PAKISTAN is learning, year after year, what it means to live on the front lines of the climate crisis. Floods and droughts don’t end when the waters recede or the rains return; each brings a major economic shock, development setbacks, and humanitarian impacts that last for years.

Over two decades, climate-related disasters caused at least $18 billion in damages in Pakistan — surpassing $60bn when losses from the 2010, 2011, and 2022 floods are added. The 2022 mega-flood alone produced $30bn in losses and reconstruction needs — about eight per cent of GDP. Yet, only about 30pc of the $16.3bn required for reconstruction has been funded, leaving a gap of over $11bn. In 2025, monsoon floods displaced 5.9 million people, destroyed 2.2m hectares (5.4 acres) of cropland, and caused $3bn in damage, reducing GDP growth by about 0.5 percentage points.

Climate change is exacerbating hunger. With a one-degree Celsius rise in temperature, the World Food Programme models a likely 6.6pc increase in the food-insecure population, with Pakistan experiencing the largest increase globally. Every disaster cycle has a long-term impact on families: children are pulled from school, livestock are sold in distress, seed stocks are consumed, and savings are depleted. Each flood erodes decades of development gains, and each drought deepens food insecurity and vulnerability.

Putting the right financial tools in place to anticipate climate disasters and support rapid recovery is essential. In fact, well-structured disaster risk financing turns unpredictable liabilities into predictable budget lines. It enables governments to layer risk, prearrange finance and save taxpayer money. This means using reserves for frequent small shocks, contingent credit for medium events, and risk transfer mechanisms such as parametric insurance and catastrophe bonds for the most severe events.

The case for scaling DRF in Pakistan is compelling.

Disaster risk finance (DRF) also helps protect the budgets that are essential for poverty reduction and climate change adaptation. For example, every dollar invested in anticipatory action saves $3 to $7 in losses, at a cost of only $2 to $10 per person. Pakistan’s Nationally Determined Contributions estimate $7bn to $14bn in annual adaptation needs. Without protection, the cost of climate disasters could far exceed these needs, crowding out investment in adaptation, poverty reduction, and development.

Pakistan has laid important groundwork: a National Disaster Risk Financing Strategy, the National Disaster Management Authority’s 2025-2030 Disaster Risk Reduction Strategy, and a National Adaptation Plan to 2030. The Benazir Income Support Programme (BISP) has also shown the model works: by delivering Rs25,000 (roughly $90) to 2.7m flood‑affected households in 2022, moving $250m through an existing national delivery system in weeks. The frameworks and the delivery systems exist. What is missing is regular inclusion of disaster risk financing in budgets before shocks, rather than after them. The government can move first.

The National DRF Strategy needs instruments: prearranged sovereign cover for major floods; automatic financing triggered by meteorological thresholds, and replication of provincial DRF models in every exposed province.

Public delivery systems can deliver at scale. BISP already reaches over 9m families, supported by a socioeconomic registry of 27m households. Provincial governments also have their own registers. Making these registries shock-responsive means pre-identifying at-risk families, setting forecast-based triggers, and automatically activating top-ups and expansions when thresholds are met.

The private sector can carry more risk. Insurance penetration in Pakistan stands at just 0.9pc of GDP. Virtually all disaster losses in Pakistan are uninsured. With the right regulatory environment, local insurers and reinsurers can build products for agriculture, livestock, and small businesses that pay out in days rather than months.

International partners have a role too, helping national and local governments develop and deploy disaster risk financing tools, improving access to resources from the Green Climate Fund, multilateral development banks, and the Fund for Responding to Loss and Damage, and supporting the integration of these instruments into the delivery channels that are essential to get resources quickly to the people who need them the most.

The Dawn climate conference has arrived at the right moment. The next monsoon is less than three months away. Scaling disaster risk financing is one of the most practical steps Pakistan and its partners can take this year to protect both the most vulnerable and the development gains they have helped build.

The writer is director, Climate and Resilience Service, World Food Programme.

Published in Dawn, May 7th, 2026