A high-level panel discussion on decentralizing climate action was held on Saturday at the Institute of Business Administration, Karachi, during Day 3 of Climate Week Karachi 2026. The session focused on strengthening the role of local governments in climate finance.
Titled “Decentralizing Climate Action: Unlocking Local Governments’ Role in Climate Finance,” the session was jointly organized by the Centre for Business and Economic Research (CBER) at IBA and Transparency International Pakistan, with support from the Climate Action Center.
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The discussion brought together senior policymakers, economists, governance experts, academics, and climate finance specialists. Speakers examined how climate resilience in Pakistan can be improved by empowering cities and districts with direct access to climate finance.
Advisor to the Finance Minister Khurram Schehzad emphasized that climate resilience is built at the local level, not through global pledges alone. He said climate governance must move closer to communities that face floods, heatwaves, and food insecurity.
He stressed that Pakistan must shift from policy documents toward practical and scalable climate financing solutions. These should support households, farmers, micro and small businesses, and local governments in adapting to climate risks.
Khurram Schehzad highlighted five key pathways to strengthen climate finance access. These included climate-smart agricultural loans for small farmers, clean energy financing for households and businesses, and affordable climate-resilient housing solutions.
He also pointed to results-based financing tools such as social impact bonds and risk-sharing mechanisms. According to him, digital public infrastructure can help reduce risks for banks and unlock last-mile climate investment.
Panelists agreed that local governments are central to climate action because climate impacts are felt directly within cities and communities. They stressed that resilience must be built where people live and work.
Three major priorities emerged from the discussion. The first was empowering local administrations to directly access climate finance through decentralized approval systems and better use of local climate data.
The second priority focused on bridging governance and planning gaps. Speakers highlighted the need to simplify the PC-1 process for small-scale climate projects so community-based initiatives can be implemented faster.
The third priority was transforming governance reforms into bankable climate projects. Experts discussed innovative financing tools such as blended finance, the National Climate Resilience Fund, and nature-based solutions including mangrove-linked carbon credits.
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Participants also highlighted two major challenges for Pakistan’s climate finance roadmap. One was the rapid shift toward solar energy, which requires structured de-risking to support community solar projects. The other was the need for quick-access emergency funds during climate disasters.
IBA Karachi reaffirmed its commitment to supporting evidence-based climate policymaking through research and policy-relevant outputs.
The session concluded with a call for stronger collaboration between government, academia, civil society, and development partners.
