Daily Times

The COP29 is currently being held in Baku, Azerbaijan where the world leaders have come together to measure progress and negotiate the best ways to address climate change. There are now 198 Parties (197 countries plus the European Union) to the Convention, constituting near-universal membership. At COP29, the key focus is on the integral role of climate finance.

Pakistan has once again highlighted its significant vulnerability to the effects of climate change and emphasized the necessity for a restructured global climate finance framework. Prime Minister, Mr Shahbaz Sharif advocated climate finance approaches that focus on nations experiencing substantial climate threats, noting that Pakistan has suffered economic damages surpassing US $30 billion due to recent climate-related calamities, such as the catastrophic floods of 2022.

He called for enhanced financial mechanisms to assist countries like Pakistan in their efforts toward adaptation, disaster readiness, and sustainable development projects. Pakistan has stressed that without climate justice there can be no real resilience.

Pakistan’s stance during COP29 is correct to a certain extent since like all other forms of justice, ‘Climate Justice Delayed is Climate Justice Denied’. However, in the case of Pakistan’s climate change challenges, should we be looking for climate justice only from the developed nations or do we need to get our own house in order before seeking accountability from the rest of the world? Pakistan is facing unprecedented levels of smog and the majority of reasons behind this climate change catastrophe are of our own making. Unsustainable agricultural practices, polluting industrial operations and hazardous vehicular emissions are just some of the factors contributing to Lahore’s continuous high ranking in the list of most polluted cities.

Pakistan’s updated Nationally Determined Contributions (NDC) demonstrate a significantly increased level of ambition in comparison to its initial commitments made following the Paris Agreement. The NDC establishes a cumulative conditional objective of achieving a total reduction of 50 percent in projected emissions from the year 2015 to 2030.

This target includes a 15 percent reduction to be accomplished through the country’s resources, while an additional 35 percent reduction is contingent upon receiving international financial assistance. Furthermore, Pakistan has also unveiled the National Climate Finance Strategy (NCFS) on the sidelines of COP29, outlining Pakistan’s roadmap to access both international and domestic finance to address climate-related issues.

According to the government, Pakistan currently faces a climate-financing gap of approx. US $348 billion is required to meet the government’s climate-resilient and low-carbon development goals.

All the stakeholders talk about the large-scale climate-financing gap existing in Pakistan. Nevertheless, there exists a limited understanding of the specific climate finance deficiencies within the country, the areas where this funding is most critical, and the strategies through which Pakistan can secure the US $348 billion required by 2030.

According to a report by UK International Development, a total of US $4 billion has been allocated to climate mitigation and adaptation initiatives in Pakistan, encompassing contributions from both domestic and international investors. It is estimated that domestic sources accounted for 16 percent of the total climate finance, while international entities contributed 84 percent.

spite the significant climate vulnerabilities faced by Pakistan, there remains an imbalanced emphasis on funding low-carbon mitigation projects compared to adaptation and resilience efforts. The distribution of climate financing is heavily weighted towards mitigation, primarily driven by substantial investments in renewable energy generation.

Up until now, Pakistan has not succeeded in accessing international climate finance at scale, which is critical in building climate resilience and accelerating the country’s transition away from fossil fuels. Pakistan’s utilization of major climate finance sources including the Green Climate Fund (GCF), Global Environment Fund (GEF), The Adaptation Fund (AF), etc, has been limited. For example, GCF has approved US$ 10.8 billion for 200 projects globally, but only US$ 221 million (2 percent) is for six projects in Pakistan. This is less than Pakistan’s peer countries.

For example, Bangladesh, which ranks similarly in terms of vulnerability to climate change, has accessed nearly twice as much GCF financing. Increased Multilateral Development Bank (MDB) climate funding is required to accelerate green and climate-resilient financing in Pakistan.

On the other front, Pakistan’s private sector can also play an instrumental role in creating a Just Green transition in Pakistan. Global development partners can effectively work alongside the Government of Pakistan and the private sector to synergize the efforts and achieve the nation’s climate finance goals. According to the World Economic Forum, a green economy is not possible without the involvement of the business ecosystem.

On average, industries generate more than 30 percent of anthropogenic emissions in a country and thus can play a significant role in the achievement of net zero. Effective collaboration between local public institutions and the private sector is vital for the creation and expansion of financially viable sustainable projects. According to climate finance experts, investors look for four components when evaluating bankable climate finance opportunities.

These components include a solid business plan, government support & commitment, preliminary off-take agreements, and project-associated risks. Focusing on these components is especially critical for Pakistan to drive both local and foreign investor confidence in bankable climate opportunities in the country given the current economic context.

Prime Minister Shahbaz Sharif was right when he said that ‘the ‘future will not forgive our inactions’. It is time that we come out of this state of inaction and myopic decision-making and start Pakistan’s Just Green transformation powered by climate finance.

The closure of schools is not the solution to the country’s climate-change crisis. Rather, developing green school buildings, transitioning to green vehicles, creating climate-smart agricultural landscapes, fostering the development of green industrial sectors, and most importantly inculcating green education in our academic system to ensure the nurturing of an ecologically conscious and socially responsible future generation.

The writers Dr Syed Asim Ali Bukhari is working as SVP/Head – ESG in The Bank of Punjab and Dr Syeda Nazish Zahra Bukhari is working as Assistant Professor in University of the Punjab.