Social

Protection Date: 5th Oct 2023

Resource
Center

Preparing Pakistan to Avail Loss and Damage Fund (L&DF) for Green Transformation

Authored by: Dr Safdar A. Sohail

2023

Social Protection Resource Centre (SPRC) Islamabad, Pakistan

First Floor, 15-E Reheat Centre, Blue Area, Jinnah Avenue Islamabad, Pakistan

1
 Chapter 1 Introduction to L&DF

1.1 Study background

Given the multifaceted and complex challenges, it is imperative for developing countries to adopt
innovative and integrated policy strategies to adapt and appropriately respond to the grave challenges
they are confronted with. However, many developing country governments are constrained, not only
in mobilizing resources but also by the lack of institutional capabilities. Hence, they need support to
develop resilience to climate change to mitigate climate-related disasters and subsequent damages
while transforming their economies to pursue climate resilient and green growth and development.
The crisis triggered by the COVID-19 pandemic, persistent climate change, and subsequent
vulnerability of developing countries impede their efforts in achieving the Sustainable Development
Goals (SDGs).

The average annual climate change cost to developing countries by 2030 is estimated to be USD 435
Billion and USD 1 trillion by 2050. The cumulative losses of 55 vulnerable countries during the past
two decades are about USD 525 Billion, whereas the total contribution by non-UNFCCC contribution
is almost USD 300 Million. To address the climate crisis and its impacts countries were urged to
undertake global efforts to support developing countries in addressing the climate change-related
vulnerabilities. This resulted in an acknowledgment of the problem in the COP27 and realisation that
delivering on climate commitments requires fundamental economic transformation and integrated
policy strategies. If nothing else, COP27 will be remembered as a comprehensive agreement to
mitigate the climate impact on developing countries in terms of the Loss and Damage Fund (L&DF).

This deal is a turning point in acknowledging the vast inequities which are created by climate change
and need urgent attention of the global community. L&DF can be instrumental in providing the
necessary resources and cushion to developing countries to develop climate resilience and adopt a
transformative path for climate-friendly and sustainable growth. L&DF support and subsequent
economic and social transformation are critical for developing countries to achieve the goals of
economic prosperity while stopping further environmental degradation and global warming.

2
Despite its small contribution to global greenhouse gas emissions, Pakistan is among the top ten most
climate-affected countries in the world. The devastation brought by the 2022 floods in Pakistan vividly
demonstrated the seriousness of climate change impacts and emphasised the urgency of discussions
for the establishment of the long-awaited/demanded climate finance for the L&DF during COP27 in
Egypt in 2022. The establishment of the L&DF becomes a near-term possibility, bringing hope to many
countries like Pakistan. Hence, it is time to consider how best to mobilise and utilise such funds in
order to maximise climate-resilient development through L&DF.

This would require a clear understanding of global climate finance and its flows, Pakistan’s eligibility
and current approach to managing climate finance, country’s internal distribution priorities. Hence,
there must be sufficient technical knowledge and adequate preparation to access and institutional
capacities to manage an enhanced provision of L&DF in Pakistan. Nevertheless, attracting adequate
international climate finance has been a challenge, and Pakistan seriously needs to strengthen its
institutional capacity to solicit and use international climate finance. The conditions under which the
financing would be available from L&DF have started emerging and Pakistan should prepare itself to
benefit from the L&DF.

1.2 Establishment of Loss and Damage Fund (L&DF)

The establishment of the L&DF is a historic triumph for climate-vulnerable developing countries in the
Global South. This was the result of decades of pressure from developing country parties which
resulted in in acknowledging the need to act on climate change. In other words, this was the
culmination of 30 years of climate talks. Under the L&DF, the developed countries will provide
financial support for the recovery and rebuilding of developing countries stricken by climate-related
disasters. Establishing L&DF is an important step towards justice for poor and developing countries
which have not caused the climate crisis, but suffer face its worst impacts. The fund aims to provide
financial assistance to nations most vulnerable and impacted by the effects of climate change. In this
respect, more than US$300 million has been pledged by European nations.

L&DF is different from other funds which are designed for climate mitigation and adaptation. While
we continue working on reducing GHG emissions and adapting to the changing climate, there are still
losses and damages that require the attention of the global community and hence the compensation
as most of such losses are in the developing countries which have very little contribution to the
problem of climate change. In other words, climate finance mechanisms for climate mitigation and
adaptation have been developed and deployed for a long time, however, L&DF is a new paradigm for
which there will be a separate pot of money with many more resources to compensate for the
damages and losses, including those which are irreversible.

3
Nevertheless, the issues such as sources of financing and the type of projects that the L&DF would
cover were not discussed in the COP27, but there was agreement over a road map to create a fund to
deal with the damages from climate-related natural disasters.

1.3 Modalities

The key question pertaining to the L&DF at this time however is how do we operationalize this fund
in the best possible ways to achieve its objectives? Thus far, the L&DF is just an agreement, its
modalities and protocols are to be finalised. Once L&DF is properly set up, it has to be properly and
adequately financed. In this respect, a transitional committee was assigned the task of providing
recommendations on the institutional arrangements of L&DF. The committee will provide suggestions
and advice regarding funding arrangements, sources of finance, and ensuring coordination and
complementarity with existing arrangements for L&DF.

1.3.1 L&DF management

Developing countries have made a long struggle for L&DF which is more than 30 years advocating for
it. L&DF is expected to the existing climate financing, which includes both national and transnational
financing for mitigation and adaptation measures taken to tackle climate change. The UNFCCC
established the financial mechanism for generating and allocating funds for developing countries'
parties. The Global Environment Facility (GEF) and Green Climate Fund (GCF) act as operating entities
for the UNFCCC. While GEF and GCF oversee the operations, these entities are accountable to the
Conference of Parties (COP) which decides its policies, priorities, and eligibility criteria.

The two other funds established by COP include the Special Climate Change Fund (SCCF) and the Least
Developed Countries Fund (LDCF), both managed by the GEF—and the Adaptation Fund (AF)
established under the Kyoto Protocol in 2001 (UNFCCC 2023). A Standing Committee on Finance also
exists to assist these financial mechanisms. However, in the Paris Agreement 2015, loss and damage
were acknowledged as distinct and separate from those climate change impacts that require
adaptation actions, hence the decision to create a loss and damage fund. Both the IPCC AR6 Synthesis
Report and COP 27 decisions recognize that existing arrangements of mitigation and adaptation have
limitations and cannot address all losses and damages.

1.3.2 Quantification and assessments

Quantification is a key aspect of L&DF as there will be a need to determine the amount of L&DF
different countries will receive. Furthermore, assessment criteria could be based on accumulated
damages or damages that occurred once and consideration of present and/or future value of the
damages. Losses and damages could be assessed quantitatively and non-quantitatively while also

4
treating the accounting of irreversible damages. The loss of indigenous culture and heritage or the
loss of national and local ecosystems could be assessed in mutually agreeable ways. However, the
existing methods to account for loss and damage associated with natural and man-made hazards may
not consider slow and accumulative losses such as irreversible loss of livelihoods or productive
systems.

Nevertheless, the valuation of life-related losses will be important, complex, and entangled with
ethical considerations. The modalities must also deal with the important factors which might
contribute to perverse incentives to meet global climate targets. The institutional arrangements and
governance structure at the international level as well as at the beneficiary countries’ level is yet to
be detailed. There will also be the need for the identification of new sources of funding to expand the
available resources. It is also important to explore the alignment and coordination of L&DF with the
existing funds, instruments, and vehicles.

This, for example, includes funds managed by the UNFCCC, the World Bank, and the Global Shield
Financing Facility. Some of the available funds are designed to help developing countries use pre-
arranged resources before a disaster hits, while others may be aimed for different purposes. In this
context, following the flow of funds from the source to the ultimate destination(s) is also important.
Nevertheless, there is a need to consider constraints faced by developing countries in the past to
access existing funding sources and hence their sub-optimal and possibly inequitable use.

1.4 L&DF payments

After working out the L&DF mechanics such as impact monitoring systems, the assessments of the
need for allocations, and design criteria to ensure progressive and sustainable initiatives are
supported; a fund needs to be established along with its payment mechanisms. The payment
mechanism will stipulate the decisions regarding the use of funds which must be inclusive to ensure
the participation of the beneficiary countries as well as the fund management entities. The payment
mechanism will also outline if the disbursements will be linked to some conditions and/or compliance
which may be gauged by means of established measurement, reporting, and verification systems
(MRVs).

Nevertheless, the scope and mechanism of the L&DF are quite tricky in terms of eligibility criteria for
financing, and under what conditions the L&DF will be provided are contentious. For example, the
2022 floods in Pakistan killed over seventeen hundred people in addition to damages of about $15
billion and economic losses of almost $15.2 billion. The country representatives urged at COP27 for
compensation and assistance to developing countries and it is a daunting task for the transitional

5
committee to make serious and practical decisions. Parties have met regularly for decades to reach an
agreement on providing climate finance to developing countries. Hence, this will essentially be a
failure of the United Nations Framework Convention on Climate Change (UNFCCC) system if the newly
established L&DF does not bear the fruits expected from this.

1.5 Past lessons

Since similar funds have been implemented before, the lessons derived from existing climate funds
would be useful to address the possible issues. These lessons would help in channelling private finance
through the L&DF toward climate change mitigation and adaptation. For example, the L&DF must be
complemented by a suite of funding streams to channel an adequate amount of resources to the
developing countries facing climate change-driven natural disasters. This could embrace the resources
from the Global Environment Facility’s Least Developed Countries Fund, the Special Climate Change,
and the Green Climate Fund, among others.

