Every Year, Same Old Fight

As Pakistan prepares to celebrate another Independence Day, standard national rituals will once again take center stage. Flag-hoisting ceremonies, parades, and patriotic broadcasts will dominate the public square. Yet, nearly eight decades after gaining political freedom, a quiet but deeply uncomfortable question persists: can a nation truly consider itself sovereign if its collective mind remains dependent on the ideas, technologies, and scientific outputs of others? ​True independence has never been merely a matter of drawing borders, raising flags, or maintaining standing armies. History teaches a relentless lesson: physical sovereignty is only a shell. It requires intellectual and scientific self-reliance to give it genuine substance and endurance. Without a thriving culture of critical inquiry, rigorous research, and technological innovation, political freedom gradually degrades into a ceremonial phrase. ​Today, Pakistan faces a severe, structural crisis within its higher education system—one that poses a direct threat to its national sovereignty and economic survival. Not a single Pakistani university currently features among the top 200 or 300 institutions in major global academic rankings, such as QS or Times Higher Education. This is far more than an embarrassing statistic for university administrators. It is an alarm bell signaling deep vulnerabilities in national security, economic resilience, and the country’s collective capacity to navigate a complex world. ​We live in an era where global power and national influence are defined by knowledge economies, artificial intelligence, quantum computing, and rapid technological innovation. Meanwhile, Pakistan’s universities are collapsing under the combined weight of severe budget cuts, outdated curricula, heavy-handed bureaucratic interference, and deeply flawed research incentives. Unless our academic institutions move away from acting as simple credential-issuing factories and transform into centers of genuine learning and problem-solving, Pakistan’s economic and political sovereignty will remain precarious. A country that relies permanently on foreign intellect, imported technology, and international financial institutions to address its core domestic problems cannot claim to be truly self-reliant. ​This decline is not a matter of subjective opinion; it is confirmed by hard empirical evidence. Over 250 public and private universities operate across Pakistan, yet the state allocates a meager 0.24 to 0.28 percent of its Gross Domestic Product (GDP) to higher education. This represents a small fraction of the 2 percent minimum recommended by UNESCO for developing nations attempting to build sustainable economies. Regional peers made strategic investments in research and technology decades ago, turning their universities into powerful engines of industrial growth. In contrast, persistent funding cuts in Pakistan have left public-sector universities financially paralyzed, with many administrators openly struggling to pay staff pensions or procure basic laboratory chemicals and equipment. ​Even more damaging than the financial deficit is the systemic decay in research quality. While university faculty publish thousands of papers every year to meet promotion targets under the Tenure Track System, the vast majority of these publications carry little to no global impact or citation value. A desperate chase for publication numbers, driven by artificial metrics and a reliance on low-tier journals, has fostered a superficial academic culture disconnected from real-world application. Our university research rarely addresses the pressing structural challenges facing the nation, whether in climate adaptation, agricultural productivity, public health, water management, or industrial manufacturing. ​The most tragic consequence of this intellectual and institutional stagnation is the unprecedented wave of brain drain draining the nation’s potential. According to official emigration statistics, over two million educated and skilled young Pakistanis—including doctors, software engineers, data scientists, chemists, and academics—have left the country in recent years. They are not emigrating simply in pursuit of higher salaries; they are fleeing a system characterized by political nepotism, lack of merit, poor infrastructure, and a hostile environment for creative thought. When a state fails to retain its best minds, it surrenders its future. Universities continue to churn out hundreds of thousands of graduates annually, but a vast proportion remain unemployable because their education has failed to equip them with critical thinking skills or modern technological competencies. Without a functional, collaborative link between universities, local industry, and government policymakers—the classic Triple Helix model—talks of economic self-reliance remain empty political rhetoric. ​Reclaiming intellectual sovereignty requires a candid national assessment and decisive, structural policy changes. First, state funding for higher education must be incrementally raised