Global South Rethinks Climate Strategy as US Exit Deepens Finance Crisis
APP
Islamabad: In the wake of the United States’ withdrawal from the Paris Agreement and growing uncertainty around global climate financing, the Sustainable Development Policy Institute (SDPI) convened a high-level virtual policy dialogue to rally the Global South around recalibrating climate governance and rethinking diplomatic strategies for a just energy transition.
Held under SDPI’s Network for Clean Energy Transition (NCET) and live-streamed globally, the dialogue brought together influential voices from across Asia, including policymakers, climate finance experts, and academics.
The central focus was on shaping the next phase of Nationally Determined Contributions (NDCs 3.0) to be more inclusive, finance-ready, and regionally coordinated.
Financing Gap Widening
In his opening remarks, Dr. Shafqat Munir, Deputy Executive Director of SDPI, warned of a looming climate finance shortfall. Of the estimated $1.3 trillion required by 2035, only $300 billion has been pledged so far.
“The withdrawal of key players like the U.S. threatens to derail the $100 billion global climate finance pledge, leaving the Global South increasingly exposed,” said Dr. Munir. He criticized Pakistan’s current NDC framework for its lack of transparency, unrealistic sectoral goals, and weak stakeholder inclusion.
“We must move from ambitious rhetoric to resourced, transparent, and inclusive climate action,” he stressed, calling for South-South cooperation to amplify the voices of developing nations at international climate forums.
From Policy to Practice
Engr. Ubaid ur Rehman Zia, Head of SDPI’s Energy Unit, echoed the concern, warning that the U.S. withdrawal has disrupted the financing ecosystem, affecting energy transitions across South Asia. He underscored the importance of shifting toward market-based financing mechanisms and climate-tech collaborations among Global South countries.
“The NDCs are central to our climate governance, but without innovative financing and regional cooperation, we risk stagnation,” he noted.
Muhammad Faisal Sharif, Director at the Private Power and Infrastructure Board (PPIB) and affiliated with the University of Bath, acknowledged Pakistan’s modest strides in net metering, retiring fossil-fuel-heavy plants, and integrating climate justice into policy.
Yet, systemic barriers persist. “Our grid is still fossil-heavy. Technology transfer remains limited, and institutional coordination is weak. NDCs 3.0 offer a vital opportunity to reset and align our development strategy with global low-carbon norms, including compliance with the EU’s Carbon Border Adjustment Mechanism (CBAM),” he remarked.
Learning from Asia
Ma Yue, Analyst at the Institute for Global Decarbonization Progress (IGDP), China, shared how electric vehicles now make up over 40% of new car sales in China. She emphasized that future climate strategies must adopt greenhouse gas lifecycle accounting and integrate sectoral inclusivity.
“South-South cooperation and transparency must become pillars of NDC implementation. Climate action must be forward-looking and collaborative,” she said.
Anjali Viswamohanan, Policy Director at the Asia Investor Group on Climate Change (AIGCC), noted that institutional investors are recognizing the long-term economic risks of climate change. She urged governments to offer policy clarity and de-risking mechanisms to unlock private capital for transition finance and nature-based solutions.
“There is momentum among investors, but governments must bridge the trust gap and create enabling environments,” she noted.
Putting People First
Dr. Zainab Naeem, Head of Ecological Sustainability at SDPI, called for a bottom-up approach to adaptation, warning that current NDCs often ignore marginalized communities, including women, youth, and indigenous populations.
“Adaptation must be people-first. Without community ownership, climate strategies will fail—and deepen the vulnerabilities they aim to solve,” she said.
Offering a geopolitical perspective, Dr. Alexandra Soezer, Director of the Climate Action Centre of Excellence, warned that global instability is undermining climate finance flows to developing countries. She emphasized the importance of Article 6 of the Paris Agreement, market-based engagement, and strategic diversification of funding sources.
“The global climate regime is evolving. Developing nations must be geopolitically agile, financially diversified, and institutionally resilient,” she stressed.
Charting a Path Forward
Concluding the dialogue, SDPI’s Senior Advisor Shakeb Elahi reiterated that NDCs 3.0 must go beyond symbolic pledges. He emphasized the need for regional partnerships, robust policy frameworks, and meaningful participation from both communities and the private sector.
“Only an inclusive, finance-ready, and resilient framework can steer us toward a just and sustainable future,” Elahi said.
This dialogue is part of SDPI’s broader mission under the NCET initiative to foster inclusive, evidence-based policymaking on climate diplomacy, energy transitions, and sustainable development.