Nevertheless, getting the details right on the L&DF must not divert attention from an even more
important mission and task to mobilise necessary resources to gear up a low-carbon and climate-
resilient transition and to scale solutions fast. L&DF must learn from existing funds and enable
comprehensive responses to be able to best serve the needs and priorities of vulnerable and
marginalized communities facing losses and damages due to climate-related disasters.

This would also mean drawing on learnings and best practices around the world to build on past
experiences and insights sourced by field experts, allowing us to consolidate what has been proven
effective in the past. These encompass diverse areas such as governance of the fund, access
requirements for developing countries, and instruments and channels, which could be adopted for
the new L&DF.

1.6 Report outline

This paper comprises six chapters. Chapter 1 is the introduction, which provides the reader with the
background of the establishment of the L&DF.

Chapter 2 discusses Pakistan’s experience with the Clean Development Mechanism (CDM) and how
this experience could be used as a source of lessons for L&DF.

Chapter 3 presents elaborates on the necessary measures to adopt for Pakistan to prepare itself for
the L&DF.

Chapter 4 presents a discussion on the assessment of Pakistan's institutional capacity to access the
resources from L&DF.

6
Chapter 5 highlights the importance of inclusive climate finance and the ways to ensure inclusiveness
in the Pakistani context and more specifically for the L&DF.

Chapter 6 proposes a list of policy recommendations in light of the analysis presented in this paper
and conclusions drawn from different chapters.

The next chapter (Chapter 2) details Pakistan’s experience of CDM and the lessons learned to be used
for L&DF.

7
 Chapter 2 Pakistan’s experience of Clean Development Mechanism (CDM)

2.1 Clean Development Mechanism (CDM) in Pakistan

CDM was established under the Kyoto Protocol to enable developed countries to invest in emission
reduction initiatives within developing countries. It was envisioned in the Kyoto Protocol that carbon
trading would allow countries to generate revenue by adopting emission-reducing activities. States
with surplus units can enter the carbon market as sellers to those that are exceeding their emission
targets. Under the regulation and administration of UNFCC, mechanisms such as the CDM were
supposed to create the carbon market. This business is growing rapidly due to increased demands of
investors or businesses looking to offset their emissions or reduce their carbon footprint. The CDM
issued one billion Certified Emission Reduction (CERs) between 2001 and 2012 (UNFCC, 2012). The
worldwide carbon credit market is projected to have a valuation of $414.8 billion in 2023, with the
potential to surge to $1.6 trillion by 2028 (Singal, 2023).

Pakistan ratified the Kyoto Protocol in 2005 and established its Designated National Authority (DNA)
in the Ministry of Climate Change to facilitate and approve CDM projects in the country. The National
Operational Strategy for CDM was approved in 2006 to provide policy guidance and incentives for
project proponents and investors. Pakistan has 76 CDM projects that have received host country
approval, of which 36 are registered with the CDM executive board. It is worth noting that Pakistan
has faced significant challenges in realizing the protocol's outlined objectives, despite being ranked
among the ten most vulnerable countries to climate change.

Pakistan can earn carbon credits and become a successful seller through various state-initiated
activities that reduce GHG emissions such as reforestation or replacing current energy-generating
systems with solar or wind-powered setups. The Government of Sindh has already launched a project
of mangrove forest plantation in Sindh. It is expected to earn 57 to 63 billion Rupees in terms of carbon
credits within the next two decades. Its first project which began in 2015 has brought in approximately
14.7 million dollars through sequestering and trading 3.1 tons of CO2 in the international carbon
market (Kiani, 2023).

2.2 Regional comparison of CDM performance

8
Notwithstanding Pakistan’s negligible share in CO2 emissions, the country could not seize the CDM
opportunity. In contrast, China and India are the largest sellers of carbon credits to European buyers.
As per 2012 data, China’s carbon credit share was 72.7% while India accrued 15.6 %. However,
Pakistan's share in overall issued CERs was only 0.4%. Of total CDM projects, China had 55.8%, India
29.2%, and Pakistan contributed a mere 0.6%. These figures denote that, out of the millions of dollars
that Pakistan had the potential to avail via carbon credits, it could only earn a negligible part (Anwar,
2015). In 2019, China’s carbon dioxide emissions per capita were 7.61 metric tons, India's 1.78 and
Pakistan's emissions were only 0.85 metric tons. As a country that is most at risk of climate change
disasters and has comparatively low emissions, Pakistan should have made the most out of CDM
funding.

A comparative institutional analysis of the CDM projects in China and India by Ganapati et al. (2008)
reveals that both countries prioritized technology transfer and funding in their CDM policies. However,
China has been more successful in technology transfer and hence utilized CER funds to achieve
broader sustainable development goals. China's Designated National Authority (DNA), which is
responsible for approving CDM projects, focused on the completion and submission of projects as per
criteria in priority sectors, which has proven effective in reducing transaction costs. In contrast, India
adopts a project-by-project approach which results in higher associated costs but greater project
diversity. Pakistan’s DNA, which is the Ministry of Climate Change, failed to come up with an effective
strategy that focused on either of these two approaches, resulting in a failure to tap into CDM
opportunity.

2.3 The Success of CDM in India

India has a market share of about 21% of the total projects that are registered under CDM and has
channeled foreign investment worth 10 billion dollars. Between 2010 and 2022 it has issued 278
million carbon credits which account for around 17 percent of the global supply. The goal for India is
to reduce emissions by 45% by 2030 and the country is making great strides to achieve that target.
Singal (2023) claimed that India will have its own emissions training system and carbon trading market
by 2025. The evolution will significantly bolster India's efforts towards energy transition, broadening
its scope to encompass various potential energy sectors within the country.

To facilitate this transition, benchmarks and targets for reducing GHG emissions intensity will be
established for these sectors, aligning them with India's climate objectives. Carbon credit trading will
then occur based on how well entities perform in relation to these sector-specific emission
trajectories. Furthermore, the scheme envisions the creation of a voluntary mechanism in parallel to
incentivize GHG emissions reduction in sectors not under mandatory obligations (PIB Delhi, 2023).

9
2.4 The Failure of CDM in Pakistan

China and India, have effectively capitalized on the CDM opportunity due to several factors. These
factors include favourable CDM policies and government initiatives, such as comprehensive
stakeholder training, awareness campaigns, staff training, and overall facilitation. Unfortunately,
many other countries including Pakistan have failed to invest in these critical areas, missing out on the
potential returns from carbon trading (Ahmed, et al, 2012).

One of the reasons for the sluggishness of CDM projects in Pakistan is its late formulation and
establishment of the CDM Cell as compared to other countries. This resulted in a lack of staff
independence, nepotism in the hiring of CDM staff, lack of familiarity with and inadequate
understanding of projects’ significance, the lack of technical expertise and capacity among high-ups,
lack of knowledge of the benefits associated with CDM, unnecessary bureaucratic interventions, the
lack of staff capacity building, and the appointment of non-technical individuals as the DNA focal
persons. Furthermore, CDM was a new and unique opportunity that was the first of its kind so it was
not well understood in Pakistan. Potential parties were unable to take advantage of the opportunity
owing to a lack of information, awareness of the advantages of carbon trading, and technical know-
how. There was more complexity in the criteria for project registration in the waste management,
agriculture, and forestry sectors.

It is also important to note that technical professionals and investors avoided Pakistan owing to
adverse economic conditions and security concerns. Due to a lack of foreign financial and technical
resources, Pakistan's CDM had a significant untapped potential. The concerned organizations
remained uninformed and uninterested in these projects. There are a lot of untapped and exploitable
prospective markets and industries for CDM business. Furthermore, the CDM was a field that the
academia was best suited to promote, however, it could not be materialized due to general apathy
(Ahmed et al., 2012). Most host countries of CDM projects were those that provided viable markets
for CDM co-products such as electricity, while greater production of CERs was found in economies
that had higher carbon intensity levels. This is unfavourable to the least developed nations and
contributes to a rationale for their lack of CDM participation.

Hence, Pakistan could not benefit from the CDM and other green financing mechanisms due to an
overall lack of expertise, limited capacity, political will, and failure to submit effective proposals on
time. To avoid the repetition in case of L&DF, Pakistan must establish a proficient and committed team
of experts. This team should thoroughly examine the eligibility criteria, evaluate necessary resources
and technology, and prioritize strategies to maximize the benefits of the proposed L&DF (Khurshid,
2022). The recent devastating floods also highlight Pakistan's susceptibility to climate-induced

10
disasters. While Pakistan qualifies for the L&DF, its experience with the CDM indicates that accessing
resources from this new fund could also prove to be challenging.

The lack of a mandate or clear policies by the Ministry of Climate Change Pakistan is another factor
that has prevented Pakistan from taking advantage of the CDM fund. As indicated before, the project
submission ratio of Pakistan has been only 0.6% while the earning of CERs is just 0.4% of the total
issued CERs trade. Pakistan has undertaken several significant emission-reducing projects and there
are also numerous biogas, hydro, and forestry projects such as the Tree Tsunami. However, Pakistan
has not yet been successful in registering and reaping its full benefits which should be addressed on a
priority basis (Khurshid, 2023).

11
 Chapter 3 Preparing Pakistan for L&DF

3.1 Pakistan’s vulnerability to climate change

Despite the country’s small contribution to global GHG emissions, Pakistan is among the top ten most
climate-affected countries in the world. Its vulnerability to the adverse impacts of climate change is
most recently evidenced by the devastating floods in 2022. The World Bank and the National Disaster
Management Authority of Pakistan’s assessment of loss and damages from the 2022 floods show that
Pakistan’s estimated damages exceeded USD 14.9 billion, and total economic losses were about USD
15.2 billion. However, climate-resilient rehabilitation and reconstruction requires at least USD16.3
billion, which does not include much-needed new investments beyond the affected assets, to support
Pakistan’s adaptation to climate change and overall resilience of the country to future climate shocks.
The floods cost 1730 lives and made more than 8 million people homeless. The floods were only the
last in a chain of climate-induced catastrophes which result in economic losses of USD3.8 billion per
year, according to the Asian Development Bank (ADB).