to at least 1.5 percent of GDP over a defined roadmap. Crucially, at least half of these new funds should be explicitly ring-fenced away from brick-and-mortar civil construction and directed toward modernizing scientific laboratories, subscribing to international scientific databases, and establishing dedicated national centers for artificial intelligence, biotechnology, renewable energy, and cybersecurity. ​Second, university governance requires immediate, radical overhaul. The Higher Education Commission and individual university senates must be insulated from bureaucratic red tape and political appointments. Vice-Chancellors and senior academic leaders should be selected through transparent, merit-based international searches, prioritizing proven scientific achievement and visionary management over political connections or administrative seniority. ​Third, the criteria for evaluating faculty performance must be completely overhauled. The current practice of rewarding sheer publication volume should be replaced with a system that prioritizes research quality, international citations, industrial patents, technology transfers, and solutions that solve tangible domestic problems. ​Finally, Pakistan must systematically engage its vast academic diaspora. Rather than lamenting brain drain, the state should build a structured “Brain Gain” program. By offering competitive joint research grants, flexible digital teaching platforms, and adjunct faculty positions, Pakistan can enable its top scholars abroad to transfer cutting-edge global science back into domestic universities without requiring them to relocate permanently. ​Patriotism in the twenty-first century cannot be measured by emotional slogans, ceremonial rallies, or flag-hoisting displays. It requires building objective competence in science, technology, and critical thought. If our universities fail to become spaces of innovation, inquiry, and problem-solving, Pakistan will remain perpetually dependent on foreign aid, external loans, and imported knowledge. Modern national defense is built not only along physical borders, but within classrooms, research laboratories, and libraries. Reforming higher education is not a luxury or a secondary policy goal; it is the single most logical path toward securing a dignified, sovereign, and prosperous future for the nation.

For more than a decade, the global debate over critical minerals has focused almost entirely on mining and extraction. Western policymakers, multinational mining companies and international financial institutions have invested billions of dollars in securing mineral reserves across Africa and Latin America. From cobalt mines in the Democratic Republic of Congo to the Lithium Triangle of South America, the prevailing belief has been simple: control the mines and secure the future of the green energy transition. However, this overwhelming focus on extraction overlooks a fundamental reality of modern industrial power. In today’s world, strategic independence is not achieved simply by digging raw minerals out of the ground. True industrial strength lies in refining those raw materials into high-purity, battery-grade and industrial-grade minerals through advanced chemical processing. It is at this critical processing stage, often referred to as the “processing bottleneck,” that China has established an extraordinary and nearly unmatched global dominance. The Mining Illusion and China’s Refining Monopoly Understanding why Western efforts to reduce dependence on China continue to struggle requires recognising the crucial difference between mining and refining. Raw lithium extracted from Australian hard-rock mines or South American brine deposits cannot be used directly in electric vehicle batteries. It must first undergo complex chemical processing to produce lithium hydroxide or lithium carbonate with a purity of 99.9 percent. The same applies to rare earth elements, cobalt, nickel and graphite. Without refining, raw minerals have little value for advanced technology or defence industries. This is where China’s true strength becomes evident. While the country’s share of global mining production is relatively limited, it dominates global refining capacity. China currently refines about 35 percent of the world’s nickel, between 50 and 70 percent of global lithium and cobalt, and nearly 90 percent of all rare earth elements. It also controls virtually 100 percent of the global market for spherical graphite, a key material used in battery anodes. This creates a major strategic challenge for Western economies. Even if companies in the United States, Europe or Australia develop new mines, much of the extracted material still has to be shipped to China for chemical processing. As a result, many attempts to bypass China ultimately continue to strengthen its refining ecosystem. The Structural Foundation of China’s Success China’s refining dominance is neither accidental nor simply the result of low labour costs. It reflects more than three decades of consistent industrial planning and state-backed investment. During the 