of resilience and justice that integrates green-blue spaces into the urban fabric.

We must act now

Dhaka must seize this moment to lead by example. The city can prioritise pro-poor policies by ensuring wetland restoration projects empower marginalised communities, create sustainable jobs, and reduce inequality. 

City authorities should integrate ecosystem valuation into policy and require ecosystem service assessments in urban planning to highlight the long-term benefits of nature-based solutions. 

They can also leverage global funds such as biodiversity, climate, and loss-and-damage funds to finance restoration initiatives. Above all, city authorities must forge partnerships among various government agencies, NGOs, multilateral development banks, and local communities to implement effective restoration strategies.

As the world turns its focus to wetland preservation on World Wetlands Day 2025, Dhaka has an unprecedented opportunity to showcase the groundbreaking Re-WET Project. 

Re-WET is not just a wetland restoration project; it is also "re-storyation," a healing new narrative of finance that is not extractive, that is pro-poor, devolved, and just by blending climate, biodiversity, and inclusive finance in one place. This initiative has taken the effort to quantify the immense benefits of wetland restoration, marking a first for Bangladesh. 

The project's findings illustrate that a thriving network of wetlands could catalyse billions in annual benefits, paving the way for Dhaka to emerge as a model of urban resilience. Dhaka's future lies not in concrete but in water, greenery, and the collective will to create a just and sustainable urban landscape.

Sifullah Khaled is a Co-Investigator of the Re-WET project and Assistant Professor in Finance at Sheffield Hallam University, UK, working on the intersection of Development, Climate, and Biodiversity Finance. Email: [email protected] . 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.