Pakistan climate budget allocations for FY27 have drawn criticism from experts after several climate-related spending heads were reduced, even as the government increased disaster-related allocations and introduced new climate-linked revenue measures.
The federal budget for fiscal year 2026-27, presented on Friday, June 12, 2026, reduced allocations for mitigation, adaptation and green subsidies, according to budget analysis reported by Dawn.
Pakistan Climate Budget Sees Cuts In Key Heads
Mitigation funds have reportedly been reduced from PKR 603 billion to PKR 124 billion, while adaptation spending has been cut from PKR 85 billion to PKR 70 billion.
The green component of subsidies also declined, with the energy sector allocation falling from PKR 529 billion to PKR 423 billion. Food, industry, transport and agriculture climate-related allocations also faced cuts.
The reductions come despite Pakistan’s exposure to floods, heatwaves, droughts, glacial lake outburst floods and other climate-linked disasters.
Disaster Spending Rises In FY27
Disaster-related spending is the major exception. The government has introduced disaster tagging and earmarked PKR 19 billion under reconstruction.
Recovery and rehabilitation funds have also increased sharply, rising from PKR 1.1 billion to PKR 21 billion.
Experts said the increase in disaster spending was important, but argued that Pakistan also needed stronger adaptation, resilience planning and preventive climate investment.
Climate Revenues Increase But Ringfencing Unclear
While spending has decreased in several areas, climate-linked revenues are expected to rise.
The government aims to collect PKR 20 billion through the EV adoption levy and PKR 50 billion through the Climate Support Levy. However, experts have questioned whether these funds will be ringfenced for climate action or absorbed into the wider federal revenue pool.
Policy experts have urged the government to publish regular reports showing where climate-tagged money is spent and what outcomes it achieves.
Climate Ministry Gets Limited PSDP Allocation
Separately, the Ministry of Climate Change and Environmental Coordination has reportedly secured about PKR 2.48 billion under the Public Sector Development Programme for FY2026-27.
Most of that amount is expected to go to the Green Pakistan Programme, while smaller allocations are planned for green skills, urban resilience and technical capacity in climate finance and environmental governance.
Background
Pakistan is among the countries most exposed to climate disasters despite contributing a small share of global greenhouse gas emissions. It has repeatedly sought international climate finance, including support for adaptation and loss and damage.
The 2022 floods caused large-scale losses, while recurring heatwaves, urban flooding and glacial risks continue to place pressure on communities, public infrastructure and the economy.
What’s Next
The key issue now is whether the government will link new climate-related revenues to verifiable climate spending.
Experts have called for stronger budget transparency, climate-risk screening of development projects, provincial coordination and structural reforms. The Pakistan climate budget debate is likely to continue as lawmakers review the federal budget FY27 and related revenue measures.
Published in SouthAsianDesk, June 22, 2026
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