1990s and early 2000s, many Western economies shifted heavy industries overseas to reduce costs and meet stricter environmental regulations. At the same time, China recognised that chemical refining would become the foundation of future technological leadership. Through successive five-year development plans, Beijing invested heavily in large-scale refining facilities, specialised metallurgical universities and low-cost energy infrastructure. Decades of research enabled Chinese engineers to master technologies capable of refining even low-grade ores efficiently and at relatively low cost. China also accepted the significant environmental costs associated with refining. Processing rare earth minerals produces toxic waste, radioactive by-products and hazardous chemicals. While strict environmental regulations and public opposition have made large-scale refining projects difficult in North America and Europe, China accepted these environmental challenges as part of its long-term national strategy. Why the West Cannot Easily Replicate China’s Model Concern over potential Chinese export restrictions has encouraged the United States and its allies to invest in domestic refining infrastructure. However, matching China’s industrial ecosystem remains an enormous challenge. Several major obstacles stand in the way First, time. Building a modern refining facility in Europe or North America typically takes seven to twelve years because of environmental approvals and legal procedures. In China, similar projects can often be completed in less than two years. Second, cost. Chinese refineries benefit from economies of scale, low electricity prices and extensive government support. Western facilities face much higher labour, environmental and operational expenses. Without strong financial guarantees, private investors remain reluctant to finance projects that could later become uncompetitive if China lowers prices. Third, skilled manpower. Decades of industrial outsourcing have reduced the number of mining metallurgists and chemical engineers in many Western countries. Meanwhile, China continues to produce thousands of specialised engineers every year, maintaining a steady pipeline of technical expertise. Strategic and Geopolitical Consequences China’s refining advantage extends far beyond electric vehicles and consumer electronics. It has become a critical factor in global defence and national security. Modern military equipment—including guided missiles, radar systems, nuclear submarines and fifth-generation fighter aircraft such as the F-35—depends heavily on refined rare earth magnets and processed critical metals. In the event of a military crisis involving Taiwan or the South China Sea, China would not necessarily need to block access to global mines. Instead, it could simply restrict exports of refined minerals. Such a move could disrupt Western defence manufacturing within months, even if friendly nations continued producing raw mineral resources. The global competition over critical minerals, therefore, is no longer centred solely on who owns the mines. It increasingly depends on who controls the refining process—the stage where China has built its strongest and most strategically important advantage.

Saudi Arabia, Pakistan and Türkiye have signed the Makkah Joint Defence Agreement on 7 August in 2026 and this signing is far more significant than what ceremony and symbolism it carries. Signed in Makkah by Saudi Crown Prince Mohammed bin Salman, Turkey’s President Recep Tayyip Erdoğan and Pakistani Prime Minister Shehbaz Sharif, the deal provides that an armed attack against any one of the three countries will be considered as an attack against all the three countries.  But its sincerity was greatest not in the denouncing of a specific enemy but in an understanding of the strategic environment which has produced an enemy. It is not a moment for defining the agreement as an “anti-Iran, anti-Israel, anti-American pact. There’s no mentioning of any of these states being specifically called out as the target state. Instead, the agreement seems to be part of a larger strategic pivot amid a more complicated security landscape in the Middle East. Saudi Arabia, Türkiye and Pakistan have divergent agenda in foreign-policy, but all three countries have an interest in lessening strategic vulnerability while gaining more ‘room for manoeuvre’. For the capital of the Hejaz, the key strategic priority is defending its territory, which contains important military bases, energy resources and trading lines, set in a much-changing environment. Saudi Arabia has close relations with Washington, but its foreign policy in recent years has been firmly founded on a strong sense of need for building more than one strategic partnership with the outside world. As such, the Makkah deal is more a tool for “strategic hedging” and less a statement of opposition to a specific regime. The participation of Türkiye is especially significant. While Ankara is a NATO country, it is also developing an autonomous regional foreign policy. In particular the dealings of