File photo of interim Finance Minister Shamshad Akhtar
Caretaker Finance Minister Shamshad Akhtar on Wednesday said Pakistan needs an estimated investment of $340 billion by 2030 to tackle challenges posed by climate change, noting this is equivalent to 10 percent of the country’s cumulative gross domestic product (GDP).
“Pakistan will spend Rs. 200 billion on climate change impacts by 2030,” she said during an address at the 2nd Pakistan Climate Conference, organized by the Overseas Chambers of Commerce and Industry (OICCI). Stressing that the intensity of the economic crisis had subsided, she noted the country still faced intense climate challenges in its future. Currently, she said, only $39 billion in public finance and $9 billion through public-private partnerships is expected over the coming decade for both climate mitigation and adaptation efforts.
“One of the biggest challenges we have internationally is the issue of trade-off between climate finance and developmental finance,” she said. “Getting money for Pakistan’s climate crisis undercuts other development finance,” she added. To overcome this, she explained, the Ministry of Finance was partnering with the Ministry of Climate and would jointly attend the COP28 in November to seek innovative climate finance mechanisms.
According to Akhtar, the Asian Development Bank (ADB) would provide financing to tackle climate change challenges like the World Bank. Amidst the prevailing fiscal deficit, she said the National Adaption Plan would help arrange financing to tackle climate change issues. Funds raised for Islamic and green financing from the capital market and corporate and private sector would also help, she added.
Legal amendments have already been made, she claimed, and the cabinet has ratified changes approved by the Economic Coordination Committee. “If we can remain on course, which is always a challenge given what’s going on within Pakistan, we should be able to bring at least one issue of Sukuk,” she said, adding the issue will have a “green element” to it.
Akhtar noted that climate vulnerability and sovereign debt constitute “a very important element” in the dialogue taking place within the international financial architecture.
Also addressing the conference via video-link, Energy Minister Muhammad Ali said the cost of climate change to Pakistan was substantial and continuously increasing as the country faces severe economic challenges. He said Pakistan’s energy transition requires substantial investments in energy assets infrastructure by 2040. To achieve this, he said, “we must leverage the capabilities of the private sector, especially OICCI as it consists of most advanced global organizations, who have the technologies and knowhow to contribute towards Pakistan’s climate future.”