The chilly winds and the scent of cardamom, once again, mark the advent of winter in Lahore. The city once known for its gardens and greenery is now known for its smog. With the Air Quality Index (AQI) reaching 1,000+ last season, there is an urgent need for innovative climate-friendly practices to deal with this hazard.

In addition to the short-term measures to protect the citizens from health emergencies, there is a need for viable long-term solutions to tackle climate crisis as well. Clearly, extreme unpredictable climate changes call for shifting towards sustainable methods of production and consumption. This translates to shifting towards using more renewable energy sources as opposed to non-renewable ones in order to preserve the environment.

Although there are still gaps between the objectives for green energy and the results achieved, several global initiatives are making real progress by mobilising corporations to adopt renewable energy on a large scale. This growing corporate commitment has rapidly increased the demand for renewable energy sources by the corporate sector; and this demand is expected to grow further after it doubled compared to the peak in 2019.

Global initiatives such as the ‘RE100 Coalition’ and the ‘Clean Energy Buyers Association’ have brought on board over 400 leading companies, including the tech giants, to source 100 per cent of their energy from renewable sources and to advance low-cost, reliable, and carbon-free global electricity systems respectively.

The country needs a well-thought out transition plan to bring the theoretical green, sustainable economy into reality

In the context of Pakistan, even though renewable energy sources are a very efficient way of achieving a greener and sustainable economy in theory, it needs to be well thought out and properly executed to make a noticeable difference. Encouragement of innovation and efficiency by the government paves ways for achieving a cleaner environment.

One such example is the availability of electric vehicles by the Punjab provincial government. Along with the public sector, the responsibility also falls on the corporations to come up with ways to reverse the environmental degradation caused by their practices over the years. If the companies can achieve such technological advancement to come up with sustainable practices, they would also be following the United Nations Global Compact which expects and encourages the organisations to fully utilise their research and development facilities and come up with sustainable practices and environmentally friendly technologies.

The concept of demand and supply applies when it comes to energy production and consumption as well. The rise in demand for energy globally increases concerns about the security of the energy supply. Moreover, this demand forces more production, and then eventually leads to harmful emissions in the atmosphere when the energy needs are fulfilled by non-renewable resources. Therefore, managing the renewable energy supply is one viable option to nudge companies to shift towards sustainable production methods and reduce their carbon emissions.

In addition, it is believed that imposing carbon tax will eventually force companies to not rely on their current non-renewable energy sources and switch to more efficient and sustainable methods of production. Consequently, ensuring energy security as well as environmental security. This shift towards responsible production and consumption would ultimately help the companies in adhering to the Sustainable Development Goals given by United Nations Development Programme. Thus, proving to be beneficial in longer term.

Another option is through the Renewable Portfolio Standard (RPS). An RPS is a policy that requires energy providers to generate or source a fixed percentage of their electricity from renewable sources to promote cleaner and sustainable energy production. Through this, multiple other resources of renewable energy would be entered into the already existing energy system. Thus, it will improve it by majorly two phenomena: by reducing energy dependency and by diversifying energy sources. RPS will clearly prove to be a suitable policy option for long-term sustainability.

In a nutshell, Pakistan’s path toward energy security and green development requires a pragmatic and phased approach with both corporate and government stakeholders playing their part. The reliance on fossil fuels cannot be eliminated overnight. However, policy efforts must focus on improving the efficiency of existing energy systems and investing in cleaner conversion technologies to gradually shift towards renewable energy sources. Moreover, public–private partnerships, subsidies for green innovation, and targeted awareness programmes can accelerate green transition. Only through a balanced strategy, aligning economic feasibility with environmental responsibility, will Pakistan be able to solve the dilemma of energy and environmental security.

The writer is an Islamic finance researcher based at the Lahore University of Management Sciences

Published in Dawn, The Business and Finance Weekly, October 20th, 2025