its government with Iran, Russia, the Gulf monarchies, Europe, and the United States make it difficult to pigeonhole current Turkish strategy into a neat geopolitical box. The importance of this in the context of Türkiye’s presence in the country is such that shooting multi-alignment rather than sectarian or bloc confrontation. On the other hand, Pakistan has years of defence cooperation with Saudi Arabia and a growing institutionalized strategic ties with Türkiye. The deal provides Islamabad a chance to take the existing military cooperation into a larger strategic partnership. However, Pakistan needs to prudently guard its ties with the neighbouring country Iran as well as its ancestral ties with Saudi Arabia and also protect and carry forward its strategic partnership with China. The most sensible thing for Pakistan to do, then, is not bloc politics but calibrated multi-alignment. Particularly noted is Egypt’s non-participation in the defence pact, but it is too early to draw a clear conclusion that the country had been denied its membership due to the influence of any other country, including the United States and Israel. Indeed, Egypt has been continuing its strong partnerships with Saudi Arabia, Türkiye and Pakistan within the framework of R4. In June 2026, all four countries’ foreign ministers met in Cairo and reiterated their efforts in the realm of consultation and regional stability and coordinated diplomacy.  This isn’t necessarily a foreign veto in action, then, that Egypt is not a party to a certain military arrangement, but could be partly because of its own strategic decisions. The same level of skepticism should be applied towards the general pronouncements about Israel. As Türkiye’s rival relationship with Tel Aviv and the Saudi Arabia’s major role in the Arab-Israeli conflict weighs in, Israel will increasingly be considered a part of the “strategic equation” of the region. However, to date there is no visible evidence that the Makkah agreement was essentially a plan against Israel. Likewise, any potential Pakistani naval base at Pasni or the potential major shift of Pakistan’s maritime strategy should be viewed currently not as policy, but as potential options. The rising significance of geography at sea is much more evident. National security is entangling in increasing ways with the Arabian Sea, the Gulf of Oman, the Red Sea and network of commercial and energy corridors. Nowadays, ports and shipping routes are not just economic infrastructure, but strategic assets, in a world of geopolitical dynamics and fragile supply networks. This geographical locational aspect highlights the significance attributed to Pakistan as going beyond its geographical limelight in geography. Chances are on the rise that China will play a key role in this new order. Beijing has already got noticeable economic presence in Pakistan and the Gulf countries, and importantly, it has built a long-term strategic presence in the Indian Ocean via the Belt and Road Initiative and CPEC. However, China has tended towards more flexible economic and diplomatic ties rather than military alliances. Saudi-Türkiye-Pakistan cooperation thus puts Beijing in a stronger position to maintain room for manoeuvre within the new framework without having to join it formally. The emerging picture is rather not that of a straightforward American power-substitution than one of an American power-displacement. Instead, the Middle East seems to be shifting towards a more pluralist and networked security configuration, in which governments have multiple relations with rival entities at the same time. Saudi Arabia can cooperate with the US and work towards closer ties with Pakistan and Türkiye; Türkiye can be in NATO and yet have a policy of its own in the region; Pakistan can have closer relationship with China, and Saudi Arabia and Türkiye; and at the same time take part in the dialogue between Pakistan and Iran and the West. After signing the Makkah agreement, its ultimate effect will be determined. Though it might turn into a regular framework of intelligence sharing, joint exercises, defence production and operational co-ordination it could serve as a lasting centrepiece of regional security. Its impact will be more limited, if it is kept largely declaratory. But at this time the most credible inference is that the Makkah pact is far from being an alliance against a common enemy but rather a strategy for the breakdown of one

