Climate action and political economy in Pakistan

Pakistan faces significant environmental challenges that pose risks to its development and long-term sustainability. Its geography exposes it to various climate risks (droughts, heatwaves, floods). Despite being one of the least significant contributors to global greenhouse gas (GHG) emissions - responsible for less than 1% - the country is among the most vulnerable to climate impacts. The economic, political, and institutional structures shaping its climate response reflect a complex interplay of short-term economic priorities, vested interests, and the global challenge of equitable climate finance.

The political economy of climate change in Pakistan underscores how institutions, power dynamics, and governance models shape climate policies. Climate action not only demands technical solutions but also requires a nuanced understanding of the broader socioeconomic forces at play. This blog explores the barriers and opportunities in Pakistan’s climate response, focusing on how political and economic factors influence its climate trajectory.

Economic dependence on high-emissions sectors

A significant barrier to climate action in Pakistan is the economic dependence on high-emissions sectors such as agriculture, manufacturing (particularly textiles), and fossil-fuel-based energy production. Industry-related emissions make up 38% of carbon emissions in Pakistan. Pakistan has only managed to slightly reduce emissions from this sector. While employing 40% of the workforce, agriculture is also a major contributor to Pakistan's total GHG emissions, accounting for about 41%. These industries are crucial for the country’s economic stability and export revenues but are also key contributors to GHG emissions.

Pakistan’s reliance on imported fossil fuels is a widely acknowledged issue that has hindered economic growth and kept energy and electricity costs high. For instance, under the China-Pakistan Economic Corridor (CPEC), Pakistan has expanded coal-fired power plants to alleviate its chronic energy shortages. While these investments aim to improve energy access, they lock Pakistan into a fossil fuel-dependent energy future, limiting its ability to meet climate commitments. Fossil fuels currently make up 40% of Pakistan's primary energy supply. A just transition to a low-carbon economy is complicated by the path dependency inherent in these sectors, where infrastructure, employment, and trade are deeply tied to high-carbon activities.

Pakistan’s total energy-related carbon dioxide emissions were around 223 million metric tons in 2021, reflecting a 5.2% increase from 2019 levels. The country’s renewable energy capacity remains relatively low, contributing around 7% to the national energy grid despite significant solar and wind potential. To make the transition more viable, Pakistan must not only decarbonise its energy system but also support the workers and industries impacted by this shift. For example, re-skilling programmes for coal industry workers, investments in clean energy infrastructure, and targeted financial incentives can help bridge the gap between short-term economic costs and long-term sustainability goals.

Political short-termism and development priorities

The political landscape in Pakistan is characterised by short-termism, where immediate electoral gains often take precedence over long-term climate action. Policymakers are frequently motivated by voter approval tied to job creation, infrastructure development, and poverty alleviation, which leads to the de-prioritisation of climate policies. Addressing climate change requires sustained commitment over decades, but the benefits of such actions may only be realised in the future. This mismatch between political cycles and the long-term nature of climate benefits has stalled meaningful progress.

Pakistan’s immediate developmental challenges - poverty (39.5% of the population lives below the national poverty line), energy shortages, and debt management—dominate political discourse, pushing climate policies to the background. The World Bank estimates that Pakistan will require approximately USD 348 billion (around 10% of its GDP) in total investment between 2023 and 2030 to effectively address its climate challenges. Of this amount, USD 152 billion (44%) is needed for adaptation and resilience efforts, while USD 196 billion (56%) is allocated for decarbonisation or mitigation measures. According to the UNDP, Pakistan historically spends between 0.6% to 0.8% of its GDP on climate-related activities.

Many low- and middle-income countries like Pakistan have to  prioritise debt repayments over essential climate adaptation and mitigation measures. As of 2024, Pakistan's debt-to-GDP ratio nears 80%, limiting its ability to invest in green infrastructure. In 2022, Pakistan received a USD 3 billion IMF bailout, but accompanying austerity measures restricted public investments in climate initiatives. In 2024, Pakistan sought an additional USD 1.5 billion from the IMF specifically to address climate change, with funds aimed at promoting both economic stability and climate adaptation through the Climate Resilience and Sustainability Facility.

