As our planet battles climate change and the rising urgency for sustainability, it’s clear: economies that swiftly embrace green growth will shape the future.
We don’t have time to waste, as climate change is already causing havoc. Pakistan knows the consequences of it as a frontline nation facing consecutive floods and drought spells.
What is a green economy— it is the one that nurtures economic development while at the same time keeps the environmental endowment intact and natural resources. This paradigm of green actions based economy promises Pakistan a transformative dramatic opportunity.
With its extreme vulnerability to climate change, ever rising demand for energy, water, cultivable land, food, fiber, and increasing environmental degradation, Pakistan, with a 250-million population, must evaluate its development strategy and take firm policy decision, because business-as-usual approach will cost us enormously in coming future.
Can Pakistan make this shift successfully? Can it turn the table and convert disadvantage, into advantage? The answer depends on its ability to harness its natural resources, implement effective policies, and attract green investments from emerging carbon and agro-forestry markets.
The green economy is an economic model that promotes sustainable development while reducing risks of environmental degradation to minimal level. It focuses on low-carbon, resource-efficient, and socially inclusive and acceptable growth.
Unlike traditional economies that rely heavily on fossil fuels, agro-chemicals and unsustainable resource mining, the green economy prioritises renewable energy, green housing, soil nourishing afforestation, sustainable agriculture, agroforestry and eco-friendly industries.
This transition is essential for tackling global challenges such as climate change, biodiversity loss, and pollution in the air and water bodies, while also creating new economic opportunities and green jobs.
On a global scale, the green economy has become a major driver of investment and job creation. Countries like China, the United States, and members of the European Union are leading the transition by investing in green infrastructure, clean energy, and carbon markets.
The global carbon credit market alone is projected to reach $100 billion by 2030, offering significant economic incentives for nations that adopt sustainable development practices. By integrating into this growing sector, developing countries like Pakistan can also attract foreign investments, generate revenue through carbon credits, and enhance climate resilience.
For Pakistan to fully capitalise on these opportunities, courageous and strategic policy actions are necessary. The federal and provincial governments must take a proactive role in establishing a well-regulated carbon market, attracting private-sector investments, and promoting community-led environmental projects.
Through these steps, Pakistan can position itself as a key player in the global green economy, securing billions in green investments while reducing its carbon footprint.
The global green economy, encompassing sectors such as renewable energy, sustainable agriculture, regenerative agriculture and green technologies, has experienced significant growth in recent years. As of 2022, renewable sources contributed approximately 28% to the world’s electricity generation, up from 19% in 1990.
Despite this progress, challenges persist. In 2024, funding for climate tech start-ups declined by 20%, and green technology investments faced setbacks due to higher borrowing costs and geopolitical factors.
Looking ahead, the International Energy Agency forecasts that over 2022–2027, renewables are expected to grow by almost 2,400 GW, accounting for over 90% of global electricity capacity expansion during this period.
This anticipated growth underscores the global commitment to sustainable development and the transition to a low-carbon future.
The case for a green economy in Pakistan
Pakistan faces severe environmental challenges, including water scarcity, air pollution, depletion of biodiversity, deforestation, and frequent climate-induced disasters such as floods and heatwaves. The 2022 floods, which caused over $30 billion in damages, highlight the urgent need for climate resilience. Shifting to a green economy is not just an environmental necessity but an economic imperative.
Adopting sustainable green policies and practices can boost GDP, create jobs, and enhance energy security. The International Labour Organization (ILO) estimates that a green economy transition could generate 60 million jobs worldwide by 2030.
Pakistan, with its vast natural resources and renewable energy potential, can tap into this opportunity to drive economic growth while reducing carbon emissions.
Carbon Credits: A game changer
One of the most promising mechanisms for financing green growth is the carbon credit market, which operates as a global incentive system to reduce greenhouse gas emissions.
Under this mechanism, businesses, industries, and governments that emit carbon dioxide or other greenhouse gases can offset their emissions by investing in climate-friendly projects, such as afforestation, reforestation, regenerative/sustainable agriculture and renewable energy.
Countries like China and India have successfully leveraged this market, and generating billions in revenue by developing large-scale reforestation programs, expanding solar and wind energy infrastructure, and implementing methane capture initiatives.
China’s national carbon market, for example, is the largest in the world, covering thousands of industries, while India has positioned itself as a major supplier of carbon credits through afforestation and renewable energy projects.
Pakistan, with its vast afforestation potential, degraded and saline / sodic lands awaiting restoration, and abundant renewable energy resources, has a unique opportunity to become a key player in the global carbon market.
By strategically developing reforestation programs, saline agroforestry, mangrove conservation initiatives, and solar and wind energy projects, Pakistan can generate millions of carbon credits annually, attracting investment from international corporations and governments looking to meet their emissions reduction targets.
This could translate into billions of dollars in revenue, strengthening the economy while promoting environmental sustainability.
One such successful project is already underway; the Delta Blue Carbon project in Sindh’s coastal areas has successfully generated carbon credits valued at approximately $40 million.
This initiative, a public-private partnership between the Sindh Forest Department and Delta Blue Carbon, focuses on the restoration and conservation of mangrove forests in the Indus Delta region.
The project has been instrumental in enhancing carbon sequestration, preserving biodiversity, and improving the livelihoods of local communities.
It represents a significant step towards sustainable environmental management and showcases Pakistan’s commitment to combating climate change through nature-based solutions.
However, to fully capitalise on this opportunity, of growing green economy, Pakistan needs to establish a robust carbon credit framework, align policies with global carbon trading standards, and develop transparent mechanisms for verifying and certifying carbon credits.
Partnering with international organisations, creating public-private investment models, and integrating carbon credit financing into national environmental policies will be essential in unlocking this potential.
