Draft green taxonomy policy likely to be released this month

KARACHI: Pakistan’s central bank said on Wednesday that the draft of the National Green Taxonomy Policy is presently undergoing consultation and is expected to be released this month.

This was announced during a meeting of the Senate Standing Committee on Climate Change and Environmental Coordination held at the State Bank of Pakistan.

The National Green Taxonomy Policy draft is currently in the consultation phase. This is expected to be shared within this month, as it has been developed with input from all stakeholders, including representatives from the provincial and federal governments, the SBP’s Deputy Governor Saleem Ullah told the committee.

He said the policy aims to identify economic sectors and their contribution to carbon emissions. The sectors covered include agriculture, forestry and fisheries, manufacturing, transport, energy, construction, water and waste management, information and telecommunications, and tourism.

Upon identification, the policy classifies sectors as green, amber or red based on their carbon footprints. The policy will then focus on mitigation and adaptation processes, involving consultation and raising awareness among stakeholders in these sectors, he added.

Last month, the SBP unveiled a draft National Green Taxonomy for public feedback, aiming to promote green finance in Pakistan. This document provides clear definitions of green projects and activities, which will help policymakers, banks, financial institutions and investors direct capital flows towards sectors focused on climate risk mitigation and adaptation.

Senator Sherry Rehman, who attended the meeting, praised the SBP’s efforts to tackle this pressing issue, noting that Pakistan is the second most vulnerable country to climate change. She emphasised the importance of routing the draft through the Council of Common Interests (CCI), highlighting that provincial involvement is essential for successful implementation. Rehman urged the Ministry of Climate Change to accelerate efforts against climate change and enhance public awareness.

“Pakistan is facing water scarcity, and farmers are struggling to secure water for their crops. In light of the US exit from the Paris Agreement, we must act swiftly to address climate change since we are on our own,” she stated. She recommended that the Ministry of Climate Change and the Pakistan Environmental Protection Agency take the lead in addressing carbon emissions.

Rehman pointed out that the Green Taxonomy Policy is crucial as it will be applied across 160 major sectors, including exports and agriculture. She remarked that climate change disproportionately impacts underprivileged communities and stressed the need for a standardised net metering rate. Furthermore, she highlighted the importance of promoting solar power at the provincial level and insisted that the policy’s implementation requires consultation with provinces and stakeholders through the CCI.

She noted that water scarcity is a significant concern and advocated for a change in perspective to minimise water waste.