Looking Ahead at 2025

From Vulnerability to Leadership: Transforming Pakistan’s Climate Finance Strategy

Date: January 3, 2025

Sobiah Becker
Advisor, Pak-German Climate & Energy Partnership
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Pakistan is at a critical juncture, grappling with escalating climate disasters and mounting economic pressures. Despite it being one of the most climate-vulnerable nations, Pakistan’s access to international climate finance remains frustratingly out of reach and domestic climate finance remains woefully unexplored. To overcome these challenges, Pakistan must rethink its approach, adopt bold reforms, innovative strategies, and renew its unapologetic advocacy to secure the resources needed for climate resilience and sustainable development.

Reframing the country’s climate narrative is paramount. The devastating 2022 floods laid bare Pakistan’s vulnerabilities, but appeals for finance must go beyond disaster recovery. Pakistan must position itself as an indispensable voice from the Global South in global climate efforts, advocating for equity in finance distribution. Data-driven proposals, anchored in detailed climate risk assessments and the economic toll of inaction, will be essential to make a compelling case both at home and abroad.

Institutional readiness is the cornerstone of progress. Pakistan’s limited accreditation to key funds like the Green Climate Fund (GCF) has stymied its financial access. Establishing robust systems for monitoring, reporting, and verification, coupled with a transparent Climate Finance Dashboard, will enhance donor confidence. A National Climate Fund could streamline domestic resources while serving as a gateway for international finance. Strengthening financial governance and aligning development plans with climate goals are critical steps in building credibility.

Domestic reforms must go hand-in-hand with international engagement. Aligning the Public Sector Development Programme (PSDP) with Nationally Determined Contributions (NDCs) ensures that public investments advance climate goals. At the same time, empowering provinces to align their targets with national and global priorities can unlock localized solutions, addressing specific vulnerabilities while enhancing Pakistan’s climate finance ecosystem.

Innovation must become Pakistan’s hallmark. Carbon trading, sustainability-linked bonds, and debt-for-climate swaps are powerful tools to mobilize finance. By creating robust frameworks for carbon markets and leveraging Article 6 mechanisms under the Paris Agreement, Pakistan can monetize its mitigation efforts while attracting private investment.

Global advocacy remains non-negotiable. Pakistan must assert itself in international climate negotiations, championing the principles of equity and shared responsibility. Forming alliances with similarly vulnerable nations and showcasing leadership in G-77 and beyond will amplify Pakistan’s voice and boost its profile.

This is Pakistan’s moment to pivot from vulnerability to leadership. By embracing institutional reform, innovative finance, and a unified national strategy, Pakistan can transform its climate challenges into a blueprint for resilience and equity. The world has a moral obligation to respond—but first, Pakistan must step up as a leader in climate action.