• From penalising green technology to sidelining adaptation, the government’s spending choices seem to contradict its own climate commitments
• Without new budget pillars, proper risk screening, end to ‘green taxes’, country’s fiscal plans will only deepen climate vulnerability
FOR a country whose economic survival is tied to shoring up its climate-resilience, the government’s budgetary allocations have failed to reflect this pressing concern.
Besides measures that discourage the adoption of solar energy and electric vehicles, the government continues to invest in mega-hydro projects despite adverse ecological impacts; proposes ‘false solutions’ such as carbon capture instead of reducing reliance on fossil fuels; and leaves the adaptation agenda by the wayside despite recurring floods.
The upcoming budget, according to officials from the climate change ministry, features at least eight proposed projects focused on climate resilience, afforestation, green growth, biodiversity conservation, and environmental monitoring under the Public Sector Development Programme — with a total allocation of Rs2.78 billion.
However, experts have repeatedly criticised the government’s seemingly “anti-climate policies”, particularly attempts to tax renewable energy, which they believe will undermine the climate-smart policy direction spurred by recent IMF and World Bank programs.
The IMF’s Resilience and Sustainability Facility (RSF) requires Pakistan to revise its public investment framework so that at least 30 per cent of the project appraisal weighting for infrastructure projects reflects climate change adaptation and mitigation criteria.
In the outgoing fiscal year, at least Rs86bn worth of PSDP projects were tagged as ‘climate adaptation’, and measures worth over Rs600bn classified as ‘climate mitigation’.
“This year, these numbers will increase. However, the true essence of tagging must be followed — it should be inclusive, not just a box-ticking activity,” said SDPI Research Fellow Dr Khalid Waleed.
Pakistan is no stranger to climate-induced disasters. From 1992 to 2021, it cost the country $29.3 billion, according to a State Bank of Pakistan report on climate change’s economic impact. The 2022 monsoon floods alone cost at least $28 billion. By 2050, Pakistan stands to lose up to 6.5 per cent of its GDP, with agriculture and industry bearing the brunt.
Both the SBP and experts agree the country is unprepared unless it climate-proofs its fiscal plans. The approach, they stress, must be rooted in science, putting people at the centre and promoting climate-smart development models.
All the tools
Ali Tauqeer Sheikh, an Islamabad-based climate expert and former climate change advisor at the Planning Commission, argues that while the government has all the tools at its disposal, it doesn’t seem interested in using them.
The government formally notified Pakistan’s Handbook on Climate Risk Screening for Policy Planning in June 2024. Yet, in the financial year that followed, none of the around 57 approved projects underwent “necessary risk screening, in violation of the approved policy”, said Mr Sheikh, who helped develop the handbook. “The budget exercise every year is basically the dialogue of the deaf,” he said, describing the process as devoid of climate-smart proposals.
Failing to climate-proof PSDP projects “increases the cost of climate action and makes populations more vulnerable”, he warned.
Dr Fahad Saeed, who runs the Weather and Climate Services think tank in Islamabad, regrets that scientific evidence is missing from Pakistan’s climate policymaking. The government allocates funds for climate action before even deciding whether they will be spent on mitigation, adaptation, or loss and damage. Without a cost-benefit analysis rooted in evidence, “decisions are not embedded in science,” he said, calling for an audit of climate-earmarked budgetary allocations.
Climate-tagging development
Last year, the government touted the budget as “climate-focused” and introduced “climate budget tagging” under the RSF to classify climate-sensitive expenditures in line with the National Climate Change Policy.
Ammara Aslam at the Policy Research Institute for Equitable Development said that while the associated conditionalities and mandatory climate screening are “present on paper, climate-proofing the budget would require a robust implementation framework”. Every department and sector, she argued, needs to transition “from broad, unallocated budgetary statements to funding specific, verifiable, climate-resilient infrastructure projects”.
Dr Shafqat Munir, who leads the resilience programme at SDPI, called tagging “a good step” but insufficient in the current scenario.
“IMF and World Bank programmes are helping to open the door, but they are not yet transforming Pakistan’s fiscal model.” The RSF, he noted, “is still too reform-heavy and financing-light. It can improve systems, but it cannot close Pakistan’s adaptation financing gap”.
New pillar
Dr Munir argued that climate change should be embedded as a standalone pillar in development planning, with new budget heads for adaptation, climate-risk financing, and anticipatory action.
“Let’s move beyond budget tagging,” he said, calling for poverty-proof and climate-risk-sensitive allocations for 2026-27. His five-point priority agenda: protection of people, livelihoods, infrastructure, fiscal stability, and growth — in that order.
Experts also urged the government to promote rather than tax green technologies. “Taxing green technologies does not do any service to Pakistan’s renewable energy goals,” said Ms Aslam, calling for existing and proposed duties on solar panels, battery storage, and related components to be scrapped.
Mr Sheikh agreed, warning such measures could undermine Pakistan’s climate-smart policy direction entirely.
Published in Dawn, June 5th, 2026
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