3.2 Review of climate public expenditure

Climate expenditure in the public sector has become a serious issue for climate change as well as fiscal
policy (Pizarro et al., 2021). Climate change poses challenges in terms of budget allocation for
developing countries as limited resources can only be invested in economic development. In addition
to an increased need for budgetary spending to invest in climate change, extreme weather events
have serious implications for economic activity. This results in a reduction in the GDP and hence the
revenue losses. Furthermore, increased illness, water scarcity, food and energy shortage, and
subsequent need for social investments and income support also increase mandatory spending.

Climate change requires lots of resources to finance mitigation and adaptation actions while also
financing the rehabilitation and reconstruction in post climate disasters. It is often more than what
developing countries in the Global South can afford. For example, estimates show that the cost of
climate adaptation alone for developing countries is expected to be a minimum of US$280 while it can
go up to US$500 billion per year by 2050 (UNEP, 2016). It is also true that past assessments of climate-
related costs have often missed several components, resulting in the underestimation of the required

12
financial needs (Resch et al., 2017). For example, the cost of climate adaptation actions proposed in
Nationally Determined Contributions (NDCs) has exceeded the current level of finance (UNEP, 2016).

Notwithstanding that climate finance has developed a lot in recent times, it is still a nascent field in
Pakistan. However, the Government of Pakistan is keen to utilize all possible opportunities of climate
finance, including grants and concessional financing as it requires a lot of resources. For example, as
part of NDC’s commitment to reduce 50% of GHG emissions by 2030, Pakistan requires about USD 151
billion of investment alone for GHG mitigation in the energy sector by 2040 (GoP, 2021). It is noted
that while concessionary finance is limited, the share for developing countries remained very low in
the past. For example, out of USD 632 billion in climate finance in 2019- 20, about USD 65 billion was
concessionary finance, and only USD 20 billion was given to poor countries (CDPR, 2022). Similarly,
most of the USD 325 billion annual funding for renewable energy was private equity or debt at market
rate.

Pakistan uses a system of budget coding that facilitates governments in efficiently allocating resources
and planning for any climate change event while also providing a baseline of the existing financing
sources and efforts (Resch et al., 2017). In Pakistan, budget coding and tracking have been introduced
at the national, provincial, and district levels since 2016 with the support of UNDP using the ‘Climate
Public Expenditure and Institutional Review (CPEIR)’ methodology. The CPEIR 2016 suggests that the
budget for climate change focuses on expenditures on food security, clean energy, or irrigation.
However, to address losses and damages from climate change, Pakistan needs to adopt a
comprehensive financing framework for climate that explicitly addresses climate change adaptation,
resilience, and recovery. Pakistan needs to adopt Climate Responsive Budgeting to track climate
finance in the budget while also targeting and translating climate change-related objectives into
budget allocation and public investments (Khan and Usmani, 2019).

As for the L&DF, there are eight sectors which are expected to receive financial support from L&DF
resources. Below we briefly describe these sectors.

1) Post floods and drought disaster transition: This is usually the recovery phase wherein major
reconstruction, development, and capacity-building activities are undertaken.
2) Social protection regime and income transfers: This entails cash transfers to the vulnerable and
exposed populations before, during, and after the disasters to avoid hunger and food insecurity.
3) Risk insurance: Risk insurance refers to the risk of natural disasters that might include loss or
damage of valuable assets, livelihood, and injury or death of the person where the insurers assess
these risks and, based on which, work out the premium that the policyholder needs to pay.

13
4) Early warning systems: Early warning systems are integrated systems of hazard monitoring,
forecasting and prediction, disaster risk assessment, communication, and preparedness activities.
5) Expenditure on climate-displaced people: As the name suggests, these are the funds that are
allocated for the displacements caused by climate-related natural disasters.
6) Emergencies preparations: This includes the steps to ensure the safety before, during, and after a
natural disaster. These plans are important for safety in both natural disasters and man-made
disasters.
7) Micro-credits for livelihood: Disbursement of micro-credit was one of the major strategies to cope
with the natural disasters.
8) Rehabilitation and rebuilding: This includes support provided to the flood or drought-affected
communities and is normally for reconstruction and rehabilitation works.

Thus, a comprehensive approach to estimating climate expenditure is to estimate the losses and
damages and the resource requirements of these eight sectors. This exercise will give a clear idea of
the financial needs and hence a plan to mobilize financial support from the L&DF.

3.3 Current financing situation

Notwithstanding the economic situation of the country is already very poor, the Pakistani government
has tried to invest in climate resilience. However, Pakistan has not been very successful in securing
financial support from international climate finance due to limited technical capacity and hence poor
access and availability. So far, the country can only get one project from the Adaptation Fund and
three projects from the Green Climate Fund and their total value is USD 122 million. Similarly, about
19 projects were approved by the Global Environment Fund (GEF). However, Pakistan could not access
Climate Investment Funds (CIFs) and other major bilateral climate funds. The progress in terms of the
“debt-for-nature” swap and carbon trading also remained very limited.

However, it is a fact that the existing financial arrangements are not sufficient to deliver the support
required to address the need for climate-proofing the key infrastructure and critical social and
economic systems. Agriculture is the case in point which provides food, fodder, and livelihood to
millions of low-skilled people in rural areas. Furthermore, the existing mechanisms, including climate
mitigation and adaptation investments, are in no way suitable to deal with the complexity of losses
and damages from natural disasters. Therefore, the new and additional pots of resources are
extremely crucial.

3.4 Demand and supply of climate finance

14
As for the demand for climate finance, it is to be used for climate mitigation, climate adaptation, and
reconstruction and rehabilitation from past damages of climate change. In terms of climate mitigation,
the highest emitting sectors in Pakistan are energy and agriculture. The cost of energy sector GHG
emissions reduction, which accounts for roughly 41% of Pakistan's GHG emissions as per 2018 data,
will be about USD 151 billion by 2040 (GoP, 2021). Similarly, it is estimated that about USD 7-14 billion
are required to enable Pakistan to adapt to climate change (CDPR, 2022).

In terms of adaptation investments, the Government of Pakistan estimated the need for USD 7-14
billion for adaptation investments. Since adaptation also involves land use improvements and forestry
projects, the cost of the Ten Billion Tree Tsunami Program (TBTTP) is a good benchmark to allocate
resources for agro-forestry or afforestation and watershed projects which would be at least double
the TBTTP cost which is USD 800 million. Lastly, there is also a need for exploring conservation debt-
for-nature swaps for mangroves and the ten billion-tree projects.

However, the key sectors which are expected to receive support from L&DF include (1) post floods
and droughts disaster transition, (2) social protection regime and income transfers, (3) risk insurance,
(4) early warning systems, (5) expenditure on climate displaced people, (6) emergencies preparations,
(7) micro-credits for livelihood, and (8) rehabilitation and rebuilding. Thus, a comprehensive approach
to estimating climate expenditure is to estimate the losses and damages and the resource
requirements of these eight sectors. This exercise will give a clear idea of the financial needs and hence
a plan to mobilize financial support from the L&DF.

3.5 L&DF in the context of Pakistan

L&DF brought hope to many countries like Pakistan, it is time to consider how best to utilise such
funds in order to maximize climate-resilient development. However, as for Pakistan’s readiness for
the L&DF, there are a number of questions which need to be answered first. For example, is the subject
of global climate finance well understood in Pakistan? How much climate finance is flowing to
Pakistan, and how has it been utilised thus far? How much did Pakistan benefit from CDM financing
for the green transformation of its industry? What are domestic options for mobilising resources for
climate investments, and how do governmental entities in Pakistan currently leverage their own
resources to fund mitigation and adaptation initiatives and efficiently manage them?

What would be needed in a new fund to ensure that Pakistan is able to access funds? What are the
governance challenges to Pakistan’s current approach to managing climate finance? What would be
the best internal distribution priorities among different possible funding allocation areas from such an
L&DF? The knowledge needed to answer these questions needs to be produced in a coherent manner
so that Pakistan can better prepare itself to access climate funds and improve domestic and

15
institutional capacities to manage an enhanced provision of funds. In Pakistan, one of the country’s
worst hit by climate change, the government has been implementing the Climate Change Policy at the
provincial level. However, attracting adequate international climate financing has been a challenge,
mainly due to the constantly changing landscape of climate finance and the limited institutional
capacity at different levels to leverage, utilise and monitor emerging climate financing (GFC Pakistan
Readiness Proposal 2015).

The failure to benefit from the Clean Development Mechanism (CDM) is a reminder that Pakistan will
need to strengthen its institutional capacity to solicit and use international climate finance. Despite
the fact that a lot of people talked about CDMs in seminars, most of them did not know the
technicalities and modalities to propose such projects which could qualify for the financing. The
conditions under which the funds would be available from L&DF have started emerging. Pakistan’s
manufacturing and agriculture sectors could not benefit from the CDM facility and a big opportunity
was lost which could improve these industries in Pakistan. Hence, Pakistan should not be a loser this
time around.

3.6 L&DF and financing needs

L&DF financing is not only about delivering disaster response and reconstruction but it also aims to
prevent communities from losing their development gains. This means L&DF must enable countries
and households to endure and bounce back from the impacts of loss and damage from climate change
and natural disasters when they have already invested in coping and adaptation. Hence, the financing
needs in the context of L&DF include climate-compatible economic growth and development as well
as the availability of resources for climate change-driven natural disasters.

