IMF urges Pakistan to prioritise climate adaptation in next budget


IMF

ISLAMABAD: As Pakistan engages in discussions at the 28th Conference of Parties (COP28) in Dubai, the International Monetary Fund (IMF) has emphasised the need for the Pakistan’s upcoming budget 2024-25 to be aligned with climate adaptation, according to a news report by Dawn.

The IMF’s technical advice to the Pakistani government underscores the importance of transparency in showcasing climate-related actions with budgetary implications to facilitate policy-making and attract climate financing.

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A delegation led by caretaker Prime Minister Anwaarul Haq Kakar is actively participating in COP28, which commenced on November 30. The Ministry of Planning and Development highlighted the alignment of Pakistan’s future with the Ministry of Climate Change and Environmental Coordination’s sustainable blueprint.

Caretaker Finance Minister Dr. Shamshad Akhtar engaged in extensive discussions with multilateral and bilateral lenders ahead of COP28, advocating for increased international financial support. Notably, Akhtar proposed ‘debt for nature’ and ‘debt for social development swaps’ to aid Pakistan in achieving climate finance targets.

The IMF has urged the ministries of finance and planning, the key players in budget formulation, to enhance transparency by providing summary information on the Public Sector Development Programme (PSDP) and the broader public investment program in budget documentation. This directive aims to address the current lack of information on the budgetary implications of climate-related actions.

Furthermore, the IMF has called for the advancement of green budgeting, including the tracking of climate-related costs and the publication of such information for the fiscal year 2023-24.

Highlighting fiscal risks associated with climate change scenarios, the IMF has called on the economic adviser wing of the finance ministry to conduct and publish a long-term fiscal sustainability analysis under different climate change conditions. The statement of fiscal risks should include information on discrete fiscal risks arising from these scenarios.

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Looking ahead, the IMF stressed the strengthening of the appraisal process for investments and projects by December 2024, incorporating climate factors into key appraisal issues such as the valuation of greenhouse gas emissions and climate impacts.

Recognising capacity constraints, the IMF recommended immediate efforts to train staff and enhance the capacity of relevant institutions, including the Ministry of Climate Change, Planning Commission, and Climate Change Authority. These efforts are crucial for overseeing and coordinating investment projects aligned with the National Climate Change Policy (NCCP) and National Determined Contributions (NDC) goals.

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