Pakistan is facing a significant financial challenge in addressing climate change, requiring an estimated $348 billion in investments from 2023 to 2030, according to a recent report by the World Bank. This figure represents approximately 10.7% of the country’s cumulative GDP during this period.
The investment is critical as Pakistan ranks as the fifth most climate-vulnerable country globally, with severe disaster risks highlighted by its position at 23rd on the 2024 Inform Risk Index.
Breakdown of Investment Needs
The World Bank’s report identifies two primary areas for investment:
- Adaptation and Resilience: $152 billion
- Decarbonization Efforts: $196 billion
Context of Climate Vulnerability
In 2022, catastrophic floods affected 33 million people, displacing 8 million, and causing damages estimated at around $14.9 billion, which accounted for about 4.8% of Pakistan’s GDP for that fiscal year. The urgency for a comprehensive climate financing strategy is underscored by these events and the country’s ongoing environmental challenges.
Historical Budget Comparisons
The World Bank noted that this projected investment need is substantial compared to Pakistan’s historical average development budget, which was about $11 billion per year between 2011 and 2015. The report suggests that the actual investment requirements might be even higher due to gaps in data regarding essential transformations needed for sustainable agriculture, flood risk management, and climate-resilient infrastructure.
In response to these challenges, the World Bank has previously pledged to provide $20 billion over ten years under its Country Partnership Framework (CPF), focusing on sustainable development and resilience-building initiatives in Pakistan.