Shah Abdul Latif Bhittai was one of the most multifaceted poets of the subcontinent. The scope of his poetry covers various areas such as peace, humanity, humility, spirituality, patriotism, patience, struggle, and many other important aspects of human life. The light of his poetry reaches the minds and souls of people belonging to different walks of life. Latif was born in a period when Persian was the official language and was also the language of poetry and other means of expression. However, he broke the chains of tradition, put aside the fear of social conventions, and used Sindhi instead of Persian as the medium of his poetry. His narrative reinforces the idea that one should prefer native and indigenous languages to foreign ones, because one’s identity and cultural association are linked with indigenous languages. He does not mean to disrespect Persian; rather, he intends to reinforce the significance of native languages. Patriotism was one of the important themes of Latif’s poetry. Sur Marvi is a testament to his inner feelings about the homeland and the deep love attached to it. According to the story, when Marvi was allegedly kidnapped by Umar, the ruler of the time, and brought to his grand palace, she rejected the luxuries and comforts of the palace. Instead, she requested Umar to return her to Malir, her homeland. Marvi tells Umar that if she dies in imprisonment, her dead body should be sent back to her beloved parents, ancestors, and the land of Malir. Even after her demise, reaching her homeland would bring comfort and peace to her soul. She wishes to be buried among the fragrant herbs and plants of her beloved land. This symbolises love, simplicity, and attachment to the homeland and its people. It shows that despite achieving all worldly luxuries and privileges, a person with a true conscience desires to return to their native land. For Latif, love for the homeland is more than a feeling or a sense of belonging. It is an attachment to one’s identity, culture, and indigenous roots. Therefore, Marvi does not care about worldly luxuries but desires to return to Malir, which may be simple but possesses natural beauty, pure love, and the affection of relatives and fellow beings. For Marvi, her homeland Malir is superior and matchless. In Sur Sarang, Latif discusses rain and the prosperity that follows rainfall through agriculture, irrigation, and the grazing of domestic animals and livestock. Latif describes Thar as a thirsty land that has always longed for rain and showers because the sustainability of Thar depends upon rainfall. The dark clouds over Thar bring excitement and happiness, not only to the poor people but also to their livestock. For the rain-thirsty region of Thar, rain indicates the hope of prosperity. After rainfall, lands are cultivated, animals are kept in homes, and people experience prosperity. This reflects the deep association between humans and nature and shows how people keep high hopes from natural blessings such as rain. Latif’s poetry does not only confine itself to love, peace, and patriotism; patience, humanity, self-surrender, and contentment with minimum means are also significant themes of his poetry. He emphasises the purity and piousness of the inner soul and encourages people to sacrifice worldly desires to elevate their inner selves. During the British era, many British officers posted in Sindh recognised the greatness of Shah Abdul Latif’s poetry and paid tribute to him. Writers and scholars such as H.T. Sorley considered him one of the great poets of the world. Through their contributions, they tried to promote and spread Latif’s message of love, peace, humanity, brotherhood, and tolerance. They observed that although Latif’s poetry apparently covers regional issues and feelings, its thoughts and expressions are universal and comparable with the works of internationally recognised poets. While talking about the concept of the Lord, Latif explains that apparently there seems to be one palace having hundreds of thousands of doors and countless windows. Wherever one looks, one can see the presence of the Lord. This indicates that God is omnipresent and can be seen through different forms of His creation and symbols. One of the fundamental aspects of Latif’s poetry is real love and the approach towards the Creator. According to Latif, the initial step to achieve this elevated spiritual status is to become humble, submissive, caring, and kind towards people living on earth. He believes that in order to have access to God, one has to brush aside worldly desires and become humble and devoted. His poetry also contains messages of hope, patience, courage, and adventure. Latif says that those who have the courage and determination to cross rivers of difficulties and hardships will ultimately reach their destination. In his poetry, the river symbolises obstacles and difficult situations that a person faces while struggling to achieve success. Those who are brave enough to face the horrifying waves of difficulties can ultimately cross the river and achieve their goals. Latif also emphasises avoiding excessive desires of the material world. According to him, the way to spiritual elevation is to remain humble, kind, and caring towards the creatures of the Lord. His poetry teaches people that life is temporary and that one must play one’s role positively in this world to achieve success in the spiritual world. Sur Samundi is another important chapter of Latif’s poetry. In this Sur, Latif depicts the life of marine traders, their economic struggles, social issues, and the feelings of their loved ones when these sailors travel through deep seas and remain away from their homes for many months. In this chapter of his poetry, Latif observes that people of the olden days were involved in trade and commerce and lived prosperous lives. These mariners travelled to far off areas and traded various valuable items, including diamonds, pearls, and jewels. They left the comforts and luxuries of their homes because they preferred trade and adventure to a comfortable life. Latif not only highlights the success and struggles of these traders but also

