By Azam Tariq

Pakistan can draw lessons from China's carbon-peaking model to better align climate action with industrial development, energy security and export competitiveness, but experts say the country needs a locally tailored approach reflecting its fiscal constraints, energy-sector challenges and institutional capacity.

China's approach is based on a "1+N" policy architecture, comprising a top-level framework supported by sector-specific implementation plans covering areas such as energy, industry, transport and buildings. Under its 15th Five-Year Plan (2026-2030), China has set a target of reducing carbon dioxide emissions per unit of GDP by 17% from 2025 levels by 2030 and raising the share of non-fossil energy in total energy consumption to 25%.

China has also shifted from controlling energy intensity alone to a dual-control system covering both total carbon emissions and carbon intensity, integrating its climate targets with broader economic and industrial planning.

Pakistan, meanwhile, is moving from climate commitments towards implementation. Its Third Nationally Determined Contribution (NDC 3.0), submitted in September 2025, aims to reduce projected greenhouse gas emissions by 50% by 2035. Of this, 17% is to be achieved through domestic resources and 33% is conditional on international finance, technology transfer and capacity building. The plan estimates investment requirements of $565.7 billion.

Speaking to Wealth Pakistan, Angelo Kairos Dela Cruz, Executive Director of the Institute for Climate and Sustainable Cities (ICSC), said Pakistan, like other developing economies, has an opportunity to pursue economic development and climate action simultaneously.

"Climate action is just a better way of developing," he said, adding that renewable energy could help Pakistan lower its carbon footprint while creating new economic opportunities.

Dela Cruz said businesses, including micro, small and medium enterprises, could be encouraged to move towards greener production through incentives for environmentally friendly and lower-carbon products.

He said green industrialisation could also be promoted through electrification and increased use of renewable energy. Industrial zones and economic corridors with greater access to renewable power could help attract investment in emerging sectors, including data centres, outsourced business services and electric vehicles.

Talha Khan, co-founder and CEO of Carbon Craft, a climate-focused venture working on decarbonisation and restoration, said Pakistan should adopt the "discipline behind the Chinese approach" rather than attempt to replicate China's model wholesale.

He said China's key lesson was the integration of climate targets with industrial planning, energy security and economic growth, while Pakistan needed to adapt that principle to its more limited fiscal resources and institutional capacity.

Khan said Pakistan should establish a credible emissions baseline and develop realistic pathways for the energy, industry, transport and land-use sectors. These should be integrated into existing economic and industrial planning rather than treated as a separate climate-policy exercise.

He also called for clearly defined responsibilities for federal and provincial institutions, backed by measurable targets and annual reporting.

Khan identified the energy sector as the first priority, saying high transmission and distribution losses, unreliable electricity supply and circular debt increase the cost of both conventional production and green industrialisation.

Pakistan should therefore improve grid efficiency, provide industry with reliable and competitively priced cleaner energy, and link industrial financing and incentives with measurable improvements in energy efficiency, he said.

For exporters, Khan identified textiles as an immediate priority because international buyers are increasingly examining energy use, water consumption, supply chain traceability and product-level emissions.

He said cement, steel and fertiliser producers should also begin facility-level emissions accounting and prepare plans for technological upgrades to improve efficiency and reduce emissions.

Khan also welcomed Pakistan's efforts to develop carbon markets but said effective implementation would determine their success. Pakistan has begun operationalising Article 6 carbon markets, with the Ministry of Climate Change and Environmental Coordination granting host-country approval to initial carbon-offset projects.

He said credible carbon projects require specialised local expertise, reliable emissions accounting, appropriate safeguards, technical preparation and patient capital.

Pakistan should initially focus on high-quality opportunities in industrial efficiency, agriculture, waste management, forestry and ecosystem restoration rather than pursuing a large number of projects without adequate preparation, he added.

The experts said Pakistan could adapt China's integrated approach by linking emissions targets with energy and industrial planning while developing implementation mechanisms suited to local conditions. Improving access to reliable clean energy, strengthening industrial efficiency, developing credible carbon markets and setting measurable institutional targets could help the country translate its climate commitments into economic and export opportunities.

Credit: INP-WealthPk