Daily Times

Pollution reduction is one of the important challenges confronting contemporary business and society. Increasing global temperature with its significant adverse impact on climate change is a worldwide concern. Pakistan, a country that contributes less than one per cent to the global greenhouse gas emission, is literally one-third under-water due to massive floods that have not only taken hundreds of human lives but killed thousands of livestock and damaged almost half of the country’s crops. One of the major causes of this calamity is the severe climate change negatively impacting the already struggling economy. In the current era, the whole world is buzzing with attractive slogans like the green revolution, net-zero, phasing-out coal and embracing renewable energy sources and Pakistan is no exception. In Pakistan, talk of embracing the renewable energy revolution is growing with each passing day but what are the ground realities? Is Pakistan ready to plug in and bask in the benefits of this clean and green energy revolution? Have we undergone the necessary policy, physical & technological infrastructure and most importantly psychological & behavioural mindset transformation required for adopting and sustaining such a revolution? Pakistan has been bestowed with tremendous renewable resources for energy production including solar, wind, biomass/bagasse, and hydro. Among these, the solar energy potential offers the largest segment of renewable energy resources amounting to approximately 2900 GW with availability almost all over Pakistan. The wind energy segment is the second largest with a potential of generating approximately 130 GW of electricity largely concentrated in Sindh and Baluchistan whereas the electricity generation potential of biomass/bagasse is approximately 2000 MW and is higher in agricultural areas of Punjab and Sindh.

A shift towards renewable energy resources is vital to minimise the adverse environmental impacts of fossil fuels.

Unfortunately, many bottlenecks, including weak and inconsistent policy infrastructure, underdeveloped local market, lack of public-private agencies coordination, slow offtake of net metering, large-scale renewable energy storage, regulatory approval delays, and inadequate consumer awareness and demand are keeping this potential untapped. There are political as well as technical, financial, and social issues which marginalize renewable energy adoption in Pakistan. A shift toward renewable energy resources is not just vital to minimise the adverse environmental impacts of fossil fuels; it is also critical for overcoming Pakistan’s electricity crisis and ensuring sustainable economic growth in the country. A coordinated mechanism is required among the various government bodies working at federal and provincial levels complemented by strategic public-private partnerships with the banking sector playing a pivotal role in the green energy revolution. Accurate and real-time mapping of the country’s renewable energy resources is required to further plan the development of electricity generation projects in strategic regions. Government should play the lead role in adopting renewable energy sources for electricity generation by converting all government and private buildings including offices, educational institutions, hospitals, parking stands, etc. to solar energy. This will instantly ramp up the demand in the local market and incentivize the various industry players. Various green building features including solar panel installation can be integrated as a regulatory requirement in the approval process of newly constructed commercial buildings especially the head offices of various organizations. Strategic partnerships with higher education institutions can result in the conduction of meaningful research through green education systems for solving the various bottlenecks in renewable energy adoption. Various public sector universities have large areas of land which can be used for the development of various green projects such as renewable energy generation and tree plantation.

Banks can play an important role in this regard by providing low-interest green financing under Green Banking for renewable energy projects. Sustainable investment is the amount of money; an organization spends on environmental and green initiatives for emission reduction, such as investment in energy efficiency, clean power, pollution reduction, recycling, and employee training initiatives. According to various sources, achieving 60 per cent of Pakistan’s currently defined renewable energy targets by the year 2040 would require an investment of approximately US$ 80 billion. Expanding the country’s solar and wind energy generation system would require US$ 20 billion along with an additional US$ 20 billion for upgrading the electricity transmission system network by the year 2040. Various international agencies like the World Bank, IFC, Asian Development Bank and KfW can boost this clean energy transformation in the presence of strategically coordinated and synergistic government efforts in this regard. Green Bonds / Green Sukuks can be issued for financing various renewable energy projects across Pakistan. The Government of Pakistan can launch low-interest rate renewable energy loans for household consumers synergizing it with various other financing schemes like the Naya Pakistan Housing Scheme. The banking industry can also neutralize its carbon footprint by converting the vast branch network and head/back offices to renewable energy sources. Renewable energy adoption may also serve as an elixir for the development of Pakistan’s sustainable agriculture sector. Biomass, solar, and wind power can produce electricity for heating, lighting, and fuel for use on the farm. Green financing may be provided for the installation of solar-powered irrigation systems and green warehouses. Furthermore, Green China-Pakistan Economic Corridor (CPEC) initiatives including renewable energy-based projects can play an important role in the development of sustainable economic development.

Countries like India have achieved the fastest-growing rate of renewable energy growth in any major economy by providing incentives and risk-management instruments early on so that utilities could incorporate renewable sources of energy without suffering economic losses. To improve the situation, there is a dire need to prioritize options in the energy sector and promote renewable energy by providing strong financial, technical, and legal support. To attract vitally needed green financing, Pakistan must build a public-private partnership for the deployment of large-scale renewable infrastructure projects that ensure a return on investment, while also keeping costs affordable for consumers. Renewable energy projects have produced the largest proportion of carbon credits available in the voluntary carbon market for offsetting claims, with major economies like China, India and Brazil acting as hosts to the largest renewable energy projects, and often generating the bulk of the credits available in the market. Pakistan can also produce carbon credits through renewable energy projects. Moreover, political stability, visionary leadership and a pragmatic and integrated power policy/energy plan are required to promote renewable energy exploitation in the country. Renewable sources of energy can help Pakistan mitigate climate change, build resilience to volatile prices, and lower energy costs. Phasing out Pakistan’s dependence on fossil fuels may seem daunting in these troubled times, but it will only become costlier the longer it takes. We must adopt the technological and financial tools needed to create a greener world, while also boosting our economy and resilience. We must invest in our future now, not later. It is high time that Pakistan plugs into the renewable energy revolution.

The writer is Chief Manager (Green Banking Office in Bank AL Habib Limited)