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Pakistan's first ever national carbon credit policy
Working hand in hand with civil society and local stakeholders, Transparency International Pakistan has played a pivotal role in shaping the country’s first-ever national carbon credit policy, ensuring that transparency and accountability are embedded at its core.
The potential of carbon markets to drive climate action in Pakistan has long been accompanied by concerns over transparency, equitable access, and effective governance. Without appropriate safeguards, emerging carbon finance mechanisms risk reinforcing existing inequalities or becoming vulnerable to mismanagement.
Recognising this, environmental experts, civil society organisations, and local stakeholders have consistently advocated for a national framework to ensure Pakistan’s carbon markets are not only functional but also fair, transparent, and inclusive. The challenge was significant: Pakistan lacked a coherent national policy on carbon credits, and efforts to establish one risked being steered by narrow interests if transparency and accountability were not built into its foundations from the start.
In 2024, Pakistan reached a major milestone with the launch of its first-ever National Guidelines on Trading in Carbon Markets, a strategic step toward engaging with global carbon markets and attracting climate finance to support mitigation efforts. Transparency International Pakistan contributed to this process by submitting a set of recommendations focused on strengthening transparency, accountability, and environmental integrity in line with global best practices.
“The integration of transparency, accountability, and equitable benefit-sharing into carbon market mechanisms is essential to ensuring that carbon finance operates with integrity,” said Raima Mehmood, Policy and Research Coordinator at Transparency International Pakistan. “These safeguards are critical for preventing misuse, addressing power imbalances, and ensuring that local communities are not excluded from the benefits of climate finance.”
Drawing on global expertise from across the Transparency International movement, including insights from the Integrity Risks in Carbon Markets in Mozambique report, the organisation's chapter in Pakistan provided a comprehensive set of anti-corruption recommendations. These included measures for equitable benefit-sharing, robust monitoring systems, and transparent public disclosure - all designed to ensure that carbon finance delivers real climate benefits without being derailed by vested interests or opaque practices.
In the follow up to the policy adoption, Transparency International Pakistan actively contributed through consultation leading up to the development of rules for carbon markets. Their advocacy ensured that accountability mechanisms were not merely add-ons, but integral components of the final framework of implementation.
As a result, Pakistan’s carbon market policy now includes provisions to ensure integrity, protect public interest, and foster inclusive participation. This reflects a shift not only in how climate finance is managed, but in how environmental governance is understood, linking climate ambition with institutional integrity.
The Ministry of Climate Change initiated the drafting of detailed carbon market rules, once the policy was adopted. Transparency International Pakistan provided technical input to this process, particularly on the application of equitable benefit-sharing mechanisms, ensuring that the principles embedded in the policy are meaningfully implemented.
