Uzair bin Farid

Pakistan, like many other developing countries, faces the challenge of creating a balance between growth and the need for de-carbonisation. Developing countries are facing the twin needs of growth and de-carbonisation, which becomes difficult for them to synchronise as they do not have access to sufficient green finance.

Dr Ijaz Ali, a macro-economic researcher at the Centre for Business and Economic Research (CBER), Karachi, said while talking to WealthPK that Pakistan was actively looking to diversify its energy sources. “Over the past decade, a lot of investment has come into the industry of solar energy. Many companies have opened up and they are providing very efficient services,” he said.

“But the problem is that we are still too far away from the target of achieving carbon neutrality and our energy consumption is increasing day by day. This is due to increasing population and the expansion of energy networks into the rural areas,” he explained. As more and more households are being attached to the national grid, the demand for energy increases. However, there is no sufficient concomitant increase in the production of energy, especially in terms of renewable and clean sources of it.

Dr Ijaz said that with the help of Chinese investments, Pakistan has been able to reduce its energy shortfall. He said it was achieved through the setting up of coal-fired power plants mainly in Sindh province. He said these sources of energy will help our industry to operate around the clock and create employment in the process.

However, he said, the burning of coal is only going to add to the threat of climate change that Pakistan is facing right now. “Thus, although we will be growing, we will not be able to sustain our growth trajectory in the medium to long term,” he pointed out. “The whole world is moving towards de-carbonisation. We also need to do that. The question is how are we going to keep growing and at the same time transition our economy from depending on fossil fuels and carbon-intensive fuels,” he emphasised.

Dr Ijaz said that Pakistan needs to seek Viability Gap Funding from international partners. “Viability Gap Funding is a combination of capital expenditure and initial support operational expenses for high-cost, low-carbon infrastructure projects,” he explained.

“In the light of the financing that Pakistan secured last year after the monsoon floods ravaged two-thirds of the country, Pakistan needs to keep lobbying for more investments and help to finance its transition to a model of de-carbonised development infrastructure,” he added.

Credit: Independent News Pakistan-WealthPk