INP-WealthPk

Green budgeting can help achieve environmental, economic sustainability

May 06, 2025

Faiza Tehseen

Green budgeting can act as a strategic tool to align public spending with environmental sustainability goals to steer Pakistan’s economy towards greater resilience and sustainable development.

“Green budgeting is designed to address the challenges posed by climate change and other related costs. It uses budgeting policy tools to integrate the climatic and environmental perspectives into budget frameworks,” explained Dr Abid Qaiyum Suleri, Executive Director of the Sustainable Development Policy Institute (SDPI).

Talking exclusively to WealthPK, he said green budgeting is emerging as a key initiative to align public spending with environmental sustainability goals. “It involves the systematic integration of environmental and climatic considerations into budgetary processes at all levels. A meaningful progress can be made by relocating resources to support low-carbon infrastructure, reforestation, pollution control measures, and renewable energy projects.”

Suleri said: “Pakistan is ranked among the top 10 countries most affected by climate-induced disasters. In 2022, the devastating floods, which caused an estimated $30 billion in damages, is a clear indicator that Pakistan is direly in need of smart green budgeting policy planning.”

He said that with limited tracking of environmental impacts, Pakistan’s budget system is largely impacted by fiscal constraints and competing development priorities, including poverty alleviation and complicated funds’ relocation toward green goals. Green budgeting requires international support and capacity building at all government, public and private levels.”

The SDPI executive director said: “Green budgeting, improved transparency and accountability in public spending can enable Pakistan to channel resources toward direct mitigation and adaptation. Globally, different countries, including Indonesia, Bangladesh, and France, have successfully initiated green budgeting frameworks. The Climate Micro Assessment Programme, which was recently introduced in Pakistan, is also a good example of carrying out fiscal planning keeping in view climate risks.”

Suleri said with an appropriate roadmap, green budgeting can transform environmental ambitions into practical fiscal policies. “Green budgeting is pivotal to safeguard the economic and ecological future of Pakistan. It can help unlock the country’s access to international climate finance platforms like Global Environment Facility and Green Climate Fund.” 

He said: “Green budgeting ensures that taxation, investments, and other government spending initiatives are aligned to address environmental issues, including reduced emissions, natural resources conservation, and renewable energy promotion. Incorporation of green budgeting criteria into budgeting will incentivise businesses and individuals to adopt eco-friendly practices, reduce the cost of green initiatives and foster innovation.”

Talking to WealthPK, Dr Mohammad Akbar, an environmental scientist, said: “Green budgeting facilitates mobilisation of green finance by ceating a transparent framework to identify and support green initiatives. It also creates livelihood opportunities in environmentally-focused sectors, including forestry and waste management.”

He described it as a systematic approach to assessing and integrating environmental and climatic considerations into fiscal policy, with the aim of promoting sustainable development and ecological conservation. He emphasised the need for initiating green budgeting policies to ensure a green future for Pakistan.

Credit: INP-WealthPk