Afforestation and reforestation for Carbon Credits
Pakistan has launched ambitious reforestation programs, including the Billion Tree Tsunami (BTTP) and Ten Billion Tree Tsunami Programme (TBTTP), which have reported to restored millions of hectares of forests. However, these efforts can be monetized further through carbon credit programs such as the UN-REDD+ (Reducing Emissions from Deforestation and Forest Degradation) framework.
Reforestation projects in Khyber-Pakhtunkhwa, Punjab, and Balochistan can generate tradable carbon credits by absorbing CO₂ emissions. Private sector involvement in tree plantations, particularly in degraded lands and riverine forests, can help Pakistan tap into voluntary carbon markets. International buyers, including multinational corporations, are actively seeking carbon offsets, presenting a lucrative financial opportunity.
Furthermore, mangrove restoration along the Sindh and Balochistan coastlines can enhance carbon sequestration while protecting coastal communities from climate impacts. Countries like Indonesia and Kenya have successfully sold blue carbon credits through mangrove conservation, and Pakistan can follow suit.
Renewable energy: The new carbon credit frontier
Pakistan’s National Renewable Energy Policy targets 60% renewable energy by 2030. Scaling up solar, wind, geothermal and hydropower projects can not only reduce emissions but also generate carbon credits, attracting climate finance.
• Solar Power: With 5–7 kWh/m² of solar irradiation daily, Pakistan can become a major player in solar energy. Large-scale solar farms in Sindh, Balochistan, and Southern Punjab can generate carbon offsets, while decentralised solar projects can provide clean energy to off-grid communities.
• Wind Power: The Gharo-Keti Bandar wind corridor in Sindh has an estimated 50,000 MW potential. Expanding wind energy projects and integrating them into the carbon credit system can attract foreign investors seeking to offset emissions.
• Hydropower: Small hydropower projects in Khyber Pakhtunkhwa and Gilgit-Baltistan can qualify for Gold Standard or Clean Development Mechanism (CDM) credits, helping Pakistan access climate finance.
By streamlining project certification and partnering with international climate funds, Pakistan can create a thriving carbon credit ecosystem.
Policy Recommendations: Unlocking Pakistan’s Green Economy Potential
For Pakistan to fully capitalise on the opportunities presented by the green economy and carbon markets, bold and strategic policy actions are necessary.
The government must take a proactive role in establishing a well-regulated and transparent system that can attract investment, foster sustainable development, and position the country as a key player in global carbon trading.
A crucial first step is the development of a national carbon market framework. This requires the establishment of a Pakistan Carbon Credit Exchange, which would serve as a centralised platform for the transparent trading of carbon credits.
To ensure the credibility and effectiveness of such a system, the government must also create regulatory frameworks for the verification and certification of carbon credits, aligning them with international standards to attract foreign buyers and investors.
Additionally, public-private partnerships (PPPs) must be strengthened to accelerate the adoption of green initiatives. The government can encourage private sector investments in afforestation, renewable energy, and sustainable land use projects by offering incentives such as tax exemptions, subsidies, and concessional financing.
These incentives will not only lower the financial risks for investors but also generate employment and technological advancements in the green economy.
To support the effective implementation of these initiatives, enhancing institutional capacity is essential. Government officials need specialised training in carbon trading mechanisms, emissions accounting, and market-based climate finance to ensure effective oversight.
Moreover, the establishment of carbon credit certification agencies can help streamline the approval process for projects, ensuring that legitimate green initiatives receive timely recognition and access to the carbon market.
Furthermore, carbon finance must be integrated into Pakistan’s broader climate policies. Aligning carbon market initiatives with Pakistan’s Nationally Determined Contributions (NDCs) under the Paris Agreement is crucial to demonstrating the country’s commitment to global climate goals.
A well-defined Green Finance Roadmap should also be developed to attract international investments from climate funds, development banks, and global corporations looking to offset their carbon footprints.
Finally, community-based carbon sequestration projects must be promoted as a means to engage local populations in climate action. Supporting afforestation initiatives at the grassroots level with financial rewards through carbon credits can empower communities and enhance environmental resilience.
Additionally, encouraging farmers and landowners to adopt agroforestry and soil carbon sequestration practices will contribute to both economic development and ecological restoration, making carbon farming a viable income source for rural populations.
In this regards, the government, through Ministry of Climate Change, may establish a Green Fund which can fund community based green actions such as nurseries, plantations, small wind and hydro power plants and solar parks.
By taking these strategic steps, Pakistan can unlock an estimated $30–50 billion in green investments over the next two decades, leveraging its vast afforestation potential and hydro, solar and wind driven renewable energy resources.
Through an effective carbon credit market, the country could generate $1–2 billion annually in carbon trading revenue, while sustainable industries like timber, biofuels, and eco-tourism could contribute an additional $5–7 billion per year to the economy.
These efforts would not only help Pakistan sequester over 60 million tons of CO₂ annually but also create 700,000 to 1 million new green jobs, driving economic growth and climate resilience. By positioning itself as a leader in the global carbon market, Pakistan can secure long-term financial stability while playing a crucial role in mitigating climate change.
Pakistan stands at a crossroads—either continue with unsustainable business as usual development, like coal or oil powered plants, chemical and water intensive agriculture or embrace a green economy that ensures long-term prosperity. The carbon credit market, along with renewable energy expansion and afforestation, provides a pathway to climate resilience and economic growth.
However, success depends on political will, strong governance, regulatory reforms, and strategic investments. If Pakistan takes decisive action, it can position itself as a regional leader in sustainable development and benefit from the global green transition.
The author is CEO of Society for Conservation and Protection of Environment (SCOPE), and a freelance environment and development consultant.
