Islamabad: Dr Shezra Mansab Ali Khan Kharal, Minister of State for Climate Change and Environmental Coordination, announced that Pakistan’s fiscal year 2025-26 budget will be the country’s first climate-focused budget. This groundbreaking initiative will require 30% of all public development projects to undergo a Climate Public Investment Management Assessment (CPIMA), marking a significant step toward integrating climate considerations into national economic planning.
Dr Shezra made the announcement during a Pre-Budget Dialogue titled “Rethinking Economic Policy for a Just Energy Transition,” organized by the Sustainable Development Policy Institute (SDPI) in collaboration with the Policy Research Institute for Equitable Development (PRIED) in Islamabad on Tuesday. She highlighted Pakistan’s increasing vulnerability to climate risks, the added strain from India’s suspension of the Indus Water Treaty, and the constraints posed by the IMF’s austerity measures, which limit development expenditures.
The minister stressed the urgent need for a transition to sustainable energy solutions, citing ongoing inefficiencies and the burden of circular debt in the energy sector. She emphasized that addressing these challenges is crucial for Pakistan’s economic and environmental resilience.
Sanaullah Baloch, MPA from Balochistan, highlighted the unequal distribution of resources fueling insurgency in his province. He pointed out that despite Balochistan’s vital contribution to the country’s energy sector, only 20% of its population has grid access, far below Punjab’s 95%, Sindh’s 85%, and KP’s 80%.
Dr Abid Qaiyum Suleri, Executive Director of SDPI, underlined the economic incentives for energy transition, noting that rising fuel prices and the influx of second-hand hybrid and electric vehicles could drive greater energy efficiency and reduce reliance on fossil fuels.
Former State Bank Governor Shahid Hafeez Kardar advocated for long-term sustainable economic policies, urging a shift from reactive subsidies to proactive investments such as green bonds and performance-based incentives to support climate initiatives.
Khalid Mansoor, former Special Assistant to the Prime Minister on CPEC Affairs, discussed the evolving focus of the China-Pakistan Economic Corridor (CPEC), emphasizing energy transition, smart agriculture, value-added textiles, and digital transformation. He stressed the importance of collaboration between Pakistan’s private sector, international investors, and China.
Senior economist Dr Khaqqan Najee attributed Pakistan’s energy issues to governance and management shortcomings rather than cost inefficiencies. He called for establishing a unified energy regulator to foster a competitive energy market and harmonize climate budgeting.
Economist Afia Malik cautioned against petroleum levies that disproportionately burden the poor, recommending carbon taxes instead that fairly distribute costs without unduly impacting vulnerable populations.
This budget initiative reflects Pakistan’s commitment to balancing economic development with environmental sustainability, aiming to create a resilient future amid growing climate challenges.
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