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ISLAMABAD: Federal Minister for Finance Muhammad Aurangzeb on Saturday urged reforms to global climate-finance mechanisms, saying the Green Climate Fund was mired in “bureaucracy” and the Loss and Damage Fund had made little progress since its launch four years ago.

Pakistan is among the world’s most climate-vulnerable countries, grappling with recurrent floods, heatwaves and rising adaptation costs that far exceed its domestic resources. The minister took up these issues while delivering his remarks via video link to COP30 in Belém, Brazil, where governments are debating climate finance, loss-and-damage funding and support for developing states facing mounting climate impacts.

“The Green Climate Fund, I do think we need to bring down the level of bureaucracy, both in terms of accreditation and the processes which can be simplified, and also with respect to disbursements and the Loss and Damage Fund,” he said in his virtual address.

The former is the UN’s main financing vehicle for developing countries to cut emissions and adapt to climate impacts, while the latter, created at COP27 in Egypt, aims to support vulnerable states facing climate losses they cannot avert or adapt to.

“I’m sure this is a big point of discussion in Belém,” he added. “It was Sharm El Sheik, where this, the whole discussion came up, and four years later, it [the Loss and Damage Fund] is still being operationalized. So, we need to think through all of this as international community as we go forward.”

Aurangzeb said Pakistan had established key policy and regulatory frameworks, including its national adaptation plan, climate prosperity plan and climate-finance strategy, but continued to face a substantial financing gap.

He welcomed recent support from the Asian Development Bank and the World Bank, noting that two components of Pakistan’s ten-year partnership program with the Bank directly target climate resilience and decarbonization.

The minister also highlighted Pakistan’s efforts to tap global capital markets for climate-linked funding, pointing out that the government hoped to issue its inaugural green Panda bond in the Chinese market before the end of the year.

Domestically, he said, work was under way to expand green sukuk and carbon-market initiatives.

“We are looking for technical support and assistance in terms of capacity building so that we can come up with investable, bankable projects,” Aurangzeb said, adding that Pakistan required help to strengthen reporting systems and adapt successful models from other jurisdictions.

Calling climate change an “existential issue,” he said Pakistan’s economic stability and its long-term growth potential were inseparable from its ability to adapt to severe climate risks.

“The sustainability and the full potential realization of this country will only come through when we deal with existential issues with a real sense of urgency,” he said.