Project title Sector SCP practice
Cotton Production Textile and leather industry Cleaner Production
HP Cogen – Pak Utilities sector Cleaner Production
SCI-PAK Textile and leather industry Cleaner Production, Waste Management
Water Stewardship Pakistan Utilities sector Cleaner Production

Focal point

Mr. Syed Iftikhar-ul- Hasan Shah Gillani,

Joint Secretary International Cooperation

Climate Change Division/Ministry of Climate Change


Under SWITCH-Asia’s Regional Policy Support Component, UNEP’s main partner in Pakistan is the Ministry of Climate Change. The following areas have been identified as priority for capacity development and policy support on SCP after a comprehensive needs’ analysis in the country. Implementation of these activities has already started by the SWITCH-Asia RPSC.

SCP coordination

  • Establishing an “SCP Center”. The SCP Center could act as a central coordinating unit for planning and implementation of SCP activities and also as a Centre to facilitate policy making on SCP. The Centre could be hosted by the Government of Pakistan and could in a first phase employ one full time expert to run the Centre.
  • Capacity Building for the Public Sector: Organizing a national capacity building workshop for government officials on SCP (central and provincial governments)
  • Waste Management:
    • Training of a group of government staff on “Integrated Solid Waste Management”
    • Drafting of an ISWM Plan for a municipality in Pakistan 

On top of these activities, that can be considered as priority for implementation, there are a number of other opportunities for SCP support in Pakistan as follows:

  • A study on the potential of nature-based tourism and ecotourism development at the local level
  • A study on the potential of organic and/or sustainable agriculture that could later result on a pilot project on best practices for organic agriculture in Pakistan (e.g in the rice sector)
  • A pilot project on the “water footprint” approach in industry. The project could include capacity building and assessment of water use in SMEs
  • A development of a national framework for Awareness and Preparedness for Disasters on the basis of the UNEP “APELL” methodology.
  • Support on developing a national framework for the management of chemicals

Status of SCP policy framework

Pakistan is equipped with a number of federal policy frameworks on environmental protection. These documents clearly reflect the understanding that environmental concerns cannot be effectively dealt with through add-on environmental policies but that the environment needs to be integrated into overarching development planning as well as into sectoral policies and plans. It is clear that ‘grow now – clean up later’ is not an option for Pakistan; the country is far too dependent on its fragile environment, which provides livelihoods to millions of low-income households. Environmental degradation and resource depletion is already having a negative impact on millions of people’s lives as well as on the country’s economy, and is undermining its prospects for future development.

From the perspective of sustainable consumption and production, there are some challenges for Pakistan that appear particularly prominent. Water and energy are crucial natural resources, for the survival and livelihoods of low-income groups as well as for the economic development of the country’s cities and industries. There is thus a very strong case for improving the way these scarce resources are managed, even from a narrow economic perspective, and there is significant potential to do so.

Framework for Economic Growth 2011-2016

The framework for Economic Growth of 2011 (Planning Commission of Pakistan, 2011a) appears to have replaced the earlier five year medium-term development plans. The document places a strong emphasis on economic growth and envisages strengthened markets with limited government interventions. It discusses how to improve labour productivity but in general pays little attention to the role of natural resources and pollution.

One significant exception is the section on agriculture, which emphasizes that environmental deterioration is an important constraint on the country’s GDP growth. It cites a World Bank study which notes that the relationship between environmental conservation and economic prosperity is currently not recognized in Pakistan.

