PAKISTAN burns $130 million every single day on the health and economic consequences of breathing poisoned air. This $47.8 billion annual toll represents 5.88 per cent of GDP lost to healthcare costs, productivity losses, and 22,000 premature deaths.

Over 11 million children under five are regularly exposed to hazardous air quality, with 1.8 million people in Punjab alone suffering health consequences during smog episodes. This crisis stems from 25 years of policy drift.

While Pakistan drafted the National Environmental Policy (NEP) in 2005 and Climate Change Policy in 2012, it lacked clarity of purpose and implementation resolve. During these lost decades, all major Asian economies invested systematically in public transportation, clean technologies and inclusive propoor policies, leaving Pakistan dangerously behind.

Current approaches remain trapped in outdated administrative and punitive measures instead of systematic, integrated solutions. This reactive approach has proven ineffective against a crisis requiring comprehensive transformation. However, Pakistan can transform this economic burden into economic opportunity by monetising carbon reductions through international markets, potentially generating revenue while cleaning its air.

BEYOND THE CONVENTIONAL PARADIGMS, AN INTEGRATED APPROACH IS NEEDED TO FIGHT THE MENACE OF AIR POLLUTION WHILE TRYING TO TAKE PAKISTAN AHEAD OF THE REST OF THE WORLD ON MANY COUNTS.

The solution lies in systematic implementation of four concurrent tracks: carbon monetisation, transportation transformation, sectoral modernisation, and regional cooperation. There are no quick fixes.

Coherent, multisectoral implementation of these four tracks can hopefully set Pakistan on the right direction by 2030. Success requires treating this as an economic transformation opportunity rather than merely an environmental problem, leveraging international carbon markets while addressing the transboundary nature of air pollution through ‘smog diplomacy’ with regional powers.

The choice is clear: continue with failed administrative approaches and accept escalating health and economic costs, or embrace systematic transformation that can deliver cleaner air, economic growth, jobs, and regional leadership by 2030.

A crisis of national scale

Air pollution has emerged as Pakistan’s most pressing multifaceted challenge, transcending sectoral boundaries and posing unprecedented threats to public health, economic stability, and environmental sustainability. The concentration of fine particulate matter (PM2.5) frequently soars to levels far exceeding WHO guidelines, contributing to a substantial burden of respiratory and cardiovascular diseases across the Indo-Gangetic Plain that affect over 900 million people regionally.

The 2024 smog crisis exemplified these impacts when pollution surges overwhelmed Pakistan’s healthcare system, with over 30,000 patients seeking treatment for respiratory ailments. Educational disruption affected 16 million children as schools and government offices were shut down, while parks, offices and markets closed across 18 districts. The World Bank estimates that one unit of PM2.5 causes $18.9 per capita in GDP wastage, making Pakistan’s economy “very air pollution intensive”. This pervasive environmental degradation is not static, but dynamic, exacerbated by climate variability and seasonal smog episodes. The crisis demands a series of actions to prevent escalating health and economic catastrophe.

The genesis

Pakistan’s air pollution crisis originated from incoherent policies implemented in the early 2000s, particularly the automobile loan liberalisation by a government that ironically also approved the NEP 2005, emphasising ambient air quality standards and vehicular emission controls.

Vehicle numbers surged from two million in 1999 to over 10 million by 2006, reaching 25 million by 2024, driving vehicular emissions to nearly half of Pakistan’s particulate and gaseous pollution. The NEP 2005’s medium-term implementation framework (2005-10) was never implemented seriously, while rapid vehicle expansion directly conflicted with environmental safeguards. All political governments from 2008 to 2024 continued with the same short-term approach.

During Pakistan’s period of policy drift, regional neighbours recognised air quality challenges and invested systematically in comprehensive metro systems, bus rapid transit (BRT), and emission standards. When environment became a provincial subject through the 18th Amendment in 2010, air quality management fell through institutional cracks. The National Climate Change Policy (NCCP) addressed air pollution as a climate challenge, but it was not until 2023 that Pakistan developed its National Clean Air Policy (NCAP). This institutional adrift cost Pakistan 25 years of potential progress, while the crisis deepened and neighbours advanced.

