Pakistan: Climate Crisis and Economic Recession
- Human-Induced Climate Change and Economic Impact: Anthropogenic activities, such as reliance on fossil fuels, deforestation, and unsustainable agricultural practices, contribute significantly to climate change, resulting in catastrophic events like floods, heatwaves, and rising sea levels that dampen economic growth and stability.
- Challenges in Climate Financing: Pakistan faces significant hurdles in securing climate funding due to corruption and political instability, hindering its ability to implement effective climate policies and meet Paris Agreement goals. Lessons can be drawn from countries like Vietnam, which leverage climate funds and bilateral agreements to address these challenges.
- Investing in Climate Resilience and Sustainability: Proactive measures, such as renewable energy integration, modern agricultural techniques, and resilient infrastructure investments, are crucial to mitigating climate impacts, ensuring economic growth, and fostering a sustainable future.
It is rightly said that those who do not learn from their past do it at their peril. It is relatively discernible in our case. Pakistan, apparently a developing country that is already teetering on the edge of economic collapse due to persistent challenges of political polarization, terrorism influx, abject poverty, cumulative inflation, poisonous air, and so forth, has failed to learn from the deleterious impacts of 2020 flooding on its economy, which pushed it two steps back without taking one forward. The devastated inundation impinged on over 33 million people, of whom 8 million are still displaced and prone to flooded areas. That flooding alone gave a hard blow of 4.8% of the total GDP for the fiscal year 2022, draining national coffers of Rs.3.2 trillion (US $14.9 billion). From empty pockets to extreme poverty to destroyed infrastructure to no way back home, 2022 is portrayed as the most deplorable year for the entire nation. But one ponders what truly fetters us in combating the menace of the climate crisis, which is no longer a natural process but a palpable man-made catastrophe.
Let us first disclose how climate change is hurtling due to anthropogenic actions, dampening economic growth. In the aftermath of the 2022 floods, the ‘Post Disaster Needs Assessment’ report illustrated the abysmal economic impediment caused by this catastrophic event and its inextricable link to human-caused activities. One of the major human-induced contributors to global warming is the manufacturing industries, which primarily run on fossil fuels, thus generating carcinogenic greenhouse gases (GHGs). Likewise, each year 12 million hectares of mature forests are cut down to be exploited by humans, leading to more carbon dioxide gas emissions directly in the environment.
Moreover, vehicles that run on the roads paved upon deforestation further exacerbate the atmosphere by releasing GHGs. Furthermore, obsolete agricultural methods, excessive crop production, and overgrazing contribute significantly to land degradation and ultimately lead to desertification. A recent landmark UN report says that overconsumption and unsustainable farming are fueling overlapping crises in nature and the climate, putting crucial ecosystems such as coral reefs at imminent risk of destruction.
The aforementioned factors bear the brunt of global warming that gives rise to tumultuous weather events. The increasing frequency and resilience of weather events such as deluges, extreme droughts, scorching heat waves, and elevated sea levels jeopardize livelihood, human life, and fiscal advances in a shaky economy such as Pakistan. Gone are the days when economic meltdown from global warming took a toll on the agrarian sector, but as for now, climate change and environmental degradation also pose significant challenges to the macroeconomy and financial sustainability in the country. For example, climate change not only impinges on individuals and households income, but it also intrudes on sectors of the economy, energy markets, inflation variability, financial markets, innovation, and rising public debt, among other things.
All these aspects impede the economy; one must wonder what happens to an economy when it is flamed outside and feeble inside. Let us find its answer. Record-breaking heat waves have been perceived since this decade, dampening economic outcomes. Power outages, water scarcity, and transportation delays idle labor and capital. This raises the cost of living and doing business, reducing efficiency and industrial output. Rising temperatures reduce production by decreasing labor efficiency, shortening work hours, and causing technical delays. Moreover, warm waters lead to food- and water-borne diseases resulting in illnesses and subsequent costs of reduced labor force. A country whose share of the informal economy and labor force is 40% and 73%, respectively, making it rely heavily on low-skilled and manual labor, is inevitably susceptible to more climate-induced change in the working conditions.
