Climate change & finance strategy

This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country. But like any insurance policy – it only works – if premiums are paid in full, and on time.

Promises must be kept, to protect billions of lives. Climate Executive Secretary Simon Stiell at the closing ceremony of the UN climate conference (COP29) in Baku, Azerbaijan, on 24 November 2024.

Challenges posed to the world because of climate change are immense and multifaceted, encompassing rising global temperatures, devastating natural disasters, biodiversity loss, and economic instability.

Against this backdrop, COP29 emerged as a pivotal platform for addressing these urgent issues, marking a critical moment in global climate governance. Concluded on November 22, 2024, in Azerbaijan, COP29 focused on bridging the divide between developed and developing nations, particularly regarding climate finance.

The conference centered on finalizing the New Collective Quantified Goal (NCQG) for climate finance, a successor to the previous $100 billion target. By emphasizing equitable financial mechanisms, COP29 aimed to empower vulnerable nations in their efforts to adapt to climate impacts and transition to low-carbon economies.

The theme, Pathways to Resilience and Sustainability, emphasized the importance of fostering innovation, inclusivity, and systemic change while integrating renewable energy, biodiversity conservation, and sustainable development into global strategies.

The statement from the COP29 Presidency highlights a pivotal moment in global climate action, reflecting both the urgency and complexity of addressing climate finance for developing countries.

The ambitious new climate finance goal, set at a minimum of $1.3 trillion annually by 2035, signifies a paradigm shift in the scale and scope of international efforts to combat climate change.

This substantial increase from the previous US$100 billion goal recognizes the evolving challenges faced by nations like Pakistan, which bear the brunt of rising adaptation and mitigation costs. Inclusive consultation processes and platforms, such as the culturally resonant Qurultay, fostered consensus and strengthened the legitimacy of COP29’s outcomes, ensuring diverse priorities were represented.

For Pakistan, these developments represent a critical opportunity to align national priorities with global ambitions. The proposed US$250 billion annual allocation to developing countries by 2035 offers a transformative pathway for Pakistan to address its escalating climate vulnerabilities.

Despite contributing less than 1% to global emissions, the country is among those most affected by climate change, facing recurrent floods, prolonged droughts, and heatwaves.

These climate shocks not only displace millions but also exacerbate socio-economic inequalities and threaten critical sectors like agriculture, which employs 40% of country’s workforce. Erratic weather patterns jeopardize food security, while urban centers such as Karachi grapple with intensifying challenges of urban flooding and heat island effects, further straining outdated infrastructure.

Pakistan’s heavy reliance on high-emission sectors adds complexity to its climate response.

Hina Shaikh a, senior Country Economist, Pakistan, International Growth Center shared some surprising facts in her blog published by the IGC that agriculture and manufacturing, particularly textiles, form the backbone of the economy but also contribute significantly to emissions.

The energy sector, dominated by fossil fuels, accounts for 40% of primary energy supply while renewables contributing a mere 7%.

Although initiatives like the Quaid-e-Azam Solar Park showcase potential, entrenched dependencies on coal-fired plants, such as those under the China-Pakistan Economic Corridor (CPEC), hinder progress toward a low-carbon future. Transitioning to clean energy will require significant investment in infrastructure, workforce retraining, and incentives for renewable adoption.

At the same time, weak governance structures impede progress. Decentralisation under the 18th Constitutional Amendment has fragmented environmental oversight, leaving provinces such as Sindh and Balochistan, which are most vulnerable, without adequate resources or technical capacity to mitigate risks effectively.

Short-term political priorities further undermine proactive climate action, as immediate development challenges like poverty and job creation often take precedence.

Accessing international climate finance, which is vital for addressing the country’s estimated US$348 billion climate adaptation and mitigation needs by 2030, remains constrained by debt burdens and bureaucratic inefficiencies.

Moreover, the influence of industrial and energy lobbies poses significant barriers. Dominated by coal and oil interests, these lobbies resist transitions to cleaner energy and delay the adoption of international mechanisms like UN carbon credits.

The lack of a robust counterbalance from underfunded environmental advocacy groups highlights the systemic obstacles to achieving a coherent climate agenda.

The outcomes of COP29 signal hope for countries like Pakistan. The proposed $1.3 trillion annual global climate finance target emphasizes shared responsibility while considering the disproportionate impacts faced by developing nations.

Pakistan could benefit significantly by advocating for mechanisms that ensure easier access to these funds. Collaborating with international partners to secure grants and concessional loans tailored to its specific challenges, Pakistan can address critical sectors, including sustainable agriculture, renewable energy, and disaster resilience.

One of Pakistan’s most urgent priorities must be to shift its energy landscape. Fossil fuels, despite being a significant contributor to emissions, remain the primary energy source. Expanding renewable energy generation, such as solar, wind, and hydropower, offers an

opportunity to reduce emissions and energy import dependency. Government incentives for renewable energy development and public-private partnerships can encourage investment in clean technology. At the same time, measures to increase energy efficiency across industries and urban centers would further enhance sustainability.

Agriculture, the backbone of Pakistan’s economy, requires targeted reforms to withstand the effects of climate change. Investments in climate-smart agricultural practices, such as efficient irrigation systems and drought-resistant crops, are critical.

Integrating technology into farming processes can also optimize resource use and reduce emissions. Empowering rural communities through education and access to finance will ensure more inclusive participation in these reforms, strengthening food security while fostering resilience against erratic weather patterns.

Urban planning and infrastructure development are equally vital in Pakistan’s climate response. Rapid urbanization has left cities like Karachi vulnerable to flooding, heatwaves, and poor air quality.

By investing in sustainable urban infrastructure, including green buildings and improved public transportation, Pakistan can enhance the resilience of its cities while reducing emissions.

Introducing urban green spaces, rooftop gardens, and rainwater harvesting systems would mitigate the heat island effect and improve water management in urban areas.

The challenges of climate adaptation and mitigation in Pakistan extend beyond technical solutions.

Addressing these challenges requires a fundamental shift in governance and policymaking. Strengthening coordination between federal and provincial governments is crucial to ensure effective implementation of climate policies.

Establishing a centralized climate finance authority would streamline the allocation of funds, monitor progress, and ensure transparency.

Integrating climate considerations into development planning and policymaking at all levels will embed sustainability into Pakistan’s growth trajectory.

Accessing international climate finance remains a cornerstone of Pakistan’s climate strategy.

Building a robust case for concessional funding through transparent reporting mechanisms and compelling evidence of climate vulnerabilities can enhance Pakistan’s standing in international negotiations.

Forming alliances with other developing countries can strengthen collective bargaining power in global forums like COP. Moreover, Pakistan should actively engage with the private sector, both domestically and internationally, to attract investments in green projects.

Education and public awareness are pivotal to achieving long-term climate goals. By integrating climate education into school curricula and launching national awareness campaigns, Pakistan can foster a culture of environmental responsibility. Engaging youth and community leaders as advocates for sustainable practices will create a groundswell of support for climate action. Strengthening environmental advocacy groups through financial and institutional support will ensure a strong voice for sustainability in policy discussions.

Pakistan stands at a critical juncture where the consequences of inaction are severe, but the opportunities for transformation are immense.

By embracing the spirit of COP29 and leveraging international climate finance mechanisms, Pakistan can address its vulnerabilities while contributing meaningfully to global climate goals. Strengthening governance, fostering innovation, and mobilizing public and private investments will be essential in charting a sustainable future.

Integrating global support with local resilience efforts will enable Pakistan to overcome its climate challenges, ensuring a legacy of environmental stewardship and socio-economic stability for the future generations.

Copyright Business Recorder, 2024