Green energy plans

Sound green energy policies can have a lasting positive impact

Green energy plans


ecently, there have been rumours that the government is considering the imposition of new taxed on solar energy use. The Power Division has denied that there is any suggestion to impose additional taxes. However, the rumours have caused confusion in market and slowed down the installation of solar power units in the domestic sector.

Pakistan is among the countries most vulnerable to the impact of climate change. While Pakistanis cannot prevent carbon emissions by the rest of the world, moving towards sustainable sources of energy is a step towards greater climate resilience.

The 2017 net-metering policy encourages the integration of alternative sources of energy such as solar power into the national grid.

For a sustainable future, the government must always be on the lookout for ways to limit the carbon footprint. It must also adhere to the commitments made under the Paris Agreement, to “achieve a balance between anthropogenic emissions by sources and removal by sinks of greenhouse gases…”

The progress so far has not been satisfactory, despite the conference in Glasgow, the United Nations Emissions Gap Report highlighted a 2.4-degree Celcius warming of the Earth.

A 2.4 degrees Celcius rise in average temperature might not sound daunting considering certain areas of Pakistan have witnessed very high temperatures during summers for many years. However, according to a recent study by the World Bank, a 2-degree increase could expose 37 percent of Pakistan’s population to severe heat at least once every five years, cause a 0.46-metre rise in sea level along the coast and lead to an 8 percent loss in vertebrate species and a 16 percent loss in plant species.

In a top-down approach, the government and policy-makers take the lead in steering the country towards a more sustainable environment. The government’s climate policy needs to promote and support a move towards environment-friendly strategies, with clear, ambitious targets, plans and timelines for full transition towards a zero-carbon economy.

There is a need to identify and list negative externalities that impact the environment. A Pigovian tax can then be pushed for. It is a tax on market transactions that create negative externalities. It impose a cost of production on third parties. Tobacco taxes are an examples of Pigovian tax. Pakistan has not shied away from imposing these to discourage smoking.

Such taxes not only distributes the problem across parties but also tend to help phase out cost-ineffective practices. In the United Kingdom, back in 2013, coal use fell sharply to the lowest level since 1890 with the introduction of a carbon tax of around $25 per tonne.

A drastic change in national policy is needed to remove fossil fuel subsidies and keep green subsidies.

In recent years, Pakistan has moved towards exploitation of renewable resources. Solar, hydro and wind power have being the three main resources. Renewable energy use can flourish with research and development in these sectors. 

Successive governments have been hesitant to remove subsidies on fossil fuels. The Imran Khan famously fixed petrol prices at a low level while international prices were rising. Former finance minister Miftah Ismail too came under the spotlight for supporting fuel price hikes.

According to a report by the World Bank, published at the end of 2023, Pakistan had the highest fuel subsidy in South Asia, (2.6 percent of the GDP) in 2020. In March 2023, the International Monetary Fund forced Pakistan to scrap new fuel subsidies to resume talks about stalled loans.

Recent years have witnessed Pakistan moving towards renewable resources like solar, hydro and wind. Renewable energy will flourish with research and development in these sectors and the adaptation of new technology.

Subsidies on renewable products can lead to a rapid move away from fossil fuels. Removal of consumer subsidies on fossil fuels can relieve the government of a huge financial burden and at the same time contribute to a reduction in emissions. Subsidies to lower carbon options, such as clean coal, may still be effective in biasing markets away from lowest-cost solutions that have a greater environmental impact.

The rapid emergence of housing societies across the country is also causing environmental degradation by replacing grasslands, forests and agricultural fields with concrete. There is a desperate need to halt the conversion of agricultural land and forests into gigantic housing societies.

On a regional level, the role of regulation and accountability has not been fully utilised. Most new regulations in climate policy are uniform, the idea of first-mover risk (the potential challenges and drawbacks that a company may face when it’s the first to enter a new market or introduce a new product) has been eliminated.

Industries tend to compete to overcome the risk of new regulations. With everyone adjusting, the freeloader concerns are removed with uniformity bringing change for all parties involved. These shifts signal market investment in new clean technologies.

There is an opportunity for policymakers and governments to create a positive impact. This places a responsibility on their shoulders.

Pakistan is on the brink of a climate-related disaster with flash floods, inconsistent rainfall, unexpected seasons and poor air quality indicating the severity of the problems. Everybody needs to be aware of the threat and play their part towards a greener Pakistan.

The writer is a University College London graduate with a master’s in urban economic development. He is the co-founder of HamSukhan, a community-based learning platform (

Green energy plans