As the Asian Development Bank (ADB) convenes its 58th annual meeting, taking place from May 4-7 in Milan, Pakistan is facing an early and intense heatwave. Per the ADB’s latest ‘At a Glance’ report (2023), 17 per cent of the Bank’s total lending and investments globally are directed toward the energy sector, underscoring its significant role in financing power generation and infrastructure — including fossil fuel projects in countries like Pakistan.
The NGO Forum on ADB estimates that the Bank has invested $15.28 billion in 74 energy projects in Pakistan, and its focus on conventional energy over renewables raises concerns. While 50.5pc of the funds were earmarked for modernising the national grid, 17pc support conventional energy expansion (1,330 MW). Meanwhile, renewable projects receive minimal funding. Wind and solar allocations remain unspecified.
Simply put, the ADB’s continued investment in fossil fuels contradicts its sustainability commitments, potentially undermining Pakistan’s energy security and environmental goals. Fossil fuel financing also impacts air quality, with rising levels of particulate matter (PM 2.5), tropospheric ozone and nitrous oxide, disproportionately burdening the country with public health crises, environmental degradation and economic loss.
Policy and practice
The ADB’s 58th annual meeting presents a critical opportunity to address air pollution — a pressing global crisis that remains conspicuously absent from the meeting’s core agenda. While the health and environmental impacts of unchecked emissions are profoundly damaging, the meeting has yet to commit to concrete measures that reduce the pollution footprint of ADB-funded projects or advance technological solutions.
This year’s meeting includes constructive engagement with civil society organisations (CSOs) and affected communities. However, this dialogue must translate into meaningful action.
Air pollution is affecting every corner of the planet, harming biodiversity, undermining public health, and jeopardising the Paris Agreement’s 1.5°C goal. And while the ADB claims its safeguards mitigate environmental harms, there is a significant gap between policy and practice. The Paris Agreement’s Enhanced Transparency Framework (ETF) aims for standardised climate accountability, yet international financing institutions (IFIs) such as the ADB fall short in aligning their Environmental and Social Framework (ESF) and Energy Transition Mechanism (ETM) with these standards.
Where the ETF requires detailed emissions reporting, IFIs like ADB often hide project-level GHG impacts, particularly from coal and gas projects. For instance, ADB-funded coal plants in Pakistan report only aggregated emissions, obscuring local health and ecological damage. Moreover, the Paris Agreement’s focus on CO2 neglects Short-Lived Climate Pollutants (SLCPs) such as methane and black carbon, which account for around 45pc of global warming and are common in ADB’s fossil fuel investments.
The ADB, a 69-member multilateral lender, has long positioned itself as a ‘Climate Bank’ and champion of sustainable development through its Environmental and Social Framework. However, the ESF’s non-binding enforcement mechanisms have led to inconsistent adherence to safeguards on displacement, pollution, and indigenous rights — limiting its effectiveness in advancing climate and social justice goals. The absence of Greenhouse Gas Protocol (GHG) standards in Pakistan also restricts the Bank’s space in the integration of stringent emissions standards and technical support. This limitation locks the country into high-pollution development pathways despite the ADB’s role as a multilateral development bank (MDB) with an agenda to foster sustainable growth.
In the absence of GHG standards, lack of technical inputs, absence of technology transfer, and non-vital role of the private sector, Pakistan’s reliance on fossil fuel is bound to manifold its environmental and air pollution challenges. Emissions of sulfur dioxide (SO₂), nitrogen oxides (NOx) and particulate matter have a direct impact on vulnerable communities, who already lack healthcare facilities, face economic inequality and live in vicious cycles of poverty. Toxic air is compounding respiratory diseases, increasing the disease burden and premature deaths amongst these communities. Over the last two decades, Pakistan has witnessed a sharp rise in disease burden, particularly from non-communicable diseases (NCDs) such as ischemic heart diseases, strokes, lung disease and cancers, with air pollution being a major risk factor.
These diseases account for over 50pc of total deaths in Pakistan. Premature deaths from Chronic Obstructive Pulmonary Disease, stroke, and asthma are on the rise. These are largely caused by outdoor fine particles, particularly in major urban centres of Lahore, Karachi, and Islamabad, where ambient air quality levels exceed World Health Organisation (WHO) safe limits by 10-15 times. As the third most air-polluted country in the world, air pollution in Pakistan traps generations in poverty by harming children’s health and cognitive development, besides hampering their potential. Families struggle to escape as pollution exacerbates unemployment, education gaps, and healthcare access.
Moreover, the ADB’s newly updated Environmental and Social Framework (ESF), launched in 2024, establishes safeguards to minimise environmental harm and protect communities affected by its projects. The framework covers nine key standards: environmental assessment, involuntary resettlement, indigenous peoples, labour conditions, biodiversity, pollution control, and climate resilience.
However, its weak enforcement and loopholes for continued coal financing — lack of meaningful consultation with communities, CSOs, and women’s rights organisations; promotion of resource-intensive and environmentally destructive energy alternatives or “false solutions”; lack of clarity on the extent to which ADB’s safeguards and accountability mechanism — undermine its credibility as a tool for environmental and social justice.
