Pakistan has assured the International Monetary Fund of sweeping climate-focused reforms under a multi-billion-dollar sustainability framework, signalling a policy shift that links environmental goals with economic stabilisation and future development planning.
According to official documents, the government has committed to imposing an additional Rs5 carbon levy on petrol and diesel under the $1.3 billion Resilience and Sustainability Facility (RSF), with reform targets extending through 2027. The plan includes allocating at least 30% of infrastructure spending to climate-related measures, while all development projects costing over Rs750 million will require mandatory climate impact assessments.
As part of the broader agenda, the Ministry of Finance plans to introduce subsidies for electric vehicles, aiming for 30% of new cars and 50% of motorcycles to be electric by 2030. Electricity subsidies will be restricted to deserving consumers, while support for affluent users will be phased out. The government has also pledged to curb power theft, reduce line losses and make energy labelling mandatory for major household appliances to promote efficiency.
The reform package also focuses on strengthening disaster risk financing and improving water management. Provinces will introduce service charges for efficient water use and revise irrigation tariffs to boost revenues. The finance ministry will publish an annual climate budget report, while banks will be required to assess climate related financial risks. Plans are also underway to roll out green finance instruments and a national green taxonomy aligned with global sustainability standards.