This is an undisputed fact that the costs of addressing loss and damage in developing countries will be
very high as the value of losses and damages are compounded by socioeconomic problems such as
poverty, food shortage, and disease to name a few. As for L&DF needs in Pakistan, the economic costs
of the 2022 disastrous floods are expected to reach at least USD10 billion (Gallagher and Addison,
2022). This, however, does not account for non-economic forms of loss and damage and their costs
such as loss of life, well-being, territory, cultural identity, indigenous knowledge, and biodiversity as
these costs are seldom incorporated in formal estimates of loss and damage from natural disasters.

3.7 Sector distribution and best contenders

The L&DF modalities may also determine and guide the sectoral distribution of the financial support
secured under the L&DF. However, the best way to use the resources generated through this fund in
Pakistan would be to spend on disaster risk reduction and management and developing the resilience

16
of the most vulnerable communities. This mainly includes monsoon flooding and prolonged droughts
which result in losses and damages to livelihood, key infrastructure, and basic services, among others.
This also includes livelihood which largely depends on agriculture and livestock in rural areas as about
35% of the total population is dependent on this sector. Hence, climate-proofing of agriculture is
critical as there are very limited off-farm income opportunities in rural areas of Pakistan.

The National Disaster Risk Management Fund (MDRMF) was established with the technical and
financial loan-based support of ADB. It has a National Disaster Risk Finance Unit dedicated to
formulating risk finance strategies. The funds for MHVRA are managed and released by the (NDRMF).
About 70% of the cost is financed by NFRMF, while 30% is contributed by implementing partners. For
international climate finance including the L&DF, NDRMF’s coordination with CFU and other partners
is necessary to avoid fragmentation and synergize project and program planning. The NDRMF is the
responsible funding agency for the Rs. 3 billion flood Rehabilitation scheme in Sindh (Kundi, A. 2023).
Similarly, the capacity of National Disaster Management Authority (NDMA) and provincial disaster
management authorities could be enhanced to implement L&DF.

17
 Chapter 4 Assessment of Pakistan’s institutional capacity for L&DF

4.1 Institutional architecture

Before discussing the institutional capacity issues and the need for capacity enhancement, it is
important to identify the key institutions relevant to the mobilization and implementation of the
L&DF. In Pakistan, the focal ministry to deal with matters pertaining to the environment, climate
change, and natural disasters is the Ministry of Climate Change and Environmental Coordination
(MoCCEC). This is the umbrella organization which oversees and guides the departments and agencies
in the federal capital as well as in provinces. After the MoCCEC, the second most important
government department that deals with climate change and natural disasters is the National Disaster
Management Authority (NDMA). It is the lead agency at the federal level for Disaster Management
activities as well as the executive arm of the National Disaster Management Commission (NDMC)
which was established under the Chairmanship of the Prime Minister of Pakistan.

While NDMA is based in the federal capital, there are provincial and state disaster management
authorities which are working in the provinces. After the MoCCEC and NDMA, the Federal Flood
Commission (FFC) is an agency under the Ministry of Water Resources of the Government of Pakistan.
The FFC was established with the purpose of integrated flood management at the national level and
is responsible for the development and maintenance of flood protection and control systems in
Pakistan. Lastly, Pakistan also has the National Disaster Risk Management Fund (NDRMF). NDRMF is a
public limited company and its aim is to establish a government-owned sustainable mechanism to
support disaster risk reduction and financing instruments that can enhance Pakistan’s resilience to
future disasters.

4.2 Existing institutional gaps

There are many issues pertaining to the institutional capacity to manage climate finance in Pakistan.
For example, Pakistan has a bad record of efficiently utilizing foreign aid which resulted in many
problems ranging from inefficient and wasteful use of resources, incapacity, and corruption, to name
a few. It is important to highlight that the potential sectors and contenders of L&DF support have been
the recipients of foreign aid in the past. However, they often failed to implement high social impact
projects to ensure the best use of available resources. While Pakistan did not get a lot of funding, for

18
example, in climate finance, the country has serious capacity issues which need to be addressed
before L&DF becomes functional to ensure the smooth access and utilization of the available
resources.

Thus, in addition to access and mobilizations, the efficient utilization and management of public
expenditure have also been a challenge. Hence, there is a need to enhance the capacity of the public
sector starting from the identification of projects to planning, execution, and evaluation. Pakistan also
has a less than inspirational story of Public Private Partnership (PPP) project implementation. The PPP
Authority and law have not given special importance to international climate finance-funded projects.

Since the mandate of the Ministry of Climate Change and Environmental Coordination is limited due
to the devolution of powers after the 18th Amendment of the Constitution of Pakistan, its human,
technical, and financial capacity is also inadequate. Similarly, challenges of intuitional capacity,
governance coordination, and inter-sectoral synergies together worsen the efforts to adopt
comprehensive actions for climate change and alignment of government projects with those goals.
This impedes Pakistan’s capacity to access international climate finance. It is essential to conduct an
institutional assessment to identify areas requiring technical assistance and reforms for institutional
governance to prepare Pakistan for the L&DF to improve the country’s capacity to access climate
finance. In addition, there is a need to improve the coordination for steering a climate change-ready
future. This will include the coordination between the focal ministries and departments with other
key ministries such as the Ministry of Planning, the Ministry of Climate Change, and the Ministry of
Finance.

4.3 Missing role of financial intermediaries

Central banks all over the world, including those in developing countries, have positively responded
to climate change and environmental degradation to ensure sustainable development and avoid
damages from unfavourable climate changes which occurred in the recent past. Notwithstanding
Pakistan is highly vulnerable to climate change and the international community has already realised
this, unfortunately, the Pakistani financial system did not fathom the gravity and enormity of the
problem of climate change beyond this being a risk factor. However, climate change is a
multidisciplinary subject which is rooted in science but has serious implications for society and the
economy.

This means the relationship between climate change and financial systems cannot and should not be
seen through risk and seeing climate merely as the source of risk is not only naïve and uneducated but
a negligence. For example, financial institutions have a key role to play in price instability, food crisis,
and inflation during climate change-driven natural disasters. Climate change affects the valuation of

19
assets and investments in many ways. Similarly, certain investments such as those in the oil and gas
industry induce climate change, while others such as green technologies, including renewable energy
and electric vehicles are climate-friendly.

A large part of the global financial system has aligned itself with climate change. This includes
expansion in climate finance and a number of products and services (e.g. green bonds, climate
insurance, and concessional loans for climate-friendly investments) and financial instruments to tackle
climate change. Pakistan, on the other hand, has failed to provide small loans and micro-credit to
vulnerable farmers who lose their livelihoods in addition to contributing to food insecurity. This clearly
shows that financial institutions have a greater responsibility and role to play in addressing the
problem of climate change.

However, in Pakistan, there seems to be a lack of a holistic and comprehensive understanding of the
nature of the climate change problem and its implications for different socioeconomic and ecological
systems. One factor behind the limited understanding of climate change as a multifaceted and serious
problem is also a misunderstanding amongst Pakistani economic managers that tackling climate
change means a compromise on economic growth and/or economic growth could be achieved
without dealing with climate change. However, the world has walked passed that stage of arguing
with climate critics.

Pakistani financial system must align itself with the global financial systems where the roles and
responsibilities of financial institutions have changed in the wake of climate change. Climate change
should not only be seen as a risk factor by financial institutions but an avoidable force which is going
to massively affect the economies and societies in future. One simple way to look at climate change
would be from the financial and investment standpoint which could be divided into two parts: one, to
invest in the environment and climate-friendly projects, i.e. green investment, and two, how to make
sure that the investments which have already been done are climate-proof.

Seemingly, this is all about risk, but it is much more than that indeed. This includes climate mitigation
(reduction in CO2 emissions), climate adaptation (adjustment of socioeconomic and ecological
systems with changing climate), climate proofing (in terms of reduction in and management of natural
disasters), and climate-compatible investments (a development which is resilient to climatic changes).
There is an urgent need to develop the capacity of the Pakistani financial system to prepare it to
respond to climate change in a holistic and broader way.

4.4 Planning for L&DF projects

20
The fundamental principles of effective climate action are a) political commitment of leadership b)
actively participating in international and regional processes c) formulating policies and action plans
for adaptation and mitigation d) governance and institutions dedicated to working on climate change
e) monitoring and policy implementation, and f) optimal utilization and mobilization of external and
domestic resources (Kakakhel, 2023). Pakistan needs to focus on improving the political commitment
of leadership, monitoring and policy implementation, and optimal utilization and mobilization of
external and domestic resources to enhance its technical capacity to access and mobilize financial
resources under L&DF.

Keeping these in view, suitable projects need to be identified based on the principles of sustainability,
feasibility, and cost-effectiveness, aligned with national goals, and integrated with existing initiatives
where possible. Prioritizing projects that have co-benefits, i.e. to address climate adaptation while
also resolving issues of loss and damage, should be a priority. For example, mangroves are frontline
defense in case of tsunami, and maintenance of large mangrove belts on the coastline serves as a
strategy for climate risk reduction. However, mangroves also play the role of climate mitigation and
local livelihood.

4.5 Data, quantification, and human resources

Conceptually, the loss and damage concept is about climate-incurred loss despite adaptation. It is
important to configure why and how loss and damage apart from measuring it alone. Loss and damage
is one of the three thematic pillars of UNFCCC. Therefore, it is a requirement for Pakistan under the
Paris Agreement to assess climate losses, determine actions to address them and quantify the needs
(Sheikh, 2022). Five yearly exercises on data on loss and damage is another commitment for which
Pakistan needs to technically prepare itself. Currently, the adaptation needs are being identified and
the possibility to include loss and damage assessments may be explored. The unavailability and
inaccessibility of data affect the quality of proposals fielded by Pakistan to access funds (Bashir et al.
2023). Researchers and academia need to be actively engaged in conducting research in the context
of L&DF apart from mitigation and adaptation. For example, sectoral losses to agriculture due to
changing weather and global warming need to be factored in.