The myth of ‘clean coal’
In recent years, the ADB has sought to justify its continued coal investments in Pakistan by promoting supercritical technology as adequate pollution control. However, this technology does not fully address the health and environmental consequences of coal combustion.
While supercritical plants may offer modest efficiency improvements, they still emit dangerous levels of particulate matter (PM2.5), sulfur dioxide (SO₂), and nitrogen oxides (NOx) — pollutants directly linked to respiratory diseases, cardiovascular problems, and premature deaths in surrounding communities.
In practice, most carbon capture projects in Pakistan and elsewhere utilise the trapped CO₂ for Enhanced Oil Recovery (EOR), a process that extends the life of fossil fuel extraction rather than phasing it out. Underground CO₂ storage carries significant risks, including methane leakage — a greenhouse gas 80 times more potent than CO₂ in the short term — and groundwater contamination.
Displacement, land grabbing, and broken promises
ADB-funded fossil fuel projects have also inflicted severe social costs on Pakistani communities. Large-scale coal-linked infrastructure, such as roads and transmission lines, has caused forced evictions in Sindh and Punjab. This has prompted residents of the Karachi Northern Bypass Highway to file complaints over violations of ADB’s resettlement safeguards.
Meanwhile, farmers in Thatta and Badin faced delayed compensation and exclusion from project consultations, sparking protests in 2021. The Bank’s own monitoring has also admitted to “gaps in grievance redressal”.
The ADB’s energy transition mechanism and enhanced transparency framework also have gaps in addressing gendered impacts on health, land rights and land-based livelihoods, unpaid care work, gender-based violence (GBV), energy access, changes to gendered power dynamics in households and communities, employment, and decent work.
On the other hand, labour conditions remain dire, with inadequate contracts, unsafe workplaces, and suppressed rights persisting despite the Bank’s Environmental and Social Framework.
The Bank’s Accountability Mechanism Policy (2012), now under review, must prioritise people. The lender must recognise that project-affected communities bear the brunt of pollution, land loss, and health risks when accountability fails. The mechanism’s redesign must ensure transparency, redressal, and meaningful participation to prevent further harm.
Heat stress, failing crops, and a looming food crisis
Pakistan now faces record-breaking 50°C summers, with ADB-funded coal projects in heat-stressed regions worsening the agricultural crisis. These projects emit methane (CH₄), ozone, and black carbon, byproducts of fossil fuels, and are linked to crop yield losses and diminished crop quality in wheat and rice.
Simultaneously, PM2.5 from coal and farm fires reduces photosynthesis, while erratic rainfall and heat disrupt growing cycles. Livestock develop pollution-linked respiratory diseases. In the long term, by 2100, South Asia could experience up to a 50pc yield loss in staple crops, with countries like Pakistan especially vulnerable due to reliance on water-intensive crops.
Climate finance and ADB’s clean air agenda
Clean air must be central to the ADB’s climate finance agenda. Less than 1pc of international development funding and only 2pc of international public climate finance was targeted towards air pollution action from 2015 to 2021.
The Bank must bridge this gap by scaling investments in clean energy and pollution control — through solar microgrids and methane capture — instead of just CO₂ cuts. Its energy transition mechanism should tie coal phase-outs to measurable air quality gains, aligning with Pakistan’s Nationally Determined Contributions (NDCs) and, by extension, its clean air plans. Without binding air quality safeguards, the ADB’s ‘climate finance’ risks fuelling the very crises it claims to solve.
Pakistan is at the forefront of the climate crisis and is trapped in a debt burden. The ADB must prioritise the rights and needs of the Pakistani people over debt servicing. Debt cancellation is critical for Pakistan to build climate-resilient infrastructure, provide clean air, and establish social safety nets for the people of Pakistan.
Integrating the right to clean air
In 2024, Pakistan took a historic step by amending its Constitution to include Article 9A, which guarantees the right to a clean and healthy environment as a fundamental human right. The UN General Assembly’s landmark 2022 resolution explicitly recognises access to a clean, healthy, and sustainable environment as a universal human right. This mandate compels institutions like the ADB to mainstream this principle into their core mission and country strategies.
The ADB must ensure its Just Energy Transition Mechanisms (JETMs) and coal phase-out frameworks — such as the Energy Transition Mechanism (ETM) — actively safeguard this right.
The global lender must also mandate real-time, project-level disclosure of all GHGs and Short-Lived Climate Pollutants (SLCPs) — especially methane and black carbon — from its funded projects in Pakistan. This aligns with the Paris Agreement’s Enhanced Transparency Framework and the Global Methane Pledge, which Pakistan joined in 2023.
To effectively reduce fossil fuel dependence and harmful emissions in Pakistan, the ADB must strategically redirect financing toward scalable clean energy technologies while implementing rigorous accountability measures. This shift would align with the ADB’s own 2023–2032 Climate Transition Framework, which prioritises “low-carbon technology transfer” but lacks enforceable benchmarks for fossil fuel phaseouts.
The Bank’s annual meeting offers a crucial opportunity to correct course to shift from funding pollution to financing solutions. For the sake of millions of Pakistanis breathing poisoned air and farming on a heating planet, the answer must be clear.
