LAHORE: A panel of experts unanimously demanded prioritising key interventions required for reducing air pollution and turning Pakistan’s air quality crisis into an investment opportunity.

They were speaking at a conference on Saturday organised by the Dawn Media’s “Breathe Pakistan” initiative.

According to them, these priorities must include strengthening institutions for air quality management governance, leverage information, catalyse investments, create a national dialogue linking environmental and financial health, encourage collective ownership (government, DFIs, banks, private sector etc) and opportunities to turn Pakistan’s air quality crisis into investment opportunity.

“The world’s four most exposed countries to hazardous air pollution are in South Asia, including Bangladesh, Nepal, India and Pakistan, wherein 97.9pc, 96.4pc, 96.3pc and 93.1pc of their respective population are exposed to hazardous concentration of air pollution,” revealed World Bank’s senior environment specialist Shafick Hoossein, while delivering the keynote speech.

Experts say air pollution reducing human capital development and economy, along with causing two million premature deaths in South Asia each year

The session titled “Financing Clean Air for Pakistan” was moderated by Ms Fatima Attarwala, Dawn’s Editor of Business & Finance Weekly with panelists Arsalan Iqbal, the Bank of Punjab’s (BoPs) Chief Risk Officer and Rafay Alam, Environmental lawyer. BoP Chairman Zafar Masud, who also heads the Pakistan Banking Association (PBA), also spoke on the occasion.

Mr Hoossein said that air pollution had been reducing human capital development and the economy, and also causing two million premature deaths each year and taking away an average of five years of life expectancy for the typical South Asian. He said the average South Asian was losing more than two weeks each year and was suffering from air pollution-related diseases. Most significant among these include heart, lungs and diabetes, he added.

Mr Hoossein said that adverse health effects had high economic costs in terms of reduced labour productivity and foregone output. The annual welfare costs in the South Asian region had been estimated to be more than 10pc of their per annum GDP, he maintained.

He said that there was just one percent of all international development funding targeting outdoor air pollution projects in this time period.

“Scarcity of grant funding hampers progress, as only 6pc of overall air quality funding from international development funders came in the form of grants. Black carbon receives smaller amounts of funding despite its unique climate and health impacts,” Hoossein explained.

Air pollution control measures with decarbonisation policies could reduce black carbon emissions by almost two-thirds, he added.

He emphasised the need for additional cumulative investment -- $3.2 trillion, the WHO interim target-2 by 2040 -- to halve the number of people exposed to the levels above 25ug/m3 (fine dust particles).

Speaking on the occasion, Mr Masud said that Pakistan’s major cities ranked among the world’s most polluted, with PM2.5 levels exceeding 200pg/m3 during peak smog season. Transport sector, according to him, contributed over 40pc of urban air pollution in Punjab, costing the country heavily.

“This also hits directly to our output and earnings,” he added. According to the World Bank, he said air pollution costs Pakistan 6pc of the GDP every year, with agriculture yields falling by 5-10pc during ‘smog months’. This leads to loan repayment stress, besides penalties imposed by buyers on the country’s exporters for poor compliance.

“Dirty air means lower repayments, weaker exports and higher non-performing loans,” he said. He sought creation of a national dialogue, encouraged collective ownership and turned Pakistan’s air quality crisis into an investment opportunity.

Discussing Pakistan’s climate finance gap, he said the country’s total climate investment needed $348 billion by 2030.

“I think the world is not short of capital. It is short of confidence in our readiness,” he maintained. He said that the reasons behind non-flowing of finance included pipeline readiness (few feasibility studies; weak MRV frameworks), capacity (limited climate-risk expertise in both banks and bureaucracy and tenor) and a lack of long-term financing for green projects. He also emphasized the need of green taxonomy - the plumbing for capital flows that defines why green / transition investments are critical to avoid green-washing and to attract international finance.

“The Federal Green Taxonomy — SBP, 2025 is a game changer as it aligns Pakistan with EU, ASEAN, IFC standards,” he said, urging banks to become the architect of the low-carbon economy by channelising liquidity towards clean, resilient sectors and partnering with DFIs for concessional lines (AFD, ADB, WB).

Earlier, the panelists discussed various issues related to deteriorating air pollution, urging people to demand for a cleaner environment.

Mr Rafay Alam said, “People want a clean environment. They want to talk about this. But they are doing this cosmetically and superficially”.

Mr Arsalan Iqbal sought for creating demand for green financing for which the funds were available.

“How we can finance for green projects, if the customer doesn’t seek it,” he said.

Published in Dawn, October 12th, 2025