Climate funds ignore vulnerable

ADB adviser calls for Provincial Finance Commission, shift to pre-arranged support

KARACHI:

Climate finance, both globally and in Pakistan, continues to flow mainly to mitigation projects like renewable energy due to clearer financial returns, while adaptation measures such as flood defences, water management and climate-resilient agriculture receive far less funding despite their importance for a highly climate-vulnerable country. These projects are often seen as less profitable and more reliant on public or concessional financing. This imbalance is increasingly shaping development priorities in Pakistan, raising concerns about who truly benefits from climate finance on the ground.

Pakistan should link Public Sector Development Programme (PSDP) allocations to climate risk screening, ensuring that no infrastructure project is approved without an adaptation lens. Additionally, climate finance distribution in Pakistan must follow vulnerability, not capacity. The Provincial Finance Commission (PFC) should be mandatory, taking care of climate adaptation, said Dr Abid Qaiyum Suleri, an advisory council member of the Asian Development Bank (ADB), in a conversation with The Express Tribune. This domestic policy measure will ensure development spending is aligned with climate resilience, he added.

"Climate financing in Pakistan flows predominantly through federal government ministries, particularly the Ministry of Climate Change and the Economic Affairs Division. The bulk of climate finance globally, and in Pakistan, gravitates towards mitigation rather than adaptation. It tends to concentrate in provinces with stronger institutional capacity, Punjab and (urban) Sindh, while Balochistan and interior Sindh, which are both poorer and more climate-exposed, receive far less per-capita investment," Suleri said.

He raised concern that the highest heat exposure is in central and eastern Punjab. The northern areas face grave risks from glacial lake outburst flooding (GLOF) and frequent landslides that cut off communities and put populations at risk of isolation and resource shortages. Despite this, adaptation financing for these areas remains thin, he said, adding that this can be addressed by the PFC focusing on the needs of these areas.

The ADB is supporting Pakistan through major climate programmes focused on disaster resilience, flood recovery, social protection, glacier-linked water management and women-inclusive financing. The ADB country director's office did not reply to a request for their views in this regard.

Suleri, who is also the Executive Director of the Sustainable Development Policy Institute (SDPI), advocated shifting from reactive relief to proactive, rules-based systems where support is pre-arranged. With predefined entitlements and data-based triggers (such as wind or rainfall), aid is delivered automatically through parametric insurance without loss verification. Combined with adaptive social protection (ASP), which enables rapid cash transfers, this approach makes disaster response faster, more predictable and more equitable.

The existing mechanisms, including climate mitigation and adaptation investments, are in no way suitable to deal with the complexity of losses and damages from natural disasters. Agriculture, which provides food, fodder and livelihood to millions of low-skilled people in rural areas, lacks adequate financing protection, he added.

Suleri highlighted that this is why rural smallholder farmers in the floodplains of Punjab and Sindh, whose agricultural land is most exposed to flooding but who lack a voice in project design, remain highly vulnerable. Women and other vulnerable groups are disproportionately affected by climate change and disaster events, yet are systematically underrepresented in financing governance. Communities in Balochistan and Gilgit-Baltistan facing GLOF risks have the weakest institutional capacity to attract and absorb climate funds. Informal workers dependent on agriculture and fisheries bear the brunt of climate shocks but remain largely invisible to green finance instruments designed for formal sectors.

At a larger landscape, he suggested rebalancing the global climate finance architecture. The current 90:10 split favouring mitigation must be challenged at COP negotiations. Developing countries should push collectively for a mandatory 50:50 adaptation-mitigation floor. The Global Goal on Adaptation (GGA) agreed at COP28 must be backed by quantified finance targets, not just qualitative benchmarks. Besides, multilateral climate funds such as the Green Climate Fund (GCF), the Global Environment Facility (GEF) and the Least Developed Countries Fund (LDCF) should ring-fence at least 50% of disbursements strictly for adaptation in climate-vulnerable countries.

When finance comes in the shape of loans instead of grants, it increases Pakistan's already heavy debt burden and raises concerns about long-term fiscal stability. While it can fund large projects, the benefits often bypass the most vulnerable communities, highlighting the need for more grant-based and targeted support, said Suleri.