Arsalan Ali

Air pollution, predominantly caused by the combustion of fossil fuels, has emerged as a significant concern for Pakistan, contributing to a substantial portion of the economic costs associated with climate change. According to a document of the Ministry of Climate Change and Environmental Coordination, a copy of which is available with WealthPK, the total economic costs of climate change in Pakistan range from $1.3 to $1.9 billion, equivalent to 0.5% to 0.7% of the country's gross domestic product (GDP).

The document stated that air pollution contributes the largest proportion of approximately 30% to 34% to the economic costs, followed by water-related costs, comprising 26% to 27%, and malnutrition, 15% to 17%. The impact of temperature-related diarrhoea ranges from 9% to 17%, while agricultural productivity losses amount to 5% to 7%. It added that decreased exports account for 1.6% to 2.3%, while sanitation-related diarrhoea represents 1.2% to 1.9%.

Dr Abedullah, Chief of Research at Pakistan Institute of Development Economics (PIDE), said while talking to WealthPK that the power, transport and industry sectors are the primary consumers of fossil fuels in Pakistan. Based on data from Oil Companies Advisory Council (OCAC), the consumption of fossil fuels/energy products by transport, power, and industrial sectors in April 2023 stood at 1,038,746 m. tons, 48,280 m. Tons, and 72,504 m. tons, respectively. Throughout the first 10 months of FY23, these sectors maintained a consistent consumption level, with figures reaching 11,293,221 m. tons, 1,462,060 m. tons, and 962,245 m. tons, respectively.

Dr Abedullah emphasised that the transportation sector is the largest consumer of oil, and a primary contributor to the country's deteriorating environment. He stated that the emission of air pollutants from vehicles is depleting the environment and exacerbating air pollution. The PIDE research chief believes that the manufacturing of electric vehicles (EVs) in Pakistan will not only help combat environmental issues, but also create opportunities for new industries.

According to data from Pakistan Bureau of Statistics (PBS), petroleum group imports amounted to $13.97 billion during July-April 2022-23, compared to $17.03 billion during the same period of FY22. This decrease indicates a potential shift towards reduced reliance on fossil fuels. Dr Abedullah said that substantial expenditure on importing fuel has contributed to the escalation of trade deficit.

He said that if the transport sector continues to expand, there will be a heightened demand for petroleum products, which will put additional pressure on foreign payments and further widen the trade deficit. He said the adoption of EVs in the country can significantly reduce these hazardous emissions. By relying more on EVs and renewable energy sources, Pakistan can decrease its dependence on oil, leading to a reduction in the fuel import bill. He stated that this shift towards EVs will help lower the country's trade deficit by reducing the expenses associated with oil imports.

Credit: Independent News Pakistan-WealthPk