Influence of interest groups and industry lobbies

Powerful energy and industrial interest groups in Pakistan, particularly from coal and oil, heavily influence climate policies, hindering the adoption of stricter regulations. The Thar coal project and others under CPEC are prime examples, where reliance on coal addresses energy shortages but overlooks environmental sustainability due to significant emissions and pollution. Additionally, Pakistan missed opportunities for UN carbon credits by not pushing Independent Power Producers (IPPs) to retrofit plants, losing potential revenue from emissions reductions. These long-term environmental and health costs make coal a less viable solution for Pakistan's energy future.

Environmental and climate advocacy groups in Pakistan, though growing, struggle to counter the influence of powerful industrial lobbies due to limited resources and political influence. These dynamics reflect global trends where industries facing losses from decarbonisation pressure policymakers to maintain the status quo. According to Olson's theory of collective action, smaller, concentrated groups like fossil fuel industries shape policies more effectively than diffuse public interest groups. This imbalance has delayed comprehensive climate policies in Pakistan, exemplifying the "tragedy of the commons," where short-term economic interests overshadow collective environmental responsibility.

Climate justice and international finance

Pakistan’s case for climate justice is built on the principle of common but differentiated responsibilities (CBDR), which recognises that while all countries must act on climate change, high-income countries bear a greater historical responsibility. Pakistan’s vulnerability to climate change amplifies its need for international financial and technical support. At the 2022 Conference of Parties (COP27) and other international platforms, Pakistan has been a vocal advocate for climate reparations, demanding that high-income countries contribute to the costs of climate adaptation and mitigation. However, accessing international climate finance has been slow and often comes with conditions tied to donor priorities.

Pakistan’s share of international climate finance is minimal. The economic losses from the 2022 floods amounted to USD 30.1 billion and far exceeded the total global disbursements from the UNFCCC funds of about USD 22 billion.  Over the past 30 years, Pakistan has accessed less than USD 1 billion from key funds like the Global Environment Facility, Adaptation Fund, and Green Climate Fund. This highlights the significant gap between the country’s climate-related needs and the financial support it has received and was able to access.

Pakistan relies significantly on foreign aid for climate action due to limited domestic resources and high external debt. International donors like the World Bank and IMF provide essential funding for climate adaptation and mitigation. However, much of this aid is tied to conditions that may not align with Pakistan’s long-term climate goals. Ensuring that climate finance is more accessible and adaptable to local needs is crucial for addressing this challenge effectively.

A balanced path forward 

Pakistan has immense potential for green growth by harnessing its largely untapped solar and wind energy resources, which can reduce its reliance on fossil fuel imports and improve energy security. The Alternative and Renewable Energy Policy 2019 aims to increase renewable energy to 30% of the national mix by 2030, but achieving this will require significant investments, policy coherence, and private sector incentives. Recent developments, such as Pakistan's first solar auction in 2022, signal progress, with public-private partnerships poised to create jobs and expand green energy projects.

Strengthening local governance is essential for effectively managing climate risks, especially after the 18th Constitutional Amendment decentralised environmental and climate governance to provincial governments. However, this decentralisation has led to fragmented policy implementation, as provincial governments, especially in vulnerable regions like Sindh and Balochistan, often lack the necessary resources and technical expertise. Greater coordination between federal and provincial bodies, improved climate risk data collection, and investments in local governance structures are crucial for effective climate adaptation and mitigation.

Securing international climate finance and ensuring that it is accessible and flexible enough to address local needs is critical for Pakistan’s success. Strengthening governance, improving local capacity, and addressing the needs of marginalised communities will be key to effective climate action. The global community must recognise Pakistan’s vulnerability to climate change and support it through equitable financial mechanisms that offer policy autonomy. For Pakistan, addressing climate change is not only an environmental challenge but also a political and economic imperative, balancing short-term needs with long-term sustainability.

How can researchers help?

Researchers can explore specific inquiries to address Pakistan's climate challenges. For instance, they could assess the economic viability of transitioning high-emission sectors, such as agriculture and textiles, toward low-carbon alternatives. Investigating the effectiveness of decentralised governance structures in climate adaptation, particularly in vulnerable provinces like Sindh and Balochistan, would be valuable. Additionally, researchers can analyse how international climate finance frameworks can better align with Pakistan's local priorities and identify policy tools that could mitigate the influence of industrial lobbies on climate policy. Finally, exploring the socioeconomic impacts of re-skilling workers in fossil fuel-dependent industries would provide critical insights for a just transition to renewable energy.