Climate funding
PAKISTAN is in need of a staggering $340bn over the next seven years to tackle climate change and development challenges. This grim revelation came during an address by caretaker Finance Minister Dr Shamshad Akhtar at the second Pakistan Climate Conference. Dr Akhtar laid bare a critical conundrum — an intricate trade-off between raising climate finance and propelling development. The sum is equivalent to 10pc of Pakistan’s cumulative GDP during the same period. This is despite our relatively modest contribution to global greenhouse gas emissions (less than 1pc). At the heart of Pakistan’s climate aspirations are its commitments under the Paris Agreement, embodied in its Nationally Determined Contributions. These commitments are accompanied by an imposing price tag, with estimates soaring to nearly $200bn by 2030. However, the current financial landscape falls significantly short of these requirements, with a mere $39bn designated from public finance and an additional $9bn from public-private partnerships earmarked over the next 10 years. Bridging this substantial financial gap is imperative to fulfil Pakistan’s climate obligations.
To navigate this financial challenge, Pakistan has embarked on green finance initiatives, including the issuance of dollar-denominated green Eurobonds by Wapda. However, concerns over the high cost of international bond issuance and issues with the sovereign, have prompted a strategic shift. Dr Akhtar has championed an alternative route, favouring the Pakistan Stock Exchange as the platform for raising the necessary funds. Legal amendments have already paved the way, with government securities and diverse financial instruments, including Islamic and green finance, poised to take centre stage. Notably, an upcoming Sukuk issue will bear a ‘green element’, further aligning financial objectives with environmental goals. As Pakistan prepares for the forthcoming COP28 in the UAE, the nation is poised not only to emphasise the urgency of climate action but also to demand the realisation of the $100bn annual climate pledge. This commitment carries immense importance in Pakistan’s pursuit of sustainable development. Additionally, Pakistan will vigorously advocate for the establishment of a ‘loss and damage’ fund. This call recognises the unique climate challenges the country confronts — from the ominous spectre of glacial melting and frequent natural disasters to the relentless onslaught of heatwaves and the encroaching menace of sea-level rise.
Dr Akhtar’s sobering assessment calls for innovative solutions, unwavering international cooperation, and an indomitable commitment to securing the funds necessary to confront climate and development challenges in unison. In the words of UN Secretary General António Guterres, “As the glaciers retreat, we cannot. We must move forward with climate action”. The world must heed this urgent call, recognising that the challenges facing Pakistan are not isolated but emblematic of the shared responsibility to combat climate change and foster a sustainable future for all.
Published in Dawn, November 4th, 2023
DAWN
Editorial
Editorial
Published November 4, 2023
PAKISTAN is in need of a staggering $340bn over the next seven years to tackle climate change and development challenges. This grim revelation came during an address by caretaker Finance Minister Dr Shamshad Akhtar at the second Pakistan Climate Conference. Dr Akhtar laid bare a critical conundrum — an intricate trade-off between raising climate finance and propelling development. The sum is equivalent to 10pc of Pakistan’s cumulative GDP during the same period. This is despite our relatively modest contribution to global greenhouse gas emissions (less than 1pc). At the heart of Pakistan’s climate aspirations are its commitments under the Paris Agreement, embodied in its Nationally Determined Contributions. These commitments are accompanied by an imposing price tag, with estimates soaring to nearly $200bn by 2030. However, the current financial landscape falls significantly short of these requirements, with a mere $39bn designated from public finance and an additional $9bn from public-private partnerships earmarked over the next 10 years. Bridging this substantial financial gap is imperative to fulfil Pakistan’s climate obligations.
To navigate this financial challenge, Pakistan has embarked on green finance initiatives, including the issuance of dollar-denominated green Eurobonds by Wapda. However, concerns over the high cost of international bond issuance and issues with the sovereign, have prompted a strategic shift. Dr Akhtar has championed an alternative route, favouring the Pakistan Stock Exchange as the platform for raising the necessary funds. Legal amendments have already paved the way, with government securities and diverse financial instruments, including Islamic and green finance, poised to take centre stage. Notably, an upcoming Sukuk issue will bear a ‘green element’, further aligning financial objectives with environmental goals. As Pakistan prepares for the forthcoming COP28 in the UAE, the nation is poised not only to emphasise the urgency of climate action but also to demand the realisation of the $100bn annual climate pledge. This commitment carries immense importance in Pakistan’s pursuit of sustainable development. Additionally, Pakistan will vigorously advocate for the establishment of a ‘loss and damage’ fund. This call recognises the unique climate challenges the country confronts — from the ominous spectre of glacial melting and frequent natural disasters to the relentless onslaught of heatwaves and the encroaching menace of sea-level rise.
Dr Akhtar’s sobering assessment calls for innovative solutions, unwavering international cooperation, and an indomitable commitment to securing the funds necessary to confront climate and development challenges in unison. In the words of UN Secretary General António Guterres, “As the glaciers retreat, we cannot. We must move forward with climate action”. The world must heed this urgent call, recognising that the challenges facing Pakistan are not isolated but emblematic of the shared responsibility to combat climate change and foster a sustainable future for all.
Published in Dawn, November 4th, 2023
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