Pakistan Demands Urgent Equitable Climate Finance: 5 Powerful Warnings at UN Environment Forum

Equitable climate finance took center stage at the United Nations Environment Assembly (UNEA) in Nairobi as Pakistan delivered a powerful warning on the deepening risks environmental degradation poses to the global financial system. Federal Minister for Climate Change and Environmental Coordination Dr Musadik Malik urged world leaders to move beyond rhetoric and make climate finance more accessible, fair, and responsive to the needs of climate-vulnerable nations.

Speaking at a high-level leadership dialogue titled “The Bottom Line: Why Tackling Environmental Degradation Is Critical to the Future of the Global Financial System,” Dr Malik emphasized that ignoring environmental risks is no longer just an ecological failure—it is a financial one.

Pakistan’s Strong Call at the UN Environment Assembly

The UNEA side event brought together global policymakers, financial regulators, development banks, and sustainability experts to explore how environmental degradation threatens economic stability.

Dr Malik stressed that equitable climate finance must become a core pillar of global financial architecture, particularly for developing countries like Pakistan that face escalating climate impacts despite contributing minimally to global emissions.

“Environmental degradation is no longer a distant risk—it is a present danger to financial stability,” the minister warned.

The dialogue underscored the urgent need to align financial systems with environmental realities.

Environmental Degradation as a Systemic Financial Risk

Experts at the forum agreed that climate change, biodiversity loss, land degradation, pollution, and waste mismanagement are creating systemic financial risks. These include:

• Supply chain disruptions
• Insurance market instability
• Rising public debt
• Increased disaster recovery costs

Unchecked environmental damage can trigger macroeconomic shocks, particularly in emerging economies with limited fiscal space.

Climate Injustice: Countries Paying the Highest Price

A central theme of Pakistan’s intervention was climate injustice. Dr Malik highlighted that nations contributing the least to greenhouse gas emissions are often the ones suffering the most devastating impacts.

Pakistan, which contributes less than 1% to global emissions, has endured:

• Catastrophic floods
• Record-breaking heatwaves
• Glacier lake outburst floods
• Agricultural losses and food insecurity

These realities make equitable climate finance not a favor—but a moral and economic obligation.

Mobilising Private Finance for Climate Stability

Participants emphasized that public funding alone cannot bridge the climate finance gap. Governments must create enabling environments that steer private capital toward sustainable investments.

Key strategies discussed included:

• Green bonds and sustainability-linked finance
• Climate risk disclosure standards
• Incentives for climate-resilient infrastructure
• De-risking mechanisms for developing economies

Dr Malik stressed that private sector engagement must be responsible, transparent, and aligned with national climate priorities.

Policy Coherence and Regulatory Reforms

One of the strongest messages from the dialogue was the need for whole-of-government approaches. Fragmented policies weaken climate finance effectiveness.

Experts called for:

• Integrated fiscal, monetary, and climate policies
• Strong environmental regulations
• Climate stress testing in financial institutions
• Mandatory ESG disclosures

These reforms can help ensure that equitable climate finance strengthens both environmental outcomes and financial stability.

Pakistan’s Climate Vulnerability and Financing Gap

Pakistan faces a massive climate financing gap, particularly in:

• Flood-resilient infrastructure
• Water resource management
• Climate-smart agriculture
• Urban resilience and heat mitigation

Despite international pledges, actual disbursements remain slow and inaccessible. Complex procedures, high interest rates, and limited grant-based financing continue to disadvantage vulnerable countries.

Dr Malik urged international financial institutions to reform climate funding mechanisms to reflect ground realities.

Role of Global Cooperation and Responsible Investment

The minister underscored that global cooperation is essential to ensuring financial and environmental stability reinforce each other.

He called for:

• Reforming multilateral development banks
• Scaling concessional finance
• Strengthening South–South cooperation
• Enhancing transparency in private investments

Without coordinated action, climate risks could spiral into broader economic crises.

Aligning Financial Flows with Sustainability Goals

Pakistan reaffirmed its commitment to climate-resilient development and aligning financial flows with global sustainability goals, including the Paris Agreement and Sustainable Development Goals (SDGs).

Dr Malik emphasized that finance must support adaptation, not just mitigation—especially for frontline states.

Way Forward: From Commitments to Action

Despite years of pledges, the global climate finance target of $100 billion annually remains unmet. Pakistan urged the international community to move from promises to delivery.

Key priorities include:

• Faster access to funds
• Increased grant-based finance
• Loss and Damage operationalisation
• Risk-sharing mechanisms for vulnerable countries

Only then can equitable climate finance become a reality rather than a slogan.

Conclusion

Pakistan’s forceful intervention at the UN Environment Forum sent a clear message: environmental degradation threatens not only ecosystems but the foundations of the global financial system. Without equitable climate finance, vulnerable countries will remain trapped in cycles of disaster, debt, and underdevelopment.

Dr Musadik Malik’s call reflects a growing global consensus—financial stability and environmental sustainability are inseparable. The time for decisive, fair, and inclusive climate financing is now.