ISLAMABAD: An Asian Development Bank (ABD) report released on Sunday estimates that in order for Pakistan to meet international commitments on reducing carbon emissions, more than $390 billion in additional investment will be needed by 2050 through the industry’s transition from coal to gas, transportation electrification, and the substitution of electricity for gas for cooking.
The necessary energy growth plans necessitate significant investment commitments, according to the Pakistan Low-Carbon Energy Outlook and Technology Road Map report.
In a low-carbon scenario, $153 billion must be invested in hydroelectric generating, $103 billion in nuclear power, $62 billion in wind power, and $51 billion in solar power. According to the analysis, $22 billion must be invested in transmission and distribution in order to meet the increasing demand for power and preserve grid stability.
In order to achieve energy efficiency savings, these significant expenditures in the power industry are on top of the investments needed in the transportation and residential sectors. “It will be difficult to accomplish such a large investment program,” the financing organization with its headquarters in Manila stated.
The majority of money will have to come from the local and foreign private sector through direct investment, equity funding, bank credits, bond issues, and international financial assistance, which would necessitate significant reforms, it stated, because direct government support is probably going to be restricted. “For this large-scale funding to be possible, the investment climate must be sufficiently encouraging,” the statement stated.
claims that in order to secure funds, significant policy actions, regulatory reforms, and careful planning are necessary.
According to the analysis, compared to the business-as-usual scenario, the low-carbon scenario would result in around 23% fewer greenhouse gas emissions from the energy sector in 2030 and 36% fewer emissions in 2050. As a result, it is feasible to achieve the same growth rate while reducing emissions by around one-third. To achieve this, significant policy changes will be needed to fortify the financial intermediation system, match private sector incentives with environmental policy objectives, make sure the regulatory framework effectively supports these objectives, and create a project planning and execution system that satisfies the needs of both bilateral and multilateral donor organizations.
It will only be feasible to believe that the low-carbon scenario may be fully funded and implemented if significant progress is made in these areas.
Furthermore, from the perspective of energy delivery, a transition to a low-carbon pathway will need to be supported by efficient system planning, sufficient mechanisms and incentives for flexibility on both the supply and demand sides, short-term system balancing, and stability processes.
The government’s goal of becoming an upper middle-income nation by 2047 is the foundation of the report. It stated that maintaining a reasonable rate of economic growth, providing for the rising demand for energy at a reasonable cost, minimizing the harm caused by emissions, and fulfilling government goals and international obligations under the Paris Agreement on Climate Change were Pakistan’s main policy challenges.
Pakistan is one of the top 10 nations most impacted by climate change, making it extremely susceptible to its negative effects.
Using 2015 as the base year, Pakistan proposed in 2016 to cut up to 20 percent of its national greenhouse gas emissions by 2030 as part of the climate change negotiations under the nationally determined contributions (NDCs).
The government accepted the updated NDCs in 2021, which expanded this goal to a total reduction of 50% by 2030, of which 15% is unconditional and the remaining 35% is contingent upon receiving sufficient foreign financial aid.
Fuel switching and electrification have a significant impact on the low-carbon scenario. According to the report, the industry’s shift from coal to gas, transportation electrification, and the substitution of electricity for gas in cooking are the main demand-side mitigation prospects.
A significant transition to cleaner fuels is a crucial component of the low-carbon scenario. By 2050, natural gas would account for 26% of the entire primary energy supply, while cleaner fuels would account for 22%.