Annual Plan 2013-2014

In addition to its long-term and medium-term plans, the Planning Commission of Pakistan also develops annual plans that review the current situation and progress towards the objectives of the longer term plans, and list major government activities in key sectors. In the chapter on Climate change & Environment, the plan recommends and promotes the following key actions:

  • Achieving MDGs targets, particularly those relating to environmental sustainability under Goal 7
  • Implementation of the action plan of National Climate Change Policy and adequate sharing of responsibilities at all levels
  • In the wake of 18th Amendment, review and amendments in environmental regulations in consultation with Federal And Provincial Environmental Protection Agencies, civil society and private sector in order to be able to better implement the policies
  • Involvement of private sector and NGOs under public-private partnership for effective and efficient conservation and management of natural resources 

(Source: Annual Plan 2013-2014, Chapter on Climate change & Environment) 

The National Sustainable Development Strategy

The National Sustainable Development Strategy (2012) provides Pakistan’s country driven future blueprint for a green economy. The Strategy includes strategic goals such as greening of the pro-poor economic growth model, safeguarding the environment, vulnerability mapping, community based adaptation, sustainable land management, and undertaking future climate-resilient development especially in infrastructure. 


National Climate Change Policy (2012)

Pakistan launched its first National Climate Change Policy (2012), with the goal of ensuring climate change is mainstreamed in the economically and socially vulnerable sectors of the economy and to steer the country towards climate-resilient development. The Policy addresses the threats of climate change through adaptation and mitigation measures. Mitigation measures pay special attention to integration of climate change considerations and energy infrastructure, fuel, and technology investments; energy efficiency requirements in building codes; and long-term transport planning. The Policy also aims to strengthen institutional frameworks (such as through proposed establishment of a National Climate Change Commission), cultivate climate change professionals to augment in-country capacity, and raise public awareness on climate change.


Pakistan Environmental Protection Act 1997              

This fundamental piece of legislation provides the legal basis for environmental governance in Pakistan. It outlines the roles, mandates and responsibilities of the key institutions at federal and provincial levels, including environmental protection councils and environmental protection agencies (ADB, 2008; World Bank, 2006). 

Consumer Protection laws in Pakistan 

Presently, the Islamabad Capital Territory as well as all the four Provinces has their respective Consumer Protection statutes namely the Islamabad Consumer Protection Act 1995, the N.W.F.P Consumer Protection Act 1997, the Balochistan Consumer Protection Act 2003, Punjab Consumer Protection Act 2005 and the Sindh Consumer Protection Ordinance 2007.

They state the ineffective implementation of standards and quality specifications and mention the impact of consumer purchasing on the environment. The act promotes prevention, control of pollution and promotion of sustainable development. 

Resource consumption and production

Main Resource Consumption and Resource Efficiency Indicators (2010)

Population (millions) 173.149
GDP (billion USD) 139.224
GDP is in USD exchange rate based on year 2005 and deflated.
Source: UNSD database.
Subject Area Total Per person Per USD$ of GDP
Domestic Material Consumption, DMC
(tonnes, tonnes per capita, kgr per 1USD$)
660,568,189 3.82 4.74
GHG emissions
(kilotonnes,tonnes per capita, kgr per 1USD$)
354,528 2.05 2.55
Total Primary Energy Supply, TPES
(Petajoules, Gigajoules per capita, Megajoules per 1USD$)
3,533 20.41 25.38
Water Use
(Trillion litres, Kilolitres per capita, Litres per 1USD$)
183.50 1,059.78 1,318.02
Subject Area Indicator
Population density 2015 (UNESA 2012 revision), population per 236
GDP per capita (USD), 2013 WB 1,275.30
HDI Rank (2013) UNDP 0.537
Arable land (hectares per person) WB 2012 0.12
Forest cover in % (2010), UNSTATS 2
Material intensity (2010)UNEP 4.74
Per-capita energy use (kg of oil equivalent per capita) 2011, WB 482
Energy intensity (total primary energy consumption per USD of GDP) 2011, EIA 18,449.16
GHG intensity (2010) UNEP 2.55
CO2 emissions (metric tone per capita), 2010, WB 0.9
Number of Middle Class consumers % (2010), ADB 40
Number of people with income < 2USD/day (PPP, USD, %), 2010, ADB 60

Trends in Resource Consumption and Resource Efficiency Indicators (1970-2010)

DE: Domestic Extraction;
MI: Material Intensity of the economy;
MF: Material Footprint.
All other abbreviations explained in the table above

