Pakistan urged to shift climate finance towards adaptation amid funding imbalance

Climate finance in Pakistan continues to be directed largely towards mitigation projects such as renewable energy, while adaptation measures receive significantly less funding despite the country’s high exposure to climate risks.

Experts warn that this imbalance is shaping development priorities, as projects like flood protection, water management and climate-resilient agriculture remain underfunded due to lower financial returns and reliance on public or concessional financing. 

Dr Abid Qaiyum Suleri, advisory council member of the Asian Development Bank (ADB), said Pakistan should integrate climate risk screening into its Public Sector Development Programme (PSDP) to ensure infrastructure projects incorporate adaptation measures. He also called for climate finance allocation based on vulnerability rather than institutional capacity.

He noted that climate funding is largely channelled through federal ministries and tends to concentrate in provinces with stronger institutional capacity, such as Punjab and urban Sindh, while regions like Balochistan and interior Sindh receive less investment despite facing greater climate exposure.

According to Suleri, central and eastern Punjab face high heat exposure, while northern areas remain vulnerable to glacial lake outburst flooding and landslides. However, financing for adaptation in these regions remains limited.

The Asian Development Bank is supporting Pakistan through programmes focused on disaster resilience, flood recovery, water management and social protection, although concerns remain over the overall distribution of climate finance.

Suleri advocated a shift from reactive disaster response to pre-arranged systems using data-based triggers and parametric insurance, combined with adaptive social protection mechanisms to enable faster and more predictable support during climate shocks.

He added that existing mechanisms are insufficient to address losses from natural disasters, particularly in agriculture, which remains highly exposed but lacks adequate financial protection.

Rural communities, smallholder farmers, women and informal workers were identified as among the most vulnerable groups, often excluded from climate financing frameworks. Regions such as Balochistan and Gilgit-Baltistan also face constraints in accessing and utilising available funds.

At the global level, Suleri called for rebalancing climate finance, noting that the current 90:10 split in favour of mitigation should shift towards a 50:50 allocation between mitigation and adaptation. He also urged multilateral climate funds to earmark at least half of their disbursements for adaptation in climate-vulnerable countries.

He warned that reliance on loans instead of grants for climate financing increases Pakistan’s debt burden and limits benefits for vulnerable communities, underscoring the need for more targeted and grant-based support.