The current state

Pakistan’s air pollution stems from four primary interconnected sources: transportation and fuel quality, accounting for 45pc of year-round pollution through low-quality fuel and inadequate emission enforcement; industrial and energy production, contributing 40pc via coal-fired power plants and outdated processes; agricultural burning, contributing 10-20pc during post-monsoon seasons; and seasonal and structural factors, including winter inversions, deforestation, waste burning, and outdated brick kilns, compounding these sources across the regional airshed.

The economic burden includes healthcare expenditures, productivity losses, agricultural yield reductions, and premature mortality. The health crisis affects 11 million children under five in Punjab’s worsthit areas, demonstrating the urgent need for systematic transformation beyond administrative fixes.

Beyond administrative measures

Current policy responses remain trapped in reactive, command-and-control approaches with limited effectiveness and growing international implications.

The NCAP 2023 targets 38pc PM2.5 reduction by 2030, but remains constrained by relaxed standards, insufficient monitoring, and weak legal frameworks that increasingly conflict with international trade requirements. Under the European Union’s Carbon Border Adjustment Mechanism (CBAM), these limitations pose trade risks as global markets demand credible environmental compliance, requiring Pakistan to strengthen clean air measures and align with stricter standards.

There are no shortcuts to decades of negligence.

Success requires implementation of four concurrent tracks, pursued simultaneously through multisectoral coordination. Only systematic implementation can set Pakistan on the right direction by 2030.

Track 1 involves monetising emissions through international carbon markets. The maturation of international carbon markets under the Paris Agreement presents Pakistan’s most transformative opportunity of reframing emissions from liability to tradable asset. Recent climate negotiations in Baku formally recognised voluntary cooperation mechanisms and regulated international carbon markets, enabling countries to convert reduced emissions into tradable credits.

When Punjab’s children breathe clean air by 2030, when Pakistani EVs get exported to global markets, and when carbon credits fund the nation’s green transition, the world will study Pakistan’s blueprint. This is not an environmental policy. This, instead, is an economic strategy disguised as climate action. The next five years will determine whether or not Pakistan will emerge as a new player in South Asia’s clean air landscape.

Pakistan has initiated this journey through the Delta Blue Carbon Project (2017) and approval of Policy Guidelines for Trading in Carbon Markets (2024). Thailand’s Bangkok E-Bus Programme demonstrates this financing model through Energy Absolute Public Company Limited’s partnership with Swiss entities. The project replaced thousands of internal combustion buses with electric vehicles through verified carbon credit sales to Switzerland’s KliK Foundation at over $30 per credit. South Pole verified avoided emissions sold as Internationally Transferred Mitigation Outcomes, while UNDP’s Carbon Payment for Development Programme enhanced credibility, targeting 500,000 tonnes of emission reductions by 2030.

Pakistan can replicate this model leveraging the Bank of Punjab’s joint venture agreements with Chinese manufacturers. Promising partners include such players as BYD, CATL, Geely, JAC Motors and Changan Automobile. These partnerships, combined with carbon credit financing under CPEC 2.0 can make Pakistan’s transition entirely self-funding, while creating domestic manufacturing ecosystems generating employment and export potential.

For Pakistan’s fleet of 25 million vehicle producing nearly half of national emissions, systematic electrification could generate billions in carbon revenues, creating self-sustaining financial models transforming pollution burdens into economic opportunities. Implementation requires establishing dedicated carbon market authority, quantifying emission reduction potential across sectors, and developing verified carbon credit pipelines for largescale projects.

Track 2 involves comprehensive transportation transformation. Urban air pollution fundamentally reflects transportation systems dominated by individual vehicles. Sustainable solutions require dual strategies: integrated mass transit development and large-scale vehicle electrification, moving beyond the administrative approach of temporary vehicle bans.

Current Pakistani mass transit projects operate in isolation when there should be a seamless network of buses, metro lines and feeder services. The transition’s scale necessitates public-private partnerships.

Likewise, Pakistan’s electric vehicle policy needs to go beyond setting symbolic targets. Pakistan should pursue state-backed acquisition of complete EV production lines through CPEC 2.0, providing investment certainty while securing technology transfer and local assembly capabilities. Large-scale EV rollout promises cascading benefits, including significantly reduced fuel import bills, creation of high-skilled manufacturing jobs, and profound public health improvements. The Bank of Punjab’s financing agreements demonstrate financial sector readiness to support this transition.

Success requires national vehicle retirement age standards, targeting highly polluting older vehicles, enforcing fuel quality standards reducing sulphur content, and introducing robust and mandatory vehicle fitness testing.