The sectoral estimates of loss and damage from climate-related disasters in the medium and long term
need to be regularly updated to assess the adaptation gaps and the financial needs of the country.
The federal government in Pakistan received capacity building and technical knowledge support
through the Action on Climate Today- South Asia programme of the DFID to mainstream such
measures into policy, planning, and budget cycle. Provincial as well as federal government officials
received training on accessing international climate finance under this programme (Resch, 2017).

21
However, this capacity building would only be fruitful if the trained staff did the relevant work, i.e.
climate finance resource mobilization and preparation of projects for different types of climate finance
resources. Sectoral climate financing studies are required to configure the potential of each sector for
climate finance generation. Clean energy transitions hold significant potential for international climate
finance if Pakistan develops an energy sector-specific inventory and shortlists the potential projects.

4.6 Integrating climate change in the planning process

Mainstreaming climate change into development remained a serious problem as well as a neglected
area in Pakistani planning and development systems. The integration of climate change adaptation
and resilience at federal and provincial levels of government in planning, policy-making, and budgeting
is important to enhance the capacity to access climate financing. The climate risks need to be
accounted for in the mid-term budgeting framework (MTBF) of the line ministries at the federal and
provincial levels of government. The MTBF process is being implemented in federal and provincial
governments, but it is not being utilized to develop climate-focused projects. Aligning climate costs
with development actions also brings synergy in government expenditures across sectors.

Although cross-sectoral policies and plans are developed, it is often the case that development
investments are given priority when they have a conflict with climate-related investments. The
Climate Finance Unit (CFU) in Pakistan has members trained in seeking and identifying international
climate finance, developing project proposals, and supporting line ministries for climate. However,
the mandate burdens the unit with managing multiple project streams with limited human and
financial resources. On the other hand, CFU cannot enforce compliance on other ministries to
integrate climate-responsive policies and strategies. The coordination between ministries and across
provinces needs a functional and empowered “Pakistan Climate Change Council” as envisioned in the
Climate Change Act 2017. As for the National Climate Change Policy, the incorporation of adaptation
measures in line ministries at the provincial and federal levels is a fundamental requirement. However,
the policy doesn’t create any incentives or disincentives to ensure compliance (Gogoi, 2017).

4.7 Improving disaster management policies and institutes

Disaster management and disaster risk reduction policies in Pakistan are often faced with resource
constraints in times of crisis. The creation of an inter-provincial climate risk pool under the National
Finance Commission (NFC) award is one of the practical solutions that can help governments tackle
short-term and immediate needs in the face of climate-incurred damages (Sheikh, 2023). Due to
limitations of technical knowledge and data, the quantification of adaptation needs is less
comprehensive compared to mitigation needs in developing countries like Pakistan (Kakakhel, 2022).

22
Considering the loss and damage costs, the post-disaster needs assessment of the 2022 floods was
conducted with the technical support of international donor agencies.

Separate and dedicated units must be established for adaptation, mitigation, and loss and damage in
the climate finance unit to overcome such technical limitations in costing needs. The scale of
destruction that was incurred by the 2022 floods was not anticipated but the flood situation was
predicted beforehand. The NDMA, despite having a vast network in every district, did not make
necessary arrangements for evacuation, temporary rehabilitation, and other risk reduction measures
(Singh, 2022).

4.8 Responding to climate change impacts

The heat wave management plan for Karachi was developed a decade ago but has not been
implemented so far. The heatwaves now occur in other cities as well and with more intensity. Perhaps
a national heatwave categorization should be adopted to prepare for heatwaves beforehand. The
averted Biparjoy cyclone in Karachi was a test case for district disaster management. About 80,000
people were evacuated for the first time in the country. However, the district management authority
called in security forces to aid in evacuation (Sheikh, 2023).

As per the SENDAI framework, national disaster policies, and commitments of Pakistan, the country
aims to complete Multi-Hazard Vulnerability and Risk Assessment (MHVRA) in all districts by 2030.
Accordingly, a district disaster management plan is developed defining the roles and actions of each
department.

4.9 Strengthening NDMA

Disaster management institutions are well established at the federal, provincial, and district levels.
The policies of NDMA are responsive in character rather than preparedness-oriented. Furthermore,
despite having a vast network and district-level plans, the lack of resources is a problem for disaster
risk reduction. It is often recommended that a disaster financing strategy is developed that aligns
national disaster strategies and action plans with international climate funds. Such a strategy should
be prepared with particular reference to the loss and damage to short-term and medium-term needs.
Also, community participation and community-led projects need to be configured for loss and damage
as the vulnerable population is at the center of the impact of climate change.

4.10 Reaching the most vulnerable at the domestic level

The purpose of the loss and damage fund is to reach the most vulnerable groups. Establishing it as a
principle, at the domestic level the communities directly affected by sudden events or slow onset

23
impacts of climate change should have social security arrangements in place and contingency funds.
For this purpose, vulnerable countries should strengthen their institutions that track the social
protection of vulnerable populations along with developing solutions for sustainable livelihoods that
may be lost and damaged due to climate change (Dahiya and Okitsari, 2022). For Pakistan, it is
necessary to include social protection projects in its loss and damage portfolio as a priority given the
dependency of large-scale population on agriculture and high poverty.

4.11 Regional comparison

A comparison of climate finance and climate risk in South Asia reveals that despite, India being the
highest emitter and fifth most vulnerable to climate change in the region, it received the highest
international climate finance due to its strong institutional capacity and effectiveness. While Pakistan
has lost 0.678% of its annual GDP on average due to climate change, India lost 0.274%. The regional
comparison of South Asian countries depicts that countries with stronger intuitions are better able to
access international climate finance (Masud, 2023).

The African leaders have pushed for “climate compatible growth” of the region by specifying climate
actions, financing needs, and investment opportunities in the (African Climate Summit 2023). The
summit concluded with propositions to set up new and restructured financing instruments at the
international level to reduce the burden of debt and achieve green growth goals. While a regional
summit for South Asia is a farfetched idea given the political realities, the interconnectedness of the
issues of climate change and loss and damage demand regional cooperation.

4.12 Establishment of a domestic fund

One other suggestion to effectively mobilize and access the L&DF is that Pakistan establish its own
domestic climate fund, as indicated in the latest National Adaptation Plan. This fund could help
Pakistan in improving the capacity of key departments and agencies to implement the L&DF. The L&DF
would however come for the sectors, which have a history of suffering losses and damages. This would
require developing protocols and guidelines by the government in consultation with the key
stakeholders. It is important to mention that the UNDP framework of climate expenditure review is
inadequate for L&DF as well as climate finance-related funds which Pakistan may seek in the future.
The establishment of a domestic fund will allow for the pooling and allocation of resources for the
following eight sectors; (1) post floods and droughts disaster transition, (2) social protection regime
and income transfers, (3) Risk insurance, (4) early warning systems, (5) expenditure on climate
displaced people, (6) emergencies preparations, (7) micro-credits for livelihood, and (8) rehabilitation

24
and rebuilding. The establishment of a domestic fund will also enable the responsible government
departments to undertake the scientific assessment of future needs.

Chapter 5 Preparing Pakistan for L&DF

5.1 Introduction

Pakistan's preparation to access the resources from L&DF is critical which also includes enhancing
institutional capacity to develop projects which are aligned with the criteria of the fund. However,
there is a strong realization among the planners, policymakers, experts, and civil society in Pakistan
that the country has not been able to effectively access climate finance in the past. There are only a
handful of projects through which Pakistan has received climate funds (see Table 1). The constraints
have also been highlighted in the Climate Change Finance Framework (2017), Living Indus Initiative
(2023), and National Adaptation Plan (2023). There is, however, a shortage of trained manpower with
a technical understanding of climate finance to prepare projects with robust analysis and rationale
(Ebrahim, 2022).

Table 1 International climate finance projects of Pakistan till 2021

Facility Name Number of projects
Adaptation Fund 1 (grant)
Green Climate Fund 3 (Concessional loan and grants)
Global Environment Fund 19 (Grants and Concessional loans)
Clean Development Mechanism 18
Climate Investment Funds 0
Major Bilateral Climate Funds 1

L&DF is going to be a third operating entity fund of the UNFCCC similar to the Global Environment
Facility (GEF) and Green Climate Fund (GCF). Hence, lessons learned in accessing GCF and GEF funding
provide preliminary grounds for institutions in Pakistan to work on approaches to access funds from
a new entity (Richard et al. 2023). Thus far, Pakistan’s inability to effectively avail the previous facilities
was not being able to bring forth bankable projects as well as apply rapidly for the funds. The
underlying problem is due to incapacity at the institutional level in terms of understanding climate

25
finance and the mechanisms through which different funds operate and release resources. While the
L&DF is still being established under UNFCCC, some small-scale funds have been made available (Table
2). Amongst these, Pakistan is selected as a pathfinder country for Global Shield, to analyse climate
risks and the efficacy of protection systems in place. It will provide Pakistan with risk modelling and
data necessary for planning against climate events (Federal Ministry of Economic Development, 2022).

