Pakistan's first ever Carbon Market Policy launched

ISLAMABAD: In a groundbreaking move to combat climate change, the Federal Cabinet has approved Pakistan’s first-ever Carbon Market Policy.

The policy, spearheaded by the Ministry of Climate Change and Environmental Coordination, is a bold step toward achieving the country’s climate and development goals while aligning with global efforts under the Paris Agreement.

The Carbon Market Policy provides a comprehensive framework to operationalize carbon markets in Pakistan, creating opportunities for emissions reductions across sectors such as energy, agriculture, waste management, and forestry.

According to Climate Ministry Spokesperson, the initiative aims to attract both domestic and international investments while ensuring social equity and environmental integrity.

The Ministry highlighted that the policy is rooted in three pillars: environmental integrity, economic development, and equitable benefit sharing.

These priorities ensure that projects under the carbon market generate real, verifiable emission reductions and deliver economic and social benefits for communities.

The approval process has been made simple and efficient to attract investors, with minimal fees.

A Corresponding Adjustment Fee (CAF) will allocate 12% of net revenues to provincial and national climate funds, while only 5% of credits generated will be adjusted toward Pakistan’s voluntary climate commitments.

The policy is supported by international organizations such as USAID, World Bank, UNEP, and GIZ, which are aiding Pakistan in building carbon market regulations, a carbon registry, and a pipeline of projects. These partnerships are expected to mobilize significant capital and expertise to turn the policy into impactful actions for climate resilience.

Federal officials emphasized that the policy will channel investments into sectors with high emissions reduction potential, foster the deployment of clean technologies, and contribute to achieving Pakistan’s Nationally Determined Contributions (NDCs).

With this policy, Pakistan has extended an invitation to global carbon market players to collaborate in developing projects that support national development, uplift local communities, and contribute to a sustainable low-carbon economy.

“This policy marks a decisive step forward for Pakistan’s climate ambition. It’s a call to action for both domestic and global partners to join hands in creating a resilient, low-carbon future for Pakistan,” stated the ministry spokesperson.

As one of the most climate-vulnerable nations, Pakistan’s proactive approach through its Carbon Market Policy could set a benchmark for other developing nations striving for sustainable growth and climate action.