Panel a) Pakistan’s GDP grew fastest, followed by TPES. DMC and GHG emission grew in parallel, while population growth was slowest, although population still tripled over the period 1970 to 2010. Panel b) shows modest growth in per capita DE, concentrated in the non-biomass materials categories. Panel c) also indicates little growth in MF per capita over the period. The lower gross level of MF compared to DE is accounted for by a much lower biomass component in MF, with the non-biomass components remaining comparable between DE and MF. Looking back at panel a), the relatively low rate of materials usage per capita has still translated to a fourfold increase in DMC, mainly a result of Pakistan’s relatively rapid population growth. Panels d), e) and f) show stable to moderately increasing material and energy consumption, and GHG emissions, per capita regardless of whether footprints or conventional measures are used. All six intensity measures decreased (very slightly in the case of adjusted EI), giving across-the-board relative decoupling. Conventional measures of material and energy consumption overestimate relative to footprint based measures, almost doubling estimates in the case of energy.

(Source: UNEP CSIRO Indicators for a Resource Efficient and Green Asia and the Pacific, 2015)

Key references relevant to SCP

  • Planning Commission of Pakistan, 2011a. Pakistan: Framework for Economic Growth. Government of Pakistan, Islamabad.
  • Planning Commission of Pakistan, Annual Plan 2013-2014. Government of Pakistan, Islamabad.
  • World Bank, 2006. Pakistan: Strategic Country Environmental Assessment. World Bank, Washington DC.

UNEP's relevant activities

The information in the country profiles herein have been obtained through research with firsthand and secondhand sources. The information presented herein cannot be considered as official policy of governments or other official bodies. The SWITCH-Asia Programme cannot be held responsible for the content of the sites to which it provides links or for the availability of servers or links. Information is being continuously updated in order to maintain an up to date country profile. If you would like to contribute information for this profile or have any further comments, please send an email to:



  • SMEs constitute more than 90% of the total 3.2 million economic establishments in Pakistan.[1] SMEs contribute 30% in GDP, 25% in exports and employ over 78% of non-agricultural workforce.[2]
  • Less than 4% of SMEs currently avail loans despite about 40% having a banking relationship.
  • The majority of SMEs are sole proprietors or family owned. 61% of SMEs obtain loans from friends and family and 30% from landlords or shopkeepers.[3]
  • Many SMEs in Pakistan and the Middle East and North Africa (MENA) region have not accessed banking due to the fact that they require Shariah-compliant banking; and banks in those regions have tried to provide those services to fulfill that demand.[4] However an IFC report has highlighted challenges for SMEs in Islamic banking, such as long and tedious transactions and processing. The report also found that Islamic SME loans have very high collateral ranging from 130% to 140% of the total loan amount.[5] There is also need for more training in SME lending practices as well as the development of financial products and procedures suitable to SMEs.


[1] Ahmad, I. Role of State Bank of Pakistan in SME Development. Presentation. Retrieved from

[2] International Finance Corporation (IFC). Islamic Banking Opportunities Across Small and Medium Enterprises. Retrieved from

[3] Ibid.

[4] Ibid

[5] Ibid 

Green financing is still limited

Although there is awareness of sustainable banking and green bank lending, green financing is not a priority for many banks or SMEs. 

There are a number of microfinance banks in Pakistan that tailor loan products to micro-enterprise owners as well as farmers and livestock entrepreneurs. However, none offer loans targeted towards environmental sustainability or sustainable production processes.  

Currently, the State Bank of Pakistan is leading green lending in the energy sector with their Refinancing Scheme for Renewable Energy available through commercial banks.