Table: 2 Existing Loss Damage Finance outside UNFCCC

Name of Facility Type
African Risk Capacity (ARC), Pooling and Risk Management
Caribbean Catastrophe Risk Insurance Pooling and Risk Management
Facility (CCRIF)
G7-led Global Shield A) Multilateral Grants B) CVF C) Insurance Resilience
Scotland Bilateral Fund – Grant
Denmark Bilateral Fund – Grant

The L&DF support is expected to be thematically categorized, first related to the immediate disaster
response, second medium-term needs for rehabilitation and reconstruction, third slow onset-events,
and lastly for sub-governmental and nongovernmental entities (Richard et al. 2023, Climate Action
Network, 2023). Therefore, Pakistan needs to formulate detailed proposals that undertake loss and
damage needs in the short as well as long term. The Ministry of Climate Change of Pakistan was the
designated national authority of GCF, and it will also be responsible for overseeing funding requests
for L&DF. Therefore, the capacity of the Climate Finance Unit (CFU) at the Ministry needs to be
enhanced further. The L&DF is supposed to be comprised of grants and direct financing instruments,
while also prioritizing programmatic support over project-based funding (Richard et al., 2023). The
institutional capacity of Pakistan needs to be evaluated and gaps should be identified in the context
of the proposed modalities and funding instruments of the L&DF. Our Study attempts to do a
systematic institutional capacity assessment in the following section, identifying the gaps in the
context of the proposed modalities and funding instruments of the L&DF.

5.2 Programmatic funding

Programmatic funding is usually more sustainable as the approach is established around developing
country-led investment plans and thematic programmes which are often supported by multi-lateral
agencies1. The programmatic support in line with the country’s policies and development plans offers
an opportunity to field long-term programmes through budgetary support for development priorities.
The slow onset impacts of climate change such as loss and damage due to glacial melt have long-term
needs that are better addressed through programmatic funding. The L&DF seeks to establish such

1
https://www.cif.org/sites/cif_enc/files/knowledgedocuments/evaluation_of_cif_programmatic_approach_bri
ef.pdf.

26
funding windows for slow on-set climate change impacts (Practical Action for Addressing Loss and
Damage, 2022). In this respect, the line ministries should prioritize and prepare bankable proposals
based on Multi-Hazard Vulnerability and Risk Assessment for areas which are most vulnerable due to
changing weather patterns, extreme heat, glacial melt, and desertification in Pakistan. Such proposals
should priortise food security, resilience, livelihood diversification, and damages to housing and key
infrastructure as fundamental components to mainstream disaster management and climate change
while targeting L&DF.

5.3 Accessing Concessionary Loans

The global landscape of international climate finance is competitive, especially considering the limited
share of concessionary loans and grants in international climate finance. Furthermore, the qualifying
criteria for these programmes are highly strict. Pakistan needs to indicate specific programmes and
projects which require investment for emissions reduction and improvement of the overall
environment and climate and present a strong case for concessional loans and/or grants. While it is
limited in scope, Pakistan’s NDC 2021 is a relevant document to approximate the cost estimates for
emission reductions and climate adaptation. However, there is a need to expand the NDC scope to
specific and targeted projects (Mako, et al., 2022). The energy sector followed by agriculture is the
highest emitter.

5.4 Ensuring direct access to resources

It has been noticed that international climate and other multilateral funds often go to intermediary
organizations such as ADB, DIFD, or the World Bank (Shaikh, 2023). However, Pakistan needs to
develop its capacity and equip itself to mobilise, access, and use/implement the L&DF to evade
transaction costs and administration delays. The underlying principle of L&DF is climate justice and
hence the modalities should create such instruments which are more flexible and tailored to the
institutional capacity of the developing countries. Nevertheless, Pakistan must prepare itself to be the
most suitable candidate for L&DF in all aspects. The Ministry of Climate Change of Pakistan must
establish a cell to dedicate its efforts to prepare Pakistan in terms of capacity and readiness to
capitalize on the L&DF. Furthermore, there must be a focal person from each sector and
province/region to coordinate with the cell.

It is also vital to link the search for climate finance to existing national policies and strategies related
to climate change and sustainable development and designate a coordinating body to help ensure
that different sectors of the country are represented in decision-making processes and their focal
person meet and interact on a daily basis. Institutions that will be responsible for overseeing and
implementing projects or programs funded through direct access to funds from L&DF should be well-

27
resourced from all aspects and ensure an inclusive approach. Linked climate finance to national
strategies and appointing the appropriate institutions as the focal point and coordinating bodies are
some of the basic things to consider in the planning of the project. The institutional capacity of those
institutions designated to facilitate and implement L&DF should be enhanced on a regular basis
(Masullo et al. 2015).

Chapter 6 Inclusive climate finance and L&DF

6.1 Introduction

Climate change has profound social and economic impacts that disproportionately affect people from
different socioeconomic groups. This is especially serious for the financially excluded groups. For
example, they might get excluded from the support being provided, resulting in worsening their
existing vulnerabilities. One of the reasons for this problem is that climate finance remained isolated
from financial inclusion in general, despite significant overlaps between them. Similarly, poor
communities and households might find it difficult to avail different financial instruments as they have
a physical risk from climate change which might affect the reliability of collateral. This means that
amplified physical risk in terms of climate disasters could be the cause of financial institutions'
reluctance to lend to low-margin and high-risk customers.

Climate finance is an essential tool to address the adverse impacts of climate change in line with the
goals of the Paris Agreement. However, planners, policymakers, and regulators confront the dual
challenge of financial exclusion and climate change which impede financial stability and financial
inclusion to support vulnerable communities in building resilience to climate change and mitigate
subsequent losses. Similarly, the transition to a low-carbon economy and changes in consumption and
production patterns, use of technology, and changes in investment preferences often result in
financial exclusion. Similarly, regulatory and other policy changes in the financial sector to advance
the low-carbon transition can also cause unintended consequences in terms of financial exclusion.

Nevertheless, inclusive climate finance could help against the negative impacts of climate change. For
example, financial institutions could design products and services such as savings, credit, insurance,
money transfers, and new digital delivery channels to enable vulnerable communities to deal with
climate risk.

6.2 Climate finance and social inclusion

28
Notwithstanding that global climate finance volume has grown manifolds, access to and distribution
of climate finance are not equitable. Developing countries which face socioeconomic problems and
are more vulnerable to climate change often struggle to benefit from climate finance. Several
destitute groups, including women, youth, and marginalized communities also contribute, but existing
systems fail to ensure the reward for their participation. This undermines the social inclusion aspect
of climate finance, resulting in more disparities and inequitable access to resources. Similarly, social
inclusion in emissions reduction programs is about having a voice in the planning and implementation
of initiatives that yield fair access to benefits.

Social inclusion in climate finance seeks to enable disadvantaged communities to benefit from climate
finance windows. Hence, inclusive climate finance means the removal of barriers to the participation
of the most disadvantaged countries and regions to promote equity and ensure fair distribution of
resources. To implement inclusive climate finance, there is a need to devise viable models and systems
which serve vulnerable countries and marginalized population groups, resulting in ensuring equitable
access to and distribution of climate finance. Furthermore, inclusive financial systems substantially
impact the lives of vulnerable households in their responses to climate change. However, vulnerable
countries often lack an overarching framework to understand, explain, and mainstream inclusive
finance in climate change. This framework must entail the approach in which financial services can
support vulnerable communities in the face of climate threats. Below, we present a framework for
Pakistan to effectively utilise the L&DF.

Since financial services are critical to climate adaptation and mitigation, financial exclusion precludes
vulnerable groups from developing resilience. If a significant fraction of the vulnerable population is
unable to adapt to climate change, their vulnerability to economic shocks will be aggravated, resulting
in poverty and unemployment. This social inequity and exclusion from economic opportunities could
cause instability and conflict. However, inclusive climate finance has the potential to develop
resilience while facilitating the transition to a low-carbon and sustainable economy. Inclusive climate
finance could also reduce the financial exclusion experienced by vulnerable groups and foster
equitable access to resources.

The lack of inclusiveness in climate finance is one of the major factors which resulted in the slow
evolution of green financing in Pakistan. Hence, it is important to note that irrespective of the
modalities of the disbursement/operationalization of L&DF, the inclusiveness of climate finance would
be a critical factor that will contribute to the success of L&DF. This study clearly indicates that the
climate finance ecosystem in Pakistan must be inclusive to achieve the desired objectives of climate
finance as well as the soon-to-be-materialised L&DF. The inclusiveness of the climate finance

29
ecosystem could be better attended by ensuring that the neglected elements are given due
importance in processes.

