The summer of 2025 has shown once again that climate change is no longer a slow crisis. From Catalonia (Spain) to Chakwal, Moscow to New Jersey, and Texas to Himachal Pradesh, heavy rains and flash floods have transformed highways into rivers, cities into wetlands, and villages into ruins. If the 2022 floods in Pakistan were meant to be a global wake-up call, this July’s events indicate the world pressed snooze.
In the US, at least 120 lives were lost over the Fourth of July weekend when a wall of water surged through the Guadalupe River in central Texas, catching a youth camp and local communities off guard. New York and New Jersey faced their own version of paralysis: over 153 millimetres of rain fell in less than 90 minutes, flooding subway systems, cutting power and triggering a state of emergency.
In Russia, weeks of erratic rainfall overwhelmed urban infrastructure in Moscow and submerged entire villages in Yakutia. Meanwhile, Pakistan, still reeling from the 2022 deluge, found itself once again deploying troops to rescue families in Khyber Pakhtunkhwa and Punjab. Two hundred and sixteen lives have already been lost due to flooding and heavy monsoon rains across Pakistan since 26 June this year. The monsoon season is far from over.
The question is no longer whether the climate is changing; it is whether we can adapt to it. It is how governments are responding. The answer, so far, remains uneven.
One area where global response is breaking down is international climate finance. Following Pakistan’s 2022 floods, one of the worst climate-related disasters of the decade, donors met in Geneva in January 2023 and pledged a seemingly generous $10.987 billion to assist Pakistan in rebuilding. However, the fine print reveals a different story.
Just 5.0 per cent of those pledges, or $546.4 million, were offered as grants. The rest were loans, some on concessional terms, others less so. Even that might have been acceptable, had the funds arrived on time. But as of June 30, 2025, only 42 per cent of the total committed funds had been disbursed. Take out the $1.88 billion oil-on-deferred-payment facility, and the actual liquidity Pakistan received drops to 24.9 per cent. This was supposed to be emergency assistance. Instead, Pakistan is entering yet another monsoon season with more climate risks than resources.
In an era of shrinking bilateral and, by extension, multilateral development assistance, countries like Pakistan must bolster their climate adaptation capacity through domestic resources. Relying endlessly on external bailouts is not a viable approach. Nevertheless, the recent $1.4 billion Resilience and Sustainability Facility (RSF) offered by the IMF presents a rare case where external financing could help lay the groundwork for climate resilience.
The release of the first tranche of the RSF depends on the successful completion of the second review of the main IMF programme this September. The message is clear: donors must honour their pledges. But Pakistan, too, must be prepared to lead its own transition through a reform agenda.
Unlike traditional disaster response loans, the RSF is not designed to patch fiscal deficits. It is meant to embed climate resilience into the core of Pakistan’s public policy. And for once, the architecture is forward-looking.
The RSF requires Pakistan to integrate climate adaptation and mitigation into the Public Sector Development Programme, develop a credible disaster risk financing strategy, and implement water pricing reforms at the provincial level. The State Bank is tasked with issuing guidelines on climate-related financial risks, while energy policy must pivot toward renewables with clear targets.
If implemented, these reforms could institutionalise resilience rather than react to every climate emergency as a surprise. Pakistan’s commitment to phase out inefficient energy subsidies and introduce a carbon levy on fossil fuels (although I think it should have followed the polluters pay principle rather than a general levy on fuel consumption) could create the fiscal space needed to fund adaptation from within.
To be clear, these are not cosmetic tweaks. They represent a paradigm shift: from disaster relief to risk reduction, from donor dependency to climate budgeting. But they will require political will, administrative follow-through and public buy-in. And they must survive the churn of elections, bureaucratic inertia, and elite resistance.
Pakistan is not alone in facing climate havoc. But it may soon be one of many climate-vulnerable countries competing for the same shrinking pool of concessional finance. In 2025 alone, over a dozen major economies, from China to the US, have experienced floods, heatwaves or wildfires with billion-dollar damage tags. The cumulative toll is straining global disaster response systems. In the US, the Federal Emergency Management Agency (FEMA) is facing budgetary strain after a record number of federal disaster declarations in just six months.
This presents a tough dilemma for the Global South: what happens when the Global North also requires support? Aid flows are political, and when voters in Berlin or Washington see their communities flooded, there is less enthusiasm for foreign aid. Even climate finance, which we in the global south argue should be the moral duty of high emitters, risks becoming more transactional.
Add to that the harsh arithmetic of existing green finance flows. An estimated 85 per cent of global climate finance is absorbed by the world’s top 10 economies. That leaves 190 countries competing for the leftovers. According to Climate Policy Initiative, less than 3.0 per cent of global climate finance reaches Least Developed Countries, and the ten countries most affected by climate change from 2000-2019 received less than 2.0 per cent of global climate finance.
Another dimension of this conundrum is the contrasting human toll from this summer’s floods. New Jersey, inundated by record-breaking rainfall, saw just two fatalities. Texas, with its sprawling emergency systems, still lost over 120 lives, many in rural areas with limited warning systems. In Pakistan, over 260 deaths were recorded within weeks, despite the lessons of 2022 and improvements in forecasting. In 2022, the toll was over 1,700.
The difference in outcomes is not just a matter of income; it is also a matter of governance and policy choices. Texas had previously rejected a proposed flood siren system as too costly, ironically, a decision that may have increased the death toll this year. In contrast, Bangladesh, with significantly fewer resources, has dramatically reduced cyclone fatalities through the use of early warnings, community shelters and clear evacuation protocols. What matters is not just what you can afford, but what you prioritise.
Still, it would be misleading to reduce every climate disaster to governance failure. Climate change is now testing the resilience of even the best-prepared systems. While institutional capacity and leadership are important, so too are geography, exposure and financial constraints. In countries with constrained fiscal space, the margin for error is far thinner. The cost of inaction, or delayed action, is measured in lives.
For Pakistan, this moment could become an inflexion point. The IMF’s RSF programme, with its climate-linked conditionality, offers more than just dollars. If implemented fully and sincerely, the RSF provides a framework for incorporating climate risk into economic strategy. However, it must be enacted not as a mere box-ticking exercise, but as a genuine political commitment.
For the international community, the test is credibility. If pledges remain unfulfilled and climate finance remains elusive, then solidarity becomes a slogan rather than a principle.
The writer heads the Sustainable Development Policy Institute (SDPI) and is a member of thea visory board of the Asian Development Bank Institute. He tweets/posts abidsuleri