DUBAI: Holistic responses to climate change-induced challenges for developing countries like Pakistan are not going to be cheap, since conventional mechanisms have demonstrated their inability to move at speed and scale that is required.

This was the thrust of the argument put forward by Dr Charles Ehrhart at a discussion held on the sidelines of the COP28 summit.

The global head of Climate Risk, Resilience and Adaptation at KPMG — one of the world’s ‘big four’ accounting organisations — was speaking during a panel discussion titled ‘Decarbonising Economies: Risks of Untested Technologies’, hosted at the Pakistan Pavilion on Saturday.

Moderated by Amir Paracha, president of Pakistan’s Overseas Investors Chamber of Commerce and Industry (OICCI), the discussion featured global and local Pakistani experts coming together to talk about the possibilities of public-private partnerships and how they could help developing nations like Pakistan cope with climate change impacts.

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Mr Paracha noted that Pakistan was one of the top 10 top countries when it comes to climate change. “But when it comes to emissions, we are nowhere in the top 10,” he said.

“We are on the receiving end of climate-induced disasters. The problem is so monstrous that it cannot be managed singularly by the government of Pakistan, by the Ministry of climate Change, nor by thinktanks. Therefore, the private sector must collaborate with the government and the ministry to help solve this problem,” he said.

In Dr Ehrhart’s view, for public-private partnerships to achieve optimal results, there is a need to “appreciate, recognise and address the political trade-offs, to create synergies, but most importantly to create organisations that have the agility to understand the rapidly changing landscape in which they operate”.

“So much of the conversation, globally, is around the role of banks in mobilising capital. But there is an equally essential role in the insurance sector, which has many different instruments and tools. That can be layered into these blended financial instruments and solutions to help de-risk and bring in the private sector,” he said.

Answering a question on whether the development of carbon markets should be prescribed as an effective solution in influencing decarbonisation across the economy for a country like Pakistan, Dr Karen Olsen’s answer was in the affirmative.

A senior adviser at the United Nations Environment Program (UNEP), she said that carbon markets were among some of the most powerful tools to involve the private sector in de-carbonisation through pricing emissions.

“But there are many different kinds of carbon pricing; there are also different kinds of markets, and they’re not all equally efficient. All countries in context of the UN agree on the rules, modalities, procedures, and the guidance, to safeguard integrity, and are trying to set the international best practice.”

Mentioning the challenge of bad projects with no integrity, she said that such endeavours were “ruining the reputation of carbon markets”.

But in the context of Pakistan, she recommended the formulation of a domestic emissions trading scheme.

“That’s where you can best drive investments toward decarbonisation, starting with the big emitters,” she said, adding that the voluntary carbon market is where the activity and demand is concentrated.

Published in Dawn, December 11th, 2023