Climate crisis drains nearly 1% of Pakistan’s GDP every year

February 10, 2026 (MLN): Pakistan is losing close to 1% of its gross domestic product (GDP) annually due to climate-related damages, speakers said on Monday at the 4th Pakistan Climate Conference.

Participants urged a faster shift from policy frameworks to bankable climate action.

Organised by the Overseas Investors Chamber of Commerce & Industry (OICCI), the Conference brought together federal and provincial policymakers, development partners, climate experts, journalists and corporate leaders.

Speakers highlighted Pakistan’s growing vulnerability to floods, heatwaves and economic disruptions, despite the country contributing less than one per cent to global greenhouse gas emissions, according to a press release.

They stressed that while climate policies and frameworks are largely in place, the focus must now move toward mobilising finance and translating commitments into investable projects to strengthen economic resilience.

Federal Minister for Climate Change and Environmental Coordination Dr Musadik Masood Malik said Pakistan was on the frontline of a rapidly intensifying climate crisis.

“I commend OICCI for creating a platform where climate resilience is treated not as CSR, but as an economic imperative,” he said.

Referring to record 53°C heatwaves and floods that displaced four million people last year, Dr Malik noted that more than 13,000 glaciers were melting, with climate losses costing nearly one per cent of GDP annually.

Calling the situation an existential challenge, he said Pakistan’s updated climate commitment, NDC 3.0, targets a 50pc emissions reduction by 2035.

However, achieving a just transition would require $565.7 billion in investment, he added, stressing the need for sustainable, grant-based climate finance rooted in climate justice.

Addressing the Conference, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb described climate change as an existential threat to Pakistan’s economy.

He said key frameworks, including the National Adaptation Plan, Climate Prosperity Plan and Green Taxonomy, were already in place.

The priority now, he stressed, was mobilising available financing and developing investable projects.

Muhammad Aurangzeb highlighted the private sector’s role in providing not just capital, but innovation and technical expertise.

Speaking at the Conference, Regional Lead, Sustainable Finance, Asia and Pacific at the United Nations Development Programme (UNDP), Chongguang Yu (Charles) said the core challenge was no longer capital availability.

Instead, he pointed to fragmented systems, advocating blended finance, risk-sharing mechanisms and programmatic investment pipelines to unlock scalable private-sector participation.

President OICCI Yousaf Hussain said the Government of Pakistan was making tangible progress on its climate agenda.

He cited efforts ranging from emphasising adaptation finance through public-private partnerships at the World Economic Forum in Davos to finalising the $20 billion, 10-year Country Partnership Framework with the World Bank.

He also noted preparations for the launch of Pakistan’s first Green Panda Bond, calling these steps a clear signal of national commitment to climate resilience.

Meanwhile, Senior Vice President OICCI Jason Avanceña said the Conference was designed to move beyond rhetoric towards practical economic outcomes.

He said discussions focused on modernising Pakistan’s strained power grid, accelerating renewable energy and unlocking Blue Economy opportunities through coastal resilience and marine sustainability.

Avanceña also highlighted the use of artificial intelligence to improve climate forecasting, reduce disaster losses and strengthen investment planning.

Rehan Shaikh, CEO and Head of Coverage at Standard Chartered Pakistan, said building resilience, mobilising sustainable finance and strengthening public-private collaboration were critical for Pakistan’s long-term competitiveness.

He added that platforms like the OICCI Climate Conference played an important role in moving the climate agenda from intent to action.

As climate risks escalate, speakers agreed that climate policy can no longer sit at the margins and must now drive Pakistan’s economic planning, investment strategy and national development agenda.

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