As a result of overly crop production, overgrazing, and antediluvian agrarian practices, our verdant plains are withering as vital nutrients of soil are consumed at a higher rate, whereas disproportionate use of fertilizers further degrades the soil nutrient-holding capacity. Hapless and less aware farmers are always on the frontlines when unexpected deluges hit their hand-grown vegetation. Pakistan’s economy relies heavily on agriculture, contributing 26% to its GDP and employing 52% of the population. On the contrary, research estimations anticipate that agricultural productivity will reduce by 8-10% by 2040 and a $19.5 billion loss in rice and wheat production by the year 2050 due to climate adversities. An eye-opening area of 4.4 million acres of crops has been devastated, foreshadowing that unless we take decisive actions, this situation will remain unresolved.
Karachi, the industrial hub of Pakistan, is home to 70% of the country’s industries. Rising sea levels could threaten 10% of Pakistan’s coastal population’s livelihood; it also hinders the smooth functioning of 40% of its industry located near these zones due to flooding and coastal erosion. According to the Asian Development Bank, climate change could drain 12% of Pakistan’s GDP by 2070 due to various factors, including rising sea levels affecting natural resources such as fisheries and agriculture. Indonesia and Bangladesh face similar challenges of rising sea levels as both economies rely on coastal capital.
One of the most formidable challenges in implementing our climate policies is securing the necessary funding. Despite a growing global focus on climate investments, Pakistan has struggled to secure adequate climate financing due to the corruption conundrum and political instability. An evaluation by the Asian Development Bank revealed that Pakistan has received the least amount of climate financing among comparable countries over the past decade. This shortfall is alarming, as achieving our climate goals under the Paris Agreement requires significant financial resources. Creating a more favorable investment climate for climate-aligned projects and aligning our policies with global climate objectives is not just desirable—it is vital. Countries like Vietnam and Jakarta could serve as the best examples in climate financing. They have established bilateral agreements such as the Green Climate Fund (GCF) and the Adaptation Fund, which present action plans and demonstrate accountability.
Nonetheless, there is always a silver lining in every cloud. Investment in resilient infrastructure in developing countries could deliver $4.2 trillion over its lifetime. An investment of $1 in resilient infrastructure, on average, yields $4 in benefits, says the World Bank. We have no other option than investing in climate resilience to protect the lives and livelihoods of vulnerable communities and safeguarding social and economic systems to ensure the country’s economic progress. Every dollar invested in climate resilience will save millions for combating and mitigating it. For example, investment in water availability and increased food security in Kenya, typhoon-resilient housing in Vietnam, urban flood risk management and averted losses in Mozambique, and urban heat management and reduced heat-related mortality and morbidity in India are some of the pieces of evidence of gainful investment in climate adaptation and resilience in the Global South.
With a shift towards renewable energy and green technology, we can hope for a greener future. Integrating solar and wind energies into the current energy sector will not only save millions of dollars for cheaper production, but they will also help us keep the environment pollution-free. Moreover, there is an urgent need to diversify the agriculture sector with technologies like drought-resistant crops, efficient irrigation techniques, and modern agricultural practices for better productivity and management.
Likewise, enhanced water management via rainwater harvesting, drip irrigation, and canal lining will conserve water for agriculture, hydropower plants, and drinking water supplies, leading to a robust economy. To add more proactive disaster risk management by implementing localized disaster response strategies, focusing on early warning systems and community training minimizes economic losses, protects vulnerable communities, and strengthens national resilience against the climate crisis. For inclusive economic growth, addressing social inequalities by providing equal access to education and resource exploitation is crucial. This will foster social equity, reduce poverty, and empower communities to adapt to climate challenges.
There is no denying that time ahead is challenging, but we must face it valiantly. Fixing the fundamental problems could either cushion socio-economic systems from the impacts of natural calamities and prevent the draining of economic gains or amplify the quandary. Policymakers need to review and, where required, improve and align their toolkit to the new challenges. The government’s raison d’être should be rooted in the commitment to economic prosperity, ensuring that every policy decision contributes to the welfare of its citizens. Nevertheless, collective efforts to create a greener environment that guarantees a sustainable economy will be critical shortly, as climate change will remain a major global risk for some time. In the words of Rabindranath Tagore, “The highest education is that which does not merely give us information but brings our life in harmony with all existence.” It is time for us to harmonize our actions with the needs of our planet, ensuring that the dawn of a greener Pakistan is not just a dream but a reality.
The author is a freelance writer who believes in the transformative power of words to inspire positive change in society.
