By Business Desk | Published Sep 23, 2025 | 6:49 pm
Pakistan has the potential to generate between 40 million and 75 million tons of tradable carbon credits annually, translating into revenues of $400 million to $2.25 billion, according to a new report released Tuesday by Transparency International Pakistan.
The report, Carbon Markets Readiness in Pakistan: Addressing Governance Gaps and Safeguarding Against Integrity Risks, highlights opportunities and challenges in developing a credible carbon market, while stressing the need for strong governance frameworks to ensure transparency and community trust.
“If even 10 to 15% of Pakistan’s annual greenhouse gas emissions were addressed through carbon projects, the country could unlock a substantial revenue stream from voluntary markets,” the report noted. It added, however, that the absence of a consolidated national emissions baseline remains a key barrier.
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The assessment warns that despite broad policy frameworks, Pakistan lacks on-the-ground technical capacity to implement complex instruments such as emissions accounting, monitoring and verification systems, carbon ownership laws, and market registries. It recommends establishing a dedicated carbon markets team within the Ministry of Climate Change and provincial departments.
TI Pakistan’s Executive Director, Kashif Ali, stated that transparency was the biggest challenge. “Without clear and accessible information on decision-making, benefit allocation, and safeguards for affected communities, trust in these mechanisms risks being undermined,” he said. He called for clear reporting standards, benefit-sharing frameworks, and stronger channels for community participation.
The report sets out 10 recommendations, including the development of robust data systems, a comprehensive carbon market law, institutional safeguards for equity and participation, and the creation of a National Carbon Coordination Council to oversee carbon trading. It also stresses the importance of pilot projects, technical training at all levels of government, and stronger international linkages to enhance credibility and market access.
Justice (retd) Zia Perwez, chairman of TI Pakistan, said the findings should help federal and provincial governments, international partners, and civil society design a strategy that positions carbon markets as a critical tool for climate finance and sustainable development.