Energy crisis as catalyst

IN September 2025, Prime Minister Shehbaz Sharif declared a climate emergency. Most ministries ignored it. The government lurched from one fiscal crisis to the next, eyes fixed on the IMF programme, ignoring the energy transition the country desperately needed. Then came March 2026.

The US-Israeli war on Iran closed the Strait of Hormuz, and the consequences for Pakistan were immediate and brutal. Prior to the announcement of the ceasefire, petrol had jumped by about 20 per cent in a week. LNG shipments had collapsed from around 12 a month to a trickle. The government had announced a four-day work week, closed schools, and told cricket fans to stay home. Inflation had spiralled, and political stability frayed. This should not be surprising. This is the price of inaction.

The climate emergency declaration was not merely an environmental statement: it was an economic one. Energy security, macroeconomic stability, inflation and climate resilience are the same problem wearing different faces. Pakistan had six months between the prime minister’s announcement and the outbreak of war to begin building structural buffers. It did not. What the government has offered since are ad hoc austerity measures and conservation campaigns — necessary, but narrow and unsustainable. School closures do not build nations. A four-day work week does not build an economy.

By August 2025, Pakistan had imported nearly 50 GW of solar panels; solar now accounts for around 20 to 25 per cent of total production. Citizens led this revolution, not government. And government responded by slowing solar adoption via taxes to protect grid inefficiencies. The PM declared a climate emergency on one hand and suppressed the climate solution on the other. This is the time to adopt a coherent, four-track strategy.

The climate emergency declaration was both an environmental and economic statement.

Accelerate the EV transition: With roughly 80pc of petroleum products consumed by transport, Pakistan’s oil dependence is fundamentally a mobility problem. This is not an energy emergency, but a transport emergency wearing an energy mask. Pakistan’s New Energy Vehicle Policy 2025-30 set in 2019 a target of 30pc electric vehicle sales by 2030, but it has barely moved. Worse, the government undermined its own policy objective by allowing commercial imports of used petrol cars.

The long-awaited revised NEV policy, under preparation for years, must be released immediately. Every week, it sits on a ministry table, Pakistan bleeds foreign exchange on petrol an electric fleet would not require. The world has changed, and we should now have stronger targets: at least 60pc electric sales by 2030, and public transport buses fully electrified in our five major cities within three years. China has surplus EV manufacturing capacity and competitive financing; a procurement deal through CPEC frameworks is viable and overdue. The NEV policy’s charging station targets must be tripled if electrification is to be viable at scale.

Promote battery-backed solar: From under one gigawatt of solar panel imports in 2018 to over 50 GW by early 2026, Pakistan’s energy transition is one of the world’s fastest consumer-led transitions. It drove a 40pc drop in oil and gas imports between 2022 and 2024, avoided $8-12 billion in import costs to date and could save a further $6.3bn this year alone. Lifetime savings from current installed capacity could exceed $100-180bn. That is a strategic asset of the first order. We know what the government did with it: it ignored that maintaining the preceding growth rate over five years would have taken installed capacity from around 33 GW to over 60 GW, potentially saving an additional $30-40bn in import costs by 2030. You do not fix a structurally broken grid by slowing down the solution that is replacing it.

Solar’s daytime strength is a liability at night without storage. I am among a growing number of people who have panels and batteries — riding out this crisis on stored sunlight. Battery imports must reach 8.75 GWh by 2030; that projection must become a policy target, not a market accident. Zero-rate GST on lithium-ion systems, extend investment credits for battery installation, and deploy concessional credit to incentivise transition.

Adopt freight efficiency: Diesel is the backbone of Pakistan’s freight economy, and trucking costs are feeding directly into food prices. Pakistan Railways freight handling has dwindled from 73pc to barely 2-3pc. It is not a railway failure but a deliberate, decades-long national logistics policy failure. It has left the country dependent on diesel trucks for every tonne that plies between its cities.

Pakistan’s largest cities lie along a single north-south corridor perfectly suited to rail freight. The lingering ML-1 railway upgrade is the single CPEC project with the greatest bearing on freight costs, diesel displacement and carbon emissions. The Planning Commission projects it could boost GDP by 2-3pc and raise freight capacity up to 34m tonnes annually. Accelerate it now, mandate bulk commodity movement to rail, and redirect bilateral capital towards railway electrification. The correction is overdue.

Redirect carbon levy: Pakistan is already collecting a carbon levy and spending virtually none of it on climate or energy security. Introduced at Rs2.50 per litre in the FY2025-26 budget, it increased to Rs5 the next year. The government collected a climate tax, spent it on general revenue, and then declared a climate emergency. The contradiction is staggering.

Pakistan should ringfence 100pc of carbon levy proceeds, govern it with a transparent oversight board and leverage it exclusively for i) strategic fuel reserves, ii) battery storage, iii) public transport electrification and iv) grid modernisation. That intention must become an earnest obligation, not gimmickry.

After all, Pakistan is not without agency. The solar revolution happened despite government policy, not because of it. Citizens made the rational choice when the state would not. The government’s task now is to catch up and formalise, scale and finance what Pakistanis have already begun building for themselves. The PM declared a climate emergency in September. The world handed Pakistan an energy emergency in March. They are the same emergency. The next six months can be different only if the government treats low-carbon development not only as an environmental aspiration but also as an economic and national security imperative.

The writer is a climate change and sustainable development expert.

Published in Dawn, April 9th, 2026