Pakistan has assured the International Monetary Fund (IMF) of a comprehensive 13-point climate reform agenda under the $1.3 billion Resilience and Sustainability Facility (RSF) program. The reforms, to be implemented by 2027, focus on climate resilience, energy efficiency, disaster preparedness, and financial stability across federal and provincial levels.
Disaster risk financing will be strengthened to manage natural hazards such as floods and droughts, reducing fiscal shocks. Climate impact assessments will become mandatory for all major development projects costing over Rs7.5 billion, ensuring that resilience measures are incorporated into public spending. At least 30% of infrastructure project budgets will be allocated to adaptation, mitigation, and resilience-building components. Annual climate budget reports will track progress and improve transparency.
The reform package includes the imposition of a Rs5 per liter carbon levy on petrol and diesel to discourage fossil fuel use and fund climate initiatives. The government plans to promote electric mobility, targeting 30% of new vehicles and 50% of motorcycles to be electric by 2030.
Energy subsidies will be limited to deserving consumers, while measures to curb electricity theft and line losses will be strengthened. Mandatory energy labeling for appliances like refrigerators, fans, LEDs, motors, and air conditioners will promote energy efficiency by June 2027.
Water pricing and irrigation reforms are also included, with service charges for water use introduced in Sindh, Khyber Pakhtunkhwa, and Balochistan, alongside revenue reforms in Punjab and Sindh to improve sustainability.
The financial sector will undergo reforms, including mandatory climate-related financial risk reviews for banks, introduction of green finance instruments, and a green taxonomy to guide sustainable investments. These steps aim to align Pakistan’s development, energy, and financial policies with long-term climate resilience goals.