 The State Bank of Pakistan also published a concept paper in 2015 on green banking outlines possible measures to develop green financing such as:[1]

  • Issue guidelines on green banking  
  • Encourage banks to integrate assessment of environmental risks in evaluation of credit proposals
  • Enhance credit facility to renewable energy and energy efficiency
  • Proactive green banking initiative, such as financing green vehicles, green buildings and solar energy
  • Establish a group on sustainable energy financing with banks, Development Finance Institutions (DFIs) and the IFC to create policy measures on green financing
  • Develop carbon-offsetting businesses
  • Awareness building

[1] State Bank of Pakistan. (2015). Concept paper on green banking. Retrieved from


  • Economic conditions in Pakistan as well as natural disasters have significantly hindered the banking sector and disrupted many businesses.
  • Low levels of skill and training
  • Poor infrastructure
  • High cost of credit
  • Large collaterals
  • Lack of legal and regulatory framework
  • Lack of financial literacy, especially in rural areas
  • Cumbersome loan process
  • Corruption
  • Religious beliefs (need for Shariah-compliant banking services)
  • Banks lack expertise in SME lending
  • Banks lack specialized financial products for SMEs

Government institutions for cooperation

  • Small and Medium Enterprises Development Authority (SMEDA)
  • State Bank of Pakistan- Infrastructure, Housing and SME Finance Department
  • Pakistan Climate Change Council

Main institutions providing Green Finance

  • State Bank of Pakistan
  • SME Bank Ltd.
  • United Bank of Pakistan (UBL)
  • Habib Bank Limited (HBL)
  • The Punjab Provincial Cooperative Bank
  • Meezan Bank
  • Askari Bank
  • MCB Bank Limited
  • Bank Alfalah
  • Standard Bank Pakistan
  • Faysal Bank
  • Khushhali Bank Limited
  • Apna Microfinance Bank Limited
  • National Rural Support Program (NRSP) Microfinance Bank Limited  
  • Mobilink Microfinance Bank
  • Finca Microfinance Bank
  • The First Microfinance Bank Limited
  • Advans Pakistan Microfinance Bank Limited
  • Asian Development Bank (ADB)
  • International Finance Corporation (IFC)
  • World Bank (WB)


State Bank of Pakistan:

Refinancing scheme for renewable energy,[1] available through all commercial banks and DFIs.

Financing for the establishment of new Power Projects Using Renewable Energy with a capacity of up to 20 MW.Must meet requirements of the Alternative Energy Development Board (AEDB) and compliance with Government of Pakistan’s Renewable Energy Policy

  • Available against Letter of Credit only
  • Term: maximum 10 years with maximum grace period of 2 years
  • Interest rate: up to 6% annually
  • Principle amount is repayable in equal quarterly or half-annual installments after prescribed grace period.


SME Bank Limited:

Specialized bank to support and develop the SME sector by providing financial and technical services for SMEs.

Short term or medium term running finance: (for raw material purchases)

  • Loan amount: Rs.0.5 Million – Rs.100 Million
  • Term: 1 year or 3 years
  • Annual interest rate: 1 year KIBOR (Karachi Interbank Offered Rate) + 6.5%
  • Mortgage of urban residential/commercial/industrial properties acceptable (Max. financing will be 70% of Forced Sale Value of the security & collateral}.

 Term loan for fixed-term assets:

  •  Loan amount: Rs.0.5 Million – Rs.100 Million
  • Term: 1 - 5 years 
  • Annual interest rate: 1 year KIBOR (Karachi Interbank Offered Rate) + 5.5% (adjusted annually)
  • Mortgage of urban residential/commercial/industrial properties acceptable (Max. financing will be 70% of Forced Sale Value of the security & collateral}.


Meezen Bank:

Offers Shariah-compliant banking services for SMEs, including working capital financing for purchasing raw materials, long-term financing for acquisition of assets, and trade-related financing.

Small Enterprises: 50 employees, up to Rs. 150 Million annual sales turnover

Loan amount:  Up to Rs. 25 Million 

Medium Enterprises:  51 to 250 employees (Manufacturing & Service Concerns) or 51 to 100 (Trading Concerns) Rs. 150 Mn – Rs. 800 Million annual sales turnover.

Loan amount: Up to Rs. 200 Million

 Program Partner Karandaaz Pakistan:

·      Established by UK DFID and the Bill and Melinda Gates Foundation to promote access to finance for SMEs implementing technology-enabled solutions.

