Pakistan's climate crisis costs 1% of GDP annually, urges shift to actionable climate finance: report

Experts at the 4th Pakistan Climate Conference, organised by the Overseas Investors Chamber of Commerce & Industry (OICCI) on Monday, revealed that the country’s annual climate-related losses are nearing 1% of its GDP. Amid ongoing floods, heatwaves, and economic disruptions, leaders at the conference emphasized the urgent need for a transition from policy frameworks to actionable, bankable climate solutions. 

Despite contributing less than 1% to global emissions, Pakistan finds itself on the frontline of climate impacts, including record-breaking heatwaves, catastrophic flooding, and the ongoing melting of glaciers.

Dr. Musadik Masood Malik, Federal Minister for Climate Change, emphasized the urgent need for targeted investment to counter the escalating environmental crisis. He highlighted that the country's Nationally Determined Contributions (NDC) 3.0 aim for a 50% reduction in emissions by 2035, but achieving this would require an investment of $565.7 billion in climate finance.

Senator Muhammad Aurangzeb, Pakistan's Finance Minister, stressed that while key frameworks are in place, the country must now focus on mobilising financial resources and creating investable projects, urging the private sector to step in with capital, innovation, and expertise.

A key focus was on the role of blended finance, as Chongguang Yu (Charles), Regional Lead for Sustainable Finance at the UNDP, pointed out that the real challenge is not capital availability but fragmented systems. He urged for innovative financial solutions and risk-sharing mechanisms to unlock private sector participation.

Yousaf Hussain, President of OICCI, highlighted Pakistan's progress on the climate agenda, referencing the ongoing $20 billion, 10-year Country Partnership Framework with the World Bank and upcoming initiatives like the Green Panda Bond. The event also emphasized the importance of integrating climate considerations into economic and investment planning to address long-term risks.