Fostering green investments

Green climate finance can support efforts to mitigate and adapt to the impacts of climate change

Fostering green investments


he devastating floods in Pakistan have highlighted the urgent need to prioritise climate change mitigation and adaptation efforts in the country. The scale of the devastation, with over 33 million people affected, underscores the urgency of taking concrete steps towards building resilience and addressing the root causes of climate change.

Green climate finance can be defined as financing that is directed towards low-carbon and climate-resilient development. It is a mechanism that can be harnessed to address the root causes of climate change, while also helping build resilience and adaptation capacity in vulnerable communities.

In Pakistan, too, green climate finance can play a critical role in supporting efforts to mitigate and adapt to the impacts of climate change.

Accessing green climate finance can be a challenge for many developing countries, including Pakistan, due to the stringent conditions proposed by the multilateral institutions and capacity issues at the national and sub-national level in conceiving bankable projects.

Several avenues can be explored to facilitate access to these funds. One such avenue is the Green Climate Fund (GCF), which is a financial mechanism established under the United Nations Framework Convention on Climate Change (UNFCCC).

The GCF is designed to support low-emission and climate-resilient development in developing countries. It can provide much-needed financing for Pakistan to undertake climate change mitigation and adaptation efforts. The Loss and Damage Fund instituted at COP27 also offers a glimmer of hope for financing climate-specific projects in vulnerable countries like Pakistan.

Another avenue for accessing green climate finance is partnerships with accredited entities, especially international development organisations. International development partners can help the government mobilise green climate finance and can provide technical assistance to help Sindh access these funds.

Climate financing in Pakistan has a legislative framework in the form of the Pakistan Climate Change Act, 2017, which envisages the establishment of a high-powered Pakistan Climate Change Authority and Pakistan Climate Change Fund. The Ministry of Climate Change needs to effectively engage with the provincial governments, development partners and the private sector to institutionalise and operationalise funding mechanisms for high-impact climate-resilient projects.

Being the most affected province, Sindh needs to undertake substantial green investments. In alignment with the National Climate Change Policy of 2021, the province developed a Climate Change Policy in 2022 and an action plan to promote renewable energy resources to reduce green house gases (GHG) emissions from industries, control emissions and effluents from the industries and transport sectors, ensure nature-based solutions to achieve mitigation and adaptation and develop resilience for the province against climate change and climate-induced impacts.

Several avenues can be explored to facilitate access to green funds. Green Climate Fund, a financial mechanism established under the United Nations Framework Convention on Climate Change, is a promising source.

Critical components of the GCF, like the Readiness Programme and Project Preparation Facility, can go a long way to improve the institutional readiness and capacity to conceive and undertake bankable climate-resilient projects.

In addition to accessing green climate finance, it is important to prioritise sustainable, green investments in the recovery and reconstruction efforts in Pakistan, especially Sindh. This means investing in renewable energy, energy-efficient buildings and sustainable transport systems. These investments can help not to reduce greenhouse gas emissions but also to create jobs and contribute to economic growth.

One area that holds immense potential for green investment in Sindh is renewable energy. The province has significant renewable energy potential, including solar and wind power. To unlock this potential, creating an enabling environment that encourages private investment in renewable energy projects is important. This can be done by providing policy incentives, such as tax credits and feed-in tariffs, as well as by streamlining regulatory procedures and improving access to finance.

The private sector can be effectively channelised on an equity-based model for investments in solar parks to be developed by the government. The instrumental role of augmenting institutional and legal readiness to access and harness climate financing for bankable projects cannot be over-emphasised.

Investing in sustainable transport systems can yield significant environmental and social benefits. The floods in Sindh resulted in significant damage to roads and transport infrastructure, highlighting the vulnerability of the province’s transport systems to climate change.

Investing in sustainable transport systems, such as electric buses and cycling infrastructure, can help reduce greenhouse gas emissions while also improving the resilience of the province’s transport systems to future climate shocks.

Sindh can also benefit from circular economy approaches, which can reduce waste, increase resource efficiency and create economic opportunities. Waste-to-energy projects can turn waste into electricity and sustainable agriculture practices can increase yields and reduce emissions.

The ambit of green investments must also encompass the blue economy centred on the sustainable use of ocean and marine resources for economic development, job creation and environmental protection.

The government can play a crucial role in promoting sustainable development and creating a conducive environment for businesses to invest in the blue economy.

Accessing and harnessing green climate finance and prioritising sustainable investments can help mitigate the impacts of climate change, while also promoting inclusive economic growth and creating jobs.

The writer is a Fulbright scholar with a master’s degree in international development studies and a public policy advisor. He can be reached at

Fostering green investments