Urgent Climate Crisis: Pakistan’s First Climate Budget Targets Climate Change Head-On

Climate Budget is the latest term dominating policy discussions in Pakistan — and for good reason. With the country recently ranked as the fifth most vulnerable nation to climate change, the need for climate-focused economic planning has never been more urgent. As heatwaves engulf Punjab and wildfires rage in Khyber Pakhtunkhwa, Pakistan’s government is taking its first bold step with the announcement of its first-ever climate-focused federal budget for FY2025-26.

This transformative move was revealed at a Pre-Budget Dialogue hosted by the Sustainable Development Policy Institute (SDPI), where the Minister of State for Climate Change and Environmental Coordination detailed how 30% of all public development projects will undergo a Climate Public Investment Management Assessment (CPIMA) — a groundbreaking shift toward integrating climate resilience into fiscal planning.

Climate Public Investment Management Assessment (CPIMA)

The CPIMA framework, endorsed by the International Monetary Fund (IMF), evaluates a country’s ability to manage climate-relevant infrastructure. This tool assesses projects through five key pillars:

• Planning
• Government Coordination
• Appraisal and Selection
• Budgeting and Portfolio Management
• Risk Management

Incorporating CPIMA into the climate budget could unlock international climate financing and improve transparency in infrastructure investments. As IMF documentation notes, such assessments are critical in guiding nations toward sustainable development while fortifying their resilience to climate-related shocks.

Climate Budget vs. Development Priorities

Despite its ambitious scope, many fear the climate budget could become yet another bureaucratic hurdle for much-needed development. This concern is not unfounded. Earlier this month, the government revealed in parliament that development spending remains stagnant, even as revenues increase. A massive 65% of current government expenditure is consumed by debt servicing, leaving little room for capital projects.

The challenge now is to balance climate responsibility with economic growth. While Pakistan urgently requires infrastructure upgrades, roads, dams, and urban development, it must also ensure that these projects are climate-resilient. The climate budget, if executed wisely, could serve both needs — but only if it avoids becoming a “check-the-box” exercise.

Environmental Challenges Worsening in Pakistan

The data and events paint a grim picture. Pakistan’s climate crisis is already unfolding:

• Heatwaves are beginning earlier, extending longer, and reaching deadly temperatures.
• Glacial melt in the northern regions is accelerating, threatening downstream flooding and water scarcity.
• Monsoon rains, increasingly erratic, bring devastating floods, waterborne diseases, and displacement.
• Winter smog and air pollution continue to choke major cities, with Lahore consistently ranking among the most polluted cities globally.

These realities make Pakistan’s ranking as the fifth most vulnerable country to climate change even more alarming. The Indus Waters Treaty’s suspension by India, energy sector inefficiencies, and circular debt have only deepened the crisis.

Hopes, Concerns, and the Way Forward

The announcement of a climate budget and implementation of the CPIMA are bold steps — but they must not be performative. For Pakistan’s policy to truly be impactful, it must:

• Ensure inclusivity: Development projects across all provinces must benefit from CPIMA, not just high-profile urban initiatives.
• Avoid red tape: Climate assessments should be streamlined and should facilitate, not obstruct, responsible development.
• Secure climate financing: International donors are more likely to fund infrastructure aligned with CPIMA and global climate standards.
• Build public awareness: The government should launch nationwide awareness campaigns linking climate action to everyday challenges like electricity, clean water, and food security.

To maximize success, Pakistan must also integrate the climate budget with existing frameworks like the National Adaptation Plan (NAP) and provincial climate policies. Partnerships with organizations such as UNDP, World Bank, and ADB should be strengthened for technical and financial support.

Conclusion

Pakistan’s climate budget represents a historic opportunity to rewrite the country’s development narrative. As one of the most climate-vulnerable countries in the world, Pakistan cannot afford to treat climate change as a side concern. The integration of CPIMA into economic planning, if implemented effectively and inclusively, can transform Pakistan into a model for climate-conscious development.

However, the success of this policy hinges on real action. This must not be about appeasing international donors or riding the wave of global environmentalism. The climate budget must prioritize people, planet, and prosperity — equally.

The world is watching. And more importantly, Pakistanis are feeling the heat — quite literally.

Internal Links

• Pakistan’s National Adaptation Plan for Climate Change
• Heatwave in Punjab: Early School Closures
• Forest Fires in Khyber Pakhtunkhwa

External Links

• IMF’s CPIMA Framework
• SDPI Pre-Budget Dialogue
• Pakistan Vulnerability Ranking – Germanwatch