By Augustine Nasim Gill The debate over new provinces or smaller administrative units in Pakistan should not be reduced to maps, language, identity, or political representation. The central question should be whether new administrative units will improve governance, bring public services closer to citizens, strengthen revenue collection, reinforce the rule of law, and restore public confidence in the state. Many countries have improved administrative performance by transferring authority from the center to states, regions, districts, and local governments. Yet these experiences have not all been equally successful. Where political authority was matched by adequate financing, competent administration, credible elections, the rule of law, and strong oversight, results generally improved. Where governments merely created new boundaries, assemblies, and ministries while corruption, patronage, and weak institutions remained unchanged, costs increased without transforming citizens’ lives. A Basic Distinction Must Come First Creating new provinces and genuinely devolving power are not the same thing. Successful decentralization has at least four dimensions: Four Essential Pillars Political authority: Local and regional governments must be created through regular, free, and fair elections. Administrative authority: They must have genuine authority to manage departments, appoint qualified personnel, and hold officials accountable for performance. Fiscal authority: Their responsibilities must be matched by revenue powers, a predictable share of national taxes, grants, and budgets. Legal and institutional authority: Their powers must be protected by the Constitution or strong legislation so that federal or provincial governments cannot abolish them at will. Why Smaller Administrative Units Can Succeed Smaller, empowered units bring government closer to citizens. Residents of remote districts are less likely to travel hundreds of kilometers to a provincial capital for matters involving land, education, health, policing, courts, or development projects. Regional governments also understand local conditions more clearly. The coastal areas of Balochistan, the agricultural districts of southern Punjab, a major metropolis such as Karachi, and the mountainous or tribal areas of Khyber Pakhtunkhwa do not face identical challenges. A single policy designed in one provincial capital is often unable to respond effectively to such diversity. Smaller units can also increase political accountability. Citizens can more clearly observe the performance of their chief minister, ministers, mayors, district leaders, and civil administration. This benefit, however, appears only where elections are credible, information is open, and oversight institutions are independent. 1. Germany: Shared Powers, Shared Taxes, and Fiscal Equalization Germany is a federal country composed of sixteen states, known as Länder. Each state has its own constitution, parliament, and government, and enjoys substantial autonomy over its internal organization. The federal government is responsible for national defense, foreign policy, currency, and broad national legislation. The states play central roles in education, policing, culture, public administration, and the implementation of many laws. Municipal governments provide water, sanitation, local transport, urban planning, and many daily services. Major taxes are not retained exclusively by the federal government. Personal income tax, corporate income tax, and value-added tax are shared among the federal government, the states, and, in some cases, municipalities according to established rules. A fiscal equalization system then narrows the gap between wealthier states and those with weaker revenue capacity. Germany’s success is not simply the result of having sixteen states. It rests on clearly defined responsibilities, a strong tax administration, judicial oversight, a professional civil service, and a predictable equalization system. Lesson for Pakistan: Before new provinces are created, the country must decide how income tax, sales tax, customs duties, natural-resource revenue, property taxes, and other revenues will be divided. A permanent, transparent, and publicly understood formula is essential. 