It is rightly said that those who do not learn from their past, do it at their peril. It is relatively discernable in our case. Pakistan, apparently a developing country, that is already teetering on the edge of economic collapse due to persistent challenges of political polarisation, 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 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 has been the most deplorable year for the entire nation. But one ponders what truly fetters us in combating the menace of climate change 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 overgrasing contribute significantly to land degradation and ultimately lead to desertification. Overconsumption and unsustainable farming are fuelling overlapping crises in nature and the climate, putting crucial ecosystems such as coral reefs at imminent risk of destruction, says a recent landmark UN report.
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 jeopardise 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 macro-economy and financial sustainability in the country. For example, climate change not only impinges individuals and household 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 delay 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 to rely heavily on low-skilled and manual labor, is inevitably susceptible to more climate-induced change in the working conditions.
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
As a result of overly crop-production, overgrasing, and antediluvian agrarian practices, our verdant plains are withering as vital nutrients of soil are consumed at a higher rate whereas, disproportionate use of fertilisers further degrades the soil nutrient holding capacity. Hapless and less aware farmers are always on the frontlines when unexpected deluges hit their handgrown 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 crop 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 level as both economies rely on costal capital as well.
Securing adequate funding is a critical hurdle in implementing Pakistan’s climate policies, largely due to corruption and political instability. Despite growing global investments in climate action, an evaluation by the Asian Development Bank reveals that Pakistan has received the least climate financing among comparable countries over the past decade. This shortfall threatens the achievement of Pakistan’s Paris Agreement goals, which require substantial financial resources. To address this, Pakistan must foster a favorable investment climate and align its policies with global climate objectives. Learning from countries like Vietnam and Indonesia, which have successfully utilised mechanisms such as the Green Climate Fund and the Adaptation Fund through bilateral agreements and actionable plans, could provide a roadmap for securing essential climate financing.
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
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 livelihood 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 water 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 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 localised disaster response strategies, focusing on early warning systems and community training minimises economic losses, protects vulnerable communities, and strengthens national resilience against climate impacts. For inclusive economic growth, it is highly crucial to address social inequalities by providing equal access to education and resource exploitation. This will surely 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.” We must harmonise our actions with the planet’s needs, transforming the dream of a greener and economically prosperous Pakistan into a thriving reality.