Building Climate Resilience through Policy, Planning, and Finance in South Asia

Policy, Planning, and Finance (PPF) are foundational pillars for embedding climate resilience into national development agendas. By integrating climate considerations into policy frameworks, development plans, and public financial management systems, countries can allocate resources effectively, reduce climate-related risks, and promote sustainable development.

Strong PPF frameworks facilitate climate-smart investments, enhance institutional capacity, and strengthen governance systems that support adaptation and mitigation measures. Through improved planning and financial systems, governments can mobilize resources for resilience and ensure that climate action aligns with national priorities and global commitments such as the Sustainable Development Goals (SDGs) and the Paris Agreement.

Over recent years, significant progress has been made in advancing PPF systems to address climate resilience:

• Climate Policy and Institutional Assessments: Comprehensive assessments were carried out to identify gaps and opportunities for integrating climate resilience into development planning and public finance systems.
• Guidelines for Climate-Resilient Policy and Investment Planning: Developed frameworks and guidelines that align climate resilience objectives with national and sectoral priorities.
• Climate Public Expenditure and Institutional Review (CPEIR): Introduced approaches to systematically track and monitor climate-related public expenditure across sectors.
• Capacity Development for Planners: Built institutional capacities at national and provincial levels for mainstreaming climate risks into public investment decisions and development plans.
• Decision-Support Systems and Analytical Tools: Designed tools to enable evidence-based decision-making and improve the integration of climate risk data into planning and budgeting processes.
• Climate-Resilient Investment Plans: Supported the preparation of investment plans across multiple sectors to enhance climate-smart infrastructure and improve access to international climate finance.

These interventions have strengthened the ability of governments to plan and allocate resources effectively for climate adaptation and mitigation, creating a foundation for sustainable and resilient growth.

The Guidebook on Accessing International Climate Finance

The Guidebook was developed for mobilizing external resources. It outlines access modalities for global funds (small to large funds), illustrates institutional eligibility requirements, and offers actionable recommendations for project developers and ministries. It is positioned as a capacity-building and strategy-alignment tool for aligning national priorities with international financing standards for government, private sector and civil society organizations. It promotes collaboration across sectors to leverage co-financing opportunities and strengthen funding applications. It serves as a practical reference and aims to accelerate climate finance readiness and support the implementation of Nationally Determined Contributions (NDCs) and adaptation plans.

Climate Budget Tagging in the Financial Accounting and Budgeting System of Pakistan

This publication represents a transformative shift in Pakistan’s public financial management system. It integrates climate expenditure classification directly into the federal budgeting framework and paves the way for evidence-based policy formulation, improved fiscal transparency, and alignment with the country’s Nationally Determined Contributions (NDCs), National Adaptation Plan (NAP), and Sustainable Development Goals (SDGs). While currently operational within the Finance Division at the federal level, its effective utilization depends on enhancing the capacity of Drawing and Disbursing Officers (DDOs), who are critical to accurate tagging and reporting.

Exploring Technical Assistance Needs for Pakistan through the Santiago Network on Loss and Damage.

This report identifies Pakistan’s critical technical assistance needs for addressing climate-induced loss and damage through the Santiago Network (SNLD). Pakistan faces severe risks from rapid-onset events (floods, heatwaves, cyclones) and slow-onset events (sea-level rise, glacial melt, desertification, biodiversity loss). Key gaps include limited early warning systems, outdated risk assessments, insufficient climate data infrastructure, and weak institutional capacity. The document outlines sector-specific and cross-cutting technical requirements such as enhancing forecasting, disaster management, resilient infrastructure, and financial mechanisms to bolster climate resilience. It urges Pakistan to formally communicate these needs to the SNLD to access expertise and resources, enabling effective adaptation and recovery strategies for vulnerable communities.

The District Adaptation Plans for Badin (Sindh) and Dera Ghazi Khan (Punjab) These Plans represent a critical effort to localize climate action and mainstream resilience at the sub-national level. Developed in close coordination with local governments and sectoral stakeholders, these plans offer spatially contextualized adaptation strategies tailored to the climatic vulnerabilities and socio-economic realities of each district. The DAPs provide actionable roadmaps for climate-resilient investments to climate-smart agriculture, integrated water resources management, disaster preparedness, and infrastructure, serving as replicable models for other districts in Pakistan.

Despite notable progress, the sector continues to face challenges that need to be addressed for long-term impact:

• Limited Technical Capacity: Many planning and finance institutions lack the technical expertise to apply climate risk data and advanced analytical tools in decision-making processes.
• Insufficient Coordination: Weak coordination between central planning agencies and sectoral ministries leads to fragmented climate budgeting and resource allocation.
• Data and Information Gaps: Limited availability of comprehensive climate and socio-economic data constrains evidence-based planning for climate investments.

Key lessons learned include:

• Incorporating CPEIR tools and climate-budget tagging mechanisms into public finance systems enhances transparency and facilitates systematic tracking of climate investments.
• Strengthening institutional collaboration across ministries is essential to align planning, budgeting, and sectoral strategies with climate resilience objectives.

Building on the progress achieved, the following steps are critical for institutionalizing climate resilience within PPF systems:

• Institutionalize Climate Budgeting: Expand climate budget tagging and integrate climate finance tracking into public financial management systems across all sectors.
• Strengthen Inter-Ministerial Coordination: Establish formal coordination mechanisms among planning, finance, and sectoral agencies to ensure integrated climate planning and implementation.
• Capacity Development: Scale up capacity-building programs for planners, financial managers, and policymakers on climate risk assessment, budgeting, and investment planning.
• Access to International Climate Finance: Develop bankable project proposals aligned with the requirements of global climate funds (e.g., Green Climate Fund, Adaptation Fund) to secure financing for resilience-building initiatives.
• Integrate Climate Risk Tools into Planning Frameworks: Embed climate risk assessment tools and decision-support systems into national and sub-national development plans to strengthen climate-informed decision-making.

Policy, Planning, and Finance are at the heart of climate-resilient development. By institutionalizing climate-sensitive budgeting, improving inter-agency coordination, and building technical capacity, South Asian countries can create strong governance systems for sustainable climate action. The integration of climate considerations into national development plans and financial systems will not only strengthen resilience but also ensure inclusive and equitable growth in the face of increasing climate challenges.