6.3 Pakistan’s inclusive strategic framework for L&DF

Pakistan needs an inclusive strategic framework to access the L&DF without difficulty in developing
and submitting proposals and procedural delays. This would require ample preparation and
groundwork in anticipation of future engagement with the L&DF so that the country is eligible for an
adequate amount of funds from L&DF. This strategic framework has several key aspects which are
discussed below.

a. Technical capacity and coordination

Technical capacity to access, mobilise, and implement the funding from L&DF should be the priority
of Pakistan as the country could not properly avail the CDM due to a lack of technical and institutional
capacity to help project proponents in developing the CDM projects. In addition to the lack of human,
technical, and financial capacity, challenges regarding coordination and inter-sectoral harmony
impeded the efforts in the past to adopt a comprehensive plan of action. Hence, this must be
addressed to access international climate finance.

b. Integrated approach

Integration of financial institutions and services of government, the central bank, commercial banks,
and other financial institutions is vital for financial inclusion. These financial institutions must have a
homogenous understanding and approach and uniform practices when it comes to climate finance
and expected resources from L&DF. This will enable Pakistan to benefit from key stakeholders in
devising effective policies and practices to access, mobilise, and implement L&DF for the climate
resilience and social and economic uplift of vulnerable communities and sectors while considering
equity concerns. This approach can help avoid potential conflicts and trade-offs and foster a
harmonious and collaborative approach for robust results.

c. Clear and policy-guided position

Pakistan must have a clear position with respect to the L&DF which underpins the relevant policies
such as the National Adaptation Plan 2023, the Final Updated National Climate Change Policy-2021,
the National Disaster Risk Management Policy 2013, and Resilient Recovery, Rehabilitation, and
Reconstruction Framework (4RF). These strategic policy documents will guide the efforts as well as
the extensive collaboration between agencies to devise an inclusive plan.

d. Solid implementation plan

30
A solid implementation plan with clearly outlined intended objectives and social impacts in terms of
reduced exposure and improved resilience would enable Pakistan to pitch the funding requests. This
implementation plan should be designed by technical experts from the Ministry of Climate Change,
the National Disaster Management Authority (NDMA), the provincial disaster management
authorities, the Federal Flood Commission, the Global Change Impact Study Centre (GCISC), SDGs
Division Planning Commission, and other key stakeholders.

e. Targeting diverse pots of resources

Unlike in the past, Pakistan must target multiple funding opportunities under L&DF and aim for
funding from a variety of donors and finance institutions. This would enhance the country’s chances
to access and mobilize adequate funding to develop resilience to climate change while also developing
its capacity to manage funds directly without involving intermediaries such as UNDP, ADB, and other
multilateral. Furthermore, international resources from L&DF should be augmented with domestic
public and private funding to improve efficiency, accountability, and transparency. This would require
a robust and consolidated approach to manage and implement an architecture of climate and disaster
funds while also increasing the scales.

f. Local government and community participation

The essence of inclusiveness is the participation of all relevant stakeholders in the development
processes. In this respect, the participation of local stakeholders such as local government
departments and municipal authorities, community organizations, and vulnerable groups in the
implementation of L&DF is highly important. This will develop their capacity and confidence in
addition to the technical understanding required for the implementation of L&DF. This is also
important as climate change and disaster management policies in Pakistan have been designed using
the top-down approach, hence these policies have an innate tendency to cuase social exclusion.

31
 Chapter 7 Conclusion and policy recommendations

7.1 Conclusion

Attracting adequate international climate financing remained a challenge for Pakistan due to the lack
of a comprehensive approach, limited institutional capacity to access the emerging climate financing
landscape, lack of inclusiveness, and inconsistent policies. Our study has uncovered a number of key
governing principles which should consciously be adopted to improve the climate finance ecosystem
as well as the prospects of L&DF in Pakistan. These governing principles have informed our analysis to
effectively mobilise, access, and implement climate finance, including L&DF in Pakistan. This analysis
investigated several key dimensions and impediments to the development of an efficient and agile
climate finance Pakistan. This includes the country’s technical and institutional capacity to implement
climate finance, required data and empirical evidence, past experiences, including CDM, and
inclusiveness of climate finance in Pakistan, among others.

Addressing these key governing principles and then applying them in the case of Pakistan would
transform the ecosystem of climate financing in Pakistan. This would add to the existing climate
financing, which includes both national and transnational financing for mitigation and adaptation
measures taken to tackle climate change. Similarly, bringing the principles of climate justice to the
center of the climate finance policy and discussion would also help in anchoring financial support,
including L&DF. Nevertheless, the development of a climate finance ecosystem would enable a green
transformation in Pakistan, resulting in much-needed financing of green industrialization which the
country needs for long-term sustainable and resilient economic growth and development.

7.2 Policy recommendations

Our study provides insightful recommendations for the process of L&DF and the ways in which this
could be best operationalized to achieve its intended goals. These cross-cutting recommendations will

32
enable policymakers and planners in developing countries to position themselves to seize this
opportunity.

7.2.1 Clarity on the scope

It is very crucial for Pakistan to gain clarity on the scope of L&DF and propose projects and initiatives
which are not only in line with the criteria but also indicate clear activities and measurable outcomes
using data and MRVs. This entails the identification of specific projects, projected investments, and
expected contributions in terms of climate resilience. In addition to grants and concessional financing,
some of the projects should also be identified using market-based mechanism approaches such as
incentive schemes and the possibility of profitable investments. This also means adjustments to the
social, economic, cultural, and geographic context and local conditions.

7.2.2 Technical capacity

Technical capacity remained a challenge in the context of climate change and as it stands there is a
lack of technical and institutional capabilities and research and know-how of the proposed L&DF.
Hence, proposing a flexible and grants-based approach might be a better way to deal with technical
constraints which hindered the access to similar funds in the past. In this respect, the Ministry of
Climate Change of Pakistan must establish a cell to dedicate its efforts to prepare Pakistan in terms of
capacity and readiness to capitalize on the L&DF.
To avoid the repetition of mistakes and shortcomings in availing the CDM opportunity, Pakistan must
establish a proficient and committed team of experts. This team should thoroughly examine the
eligibility criteria, evaluate necessary resources and technology, and prioritize strategies to maximize
the benefits of the proposed L&DF

7.2.3 Establishment of a domestic fund

If Pakistan establishes its own domestic climate fund, this fund could help Pakistan in improving the
capacity of key departments and agencies to implement the L&DF. The L&DF would however come
for the sectors, which have a history of suffering losses and damages. This would require developing
protocols and guidelines by the government in consultation with the key stakeholders. It is important
to mention that the UNDP framework of climate expenditure review is inadequate for L&DF as well as
climate finance-related funds which Pakistan may seek in the future.

7.2.4 Suitable windows and instruments

Identification of suitable L&DF support windows and instruments would help Pakistan in aligning its
preparation for specific opportunities. This will also help in devising a strategy to implement the
accrued resources and make informed investment decisions. For example, Pakistan may need to

33
develop guidelines for the domestic market about green bond sales. Similarly, such preparations could
help in attracting private domestic or foreign investment which will require improvement in Pakistan's
legal and institutional framework for public-private partnerships.
7.2.5 Transparency
Transparency in the access, mobilization, and use of L&DF is multifaceted and cross-cutting topic. This,
however, mainly deals with adopting the approaches that have been proven successful in the past to
provide support at the local level and most vulnerable communities. This would require participatory
and representative decision-making approaches, involving key stakeholders such as the Ministry of
Climate Change, the Ministry of Industries and Production, the Ministry of Finance, the Planning
Commission, the National Disaster Management Authority, and other line departments in provinces
in Pakistan.
7.2.6 Inclusiveness and integration
The ministries, departments, and agencies at the federal, provincial, and local levels in Pakistan lack a
collaborative approach which results in a lack of synergies in addition to wasteful overlaps and a lack
of clarity on the scope and departmental role of interdisciplinary and complex matters. Thus, it is
extremely crucial for Pakistan to adopt an overarching, comprehensive, integrated, and collaborative
approach to secure and implement resources from L&DF.
7.2.7 Compliance
The cash flow of previous climate finance funds pledged by developed countries shows that the
committed resources to developing countries have not been fully released, indicating that the
responsibilities and commitments made by the developed world have yet to be fulfilled. Hence, it is
very important to ensure compliance for this new pot of money for L&DF to be delivered as per
commitment and agreed terms and conditions. In this respect, Pakistan should prepare itself to
engage with available funding opportunities in L&DF so that the delay and subsequent uncertainty
and lack of compliance by the funding bodies could be mitigated.

References
Ahmed, A. and Salman, A. (2012) Clean Development Mechanism (CDM) Business in Pakistan:
Perceptions and Realities file:///C:/Users/HP%20Pavilion/Downloads/CDM%20paper.pdf
Anwar, (2015). Something in the air: Govt snuffs out CDM cell, deprives the country of carbon credit
facility. The Express Tribune. https://tribune.com.pk/story/834786/something-in-the-air-govt-snuffs-
out-cdm-cell-deprives-country-of-carbon-credit-facility
(Ganapatiet al., 2008) The clean development mechanism in China and India: A comparative
institutional analysis, Wiley online library https://onlinelibrary.wiley.com/doi/epdf/10.1002/pad.515

34
(Khurshid, 2o22). Does Pakistan know how to benefit from the COP27 fund? The Express Tribune.
https://tribune.com.pk/story/2388502/does-pakistan-know-how-to-benefit-from-cop27-fund
(Khurshid,2023). Pakistan fails to earn dollars through carbon credits. The Express Tribune.
https://tribune.com.pk/story/2408383/pakistan-fails-to-earn-dollars-through-carbon-credits
(Kiani,2023). Centre allows Sindh to earn $200m through carbon credits. Dawn.
https://www.dawn.com/news/1756575
(Press Information Bureau Delhi, 2023). Ministry of Power & Ministry of Environment, Forests &
Climate Change to develop Carbon Credit Trading Scheme for Decarbonisation.
https://pib.gov.in/PressReleasePage.aspx?PRID=1923458
(Singal, 2023). How carbon credits can help India reach its net-zero goals. Business Today.
https://www.businesstoday.in/magazine/drive/story/how-carbon-credits-can-help-india-reach-its-
net-zero-goals-385533-2023-06-14
(The Express Tribune, 2020). PM Imran launches Pakistan's largest tree plantation drive.
https://tribune.com.pk/story/2258738/pm-imran-launches-pakistans-largest-tree-plantation-drive
(UNFCC) Designated National Authorities (DNA)
https://cdm.unfccc.int/DNA/DNA/view.html?CID=164.
(UNFCC, 2012). News Release: Kyoto Protocol's CDM passes one billionth certified emission reduction
milestone,
https://cdm.unfccc.int/CDMNews/issues/issues/I_P0QZOY6FWYYKFKOSAZ5GYH2250DRQK/viewnew
sitem.html.
(UNFCCC) CDM: Renewable Energy based PoA in Pakistan
https://cdm.unfccc.int/ProgrammeOfActivities/poa_db/9G8CQ23D04MJRUZPI5KVTOFE1LAYXS/view
?cp=1.
(UNFCCC) Status of CDM in Pakistan and Institutional arrangements
https://unfccc.int/sites/default/files/03._saadullah_ayaz_cdm_presentation.pdf.
(UNFCCC) The Clean Development Mechanism https://unfccc.int/process-and-meetings/the-kyoto-
protocol/mechanisms-under-the-kyoto-protocol/the-clean-development-
mechanism?gclid=Cj0KCQjw9fqnBhDSARIsAHlcQYR1o0dHRjyl0vC80OhKrXOyFPI3oPhZtdjAZ5gtzavuT
ykBrS-6JsYaAgi9EALw_wcB
(Winkelmen et al., 2011) Explaining the differential distribution of Clean Development Mechanism
projects across host countries, Science Direct
https://www.sciencedirect.com/science/article/pii/S0301421510008608
Africa Renewal, UNECA. (2023). Africa Climate Summit: Nairobi Declaration makes strong push for
accelerated climate action and financing mechanisms. United Nations.
https://www.un.org/africarenewal/magazine/september-2023/africa-climate-summit-nairobi-
declaration-makes-strong-push-
accelerated#:~:text=%E2%80%9CWe%20call%20for%20a%20comprehensive,to%20Action%2C%20a
dopted%20at%20the
Bashir, M. A., Dengfeng, Z., Imran Khan, M., Shahzad, F., & Khalil, S. (2023). Novel research methods
on the net-zero economy of climate finance in the energy sector. Economic research-Ekonomska
istraživanja, 36(1), 2389-2399.
https://www.tandfonline.com/doi/full/10.1080/1331677X.2022.2097111

