This blog was submitted as part of CDPR’s Summer Blog Competition “The Student Standpoint“.
The world is progressing and developing at a pace but this progress comes at a hefty cost for current and future generations. Failure to consider the environmental impact of economic activities has had disastrous effects on global weather patterns which are likely to worsen if immediate action is not taken. An alarming new threat has reared its ugly head in the 21st century. In addition to conventional threats such as war or poverty, climate change and rising temperatures are reshaping lives in unprecedented ways, irrespective of social and economic strata. According to the United Nations, the Earth has warmed by 1.34°C to 1.41°C since the pre-industrial period (1850-1900). The warmest year on record was 2024 (United Nations, 2025). Pakistan is highly vulnerable to the consequences of climate change, despite only contributing to 0.9% of global greenhouse gas emissions (Government of Pakistan, 2021). This vulnerability was tragically demonstrated in 2022, when catastrophic floods affected nearly 33 million people, displacing close to 8 million and submerging almost one-third of the country (Finance Division Government of Pakistan, 2023).
Pakistan’s Energy Landscape
Energy is a pivotal input for Pakistan’s economic activity in almost every sector. In recent years, energy demand has increased dramatically due to the expansion of infrastructure, industries, and other sectors. Moreover, an evergrowing population has led to a significant rise in the domestic demand for electricity.
For the past several decades the country has struggled with an energy crisis. While the government has been able to significantly manage the crisis in recent years, unfortunately , most of Pakistan’s electricity is still generated from non-renewable energy sources. According to the Pakistan Economic Survey 2024-2025, Pakistan’s total installed capacity for generating electricity was 46,605 MW FY 2025, which represents a 1.6 percent increase over the 45,888 MW reported in the corresponding period of FY 2024. Thermal, hydel, renewable, and nuclear energy make up 55.7 percent, 24.4 percent, 12.2 percent, and 7.8 percent of the total, respectively, as illustrated in figure 1 (Finance Division Government of Pakistan, 2025).
Figure 1: Installed Capacity of Electricity July-March FY 2025 (Source: Pakistan Economic Survey 2024-2025)
Additionally, figure 2 illustrates that in FY 2025 period, the proportions of thermal, hydroelectric, nuclear, and renewable energy sources in the electricity generation to the total power output of 90,145 GWh are 46.3 percent, 30.4 percent, 19.1 percent, and 4.2 percent, respectively (Finance Division Government of Pakistan, 2025) . The data makes it evident that a significant amount of our electricity is still produced from non-renewable energy sources. Just 4.2% of our electricity comes from renewable sources like solar and wind. The heavy reliance on non-renewable energy sources and the consequent greenhouse gas emissions are ultimately one of the main causes of climate change.
Figure 2: Generation of Electricity July-March FY 2025 (Source: Pakistan Economic Survey 2024-2025)
Barriers to Renewable Energy Transition
Pakistan’s energy sector’s transition to renewable energy faces a few key challenges:
The financial burden of such a transition is a key deterrent. As a developing country, Pakistan lacks the financial resources to make this significant shift without borrowing from international institutions such as the IMF, World Bank or other developed countries.However, relying heavily on international loans poses challenges of its own. Many of these loans have stringent requirements, which raises Pakistan’s debt load and limits its fiscal space for other critical development needs like poverty alleviation, health care, and education. Furthermore, private sector investment is frequently deterred by the high upfront costs of renewable infrastructure, such as solar panels, wind turbines, and energy storage systems. It becomes challenging to secure long-term, sustainable funding for renewable energy projects in the absence of significant domestic incentives or subsidies.
Capacity building is another major issue. The Finance Minister, Mr. Muhammad Aurangzeb on World’s Glacier Day highlighted that although $10 billion had been pledged to Pakistan following the floods in 2022, only one-third of that amount had been received because Pakistan was unable to develop bankable, investable projects, and that is what needs to be addressed to be able to tap into global climate funds (Dawn.com, 2025).
Significant investment and time is required to upgrade the existing distribution and transmission infrastructure. Without this upgrade substantial energy losses will continue to occur in transmission regardless of the generation capacity and consumers will continue to bear the burden of these losses in the form of high energy prices.
Pakistan’s policies are inconsistent. Every administration seeks to enforce its own laws. Moreover, lack of enforcement, myopic planning, and frequent tariff changes discourage investors and have an impact on consumers. These inconsistencies lead to unpredictable electricity pricing, frequent load-shedding, and a general lack of trust in the system. Consumers also become reluctant to invest in renewable solutions and sustainable alternatives like solar panels due to uncertain, unclear or shifting regulations. As a result, consumers experience frustration, financial hardship and unreliable access to energy.
