Transformational Climate Budget Pakistan: A Bold Leap Toward a Greener Economy

Climate Budget Pakistan is set to become a reality in fiscal year 2025-26, marking a powerful shift in national economic strategy. For the first time in its history, Pakistan will subject 30% of all Public Sector Development Programme (PSDP) projects to a Climate Public Investment Management Assessment (CPIMA).

This groundbreaking announcement was made by Dr. Shezra Mansab Ali Khan Kharal, Minister of State for Climate Change and Environmental Coordination, at a Pre-Budget Dialogue held in Islamabad.

Climate Budget Pakistan – A National Imperative

The focus on a climate-centric budget underscores Pakistan’s urgent need to align financial planning with environmental priorities. Pakistan, a frontline state in the global climate crisis, suffers devastating consequences including floods, droughts, and rising temperatures.

Dr. Shezra noted that the upcoming Climate Budget Pakistan will create frameworks that integrate environmental assessments into public investment, enabling a more climate-resilient economy.

Key Highlights from the Pre-Budget Dialogue

The event titled “Rethinking Economic Policy for a Just Energy Transition” was organized by the Sustainable Development Policy Institute (SDPI) in partnership with the Policy Research Institute for Equitable Development (PRIED). Thought leaders, policymakers, and economists outlined strategic directions for a greener future.

Key Statements:

• Dr. Shezra Kharal: Highlighted the interplay between climate risk, India’s Indus Water Treaty suspension, and IMF austerity.
• Dr. Abid Qaiyum Suleri (SDPI): Advocated for hybrid/electric vehicle promotion via second-hand market liberalization.
• Shahid Hafeez Kardar: Stressed performance-based incentives and green bonds for financing.
• Dr. Khaqqan Najee: Called for a unified national energy regulator.
• Afia Malik: Warned about regressive impacts of petroleum levies on the poor.

Balochistan’s Energy Crisis: Equity and Justice

Sanaullah Baloch, MPA from Balochistan, presented a powerful critique of the energy resource distribution. He stated that Balochistan, despite powering Pakistan’s industrial revolution with its natural gas, continues to suffer from severe energy poverty.

“Only 20% of Balochistan has grid access, compared to Punjab’s 95%,” he lamented.

He called for equitable energy access as a fundamental requirement for development, stressing that any green transition must not repeat past injustices.

Economic Opportunities in Green Transition

The Climate Budget Pakistan is not just a climate imperative—it’s an economic opportunity. Experts highlighted multiple growth areas, including:

• Renewable energy development to reduce circular debt.
• Sustainable agriculture (Smart Agri-Tech).
• Electric and hybrid vehicle expansion.
• Value-added textile production with green technologies.

Khalid Mansoor, former SAPM on CPEC Affairs:

Emphasized the evolving role of CPEC in advancing smart agriculture and green energy.

“The next phase of CPEC must align with Pakistan’s green agenda,” he remarked.

Urgent Policy Shifts for Climate Resilience

Shift from Subsidies to Incentives:

Shahid Kardar called for ending blanket subsidies in favor of performance-based climate investments.

Build Regulatory Capacity:

Dr. Najee proposed establishing a strong energy regulatory authority for climate-smart governance.

Fair Taxation:

Afia Malik recommended carbon taxes targeting emissions instead of placing undue burdens on the poor through petroleum levies.

What CPIMA Means for Development Projects

The Climate Public Investment Management Assessment (CPIMA) will ensure that 30% of PSDP-funded projects undergo rigorous climate screening. This methodology allows policymakers to:

• Identify climate risks early.
• Allocate funding to high-impact sustainable projects.
• Avoid costly climate-blind investments.

This shift ensures Pakistan does not just adapt to climate change, but actively mitigates its causes.

Conclusion: A Just and Sustainable Future

With its first-ever Climate Budget Pakistan, the country is on the brink of an economic transformation. This budget is more than a fiscal document—it is a blueprint for climate justice, resource equity, and sustainable growth.

By embedding environmental criteria into national budgeting, Pakistan can lead the way in climate adaptation while fostering inclusive development.

External Links

• SDPI Official Website
• IMF Austerity Programs Explained
• CPEC Official Portal

Internal Links Suggestions

• Pakistan’s Renewable Energy Potential
• Impact of Climate Change on Pakistan
• How CPEC Can Drive Sustainability