National Carbon Policy: Pakistan lags behind regional counterparts: PRGMEA

LAHORE: The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has said the Pakistan’s first-ever national carbon market policy, launched in November last year, demonstrates country’s commitment to emissions reduction, however, it lags behind regional counterparts in ambition, sectoral coverage, and global integration, potentially limiting its effectiveness in attracting climate finance and investment.

PRGMEA regional chairman Dr Ayyaz Uddin, in a statement issued here on Monday, observed the new policy marked a significant step towards integrating carbon trading into its broader climate strategy, suggesting the government to encourage investment in Carbon Capture and Storage (CCS) and renewable energy through public-private partnerships, besides revising the high Carbon Adjustment Factor (CAF) to a more flexible rate, ensuring participation from startups and SMEs.

He also recommended the launching of nationwide awareness campaigns and capacity-building programmes to involve communities and private sectors, decentralizing governance, encouraging regional collaboration and enabling cross-border carbon trading.

Dr Ayyaz Uddin stated that the government has pledged to reduce its GHG emissions by 50% by 2030, with 15% being unconditional and 35% conditional on international support. While India has pledged 45% reduction in emission intensity of GDP by 2030, China’s goal of peaking emissions by 2030 and achieving carbon neutrality by 2060, and Bangladesh’s NDC proposed for 12 million tons (5%) unconditional reduction in GHG emission from Business as Usual (BAU) scenario by 2030 and a further 24 million tons (10%) conditional reduction in GHG emission with support from the international community taking the base year 2011. Bangladesh also has a strong focus on renewable energy alongside its conditional and unconditional targets. Sectoral coverage for Pakistan is narrow, where high-emission sectors such as cement, steel, and transportation are underrepresented in the country’s strategy, while regional peers like India and China prioritize these industries. Advanced technologies such as Carbon Capture and Storage (CCS) and green hydrogen production are also areas where Pakistan lags.

Pakistan is currently developing a nascent voluntary carbon market, operating without a formal compliance framework. In comparison, India’s market is more mature with its well-established PAT Scheme (since 2012) and discussions underway for a broader carbon trading mechanism (the proposed CCTS framework). Meanwhile, Ghana is in an emerging phase with initiatives largely centered on REDD+ forestry projects and Bangladesh has not yet established a formal market, instead prioritizing renewables and blended finance. China, on the other hand, leads the field with the largest compliance market globally, having launched its national ETS in 2021 covering around 40% of national emissions.

Pakistan’s carbon market efforts currently focus on sectors such as agriculture and a developing energy sector. This contrasts with India’s emphasis on heavy industry (including cement, steel, aluminum, and power), Ghana’s focus on forestry alongside renewable energy and transport, and Bangladesh’s concentration on renewable energy (primarily solar and wind) and agriculture.

In Pakistan, the Ministry of Climate Change & Environmental Coordination leads the policy framework, ensuring alignment with international climate commitments. In contrast, India’s energy efficiency programmes are overseen by the Bureau of Energy Efficiency (BEE); Ghana’s carbon market initiatives are administered by an EPA-led Carbon Market Office; Bangladesh’s environmental policies are managed by its Ministry of Environment, Forest, and Climate Change; and China’s extensive ETS is regulated by the Ministry of Ecology and Environment (MEE).

By addressing the mentioned challenges, Pakistan can strengthen its carbon markets policy, attract international investments, and become a key player in global climate action. While the 2024 policy is a step forward, bold reforms and enhanced integration with international markets will be crucial in achieving meaningful climate targets and ensuring long-term sustainability.

Copyright Business Recorder, 2025