Earth Day: Pakistan's Progress Toward Low-Carbon Economy

[Riaz Haq]

Pakistan celebrates Earth Day on April 22 every year by organizing various events sponsored by the government and non-government organizations to raise awareness of the issues faced by the earth. Today it is being observed with a range of initiatives, including pledges for zero waste, commitments to sustainable practices, and community-based actions to protect the planet. Pakistan contributes less than 1% of global carbon emissions, but it is among the countries considered most vulnerable to climate change. About a third of the country was devastated by massive floods in 2022. The nation committed continued pursuit of nature-based solutions to the problem at COP26 in Glasgow in 2021. As part of this commitment, the country is planting one of the world's largest mangrove forests in the Indus River Delta, a key component of its Ten Billion Tree Tsunami campaign launched by former Prime Minister Imran Khan. The area where Pakistan is making substantial progress is in moving toward a low-carbon economy. 

Earth Day in Pakistan

"Our Power, Our Planet" theme focuses on a low-carbon economy with growth in clean electricity generation and the use of electric vehicles in Pakistan. In 2024, the hydropower  contributed 10,681MW to the national grid, accounting for 25.4% of total capacity and generating 29,167GWh, representing 31.7% of total electricity generation. With nuclear power generation capacity of 3,262 megawatts, Pakistan increased the share of electricity generated from nuclear power plants to a record 17.4% in 2023 from 16.2% in 2022. Pakistan’s on-grid, net-metered solar capacity reached about 4,100 MW by December 2024. 

Meanwhile, Pakistan is in the midst of a solar power boom. It has joined the ranks of the world’s leading solar markets, importing 17 gigawatts of solar panels last year alone, according to the Global Electricity Review 2025 by Ember, an energy think tank in the UK. “Rooftop solar is fast becoming the preferred energy provider,” says Muhammad Mustafa Amjad, program director at Renewables First in Pakistan. “And the role of the grid has to massively adapt in order to remain relevant in a fast-transitioning energy economy.”

A number of auto companies have announced plans to manufacture electric vehicles. Pakistani automobile joint ventures with Chinese automakers BYD and Changan have recently launched several all-electric and plug-in hybrid models of automobiles in Pakistan. Honda Atlas Cars Pakistan Limited has announced plans to build a hybrid electric vehicles plant in the country. Other major brands like Toyota, Haval, and Hyundai are already offering similar models in the country. It all began with the 2019 electric vehicle policy approved by the government of Prime Minister Imran Khan to incentivize the electrification of the auto industry. Pakistan EV policy goal is to achieve 30% of new cars sales, 50% of new 2-wheeler and 3-wheeler sales and 30% of new truck sales by 2030. By 2040, the target is 90% of all new vehicle sales to be electric. The main incentive is the reduction of sales tax from 17% for internal combustion engine (ICE) vehicles to 1% for all-electric (EV) vehicles.

Pakistan is currently experiencing a huge economic drain in terms of fossil fuel imports. In the first two months of the current fiscal year, Pakistan's oil import bill increased by 23% compared to the same period in 2023. Paying for huge amounts of imported coal, gas, and oil in US dollars has become disastrous, particularly after 40% depreciation of Pakistani currency over the last two years. Switching to cheap renewable sources will have a salutary effect on the country's climate and economy. It will help grow the nation's exports by increasing its exporters' competitiveness. It will also make it easier to manage inflation and reduce the need for recurring IMF bailouts. 

The GenAI revolution is another factor that will dramatically increase global power demand. Wall Street investment bank Goldman Sachs forecasts that the new high-performance AI data centers alone will grow electricity demand by 160% by 2030. Pakistan needs to prepare for it if it wants to be competitive in this brave new world of generative artificial intelligence (Gen AI). 

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