·      Meezan Bank Limited and Karandaaz Pakistan will provide Rs. 9 billion to SME vendors and distributors on a program based model over the next 5 years.

Punjab Provincial Cooperative Bank:

Offers specialized banking services to farmers, including loans to SMEs, loans for agricultural products, livestock, and crop production. They also provide loans against liquid access to provide fast credit to individuals, farmers, or businesses. 

Running finance facility to meet daily working capital needs:

  • Loan amount: Rs.0.5 Million – Rs.3 Million
  • Term: 1 year
  • Annual interest rate: Flat 18.0% p.a. payable on quarterly basis and in-case of default 2% over & above 
  • Collateral:  Agri Land / urban property having value at-least double of loan amount
  • Loan processing fee: Rs. 2,500 


Askari Bank:

Askari Bank provides access to finance and credit for SMEs. Offers running finance, long term finance, and trade finance, as well as lease financing and loans for business premises. They also Prime Minister Youth Business Loan (PMYBL) focused on unemployed educated youth to support new businesses. They also offer agricultural banking.

Ask Fund Facility:

  • Loan amount: up to Rs. 50 Million for individuals and SMEs.
  • Term: 1 year (subject to renewal)
  • Quarterly interest rate
  • Collateral:  Agri Land / urban property having value at-least double of loan amount
  • Loan processing fee: Rs. 2,500


Habib Bank Limited:

Provides SME financing to aid growth in the SME sector to support employment and poverty alleviation. 

HBL Easy Loan: to meet business needs such as supplier payments, salary payments etc.

  • Loan amount: Running Finance Facility up to 95% of your savings
  • Demand finance facility up to 5 years
  • Quarterly or monthly interest rate; competitive mark up
  • Collateral: investments and deposits

HBL Small Business Finance: for SMEs in Manufacturing, Services and Trading sector

  • Loan amount: up to PKR 10 million
  • Demand Finance Facility up to 70% of the assessed value of your property
  • Demand finance facility up to 3 years
  • Affordable interest rates
  • Collateral: investments and deposits


United Bank of Pakistan:

Loans to grow SME business. 

UBL Karobar Loan:

Exclusively designed for SMEs.

  • Loan amount:  up to PKR 30 Million
  • Borrowing facility up to 75% of your property value
  • Running finance facility and term loan
  • Collateral:  mortgage of your property including residential, commercial and industrial. 


UBL Rice Husking Loan:

Available for SME customers. Sole Proprietorship, Partnership and Private Limited 

Companies for purchase of paddy from growers or open market

  • Loan amount:  up to PKR 75 Million
  • Running finance facility, term loan, and guarantee facilities


 UBL Cotton Ginning Loan:

Available for SME customers. Sole Proprietorship, Partnership and Private Limited companies and will be available for purchase of fresh crop of phutti / raw cotton from the growers and open market.

  • Loan amount: up to PKR 100 Million
  • Running finance facility, term loan, and guarantee facilities


 Bank Alfalah:

Has created a SME toolkit in partnership with International Finance Corporation (IFC) to provide business advice including business planning, marketing, and best practice case studies for SME development.

Apna Microfinance Bank Limited:


  • Loan Amount Rs. 10,000 to 150,000 and up to Rs. 500,000 for Enterprise Products
  • Term: 1 – 5 years
  • Repayment Period 1 Month to 5 Years
  • Repayment Monthly


 Agri Enterprise loan:

Running finance or term finance for skilled entrepreneurs (e.g. carpenters, black smiths, welders, lathe machinists, electricians, plumbers, tailors, embroiders (including women), meat shops, barbers, etc.

  • Loan amount: PKR 30,000 – 150,000
  • Term: 1 – 3 years


APNA Livestock Enterprise Loan:

Running finance, up to PKR 150,000



Khushhali Bank Limited

Khushhali Sarmaya (Micro Enterprise Lending)

For micro-entrepreneurs and small farmers/livestock owners. Including purchase of raw material, finished goods, stocks inventory etc.

