ISLAMABAD:
Pakistan’s economic trajectory is facing unprecedented pressure as climate-driven challenges tighten their grip on national growth, Finance Minister Muhammad Aurangzeb warned during a high-level plenary at the Sustainable Development Policy Institute’s annual conference. Addressing policymakers, experts and development partners, he stressed that climate change — coupled with the country’s rapidly rising population — poses a serious risk that can no longer be treated as a secondary concern.
The minister underlined that climate finance is fast becoming a defining pillar of global economic policy. As international markets stabilise and GDP growth gradually picks up worldwide, Pakistan is pushing ahead with structural reforms aimed at restoring investor confidence and strengthening its fiscal foundation. He noted that the country must be proactive in tapping sustainable financing windows and integrating climate-aligned strategies across public and private sectors.
Aurangzeb highlighted several major commitments recently extended to Pakistan, including a $1.3 billion climate-related financing facility from the IMF, Asian Development Bank support worth $500 million, and the World Bank’s decade-long partnership framework expected to funnel around $2 billion annually. Plans to issue Panda Bonds in China’s financial market were also referenced as a step toward diversifying Pakistan’s fundraising avenues.
He stressed the pivotal role of private-sector participation, digital financing tools and fintech-driven solutions in accelerating Pakistan’s shift toward a climate-resilient economy. With extreme weather events repeatedly disrupting agriculture, infrastructure and energy systems, he said the urgency to future-proof economic policies has never been greater.
During the same session, Dr Abid Qaiyum Suleri of the SDPI pointed out the vast mismatch between global climate pledges and actual disbursements. Though developed countries committed nearly $1 trillion under the Paris Agreement, only a fraction has been delivered. He emphasised the need for stronger regional cooperation, credible carbon-pricing mechanisms and a shift away from GDP as the lone measure of progress.
Experts at the panel echoed the call for a regional climate-banking framework, warning that without coordinated, well-financed action, South Asia will continue to bear the brunt of climate-linked economic losses.
As Pakistan continues to battle recurring floods, heatwaves and shifting weather patterns, the message from Islamabad is clear: climate change is no longer just an environmental challenge — it is an economic emergency demanding bold reforms and sustained investments.
This story has been reported by PakTribune. All rights reserved.