Pakistan Bulletin
An up-to-date and informed analyses of key issues of Pakistan.
Strategic Fiscal Response to Climate Change Challenges
June 2024
Pakistan’s fiscal strategy for the year has shifted in response to climate change, focusing on significant budget allocations and policy changes in the 2024-2025 federal budget.
Pakistan’s vulnerability to climate change has been evident through the extreme weather events it has been experiencing, in addition to recurring heavy rainfall, melting glaciers, and floods. This has not only led to economic losses but also loss of countless lives. The country grapples with the impacts of climate change not only in the previously known and affected regions of Khyber Pakhtunkhwa and Balochistan but also in the urbanized areas of Sindh and Punjab. According to recent reports, over 450 people have died in the ongoing heat wave in the city of Karachi alone in Pakistan. Thus, the importance of integrating climate change policies into the national fiscal policies for the country’s socioeconomic progress becomes evident. The federal budget, serving as a foundation for resource allocation and economic planning, plays a pivotal role in addressing these environmental challenges.
The federal budget of Pakistan for 2024-2025 has sought improved funding for the Ministry of Climate Change. What previously was a budget of Rs. 1,226 million for environment protection has dramatically been increased to Rs. 7,252 million in the year 2024-2025. According to the National Climate Change Policy (NCCP), the environmental protection measures target marine ecosystems with a special focus on the mangrove forests. Projects such as the Blue Carbon Project estimate the carbon stock in mangroves and the coastal ecosystems. Furthermore, by employing technologies to reduce pollution and its impact on the environment, the pollution abatement budget sees a significant change with its allocation rising from Rs.200 million to Rs. 6,290 million. Not only through technology, but natural barriers such as mangrove plantations are also being encouraged to carry out to protect against cyclones. This indicates an effort to activate tools to manage environmental hazards and to ultimately reduce pollution and its consequences.
The federal budget of Pakistan for 2024-2025 has sought improved funding for the Ministry of Climate Change.
Similarly, there is a visible increase in the funding for climate adaptation and mitigation efforts, with both their budgets increasing. The budget for the former has risen from Rs. 38,060 million to Rs. 55,047 million. This reflects the encouragement to adapt and counter the adverse climate impacts. Moreover, mitigation efforts which are crucial to combating global warming and to reduce the emission of greenhouse gasses, also received a boost from Rs. 144,839 million to Rs. 225,298 million. Along with climate adaptation and mitigation, additional funds of Rs. 37,278 are allocated to supported areas.
Another important allocation is for disaster preparedness which has been elevated from Rs. 34,584 million to Rs. 53,745 million. This is crucial for enhancing the country’s readiness in facing natural disasters, which are becoming more frequent and severe due to climate change, especially since the 2022 floods and the emergent need to counter the severe biodiversity loss faced. Funding for disaster response and recovery has also seen an increase, possibly with the intention that Pakistan can effectively manage and recover from environmental and climate-induced disasters.
In addition to budgetary allocations, the fiscal year has also witnessed a few strategic policy shifts focusing on ecological betterment. Prime Minister Shehbaz Sharif’s administration encouraged all provinces to ban the manufacturing, distribution, and sale of plastic bags, a policy that has been implemented in Punjab. This policy was aimed to not only counter pollution and control waste management but to also encourage the use of sustainable materials such as bags made out of cotton and paper. Moreover, the main project that has been funded Rs.15.62 billion for climate change mitigation is the Green Pakistan initiative. According to the NCCP, this project, also known as the Ten Billion Tree Tsunami, aims to not only promote biodiversity but to combat deforestation by addressing the concrete effects of climate change. This nationwide afforestation effort highlights the hopes of ecological restoration.
Initiatives to combat climate change have also relied heavily on raising public awareness. Campaigns to encourage the preservation and sustainable use of water resources are included in the government budget; these initiatives involve collaboration with various stakeholders. Legislative measures encourage household and industrial waste management procedures to combat environmental degradation. There is also a groundwater regulatory framework with laws and regulations in place for effective management of water resources.
There is a visible increase in the funding for climate adaptation and mitigation efforts in the next year’s financial outlay.
The government budget for 2024–2025 represents a significant change in the direction of addressing Pakistan’s environmental issues. The substantial increase in financing for climate change programs demonstrates the government’s commitment to addressing climate change and safeguarding biodiversity.
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