Islamabad: The federal government expects to collect Rs50 billion through the Climate Support Levy in fiscal year 2026-27, but has allocated only Rs2.48 billion for climate-related development projects under the Ministry of Climate Change and Environmental Coordination, creating a sharp disparity between projected climate-related revenues and direct federal spending on climate initiatives.
The development allocation amounts to just 4.96 percent of the projected levy receipts, meaning less than Rs5 out of every Rs100 expected from the Climate Support Levy will be spent through the climate ministry’s development programme despite Pakistan’s increasing exposure to floods, heatwaves, droughts, water scarcity and other climate-related disasters.
Budget documents show that the government has projected receipts of Rs50 billion from the Climate Support Levy in 2026-27, while the Ministry of Climate Change and Environmental Coordination has been allocated Rs2.48 billion under the Public Sector Development Programme (PSDP) for development projects.
The development allocation amounts to just 4.96 percent of the anticipated levy proceeds.
The ministry’s total allocation, including both development and current expenditure, stands at around Rs4.96 billion. Of this, Rs2.48 billion has been earmarked for development spending while another Rs2.48 billion has been allocated for current expenditure, including grants, operating costs and employee-related expenses.
The figures indicate a significant gap between the revenue expected to be generated through the climate levy and the amount being directly invested in climate-related development initiatives under the federal climate ministry.
A review of PSDP documents further shows that almost the entire development budget of the ministry will be spent on a single project. The Up-scaling of Green Pakistan Programme, previously known as the Ten Billion Tree Tsunami Programme, has been allocated Rs2.34 billion, accounting for nearly 94 percent of the ministry’s total development allocation.
The programme is aimed at increasing forest cover, supporting ecosystem restoration and promoting environmental conservation across the country.
However, the concentration of development spending in one initiative leaves relatively limited funding for climate adaptation, disaster preparedness, urban resilience and institutional strengthening.
Several other climate-related projects have received comparatively small allocations. The Green Skills for Sustainable Development project has been allocated Rs51.6 million to support green entrepreneurship and innovation.
Another Rs50 million has been earmarked for the preparation of a National Urban Strategy and development of guidelines to reduce the impacts of floods, droughts, climate disasters and environmental risks in urban areas.
Similarly, Rs40.7 million has been allocated for strengthening the technical capacities of the Ministry of Climate Change and Environmental Coordination.
Budget documents show that the ministry’s current expenditure allocation of Rs2.48 billion includes Rs1.48 billion for grants and subsidies, Rs619 million for operating expenses, Rs232 million for employee-related expenditures and Rs121 million for physical assets.
The federal climate development budget remains a small component of overall public sector spending. The ministry’s PSDP allocation of Rs2.48 billion represents less than one quarter of one percent of the federal development programme of Rs1 trillion approved for fiscal year 2026-27.
The allocations come as Pakistan continues to face increasing climate-related challenges. The country has experienced recurring floods, prolonged droughts, extreme heat events, water scarcity, glacial melting and urban flooding in recent years, while international assessments continue to rank Pakistan among the countries most vulnerable to the impacts of climate change despite its relatively small contribution to global greenhouse gas emissions.
PSDP documents show that the total cost of ongoing projects under the Ministry of Climate Change and Environmental Coordination exceeds Rs123 billion, indicating that substantial additional funding will be required in coming years to complete existing schemes and implement new climate-related initiatives.
While the government has presented the Climate Support Levy as a significant revenue measure expected to generate Rs50 billion during the coming fiscal year, budget allocations indicate that only a small fraction of the projected receipts is reflected in the federal climate development budget.
The 2026-27 budget therefore highlights a notable disparity between projected climate-related revenue generation and direct federal investment in climate development projects, with most available funding continuing to be channelled towards the government’s flagship afforestation programme.