Call to fast-track carbon policy
LAHORE:
Garment manufacturers and exporters have said that Pakistan's first-ever National Carbon Market Policy, launched in November last year, demonstrates the country's commitment to emissions reduction but it lags behind regional counterparts in ambition, sector-specific coverage and global integration, potentially limiting its effectiveness in attracting climate finance and investment.
In a statement, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Regional Chairman Dr Ayyaz Uddin observed that the new policy marked a significant step towards integrating carbon trading into the broader climate strategy. The policy suggested that the government could encourage investment in carbon capture and storage as well as renewable energy through public-private partnerships, besides revising the high Carbon Adjustment Factor to a more flexible rate by ensuring participation of startups and SMEs.
He recommended the launch of nationwide awareness campaigns and capacity-building programmes to involve communities and private sector as well as called for decentralising governance, encouraging regional collaboration and enabling cross-border carbon trading. Ayyaz Uddin stated that the government had pledged to reduce greenhouse gas (GHG) emissions by 50% by 2030, with 15% being unconditional and 35% depending on international support.
Meanwhile, India has pledged 45% reduction in emissions intensity by 2030 and China has set the goal of peaking emissions by 2030 and achieving carbon neutrality by 2060.
Bangladesh's Nationally Determined Contributions (NDCs) envisage an unconditional reduction of 12 million tons (5%) in GHG emissions from the business-as-usual scenario by 2030 and conditional reduction of 24 million tons (10%) with support from the international community. Bangladesh also has a strong focus on renewable energy.
The PRGMEA regional chairman was of the view that sector-specific coverage for Pakistan was narrow, where sectors having high emissions such as cement, steel and transportation were underrepresented in the country's strategy while regional peers – India and China – prioritised those industries. Advanced technologies such as carbon capture and storage, and green hydrogen production were also areas where Pakistan lagged behind, he stated.
He noted that the government was currently developing a nascent voluntary carbon market and was operating without a formal compliance framework. In comparison, India's market is more mature with a well-established PAT Scheme (since 2012) and discussions underway for a broader carbon trading mechanism.
Meanwhile, Ghana is in an emerging phase, with initiatives largely centred on REDD+ (Reducing Emissions from Deforestation and Forest Degradation) projects.
Ayyaz Uddin pointed out that Pakistan's carbon market efforts were currently focused on sectors such as agriculture and a developing energy sector. This contrasts with India's emphasis on heavy industry, including cement, steel, aluminium and power, Ghana's focus on forestry alongside renewable energy and transport, and Bangladesh's concentration on renewable energy (primarily solar and wind) and agriculture.
By addressing such challenges, Pakistan can strengthen its carbon market policy, attract international investments and become a key player in global climate action. While the 2024 policy was a step forward, bold reforms and enhanced integration with international markets would be crucial for achieving climate targets, he remarked.
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