There is still a general lack of public awareness. The benefits of renewable energy are still not well understood by businesses and citizens which results in inadequate uptake of and compliance with changing policies
The high cost of energy in Pakistan is making it difficult for customers to pay their bills. Pakistan’s poverty rate is already very high. The average person cannot afford it, and the fact that we produce power using fossil fuels is one of the main causes of its high cost.
Charting the Path to a Cleaner Energy Future
The government can play a leading role in facilitating the transition to a clean energy future. One means of doing so is by providing support to the solar panel industry with more subsidies and incentives. In addition, public awareness campaigns are required to educate the general public about the benefits of clean energy. The government should incentivise the transition to green energy by businesses, organizations, factories, and educational institutions that convert their entire electrical system to solar power. Fully transitioned organisations and industries should be awarded green certificates which not only recognize their commitment to clean energy but also serve as a gateway to tangible benefits. These can include better standing in Environmental, Social, Governance (ESG) rankings, obtaining loans, increased credibility when exporting to environmentally-conscious markets, preferential access to green funding, and qualifying for international sustainability funds. Additionally, by bringing local companies into line with worldwide environmental compliance standards, these certifications can increase their competitiveness globally.This will really benefit the government.
By subsidizing solar panel installation, the government can lessen the financial burden on households and businesses, which will promote a broader usage of solar energy. Electricity shortages in high-need areas will be lessened as more factories and institutions transition to solar power, which will lower demand on the national grid, especially during the peak summer months. Issuing green certificates to fully solar-powered organizations can serve as a powerful financial incentive, especially if these certificates are linked to loan eligibility, tax relief, or access to sustainability grants. This would further motivate industries to shift to clean energy sources. Such decentralization of power generation would also lessen the need for building more transmission infrastructure, particularly in underdeveloped or remote regions. As a result, electricity costs may stabilize or possibly drop, providing both businesses and individuals with long-term economic relief.
These interventions align directly with Sustainable Development Goal 7, Affordable and Clean Energy (United Nations Department of Economic and Social Affairs, 2025), which promotes access to affordable and clean energy. To ensure effective implementation, the government must start capacity-building training programs for officials working on energy-related projects. Last but not least, long-term and consistent policy commitments will support the nation’s clean energy transformation by bringing in both foreign and domestic investment and offering market stability.
Poised at a pivotal juncture, Pakistan has the potential to lead a green energy revolution in South Asia, if it is able to efficiently and sustainably leverage its abundance of renewable resources such as long sunny days in the summer, a viable wind corridor in Sindh and a youthful population. With a host of tools at its behest all Pakistan needs is a concerted effort and cohesive and prudent policies to enable a green energy transition.
About the Author: Saad Hamed is currently pursuing an MPhil in Environmental Science at Quaid-i-Azam University Islamabad, and a B.A. LL.B. (Law) at Sialkot Law College. He also holds a BS degree in Chemistry. Saad has participated in several national and international competitions, including the MIT Energy Hack 2022, where he won two awards. He is very passionate about climate change and actively advocates for environmental issues on various platforms. He can be reached at saadhamedd29@gmail.com.
References
United Nations. (2025). Climate Action Fast Facts. https://www.un.org/en/climatechange/science/key-findings
Government of Pakistan. (2021). Updated Nationally Determined Contributions 2021. https://unfccc.int/sites/default/files/NDC/2022-06/Pakistan%20Updated%20NDC%2020 21.pdf
Finance Division, Government of Pakistan. (2023). Pakistan Economic Survey 2022-2023 Annexure III – PAKISTAN FLOODS 2022 IMPACT ASSESSMENT. https://www.finance.gov.pk/survey/chapters_23/Annex_III_Pakistan_Floods_2022.pdf
Finance Division, Government of Pakistan. (2025). Pakistan Economic Survey 2024-2025. https://www.finance.gov.pk/survey/chapter_25/14_Energy.pdf
Dawn.com. (2025, March 21). Climate change has already hit the livelihood of millions in Pakistan: finance minister. DAWN.COM. https://www.dawn.com/news/1899377
United Nations Department of Economic and Social Affairs. (2025). Goal 7 Department of Economic and Social Affairs. Sustainable Development. https://sdgs.un.org/goals/goal7#overview
