by – Amir Jahangir
Founder and Chief Executive Officer at Mishal Pakistan
Addressing Limitations in Pakistan’s Pursue to Investments and Climate Action: The Case of Pakistan:
In the global pursuit of a green transition, nations are increasingly confronted with balancing economic growth with the decarbonization imperative. Like many emerging economies, Pakistan finds itself at a critical juncture where the socioeconomic implications of climate action must be carefully navigated to ensure both environmental sustainability and economic stability.
The Socioeconomic Implications of Climate Action
Pakistan’s economic framework is deeply intertwined with fossil fuels, which are not only a primary energy source but also a significant contributor to the national economy. The potential risks associated with transitioning away from fossil fuels—such as rising costs of living, threats to employment in traditional sectors, and the financial burden of restructuring—are considerable. These concerns are echoed across various regions globally, including Latin America, Southern Africa, and emerging Asia, where economic growth remains a priority alongside the pressure to decarbonize.
For Pakistan, the challenge is multifaceted. The country must grapple with the potential socioeconomic fallout of reducing fossil fuel dependence while also addressing the broader impacts of climate change, such as the increased frequency of extreme weather events and the associated costs of disaster management and infrastructure rebuilding.
Data and Framework Deficiencies
A significant hurdle in this green transition is the lack of robust data, frameworks, and tools needed to fully understand and address the socioeconomic implications of climate action. Pakistan, like many other developing nations, suffers from a scarcity of systematic data collection and the absence of comprehensive metrics to gauge the equity implications of climate policies.
The World Economic Forum’s 2024 Executive Opinion Survey, conducted by Mishal Pakistan as the Country Partner Institute of the New Economy and Societies Platform, World Economic Forum, highlights that unequal access to financing for green investments, gaps in technology and know-how, and risks to consumer accessibility of goods and services are among the top equity risks associated with the green transition. These challenges are particularly pronounced in countries like Pakistan, where financial resources and technological capabilities are limited.
The Need for Equity in Climate Action
The concept of fairness in the distribution of costs and benefits of climate action is crucial for building public support and ensuring policy stability. In Pakistan, where income inequality and poverty are significant issues, climate policies that disproportionately impact the poor could lead to social unrest and political instability. Therefore, Pakistan’s climate action strategies must be designed with equity at their core.
While many countries have recognized the importance of equity in their Nationally Determined Contributions (NDCs) to the Paris Agreement, the evidence and tools necessary for informed policy responses are often lacking. Pakistan’s policymakers need access to better data and frameworks that can help them understand the multidimensional equity implications of transitioning away from emissions-intensive sectors.
Global Archetypes and Pakistan’s Position
The World Economic Forum’s, report Transition: A Data-driven Approach identifies six country archetypes based on their approach to the green transition, ranging from Inclusive Green Adopters to Frontier Economies. Pakistan, with its low emissions per capita and a large, young population, fits into the category of Frontier Economies. These countries face significant challenges in building foundational capacities for sustainable growth while being highly vulnerable to climate risks.
Pakistan’s position as a Frontier Economy means that while its emissions are relatively low, the country still needs to invest in developing a skilled workforce, enhancing access to finance, and building resilience against physical climate risks. This necessitates innovative financing mechanisms and international cooperation to enable the country to transition to green growth without compromising its development goals.
