Role of Economic Policies in Protecting the Environment: The Experience of Pakistan by Rashid Faruqe

The purpose of this paper is to review the nature of Pakistan’s major environmental problems—both brown and green—and to assess the extent to which economic policies are affecting incentives for the environment. Experiences of other countries have shown that non distortionary economic policies that promote economic growth by improving the allocation of resources also create appropriate incentives for the protection of the environment. Since the 1980s, Pakistan has introduced some market-orientated structural reforms of the economy. Continued vigorous implementation of these reforms will help both growth and the environment. Economic policies that ensure efficient allocation of resources is a necessary, but not a sufficient condition for creating appropriate environmental incentives. Environment-specific policies are also needed to correct market failures leading to environment problems. Two types of policies can be used to deal with environmental problems—command and control policies and incentive or market-based policies. Command and control policies involve government mandating of environmental quality standards on emissions, technology type, or input use. Incentive- or market-based policies use prices to try to affect pollution and resource use. Despite the advantages of market-based approaches, Pakistan, like many other countries, mostly followed control policies. But these policies have often failed to achieve results because regulating institutions lack the financial and technical resources to implement these policies effectively. Pakistan’s brown environmental problems include industrial waste water pollution, domestic waste water pollution, motor vehicle emissions, urban and industrial air pollution, and marine and coastal zone pollution. Economic policy failures are contributing significantly to many of these problems.


Green environmental problems affect irrigated agriculture, rainfed agriculture, forests, and rangelands. In irrigated agriculture, economic policies, such as subsidies on irrigation water, have provided incentives for farmers to over use water in their production practices, thereby exacerbating the problem of waterlogging and salinity. Deforestation and rangeland degradation have resulted, in part, due to lack of property rights in communal forests and lack of incentive for local communities to participate in forest management decisions.

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The Study of Ecology and Ecological Linkages of the Lahore Canal Bank

The Ecology of the habitat and its ecological linkages were studied. All trees and shrubs in the green belt and along the canal were identified and numbers were counted. The dominant tree species were Eucalyptus, Poplar, Weeping Willow, Mango and Jaman. The dominant shrub species were Citrus, Kanair and Marwa. Total vegetation comprising trees and shrubs on the Lahore Canal Bank is twenty-one thousand, four hundred and thirty (21,430). Three thousand, seven hundred and twenty-eight (3,728) trees will remain after the cutting of trees on the 24 ft width of the green belt; five thousand, two hundred and ninety nine (5,299) trees will be cut on 24 ft width of both green belts due to the Canal Bank Road widening project of TEPA, City District Government Lahore (CDGL). Forty-four (44) bird species have been identified and observed in the field. Moreover, small mammals such as stray dogs, feral cats, Small Indian mongoose and Indian Palm squirrel have been observed. Among flying insects, Dragonflies, Damselflies, Fireflies, different types of Butterflies such as Peacock pansy and Honeybees were also observed along with annelids including earthworms. Amphibians found in the study area were Tiger frog, Common frog and Indus Valley toads whereas in reptiles Indian Monitor lizard and Chitra Dhoobi Snake were also observed.


Many vendors such as meat and fruit sellers depend on this habitat for earning their livelihoods. Meat sellers were observed throwing away sadqa meat on the green belts. House crows and Pariah kites eat the meat thrown; however, four (4) or five (5) crows were found dead on the roadside and green belt daily. After conducting an opinion survey, it was found that ninety-five percent (95%) of the residents were against tree cutting. In the Canal Bank area, trees act as sinks to air pollution especially carbon. Canal Bank is an ecologically balanced and important area possessing diversity of flora and fauna, with various socioeconomic activities and trees acting as strong air pollution buffers.

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Air Pollution: Key Issues in Pakistan

Air pollution is rapidly growing environmental problem in Pakistan. Highly inefficient energy use, accelerated growth in vehicle population and vehicle kilometres travelled, increasing industrial activity without adequate air emission treatment or control, open burning of solid waste including plastic, and use of ozone depleting substances (ODSs) are some of the major causes of deterioration of ambient air quality. Some key environmental issues about air quality in Pakistan have been assessed and discussed, using the Pressure, State, Impact and Response (P-S-I-R) framework. Rapidly growing energy demand, fuel substitution such as high emitting coal and oil, and high-energy intensity are the key factors contributing to air pollution. Some factors contributing to high-energy intensity are transmission and distribution losses in power generation, fuel prices subsidies on diesel and ageing vehicles, which are primarily diesel powered. The state of air quality has been assessed by examining the emission levels of air pollutants and ambient air quality. The average increase in sulfur dioxide across major emitting sectors (industry, transport and power) has been 23-fold over the past 20 years. Similarly, nitrogen oxides increased to 25-fold in the power sector and carbon dioxide increased an average of fourfold. Pakistan’s per capita greenhouse gas (GHG) emissions are far below the global average. Ambient air quality data show that carbon monoxide levels in Karachi and Lahore considerably exceed WHO’s recommended levels. Particulate matter content cross safety levels in the major industrial cities in the Punjab province. The reported lead levels in ambient air sites in Peshawar, Rawalpindi, Lahore and Karachi are also quite high compared to WHO’s permissible levels.

The health impacts of air, water pollution and productivity losses from deforestation and soil erosion have been assessed at 1.71 billion dollars, or 3.3 percent of GNP, in the early 90s. The losses attributed to air pollution, in terms of health care costs, amount to 500 million dollars a year. To combat air pollution, the government has formulated acts and policies, including the National Environment Action Plan (NEAP). Pakistan Environmental Protection Act, 1997 (PEPA-97) covers air, water, soil and noise pollution, including hazardous waste disposal and vehicular pollution. Its section 15, sub-sections 1 to 3, pertain to regulation of motor vehicles. NEAP reflects a renewed commitment to environment and focuses on taking immediate measures in four priority areas of concerns – air, water, solid waste, and ECO system management – to achieve a visible improvement in the quality of environment, including air.

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