Energy transition

For the first time in more than half a century, power sector emissions in both China and India declined simultaneously in 2025. This is no small development. These two countries are the world's largest coal consumers and, over the past decade, were responsible for a staggering 93% of the increase in global carbon dioxide emissions from power generation. Yet, record additions of renewable energy capacity — particularly solar and wind — helped both economies meet rising electricity demand without a corresponding rise in emissions. China cut power-sector emissions by 40 million tonnes, while India achieved a sharper relative drop of over 4% within a year.

The lesson for Pakistan could not be clearer. Even coal-heavy, rapidly growing economies have begun bending the emissions curve through aggressive clean energy deployment. Pakistan, by contrast, continues to crawl at a snail's pace — paralysed by policy contradictions, fiscal short-termism and a deepening structural crisis in its power sector. The paradox is that on one hand, Pakistan is drowning in circular debt, which has crossed alarming thresholds and continues to grow due to capacity payments and transmission losses.

On the other, the state remains reluctant to fully embrace decentralised, consumer-driven renewable energy which could ease pressure on the grid. Instead of enabling a faster solar transition, the government has tightened net metering rules and reduced buyback rates, causing increasing discomfort among the consumers producing their own electricity. We remain stuck in a loop of stopgap solutions.

What Pakistan needs desperately is a recalibration of its power sector architecture through a phased but firm transition strategy that aligns energy affordability and fiscal discipline. First, net metering should be stabilised. Second, the real leakages must be plugged. Third, Pakistan must shift its focus from capacity addition to capacity optimisation. Only then can transition towards renewable energy be possible.