Implementing a carbon tax to mitigate the impacts of global warming on Pakistan is a complex but essential step.
“The implementation of a successful carbon tax strategy in Pakistan requires careful planning, and consideration of both economic and environmental goals,” stressed Dr Abid Qayum Suleri, the Executive Director of Sustainable Development Policy Institute (SDPI), a think tank. Talking to WealthPK, he said, “We need to start thinking differently about how energy and carbon tax can help ignite our shift from non-renewable to renewable energy sources. Implementing a carbon tax can potentially help minimise the use of fossil fuels in Pakistan.”

He said, “Pakistan is a developing nation that contributes less to global greenhouse gas emissions than other nations, yet it is severely impacted by droughts, floods and other climate-related issues.” “Pakistan's energy sector is the most important contributor to carbon emissions because it relies heavily on coal, oil, and natural gas. Thus, carbon emissions reduction has been and will continue to be very challenging for Pakistan.” “A key factor in reducing greenhouse gas emissions, especially carbon emissions, is carbon taxes. The government has created laws to protect the environment, and even provincial governments started making policies after the Eighteenth Amendment to the Constitution.”However, he said the main problem was that these laws were not being put into action effectively. He pointed out that enacting a carbon tax was not as simple as it appeared. One of the key challenges in implementing a carbon tax is striking a balance between economic growth and environmental sustainability, he added.

Abid Suleri said that the level of political support for carbon tax was usually low because of its ‘opposition’ from business entities and the general public. “There is also a debate on how Pakistan's products would compete worldwide if the government opted to impose a carbon tax on industrial facilities, given the increased cost of operations.” “Implementing a carbon tax is a multifaceted task that demands a delicate balance between political, economic and environmental factors. It needs meticulous planning, clear communication, and a well-defined roadmap for transitioning towards a greener and more competitive economic framework. Policymakers must carefully consider this trade-off when crafting carbon tax policies,” Suleri underscored. “Promoting clean energy sources such as solar, wind and hydropower should be a priority of the policymakers,” he said, calling for incentives, tax credits, and streamlined regulations to encourage investment in renewable energy projects.

Credit: Independent News Pakistan (INP)