Climate finance: TIP urges govts to be mindful of integrity risks associated with carbon markets

ISLAMABAD: Transparency International Pakistan (TI Pakistan) has stated that while carbon markets are an effective tool for climate finance, national governments must remain mindful of the integrity risks associated with them.

This observation was shared at a high-level dissemination event titled “Carbon Markets Readiness in Pakistan – Addressing Governance Gaps and Safeguarding Against Integrity Risks.”

The event opened with welcoming remarks by Prof Dr Uzma Shujaat, a Member of the Board of Trustees, TI Pakistan, followed by a presentation of key findings from the report by Kashif Ali, Executive Director, TI Pakistan.

The report highlights governance gaps and integrity risks within Pakistan’s carbon market ecosystem, and offers actionable recommendations to enhance transparency, accountability, and institutional capacity.

In his address, Executive Director Kashif Ali noted, “Pakistan remains among the countries most severely affected by climate change, and the series of overlapping floods in 2025 was yet another reminder of its intensifying impact.”

He reiterated that although carbon markets offer a viable climate finance strategy, “it is important for national governments to be cognizant of the integrity risks.”

Keynote speakers included Romina Khurshid Alam, Coordinator to the Prime Minister on Climate Change and Environmental Coordination, and Ali Tauqeer Sheikh, Climate Change Expert. They discussed Pakistan’s climate governance challenges and emerging opportunities for integrating carbon markets effectively.

Romina Khurshid congratulated TI Pakistan for producing the report, stating, “Pakistan must be prepared for the opportunities and responsibilities that come with carbon markets. We do not see carbon markets as a shortcut, but as a tool to secure financial support, investment, green development, and improved sectoral cooperation.”

Hamza Rafay Butt, Climate & Nature Finance Expert at UNEP-WCMC, presented detailed findings from the report, outlining critical steps required to align Pakistan’s carbon market preparedness with global best practices.

A panel discussion on policy and institutional considerations for carbon market development followed, featuring: (Hiz Jamali (Asian Development Bank), Shah Jahan Mirza (Private Power and Infrastructure Board), Zainab Naeem (Sustainable Development Policy Institute), Ahsan Kamran (Supporting Preparedness for Article 6 Cooperation Programme), Ayhan Mustafa Bhutto (Economic Coordination Committee & Climate Change Development Division), and Syed Bulent Sohail (Sohail & Partners, LLP).

Kashif Ali moderated the session, which focused on regulatory frameworks, institutional coordination, and integrity safeguards essential for building a credible carbon market in Pakistan.

Provincial climate change departments also shared updates on ongoing initiatives, with inputs from Rizwana Anjum (Punjab), Fateh Khan (Balochistan), and Talha Hussain Faisal (Khyber Pakhtunkhwa).

Copyright Business Recorder, 2025