Pakistan Budget Slashes Climate Funds Amid Rising Disaster Risks

Pakistan's federal budget for the upcoming fiscal year, FY27, has drawn criticism for substantially reducing allocations to climate action, despite the nation's extreme vulnerability to climate-related disasters. Except for funds designated for disaster management, nearly all climate categories face budget cuts compared to the previous year.

Mitigation funds have been slashed from Rs603 billion to Rs124 billion, while adaptation funding has decreased from Rs85 billion to Rs70 billion. The "green component" of subsidies also saw reductions, with the energy sector's allocation dropping to Rs423 billion from Rs529 billion. Similar cuts were proposed for the food, industry, transport, and agriculture sectors.

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Given the country’s exposure to floods and heat waves, adaptation and resilience should receive at least as much attention as mitigation.

Experts question this budgetary approach. Giovanni Maurice Pradipta, a policy advisor at Germanwatch, argued that adaptation and resilience should receive as much attention as mitigation, given Pakistan's exposure to floods and heatwaves. He stressed the importance of preparing developing countries' budgets for climate action. Former climate change minister Malik Amin Aslam called the budget "suicidal," highlighting the complete absence of funding for climate adaptation issues, particularly heat stress. He referenced international reports warning that Pakistan could face one-third of global heat stress deaths by 2050, with nine districts becoming uninhabitable by 2030.

Despite the decrease in climate spending, the government anticipates revenue growth. It aims to collect Rs20 billion from the EV adoption levy, a 100% increase, and Rs50 billion from the Climate Support fund. While the budget imposes no new taxes on renewables, pre-budget speculation had already driven up prices for solar and batteries, according to energy expert Dr. Khalid Waleed.

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The funding or project stream for addressing climate adaptation issues, in particular heat stress, is totally missing.