35
Climate Action Network, Global Campaign to Demand Climate Justice (DCJ), and Women and Gender
Constituency (2022). Proposed Governing Instrument: Loss and Damage Fund. Climate Action
Network. https://climatenetwork.org/resource/can-proposed-governing-instrument-loss-and-
damage-fund/
Dahiya, B., & Okitasari, M. (2022). Accessing the Loss and Damage climate fund. Science, 378(6626),
1285-1285.
Data Commons. Pakistan
https://datacommons.org/place/country/PAK/?utm_medium=explore&mprop=amount&popt=Emis
sions&cpv=emittedThing,CarbonDioxide&hl=en
Ebrahim, Z (2022, November 11). Experts welcome ‘futuristic’ initiative to restore Indus River in
Pakistan. The third pole. https://www.thethirdpole.net/en/climate/experts-welcome-futuristic-
initiative-to-restore-indus-river-in-pakistan/
Federal Ministry of Economic Development, (2022, November 16) Global Shield against Climate Risks
starting to operate: Germany and Pakistan agree close cooperation. Government of Germany.
https://www.bmz.de/en/news/press-releases/global-shield-germany-and-pakistan-agree-close-
cooperation--128508
Gallagher, C. and Addison, S. (2022), How can loss and damage finance reach those enduring climate
catastrophe?, IIED, https://www.iied.org/how-can-loss-damage-finance-reach-those-enduring-
climate-
catastrophe#:~:text=Loss%20and%20damage%20can%20only,in%20coordinated%20and%20comple
mentary%20ways.
Gewirtzman, J., Natson, S., Richards, J. A., Hoffmeister, V., Durand, A., Weikmans, R., ... & Roberts, J.
T. (2018). Financing loss and damage: reviewing options under the Warsaw International Mechanism.
Climate Policy, 18(8), 1076-1086.
https://www.tandfonline.com/doi/full/10.1080/14693062.2018.1450724
Gogoi, E., Bahadur, A. V., & del Rio, C. R. (2017). Mainstreaming adaptation to climate change within
governance systems in South Asia: An analytical framework and examples from practice. ACT learning
paper. https://www.opml.co.uk/files/Publications/8617-action-on-climate-today-
act/mainstreaming-adaptation-to-climate-change-within-governance-systems-in-south-
asia.pdf?noredirect=1
International Institute for Environment and Development, Government of Scotland. (2022). Practical
Action for Addressing Loss and Damage. Government of Scotland and Global Resilience Partnership.
https://www.globalresiliencepartnership.org/resource/practical-action-for-adression-loss-and-
damage/
Kakakhel, K. (2022, October 21). Whatever happens at COP27, climate finance must be overhauled.
The Third Pole. https://www.thethirdpole.net/en/climate/opinion-whatever-happens-at-cop27-
climate-finance-must-be-overhauled/.
Kakakhel, S, (2023, May 11). Reviewing Pakistan’s climate action. The News.
https://www.thenews.com.pk/print/1069026-reviewing-pakistan-s-climate-action
Khan, D., and Usmani, Abdul W., (2018). Climate budget review guide Khyber Pakhtunkhwa assembly.
United Nations Development Programme.
https://www.undp.org/sites/g/files/zskgke326/files/migration/pk/KP-Budget-Review-03.pdf

36
Kundi, Ali, I, (2023, May 23). NDRMF to provide over Rs3b for flood rehab schemes in Sindh. The
Nation. https://www.nation.com.pk/20-May-2023/ndrmf-to-provide-over-rs3b-for-flood-rehab-
schemes-in-sindh
Lo, J, (2023, March 31). At Luxor talks, splits remain but hopes high for loss and damage fund this year.
Climate home news. https://www.climatechangenews.com/2023/03/31/after-luxor-talks-splits-
remain-but-hopes-high-for-loss-and-damage-fund-this-year/
Mako, W. P., Nabi, I., Mahmood, A., & Khan, S. (2022, May). Recent developments in climate finance:
Implications for Pakistan. IGC. https://www.theigc.org/sites/default/files/2022/09/Mako-et-al-2022-
Working-paper.pdf
Masud, M. A. K., Sahara, J., & Kabir, M. H. (2023). A Relationship between Climate Finance and Climate
Risk: Evidence from the South Asian Region. Climate, 11(6), 119.
Masullo, I., Larsen, G., & Brown, L. (2015). “Direct Access” to Climate Finance: Lessons Learned by
National Institutions. World Resources Institute. https://files.wri.org/d8/s3fs-
public/22DIRECT_ACCESS_TO_CLIMATE_FINANCE_LESSONS_LEARNED_BY_NATIONAL_INSTITUTION
S.pdf
Ministry of Climate Change & United Nations Pakistan, (2022). Living Indus. UN Pakistan and
Government of Pakistan. https://pakistan.un.org/sites/default/files/2022-09/Living%20Indus%20-
%20Investing%20in%20Ecological%20Restoration%20-%20Final%20Version.pdf
Nabi, I., Mako, W., Mahmood, A., (2022, September 12). How Pakistan can finance its greenhouse gas
emissions reduction. IGC. https://www.theigc.org/blogs/climate-priorities-developing-
countries/how-pakistan-can-finance-its-greenhouse-gas-emissions
Resch, E., Allan, S., Álvarez, L. G., & Bisht, H. (2017). Mainstreaming, accessing and institutionalizing
finance for climate change adaptation. ACT learning paper.
https://www.preventionweb.net/publication/mainstreaming-accessing-and-institutionalising-
finance-climate-change-adaptation
Richard, Anne J., Schalatek, L., Achampong, L., White, H., (2023). The loss and damage finance
landscape. Heinrich-Böll-Stiftung. Washington DC. https://us.boell.org/en/2023/05/11/loss-and-
damage-finance-landscape
Shaikh, H. (2023, February 27). How power, capitalism, and politics are perpetuating coal use in
Pakistan. https://www.theigc.org/blogs/how-power-capitalism-and-politics-are-perpetuating-coal-
use-pakistan
Sheikh, Ali, T, (2022, September 22). Loss and damage. Dawn.
https://www.dawn.com/news/1711389
Sheikh, Ali, T,. (2023, July 27). Ignoring climate thresholds. Dawn.
https://www.dawn.com/news/1767064/ignoring-climate-thresholds.
Sheikh, Tauqeer A. (2021, October 30). Comment: Pakistan commits to halving emissions, but pins
success on finance. The third pole. https://www.thethirdpole.net/en/climate/pakistan-ndc-commits-
to-halving-emissions-finance-key/
Sheikh, Tauqeer, A. (2023, June 1). Climate-smart NFC awards.
https://www.dawn.com/news/1757189/climate-smart-nfc-awards
Singh, T. (2022, December 2). ‘The ax always falls on the most vulnerable’: Pakistan demands debt
cancellation and climate justice. Peoples Dispatch. https://peoplesdispatch.org/2022/12/02/the-ax-
always-falls-on-the-most-vulnerable-pakistan-demands-debt-cancellation-and-climate-justice/.

37
UNDRR (2019). Disaster Risk Reduction in Pakistan: Status Report 2019. Bangkok, Thailand, United
Nations Office for Disaster Risk Reduction (UNDRR), Regional Office for Asia and the Pacific
https://www.preventionweb.net/files/68260_682307pakistandrmstatusreport.pdf
Van der Geest, K., & Schindler, M. (2017). Handbook for assessing loss and damage in vulnerable
communities. https://collections.unu.edu/eserv/UNU:6032/Online_No_21_Handbook_180430.pdf.
UNEP (United Nations Environment Programme) (2016) The Adaptation Finance Gap Report 2016.
Nairobi: UNEP.
Pizarro, R., Delgado, R., Eguino, H., and Pereira, A. L. (2021), Climate Change Public Budget Tagging:
Connections across Financial and Environmental Classification Systems, Inter-American Development
Bank.
GoP (2021), Updated Nationally Determined Contribution (NDC), Pakistan, Government of Pakistan.
CDPR (2022), Recent Developments in Climate Finance: Implications for Pakistan, Consortium for
Development Policy Research (CDPR), Policy Brief PB-2107.

38