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ISLAMABAD, Sep 16 (APP):Former Governor of State Bank Dr Shamshad Akhtar on Tuesday warned that Pakistan’s climate crisis could shave off up to three per cent of GDP over the next 15 years and urged policymakers to prioritize green finance as a national imperative under it’s bilateral cooperation with China under China-Pakistan Economic Corridor (CPEC).
She was speaking at a high-level conference on Green Industrialization under CPEC 2.0 organized by the Sustainable Development Policy Institute (SDPI) here under its Green CPEC Alliance, said a press release.
She suggested that Pakistan must align its frameworks with China’s rapidly evolving climate finance ecosystem to secure sustainable development. The forum also witnessed launch of the SDPI Report on Greening Pakistan’s Special Economic Zones: Technical Roadmap and Policy Lessons from China.
“Climate should have been the number one priority for any country. For Pakistan, green finance is not a niche but a necessity,” Dr. Akhtar said.
Emphasizing on innovative financing models such as green bonds, debt-for-nature swaps, and green special economic zones, she argued that these could ease Pakistan’s fiscal burden without adding to unsustainable debt.
She noted that while China has committed billions in green initiatives under the Belt and Road Initiative (BRI), Pakistan has yet to position itself to benefit.
SDPI Executive Director Dr Abid Qaiyum Suleri described CPEC as “an opportunity not just for growth but for green industrialization.” He warned against slowing climate action amid shifting US commitments to the Paris Agreement, proposing that Pakistan and China must step up to fill the leadership vacuum. “Pakistan today is being presented as a case study in solar uptake,” he said, pointing to rapid solar adoption as a key pathway for fiscal stability.
Mustafa Hyder Sayed, Executive Director of the Pakistan-China Institute, said CPEC’s second phase must focus on renewables, battery storage, and eco-industrial parks. “Pakistan’s geography makes it a natural pilot for green SEZs,” he said, adding that private capital and Chinese expertise must be brought in to catalyze low-carbon development.
Hamid Sharif, former Managing Director of the Asian Infrastructure Investment Bank (AIIB), said “We have not sent the right signals for foreign direct investment. Pakistan needs a major reform in its bureaucracy and tax regime,” he said. He argued that without credibility and compliance in agreements, Pakistan will struggle to access green Panda Bonds or attract investors.
Wang Shengjie, Head of the Political Section at the Chinese Embassy, reaffirmed China’s commitment to making Pakistan a “priority partner” in its green transition. “Green CPEC can serve as a model of international cooperation,” he said, adding that a Green CPEC Bond could help mobilize resources. He pointed out that China now leads globally in green credit and bonds, electric vehicles, and clean energy expansion.
Han Chen of the International Institute of Green Finance said China’s fiscal support policies prioritize clean energy, industry transition, and transport, while new instruments such as sovereign green bonds and blended finance models are attracting international investors.
Professor Yixian Sun from the University of Bath said China has emerged as a new global environmental leader, voluntarily channeling climate finance toward adaptation and mitigation. “Clean energy has become a new driver of China’s economy, contributing significantly to GDP growth,” he noted.
Haroon Sharif, the Chairman of Pakistan Regional and Economic Forum, argued that CPEC 2.0 will only succeed if Pakistan creates space for private capital. He urged Pakistan to establish climate-based banking infrastructure, derisking mechanisms, and private sector-led institutions to finance CPEC’s green transition. “CPEC 2.0 should cater to Pakistan’s young population, reduce energy costs, and improve market competitiveness,” he added.
“CPEC 2.0 can only be a game changer if it is green, inclusive, and responsible,” Haroon Sharif said and, called for evidence-based policymaking and strategic reforms to align Pakistan’s economy with the demands of a low-carbon future.