Key policies and governance approach

In November 2022, Pakistan’s Minister for Planning, Development and Special Initiatives, Ahsan Iqbal, confirmed that promoting green investment in Pakistan was a top priority of the government in response to the country’s growing environmental issues [10].

Pakistan’s overarching economic and social development strategy is set out in the “Vision 2025”, which outlines the need for a more people-centric development planning, targeting the poor and marginalised population and providing access to essential public services. Pakistan's aspiration is to become a middle-income country and provide decent jobs to its expanding labor force while increasing the competitiveness of its economy. The country’s 12th five-year plan is to focus on: (i) balanced and equitable regional development; (ii) sustainable, inclusive, and export-led growth; (iii) improved governance; (iv) human resource development, social protection, and poverty alleviation; (v) food, energy, and water security; (vi) local, regional, and global connectivity; and (vii) a green and knowledge-based economy [1].

Pakistan's updated 2021 NDC represents a paradigm shift toward an inclusive, innovative, whole-of-economy approach to tackling climate change challenges. The high-priority adaptation actions include (i) the Recharge Pakistan Program (reducing flood risk and enhancing water recharge at six sites in the Indus Basin, building the resilience of 10 million people, and strengthening vulnerable ecosystems) and (ii) expanding protected areas from 12% of Pakistan's geographical area to 15% by 2023 [11].

Further, Pakistan has committed to unconditionally reducing its overall emissions by 15% by 2030, relative to its projected emissions. It has also committed to reducing emissions by an additional 35% conditional on the availability of climate finance. High-priority mitigation measures include (i) expanding renewable energy (RE); (ii) greening transportation (30% of all new vehicles sold in Pakistan in various categories must be Electric Vehicles by 2030); and (iii) reducing dependence on coal (there is a moratorium on new coal power plants from 2020 onward, a ban on imported coal, the shelving of plans for two new coal-fired power plants in favor of hydro-electric power, and a focus on coal gasification and liquefaction for indigenous coal). The NDC also commits the government to continue investments in nature-based solutions (NBSs) such as the Ten Billion Tree Tsunami Program (TBTTP), a four-year project that will have the benefits of natural capital restoration, carbon sequestration, and livelihood improvements, especially for poor households [11].

In support of Pakistan’s transition to clean energy, the country has also developed the Alternate Renewable Energy (ARE) Policy and the National Electric Vehicle Policy, which targets a 30% shift to electric by 2030. The ARE Policy aims to create a conducive environment for sustainable growth of the ARE sector in Pakistan and intends to have at least 20% of its generation capacity through ARE technologies by 2025 and 30% by 2030 [12].

Successes and remaining challenges

Provinces play a pivotal role in legislative transformation towards better environmental governance and green growth in Pakistan. In 2010, the 18th Amendment to the Constitution devolved several subjects to the provinces, particularly concerning the environment [13]. However, this devolution process is still very much a work in progress. For example, there has been no effective devolution of responsibilities nor budgets below the provincial level. This continues to pose a significant constraint on the effective management and development of cities. It has also left rural villages without either the resources or the governance needed for critical investments in municipal services to improve the lives of the country’s vulnerable rural populations [11].

Pakistan also faces several fiscal challenges to achieving green growth. Provinces rely mainly on federal transfers for their budgets, with little revenue-raising effort or capacity at the provincial level. As a result, provinces lack the budgets that are needed to deliver on their ambitious mandates. The mechanisms and incentives to induce cooperation and joint action are weak, across sectors within provinces as well as between the federal and provincial levels. Additionally, there is often a lack of coherence between federal and provincial spending plans. This lack of policy and financial coordination significantly constrains Pakistan's ability to operate as an integrated economy. Due to this, there are also challenges in managing transboundary issues, such as environmental and water resource management. Institutional and capacity challenges also limit policy formulation and implementation. These constraints are more binding at the provincial level and there has been virtually no investment in building capacity below the provincial level. Taken together, these structural impediments severely undermine the country's ability to design and implement the kind of sustainable green-growth policies that are needed for Pakistan to adopt a coordinated response to climate threats and environmental degradation, including addressing important transboundary issues [11].

However, in recent years, encouraging examples of provincial action exist under green-growth programs and the national afforestation program. Such examples include the Khyber Pakhtunkhwa's Green Growth Initiative and Punjab's Punjab Green Development Program. Several provinces have also made significant financial commitments to climate action within a green-growth approach. For example, Khyber Pakhtunkhwa (KP) allocated close to 9.7% of its 2014–2015 expenditure and 8.9% of its 2015–2016 expenditure to climate-related activities. Punjab allocated 9.3% of its 2014–2015 expenditure and 13.7% of its 2015–2016 expenditure to climate change-related activities [11].

Initiatives and Development Plans

In August 2022, Pakistan signed the Green Framework Engagement Agreement with Denmark, underpinned by the mutual interests, high ambitions and shared visions of the two countries in a green and sustainable future for the planet including through private sector engagement and public-private partnerships. The Green Framework Engagement will mark the first step in creating stronger collaboration in areas such as climate change mitigation and adaptation, and a just and sustainable green transition. Pakistan is keen to benefit from Danish expertise to build its capacity for dealing with the repercussions of Climate Change. Further, Denmark is already assisting Pakistan under its Danish Energy Transition Initiative (DETI), through which technical assistance is being provided to the Ministry of Energy in the areas of planning of long-term energy scenarios and integration of renewable energy into the existing grid [14].

A Team Europe Initiative (TEI) will also support Pakistan in its green transition, through sustainable natural resource-based green job creation. Under this initiative, the EU and Member States will support actions to ensure the availability of Pakistan’s skilled workforce, secure access to finance, and strengthen climate mitigation and adaptation to achieve inclusive and green development [1].

In response to the pandemic, Pakistan launched its Green Economic Stimulus in 2020, which aims at promoting environmental activities that have an economic impact. The Stimulus focuses on creating livelihood opportunities for daily wagers in the forestry and waste management sectors through their involvement in mass plantations, setting up of nurseries, protecting natural forests, and the promotion of honey, fruits and olive plantation in Pakistan [12].  

Pakistan has also launched the Eco-System Restoration Initiative (ESRI) to attain Land Degradation Neutrality and facilitate Pakistan’s transition towards an environmentally resilient Pakistan by mainstreaming adaptation and mitigation through ecologically targeted initiatives covering afforestation, biodiversity conservation, and enabling and enhancing the policy environment consistent with the objectives outlined in Pakistan's Nationally Determined Contribution (NDC). As part of this initiative, the country seeks to establish an independent, transparent and comprehensive financial mechanism called “Eco-system Restoration Fund (ESRF)” to finance the projects and programmes under the initiative [12].  

Additionally, the Pakistan government has also approved the National Solar Energy Initiative to produce 10,000 megawatts (MW) of electricity through solar energy projects over the next months. The initiative aims to reduce the import bill of costly diesel and furnace oil. It can also be counted as a major step on the path towards a green transition [15].