Pakistan Introduces Climate-Focused Subsidy Tracking with Form-III C

Strategic Insights -

Pakistan has taken a significant step towards climate accountability with the introduction of Form-III C, a new form designed to track and classify subsidies based on their environmental impact. This move is part of the country's climate-focused fiscal reforms, building on the government's previous efforts to tag budget allocations by climate relevance. The new form will be used in the upcoming 2025-26 federal budget and aims to provide a more transparent and accurate picture of public spending's climate impact. By categorizing subsidies according to their contribution to climate goals, policymakers can better direct funds to projects that make the most impact.

Key Takeaways:

  • Form-III C will be used to track and classify subsidies based on their environmental impact in the 2025-26 federal budget.
  • The form will require departments to provide details such as sector type, cost centers, and the nature of the subsidy.
  • Subsidies will be categorized into five categories: directly favourable, indirectly favourable, neutral, mixed, or potentially unfavourable in terms of climate impact.
  • Support for crop insurance and resilient infrastructure will be tagged as climate adaptation, while clean energy and electric vehicles will be tagged as climate mitigation.
  • The new system aims to improve transparency and align with Pakistan's commitments under the IMF's Extended Fund Facility.
  • The form must be submitted by Principal Accounting Officers by May 30, 2025, using guidance from the Finance Division.
  • The new classification system will help policymakers direct funds to projects that make the most impact on climate goals.

Statistics:

  • 2025-26: The federal budget in which Form-III C will be used to track and classify subsidies.
  • 5: The number of categories for classifying subsidies based on their environmental impact.
  • 2: The types of climate goals to be addressed through subsidy tagging, namely climate adaptation (e.g., crop insurance, resilient infrastructure) and climate mitigation (e.g., clean energy, electric vehicles).
  • May 30, 2025: The deadline for submitting Form-III C by Principal Accounting Officers.

Sources:

  • [No specific sources are mentioned in the original text, but the information likely comes from official government announcements or press releases.]