2. Spain: Regional Autonomy, Public Services, and Different Fiscal Models Spain is composed of seventeen autonomous communities. These regional governments exercise wide authority over health, education, social services, and regional development. Most regions receive a share of national taxes, limited authority over certain taxes, and equalization grants. The Basque Country and Navarre have broader tax-collection powers: they collect most taxes within their territories and then transfer an agreed contribution to the central government for national services. Regional government strengthened education, health services, and local identity, but Spain has also faced regional debt, fiscal imbalances, and separatist political movements. The lesson is that autonomy is not only a financial issue; national identity, constitutional boundaries, and commitment to the shared state also matter. Lesson for Pakistan: New units should not be designed solely around language. Administrative efficiency, population, economic viability, public consent, and national cohesion must all be considered. 3. Poland: Phased Reform, a Three-Tier System, and Local Development Poland did not devolve authority in a single step after the end of communist rule. Municipal self-government was restored in 1990, and a three-tier system was established in 1998-99: the municipality (Gmina), the county or district (Powiat), and the region (Voivodeship). Municipalities became responsible for water, sanitation, local roads, primary education, and local development. Districts managed services that were too large for one municipality but too limited for an entire region. Regional governments took responsibility for economic development, regional planning, and the management of European development funds. The reform succeeded because it was phased, local institutions were prepared, elected representatives were trained, professional administrations were developed, budgets were transferred, and responsibilities were defined. The continuing challenge is that not every municipality or district has equal administrative capacity. Some smaller units remain weak in planning, data, financial management, and specialist staffing. Lesson for Pakistan: Rather than creating many provinces overnight, Pakistan should begin with administrative pilots, stronger districts, digital systems, training, and independent audit in selected areas. 4. France: Gradual Decentralization from a Centralized State France was historically a highly centralized state, but beginning in the 1980s it gradually transferred authority from the central government to regions, departments, and communes. Regional governments manage economic development, transport, and some education and training functions. Departments play major roles in social welfare, certain roads, and local services, while communes provide day-to-day municipal services. Small municipalities often cooperate through joint institutions to manage water, waste, transport, and territorial planning. France’s challenge has been that responsibilities across different layers sometimes overlap or remain unclear,

Climate change is no longer solely an environmental concern, it has become one of the defining economic and trade challenges of the twenty-first century. Around the world, governments are increasingly using market-based mechanisms to reduce greenhouse gas (GHG) emissions while maintaining industrial competitiveness and economic growth. Among these mechanisms, the Emissions Trading System (ETS) has emerged as one of the most effective policy instruments. According to the World Bank’s State and Trends of Carbon Pricing 2026, there are now 87 carbon pricing instruments operating globally, including emissions trading systems and carbon taxes, covering nearly 30 percent of global greenhouse gas emissions. These instruments generated over US$107 billion in public revenues in 2025, demonstrating that carbon pricing has evolved from an environmental policy into an important pillar of economic and fiscal governance. In the case of Pakistan, one that is most vulnerable to climate change, the discourse & discussion on emissions trading has become increasingly pertinent. While Pakistan contributes less than one percent of global greenhouse gas emissions, it remains among the nation’s most severely affected by climate-induced disasters. The catastrophic floods of 2022 alone caused economic losses estimated at more than US$30 billion, highlighting the enormous economic costs of climate vulnerability. As Pakistan seeks to achieve sustainable economic growth while fulfilling its commitments under the Paris Agreement, an Emissions Trading System offers an opportunity to integrate climate action with industrial competitiveness, investment promotion, and long-term economic resilience. An Emissions Trading System, commonly referred to as a cap-and-trade mechanism, establishes a limit on the total amount of greenhouse gas emissions that regulated industries are permitted to emit. Within this overall cap, companies receive or purchase emission allowances that authorize them to emit a specified quantity of carbon dioxide or its equivalent. Firms that reduce their emissions below their allocated limits can sell their unused allowances to companies that exceed their emission caps. This market-based approach creates a financial incentive for industries to invest in cleaner technologies, improve energy efficiency, and reduce emissions while allowing businesses the