Track 3 involves sectoral modernisation of agriculture and industry. Agricultural crop residue burning and outdated industrial processes require systematic modernisation rather than punitive approaches. The Punjab Agriculture Department launched subsidised ‘happy seeder’ technology in 2020, enabling direct wheat sowing into unburnt rice stubble, complemented by satellite-based monitoring for real-time burning detection. Research has shown that farmers using this technology can generate up to 20pc higher profits compared to those who burn stubble, while reducing greenhouse gas (GHG) emissions by 78pc per hectare.

Scaling-up requires comprehensive farmer support, expanded subsidised residue management machinery, farming incentives, and soil health education campaigns. Converting crop residue to bioenergy could meet 14pc of Pakistan’s energy needs while creating rural employment and additional income streams for farmers. Establishing collection and processing networks would generate an estimated 100,000 agricultural sector jobs while reducing burning by 60pc by 2030.

In the industrial sector, many plants continue using highly polluting fuels and processes. Solutions require mandatory transition to clean production technologies through phased equipment mandates combined with economic incentives, like tax credits and subsidised loans, for clean technology investments. Technology transfer partnerships with countries maintaining advanced environmental standards can accelerate this transition while building domestic technical capacity.

Industrial modernisation ensures Pakistani exports meet international environmental standards, protecting market access worth billions in textile, cement and steel exports, while reducing emissions by 40pc by 2030.

Smog diplomacy

Track 4 involves regional cooperation and ‘smog diplomacy’. Research published in leading scientific journals has demonstrated that air pollution in South Asia operates as an interconnected regional system. As such, domestic policies alone cannot address pollution sources that are fundamentally transboundary in nature, requiring coordinated regional approaches that match the scale of atmospheric processes.

Under the Institutional Framework Development, the Ministry of Foreign Affairs has been tasked with diplomatic engagement to address cross-border pollution impacts with India through ‘smog diplomacy’ by building on the 1998 Malé Declaration framework.

This requires establishing a South Asian Air Quality Council to coordinate policies, share monitoring data, and manage joint funding mechanisms.

Punjab’s smog war room provides a model for crisis management protocols that can extend to bilateral cooperation through sister-province agreements between Pakistani and Indian Punjab. Joint technical working groups would coordinate crop burning alternatives, industrial emission standards, and emergency response during severe pollution episodes.

Regular bilateral summits between provincial governments would address shared challenges independent of broader political tensions. Regional mechanisms supported by UN agencies and multilateral development banks can facilitate knowledge exchange through the underutilised regional environmental cooperation frameworks.

A proposed South Asian Clean Air Fund, to be capitalised at $5 billion through member country contributions, international development banks, and carbon market revenues, could finance crossborder monitoring systems, technology transfer programmes and joint pollution control projects.

Implementation roadmap

Pakistan’s transformation requires a carefully sequenced three-phase approach across all four tracks simultaneously. Phase-I (2025-26) focuses on foundation building by designating dedicated carbon market authority, securing manufacturing partnerships, developing integrated transit master plans, initiating agricultural technology subsidies, structuring industrial modernisation incentives, and creating bilateral air quality dialogue mechanisms with India.

Phase-II (2027-30) emphasises scaling and consolidation by deploying 2.5 million EVs annually through carbon credit financing, construcwting integrated transit systems, achieving 30pc reduction in crop residue burning, and implementing mandatory industrial emission standards with comprehensive technology transfer support.

The metrics of interest should be to achieve 40pc reduction in PM2.5 levels compared to 2024, generate $20 billion in reduced health and productivity costs, create 500,000 green jobs, and to establish Pakistan as the recognised regional powerhouse in clean air innovation and crossborder environmental cooperation.

The path forward is unambiguous. No other developing nation has attempted carbon market financing at this scale, integrated with comprehensive sectoral transformation and regional diplomacy. The proposed framework positions Pakistan as the architect of South Asia’s environmental future. When Punjab’s children breathe clean air by 2030, when Pakistani EVs export to global markets, and when carbon credits fund the nation’s green transition, the world will study Pakistan’s blueprint. This is not environmental policy. This, instead, is an economic strategy disguised as climate action.

The next five years will determine whether Pakistan emerges as a new player in South Asia’s clean air landscape, or remains captive to the reform inertia that has squandered every previous opportunity for national renewal.

The writer is a climate change and sustainable development expert.