ISLAMABAD: The federal government has reduced allocations under key climate spending categories in Budget 2026-27 but sharply increased disaster-related funding, while proposing a Rs50 billion Climate Support Levy and identifying Rs476 billion in green subsidies to support climate resilience efforts.
Budget documents show that adaptation spending has been reduced to Rs70.46 billion from Rs85.44 billion in the previous budget, while mitigation allocations cut to Rs124.07 billion from Rs603 billion and funding for supporting areas to Rs19.49 billion from Rs28.33 billion.
The allocations are part of the government’s climate-tagged expenditure framework covering adaptation, mitigation, and climate-supporting activities.
In contrast, the government has significantly expanded disaster-related spending. Allocations for preparedness have increased to Rs42.84 billion from Rs33.16 billion, while response-related spending has been more than doubled to Rs32.77 billion from Rs15.88 billion. Funding for recovery and rehabilitation has surged to Rs21.49 billion from Rs1.14 billion, while Rs19.14 billion has been earmarked for reconstruction activities, compared with no allocation under this head in the previous budget.
The budget also includes an Rs20 billion emergency provision for natural disasters triggered by natural hazards and Rs150 million for climate change conferences and forums, reflecting the government’s efforts to strengthen disaster resilience and engagement in international climate processes.
Separately, the government has identified Rs476 billion in green components of subsidies for FY2026-27. The largest allocation is in the energy sector, where Rs423 billion has been classified as mitigation-related spending under Category-A (directly favourable). The agriculture sector has been allocated Rs21 billion, and the food sector Rs19 billion under adaptation-related subsidies classified as Category-B (indirectly favourable).
Similarly, industries have been allocated Rs8 billion under mitigation-related green subsidies, while the transport sector has received Rs5 billion, also classified as mitigation spending. These subsidies form part of the government’s broader framework to promote cleaner energy, climate adaptation, and environmentally sustainable economic activity.
Analysts said the budget presents a mixed picture for climate financing. While direct allocations for adaptation, mitigation, and supporting climate measures have declined, the sharp increase in disaster preparedness, response, rehabilitation, and reconstruction spending suggests a greater focus on coping with the impacts of climate change and extreme weather events.
The allocations come as Pakistan continues to face growing climate-related challenges, including floods, droughts, glacial melt, and heatwaves, while seeking greater international climate financing under its adaptation and resilience agenda.
Experts say the effectiveness of the measures will depend on implementation and the government’s ability to translate budgetary commitments into tangible projects that strengthen climate resilience and protect vulnerable communities.
Copyright Business Recorder, 2026