Faiza Tehseen

Pakistan must integrate environmental considerations into fiscal policies through green budgeting to address mounting environmental challenges, said Muhammad Saleem, media spokesperson for the Ministry of Climate Change and Environmental Coordination (MoCC&EC), in an exclusive interview with WealthPK.

He said green budgeting involves identifying budgetary measures that contribute to climate change by conducting environmental impact assessments and evaluations. This economic instrument ensures that government actions, including taxation, revenue generation, spending, and investments, align with environmental objectives such as reducing greenhouse gas (GHG) emissions, conserving natural resources and promoting renewable energy.

It also includes tracking air quality,  mainstreaming climate change adaptation, and protecting biodiversity. “By aligning public spending with environmental goals, the government can make informed decisions to address climate impacts and build resilience. Green budgeting can be implemented at all government levels, including provincial and local bodies. The public sector also plays a pivotal role in responding to climate change,” he said. Saleem said, “Pakistan urgently needs to transition toward sustainable economic policies.

In this context, green budgeting mechanism is critical. It involves assessing the environmental impact of budget allocations and directing public finances toward projects that promote sustainability. This approach can balance economic growth with clean energy investments, pollution control measures, afforestation programs, and efficient water management.” He said as a viable tool for promoting environment-friendly development strategies, green budgeting is crucial for Pakistan's transition to sustainability.

The country ranks among the top 10 most climate-vulnerable nations, facing challenges like glacial melting, floods, and heatwaves. To mitigate these weather-related impacts, substantial funding is required, and green budgeting can help channel this funding effectively. He said, “The Pakistani government has made initial efforts to integrate environmental considerations into the budget process. The Climate Public Expenditure and Institutional Review (CPEIR) framework has been developed to analyse climate-related expenditures and prioritize funding for sustainable initiatives.

The government is also working in coordination with international organizations, including the United Nations Development Programme (UNDP) and the World Bank, to strengthen these efforts.” The MoCC&EC spokesman said the path to effective green budgeting still faces several challenges, including limited institutional capacity, policy incoherence, budgetary constraints, and issues with monitoring and accountability. Economic instability in Pakistan further complicates the allocation of funds for green initiatives.

“To overcome these hurdles, successful implementation of green budgeting will require strengthening institutional capacity through training programs for financial managers and policymakers. Transparent reporting mechanisms are essential to track green expenditures and ensure accountability,” he said. Talking to WealthPK, Muhammad Akbar, an environmentalist from Gilgit-Baltistan (GB) said, “If adopted successfully, green budgeting will help Pakistan transition to a low-carbon economy and achieve sustainable socio-economic development.

Integrating environmental concerns into fiscal policies will mitigate climate impacts and help build a resilient future for the country's citizens.” He said aligning the economic policies with environmental sustainability is a promising opportunity for Pakistan. Despite facing challenges, Pakistan can harness green budgeting with strategic planning, strong governance, and international cooperation.

Credit: INP-WealthPk