Transparency International Pakistan has released a new report highlighting the challenges and opportunities related to carbon market governance in the country.
According to details, the report examines weaknesses in Pakistan’s carbon market governance, existing challenges, and potential opportunities that could help develop internationally compliant projects.
The report states that Pakistan holds significant potential in the carbon market, both environmentally and economically. If just 10–15% of the country’s carbon emissions are addressed through carbon projects, Pakistan could generate 40 to 75 million tons of tradable carbon credits annually. Based on current voluntary market prices, this could translate into potential revenue of $400 million to $2.25 billion per year.
However, the report points out a major gap: while ambitious climate goals have been set, the lack of effective systems to operationalize carbon markets remains a barrier. It also notes the absence of comprehensive national baseline data, which is crucial for market development.
The study further emphasizes that carbon markets are highly technical, requiring expertise in emission accounting, monitoring and verification protocols, carbon ownership, legal frameworks, registries, caps, and crediting methodologies—areas where Pakistan currently lacks skilled professionals.
Transparency International Pakistan recommends forming specialized teams within federal and provincial climate ministries to strengthen governance.
Executive Director Kashif Ali highlighted that transparency is a global challenge for carbon markets. He stressed that without clarity on decision-making, profit-sharing, and safeguards for affected communities, trust in these mechanisms could be undermined. Clear reporting standards, accessible benefit-sharing frameworks, and community participation are essential for success.
The report also lays out eight key recommendations to strengthen Pakistan’s carbon markets:
- Build strong foundations with robust data infrastructure for key sectors and projects.
- Ensure safeguards, equity, and community participation through clear legal frameworks, FPIC consent, and grievance mechanisms.
- Enact a comprehensive carbon market law to establish legal and regulatory foundations.
- Improve institutional systems through a National Carbon Coordination Council (NCCC) to oversee and allocate responsibilities.
- Develop technical training and capacity-building programs at federal, provincial, and district levels.
- Adopt a phased, realistic, and flexible strategy with pilot projects such as the Lakhodair Landfill Gas Project, Sapphire Wind Farm, and Delta Blue Carbon Mangrove Initiative.
- Institutionalize transparency and disclosure through a public platform or registry for carbon market transactions and safeguards.
- Strengthen international linkages to build trust and access more markets.
Chairman Justice (R) Zia Pervez said he hopes federal and provincial governments, international development partners, and civil society stakeholders will use these recommendations to strategically leverage carbon markets as a key climate finance mechanism for Pakistan.