Pakistan has called for climate vulnerability and disaster exposure to be considered when public funds are distributed across regions, as policymakers debate how fiscal systems can respond to the growing costs of climate change.

Speaking at the first Gathering of Intergovernmental Fiscal Institutions in Manila, Senator Syed Waqar Mehdi said climate change, natural disasters, water insecurity and environmental degradation were creating increasing financial pressures, particularly for vulnerable regions.

He said intergovernmental financial transfers should take into account differences in climate vulnerability, exposure to disasters and environmental responsibilities, arguing that regions facing greater climate risks require stronger financial support.

Mehdi pointed to Pakistan's experience with the devastating 2022 floods, as well as recurring heatwaves and droughts, while calling for greater access to climate adaptation finance, technology and capacity-building support.

He also called for more predictable and transparent climate financing, stronger climate-budget tagging and greater parliamentary oversight of how climate-related resources are allocated and spent.

Climate risk and public finance

The remarks highlight a growing policy question for climate-vulnerable countries: whether conventional systems for distributing public funds adequately reflect the unequal costs created by extreme weather and environmental degradation.

Regions repeatedly affected by flooding, drought, water stress or extreme heat can face higher spending requirements for reconstruction, resilient infrastructure, public health, water management and disaster preparedness.

Mehdi argued that fiscal policy should therefore support both economic equity and climate resilience.

Pakistan has already begun incorporating climate considerations into public financial management. Federal climate-budget tagging is used to identify and track climate-related expenditure, while climate-risk screening is being expanded within public investment planning.

Fiscal equity also raised

Senator Abdul Qadir, who also represented Pakistan at the gathering, focused more broadly on fiscal equity and said public resources should be distributed in a fair, predictable and transparent manner.

He called for greater fiscal devolution to local governments and stronger accountability in public finance, while highlighting the Senate's role in representing Pakistan's provinces and overseeing equitable resource sharing.

The Pakistani delegation, led by Abdul Qadir and including Waqar Mehdi, travelled to Manila for the two-day conference held from September 28 to 29. The gathering brought together parliamentarians, fiscal institutions, economists and policymakers to discuss intergovernmental fiscal relations and inclusive economic development.

For Pakistan, the discussion comes as climate finance increasingly extends beyond international funding negotiations to questions about how domestic budgets and fiscal transfers are structured.

Linking public funding more closely with climate vulnerability could provide disaster-prone regions with greater resources for adaptation and resilience. Such an approach would also require reliable climate-risk data, transparent allocation criteria and effective oversight of how climate-related funds are ultimately spent.