  • Loan amount: PKR 150,001 – 500,000
  • Term: 3 –36 months

[1] State Bank of Pakistan. Scheme for Financing Power Plants using Renewable Energy. Retrieved from

Status and policies

GHG emissions data

2015 total territorial GHG emissions[1]* (excluding land use change and forestry):  171 MtCO2

2015 territorial GHG emissions per capita:  0.9 tCO2/person 

2014 CO2 consumption emissions:[2] 173 MtCO

*GHG territorial emissions are Carbon dioxide emissions from the use of coal, oil and gas (combustion and industrial processes), the process of gas flaring and the manufacture of cement.

[1] CO2 Emissions | Global Carbon Atlas. (2016) Retrieved from

[1] Carbon dioxide emissions occurring anywhere in the world attributed to the country in which goods and services are consumed. For more information see: Section 2.1.2, The global carbon budget 1959-2015, Le Quéré et al. 2016.     


2015 GDP: EUR 256 billion[1]

GDP composition by sector:[2]

Agriculture: 25.2%
Industry: 19.2%
Services: 55.6%

Agricultural products: cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs

Industry sub-sectors: textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, shrimp

[1] The World Factbook — Central Intelligence Agency. (2017). Retrieved 8 August 2017, from

[2] Ibid

Industries' contribution to climate change

GHG emissions by sector (in MT CO2-equivalent):

  • Energy: 185.97
  • Agriculture: 174.56
  • Industrial Processes: 21.85
  • Land Use Change & Forestry: 10.39
  • Waste: 12.29

Total: 405.07

Energy sector’s (high) mitigation potential:

  • Increase grid efficiency
  • Improve efficiency of coal-based power generation
  •  Large scale distributed renewable energy: solar, wind, and hydroelectricity
  • More efficient irrigation motors and pumps
  • Replace all bulbs with LEDs
  • Efficient stoves
  • Efficient water heaters
  • Replacement of boilers/furnaces
  • Efficient space heaters and air conditioners


Agriculture’s (high) mitigation potential:

  • Improving soil management
  • Improve irrigation and water management
  • Manage water in rice cultivation to reduce methane emissions
  • Implement agroforestry practices
  • Promote use of green manure, better manure management 



Climate change policies

National policies

  1. Pakistan 2025: One Nation, One Vision 2014
  2. National Climate Change Policy (NCCP) 2012
  3. The Framework for Implementation of Climate Change Policy (2014-2030)
  4. National Disaster Risk Reduction Policy 2013
  5. National Energy Efficiency and Conservation Act 2016
  6. National Forest Policy 2015
  7. The Pakistan Council of Renewable Technologies Act 2016
  8. National Sustainable Development Strategy (NSDS) 2012
  9. National Adaptation Plan (under development) 

International mitigation targets

Ratified UNFCCC in 1994
Ratified Kyoto Protocol in 2005
Ratified Paris Agreement in 2016

Pakistan’s INDC to the UNFCCC:[1]

Pakistan intends to reduce 20% of its 2030 projected GHG emissions subject to availability of international grants to meet the cost of such a reduction, which would require USD 40 billion (approximately EUR 37.7 billion) at current prices. 

Pakistan’s adaptation needs range between EUR 6.61 to EUR 13.2 billion/annum during this period.

Government financing for climate change related initiatives:

According to the UNDP Climate Public Expenditure and Institutional Review (CPEIR):

  • The total estimated federal climate-related expenditure for 2010-2014 remained between 5.8 and 7.6% of total federal expenditures.
  • Expenditure spent on adaptation varied between 25% and 60% and mitigation between 30% and 71% (combined adaptation and mitigation benefits were a maximum of 11%).
  • Total climate-related spending has increased 88 percent over the last four years (from 2010 to 2014, PKR 13.0 billion to PKR 24.4 billion)
  • National Adaptation Plan development


The Pakistan Climate Change Bill 2016

  • Passed in December 2016
  • Establishes a Pakistan Climate Change Council
  • Establishes a National Climate Change Fund (such as with funds from the Green Climate Fund) to ensure finance is delivering projects in a timely, effective, and transparent way, and that climate finance is integrated into development priorities.
  • The Board will supervise technology transfer and strengthen capacity building for adaptation and mitigation projects.[3]

[1] INDCs - Intended Nationally Determined Contributions. 2017. Retrieved from

Pakistan. (2016). Pakistan's Intended Nationally Determined Contribution (PAK-INDC).

