By: Babar Akhtar
Babarmemon30@gmail.com
Published By: ANI News Agency
Pakistan is at a strategic juncture. The country's financial resources are shrinking, while the risks associated with climate change continue to grow. Recurring floods, prolonged heatwaves, water shortages and crop losses are threatening lives, livelihoods and economic stability. At the same time, rising debt-servicing costs, mounting liabilities in the energy sector and competing development priorities are further reducing the fiscal space available for climate action. Against this backdrop, a fundamental question arises: who will finance Pakistan's climate future, and who will ultimately bear the cost?
Under its Nationally Determined Contribution (NDC 3.0), Pakistan has set a target of reducing projected greenhouse gas (GHG) emissions by 50 per cent by 2035, with a 33 per cent reduction contingent upon international support. It is estimated that Pakistan will require $565.7 billion in climate-related investment by 2035, an amount far beyond what the country can afford through its domestic resources alone.
The challenge is not merely financial; it also raises fundamental questions of climate justice. Although Pakistan contributes a very small share of global GHG emissions, it remains highly vulnerable to the effects of climate change. Historically, developed countries have accounted for the largest share of global emissions, while developing countries increasingly bear a disproportionate share of the costs. This raises a critical question: should countries that have contributed relatively little to global emissions be expected to finance the impacts of climate change through additional borrowing?
Climate finance must be reconsidered on the basis of historical responsibility, economic capacity and climate vulnerability. Grants, concessional financing and affordable technology transfers should therefore play a central role in international climate cooperation rather than adding to the debt burdens of vulnerable economies.
However, Pakistan cannot rely solely on government budgets or international assistance. Equally important is the mobilisation of private capital, particularly in renewable energy, industrial decarbonisation, energy efficiency and sustainable infrastructure. Financial instruments such as green bonds, blended finance and climate-aligned public-private partnerships (PPPs) can help increase investment. Nevertheless, private financing has its limitations.
Adaptation projects, particularly those focused on ecosystem restoration and community resilience, generate significant social benefits but often offer relatively limited commercial returns. Such projects therefore require greater public-sector investment and international concessional support. The challenge is to select financing instruments that reflect the economic and social characteristics of different climate investments.
Climate finance must also strengthen Pakistan's economic competitiveness. International markets are placing increasing pressure on industries to adopt cleaner technologies and improve energy efficiency in order to meet emerging carbon-related requirements. Industrial decarbonisation is becoming a necessity for export-oriented industries rather than simply an environmental obligation. However, without affordable financing, technological innovation and access to cleaner energy, this transition could increase production costs and undermine competitiveness.
Targeted green financing, technology-transfer partnerships and appropriate incentives can therefore help industries, particularly small and medium-sized enterprises (SMEs), reduce emissions without compromising job creation or economic growth.
The equitable distribution of climate finance is another major challenge. Mobilising billions of dollars will have little impact if the funds do not reach those most exposed to climate risks. Climate finance decisions must be guided by fairness and equity. Equality implies an even distribution of resources, whereas equity recognises that communities facing greater vulnerability and having fewer resources require additional support.
Small farmers, low-income households, flood-prone communities and economically disadvantaged regions should therefore receive priority. Climate finance is not simply about the volume of money mobilised; it is also about its effectiveness in reducing vulnerability and creating sustainable economic opportunities.
There is an urgent need for a more predictable and development-friendly climate-financing framework that can mobilise domestic resources, secure grants and highly concessional loans, and encourage responsible private investment in Pakistan.
Climate investments should prioritise resilience, industrial transition, economic productivity and social equity rather than contributing to the accumulation of unsustainable debt.
At the international level, developed economies must translate their climate commitments into tangible and affordable financial support. At the national level, investment decisions should focus on generating economic, environmental and social value.
Ultimately, Pakistan's climate future is not simply a question of who has the financial resources and who does not. It is also about whether those resources are distributed fairly and whether the communities that need them most actually benefit.
Climate finance must become an instrument of justice, resilience and sustainable economic transformation, rather than another source of financial pressure on those who are already vulnerable.
