Pakistan Unveils IMF-Backed Climate Reform Plan

Pakistan has committed to a 13-point climate reform agenda under its IMF’s Resilience and Sustainability Facility, including a new carbon levy on fuel. The measures aim to integrate climate action into fiscal policy, energy reform and infrastructure planning through 2027.

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As part of its ongoing International Monetary Fund programme, Pakistan has committed to an ambitious 13-point climate reform agenda under the $1.3 billion Resilience and Sustainability Facility (RSF), according to official documents. Central to its plan is the imposition of an additional Rs. 5 carbon levy on petrol and diesel, alongside broader measures to embed climate considerations into public finance and development planning.

The reforms include mandatory climate impact assessments for all development projects exceeding Rs. 750 million and the allocation of at least 30% of infrastructure spending on climate-related initiatives. A climate budgeting framework will be introduced at both federal and provincial levels, supported by annual climate budget reporting.

The Ministry of Finance announced that the government has also committed to scaling electric vehicle adoption, targeting 30% of new vehicles and 50% of motorcycles to be electric by 2030, while rationalising electricity subsidies to focus on vulnerable consumers. Measures to curb line losses, electricity theft, and improve energy efficiency through mandatory appliance labelling will be implemented through 2027.

Further commitments include strengthened disaster-risk financing, water use pricing reforms in Sindh, Khyber Pakhtunkhwa, and Balochistan, climate-risk assessments by banks, and the introduction of green finance tools and a national green taxonomy, aligning Pakistan’s economic reforms with global sustainability standards.