[3] National Assembly of Pakistan. (2016). The Pakistan Climate Change Act. Retrived from

Climate change adaptation efforts

Adaptation priorities:

Up to 2020 – 2025:

  • National Adaptation Plan will be developed, led by the Ministry of Climate Change, and sub-national adaptation planning capacity will be strengthened
  • Disaster risk management to floods, droughts, GLOFs, etc. will be enhanced and strengthen institutional and legal systems.  

Up to 2030:

  • Agriculture: strengthening risk management, developing comprehensive climate smart agriculture program
  • Water: watershed management, water resource allocation, use water recycling and rain water harvesting
  • Infrastructure: include innovative climate resilient infrastructure in urban planning

Climate change impacts

Climate change is a top threat for Pakistan. Pakistan has great climate variability, with 11 million hectares of desert and nearly 7,000 glaciers. Pakistan is one of the most vulnerable countries to climate change impacts. Pakistan’s current population is 201 million[1] (36% of which live in urban areas) and is expected to grow to 229 million by 2025, adding to the country’s social and environmental pressures.[2] Pakistan has a poverty rate of 21%[3] and over 26 million people rely on irrigated agriculture for their livelihoods. Damage to the coastal ecosystem due to climate change and to projects such as the China-Pakistan Economic Corridor program have displaced 80% of the five million Pakistanis who live along the coastal belt and banks of the Delta.[4] The poor are particularly vulnerable to climate change- related events such as flash floods, heat waves, Glacial Lake Outburst Floods, and cyclones. Pakistan also faces an energy crisis, with 35% of their energy use from natural gas and about 30% from hydroelectricity.

 Main climate change impacts include:

  • Floods
  • Drought
  • Glacial Lake Outburst Floods (GLOFs)
  • Heat waves
  • Rising sea level
  • Land erosion
  • Salinity intrusion
  • Cyclones
  • Climate- induced migration and displacement
  • Biodiversity loss

[1] The World Factbook — Central Intelligence Agency. (2017). Retrieved 8 August 2017, from

[2] Pakistan. (2016). Pakistan's Intended Nationally Determined Contribution (PAK-INDC). Retrieved from

[3] UNDP Pakistan. (2016). Policy Brief: Why Pakistan Needs a Climate Change Financing Framework?. Retrieved from

[4] Nazir, S. 2016 Pakistan’s Biggest threat isn’t terrorism it’s climate change. Retrieved from  

Economic, social, and environmental impacts of climate change


  • Agriculture employs 42.3% of the population[1] and agricultural products comprises 70% of Pakistan’s foreign exchange earnings.
  • 90% of agricultural output comes from irrigated farmland, of which 50 to 80% of its water comes from glaciers and snow melt;[2] thus changes in glacier melt balance will directly affect agricultural output.
  • Reduced water availability will alter crop rotation and cropping patterns
  • Major cereals like wheat and rice are predicted to decline by 15 – 20% with a predicted temperature rise of 3 degrees by 2040.[3]
  • Livestock production is predicted to decline by 20-30% reducing food supplies
  • Fruit and vegetable production, constituting high value exports for Pakistan will decline and cause large economic losses.


Extreme climatic events:

  • More than 90% of the disasters that have occurred in Pakistan over the last 40 years have been triggered by climate change. Studies by the National Disaster Management Authority NDMA show that the climate-induced catastrophes between 1994 and 2013 resulted in an average economic loss of US 3.99 billion (EUR 3.76 billion) per year.[4]
  • The Pakistan Economic Survey reported that during 2010-2012 floods more than 3,000 people were killed and losses of US 16 billion (EUR 15.11 billion) were created.[5]
  • Little or erratic rainfall can alter water tables and will lead to drought in the southern and central regions.
  • Glacier melt will increase flash floods which lead to loss of lives and decreased river flow as glaciers recede.