flexibility to determine the most cost-effective compliance strategy. The success of emissions trading systems across the world demonstrates the growing importance of carbon markets in modern economic management. The European Union Emissions Trading System (EU ETS), launched in 2005, remains the world’s largest multinational carbon market and has significantly reduced emissions from power generation, manufacturing, and aviation. China now operates the world’s largest ETS by emissions covered, initially focusing on the power sector and gradually expanding to additional industries. South Korea, New Zealand, Switzerland, the United Kingdom, Kazakhstan, and several states in the United States and Canada have also established operational emissions trading systems tailored to their economic structures. Collectively, jurisdictions accounting for almost two-thirds of global GDP have either implemented or are actively developing direct carbon pricing mechanisms, signalling that carbon markets are rapidly becoming mainstream economic policy rather than experimental environmental initiatives. Across South Asia, governments are increasingly recognising carbon markets as instruments of economic competitiveness rather than solely environmental regulation. India has initiated the Carbon Credit Trading Scheme (CCTS) while expanding its long-standing Perform, Achieve and Trade (PAT) programme to improve industrial energy efficiency. Bangladesh is developing the institutional and regulatory foundations needed to participate in voluntary carbon markets and future compliance mechanisms. Together, these developments indicate a gradual regional shift towards integrating climate policy with industrial development, trade competitiveness, and sustainable economic growth. Pakistan has also begun laying the foundations for a future carbon market, although the country remains at an early stage of development. The National Climate Change Policy, Pakistan’s updated Nationally Determined Contributions (NDCs), and the National Adaptation Plan recognise the importance of market-based mechanisms for reducing emissions. The Ministry of Climate Change and Environmental Coordination, together with development partners including the World Bank, GIZ, UNDP, and the Asian Development Bank, has initiated policy dialogue and capacity-building initiatives aimed at strengthening Pakistan’s carbon market readiness. At the provincial level, Punjab has emerged as the frontrunner in preparing for emissions trading. With technical support from GIZ, the Environment Protection and Climate Change Department and the Planning and Development Board have initiated collaborative efforts to develop the institutional architecture necessary for an Emissions Trading System. These initiatives include the development of emissions inventories, digital Monitoring, Reporting and Verification (MRV) systems, the Green Credit Initiative, and the strengthening of Punjab’s Climate Watch platform to improve emissions monitoring and support evidence-based climate decision-making. Although these initiatives do not yet constitute a formal ETS, they represent important building blocks for a future provincial pilot that could eventually inform the development of a national emissions trading framework. Despite these encouraging developments, Pakistan faces several institutional and technical challenges before an operational ETS can be introduced. Reliable emissions inventories remain incomplete across many industrial sectors, while comprehensive Monitoring, Reporting and Verification systems are still evolving. Institutional responsibilities for climate policy, industrial regulation, energy management, and environmental protection remain fragmented across multiple federal and provincial agencies, requiring stronger coordination. Furthermore, many industries and institutions have limited experience with greenhouse gas accounting, carbon pricing & reporting, emissions verification that highlight the need for substantial technical capacity building. Nevertheless the opportunities created by ETS are significant, not only due to environmental benefits but formulates holistic markets that contribute to the world economy. Carbon market revenues have already crossed the threshold of almost US$30 billion in 2016 to over US$107 billion in 2025, representing the rapid and robust growth of climate finance and green investments worldwide. The European Union’s Carbon Border Adjustment Mechanism (CBAM) signals a new era where carbon compliance is becoming integral to international trade. Although Pakistan’s textile exports are not yet covered, global buyers increasingly demand transparent emissions reporting and low-carbon production. Developing an Emissions Trading System (ETS) and robust Monitoring, Reporting and Verification (MRV) systems will help Pakistani industries strengthen compliance and safeguard export competitiveness. Pakistan stands at a crossroads in its climate and economic development. With an estimated greenhouse gas emissions of around 500 million tonnes of CO2 equivalent (MtCO2e) per year, of which