Reducing climate costs.

PAKISTAN is among the countries most vulnerable to climate disaster but least prepared to cope with it. Other factors aside, the economic cost of climatic changes have begun to destabilise and shrink the economy, adversely affecting all major growth indicators - GDP, per capita income, rate of savings, tax and revenue collection, and sovereign credit ratings. It has added to our debt burden and to the urgency for additional borrowing. The trade-offs are horribly painful: 'repurposing' painstakingly negotiated development projects with lenders to extend emergency cash support to the victims of floods. Business as usual is no longer an option. How can policymakers rethink adaptation strategies and reflect on new avenues for financing climate resilience? What lessons can be drawn from the recent floods in order to reduce the cost of similar disasters in the future?

According to Pakistan Floods 2022: Post-Disaster Needs Assessment (PDNA), just released by the Planning Commission, Pakistan has incurred losses and damages of $30.2 billion, or 4.8 per cent of this fiscal year's GDP. The scale and severity of the flooding was unprecedented: a once-in-a-thousand-years heatwave, in some areas, made way for intense rains in many places that were 400pc to 800pc higher than previous averages. This calamity hit 94 districts, including 19 of the 25 poorest ones, pushing them further behind on SDG targets. It is estimated that these floods have increased the incidence of poverty by more than 3.7pc and pushed another 8.4 million people below the poverty line.

This was not a one-off incident - only bigger and more destructive. In fact, the recently released Country Climate and Development Report by the World Bank has projected that climate disasters, environmental degradation and air pollution will result in a 7pc to 9pc fall in Pakistan's GDP, and lead to the latter shrinking by 20pc by 2050. The CCDR has estimated that Pakistan will need $348bn - 800pc more than the current annual budget - to stop climate-induced disasters. Merely $48bn will be available through public and private financing; there will be a projected gap of $300bn. On the ground, the PDNA urgently seeks $16.2bn for immediate recovery and reconstruction. The CCDR has put these needs in a longer-term perspective. It has projected that between 2023 and 2030, Pakistan will need $152bn for adaptation and $196bn for decarbonisation, as committed. These are very large sums by all standards...