Sea level rise:

  • The National Institute of Oceanography (NIO) reports that sea levels are rising by 6mm annually, which could submerge Karachi in the next 35 – 45 years, and the cities of Badin and Thatta earlier. This could displace 40 million people.
  • Seawater intrusion inundated more than 2.2 million acres of farmland in Thatta and Badin district.
  • Depletion of mangrove forests leads to damaging of agricultural land and increases the vulnerability of the region to floods, land erosion, and storms.[6]


Energy and hydropower:

  • Erratic rainfall and prolonged drought affects hydropower electricity.
  • Heat waves and extreme temperatures may also damage energy equipment and infrastructure.
  • Pakistan is experiencing serious energy crises, with electricity shortages sometimes reaching 7,000 MW. Energy shortages cause an estimated annual GDP loss of 4-7% in GDP with an estimated 2 – 6% reduction in GDP growth.[7] This causes businesses to pay high-energy costs and suffer disruptions in their business and supply chains.


Small and Medium-sized Enterprises (SMEs)

  • Extreme climatic events like floods and storms damage infrastructure and facilities.
  • There will be more interruptions to business transactions.
  • Transport and logistics routes will be damaged or disrupted.
  • Heightened prices and market volatility.
  • Impacts on employees and consumers – lack of access to basic goods and services
  • Lack of water and energy availability affect operations and productions.
  • Health issues from heat waves and increase of disease will cause decreases in labor and work production.


  • Temperature rise and floods increase the risk of diseases such as malaria, cholera, and dengue fever.[8]
  • A heat wave in Karachi June 2015 that reached 49 degrees Celsius killed at least 1,200 people (combined with socio-economic factors).

[1] Government of Pakistan, Ministry of Finance. (2016). Chapter 2: Agriculture (pp. 23-41). Pakistan Economic Survey 2015-16. Retrieved from

[2] USAID. (2012). Pakistan Climate Vulnerability Profile. Retrieved from

[3] IUCN Pakistan. Climate change: Vulnerabilities in Agriculture in Pakistan. Department For International Development, Government Of Pakistan Ministry Of Environment. Retrieved from

[4] Pakistan. (2016). Pakistan's Intended Nationally Determined Contribution (PAK-INDC). Retrieved from

[5]  Ijaz, A. (2016). Climate Change and Pakistan: Islamabad Policy Research Retrieved from

Butt, A. (2015). Karachi may sink into the ocean by 2060, Senate warns. Retrieved from

[6] State Bank of Pakistan. (2015). Concept paper on green banking. Retrieved from

[7] Climate Change and LEAD Pakistan. Basic guide to climate Retrieved from

International cooperation on climate change

Status: 2017. Inclusive of grants and loans; not an exhaustible list.



No. of Projects

Program/ areas of focus

Funding Amount


Funding Sources

Global Environment Facility




Biodiversity, climate change, land degradation, Persistent Organic Pollutants





GEF Trust Fund,

Special Climate Change Fund

Green Climate Fund and UNDP


Risk reduction from Glacial Lake Outburst Floods, Develop community-based Early Warning System (EWS) 

€34 Million

Approved 2016

Green Climate Fund






Sustainable Land Management to Combat Desertification - Phase II





Multi-lateral Fund, Montreal Protocol Unit

Mountains and Markets: Biodiversity & Business in Northern Areas


Million/ year



Pakistan Sustainable Transport

€1.8 Million



Adaptation Fund




Reducing Risks and Vulnerabilities from Glacier Lake Outburst Floods in Northern Pakistan

€3.68 Million


2011 - 2015

Adaptation Fund





Conservation and sustainable management of biodiversity in Khyber Pakhtunkhwa

€5 Million

2012 - 2015

German Federal Ministry for Economic Cooperation and Development (BMZ)