CPEC 2.0: Pakistan's Path to Sustainable Development

Pakistan’s population is growing rapidly, and to fulfill the population's needs, the country’s economy must grow at 8 percent annually consistently for 2 to 3 decades, whereas the current growth rate is hovering around 2.68 percent (Economic Survey of Pakistan, 2025). This can be realized only with several development initiatives in multiple areas. For this, Pakistan has recently taken some big initiatives, such as SIFC, Reform packages for different businesses, CPEC 2.0, and URAAN Pakistan.

It is well understood that higher growth or increased development always comes with added environmental deterioration in transitioning economies, specifically. Therefore, environmental deterioration is prospective as a result of all these development initiatives in Pakistan. Consequently country needs to prepare itself for a bigger fight for the provision of an improved environment to its citizens. Pakistan's poor standing in the global environmental indices makes this situation more critical. Pakistan currently ranks 179th out of 180 countries in the Environmental Performance Index (EPI, 2024). As Pakistan seeks to accelerate its development through CPEC 2.0, the environment should be the top priority in this development agenda, as incorporating environmental concerns into Pakistan's development plans is no longer optional but a necessity.

Energy projects, expansion of the industrial sector, and large-scale infrastructure under CPEC have great potential to drive economic growth. But, without a robust environmental framework, they could accelerate ecological degradation and climate vulnerabilities, consequently.

Pakistan can address its environmental challenges through investment in green infrastructure, introducing stricter regulations, promoting public awareness, etc. CPEC phase 2 presents a big opportunity to balance economic growth with environmental sustainability. This can be done by introducing and implementing stringent environmental standards in new infrastructure projects, leveraging green technologies, and nurturing resource conservation and clean energy, especially renewable energy. Embedding green strategies into project planning and execution not only supports environmental resilience in the long run but also boosts economic prosperity in the country.

Here, a few important environmental issues are summarized where collaboration and cooperation under CPEC 2.0 can make our environment better and livable.

Learning from China's Emissions Reduction Success

China has significantly reduced its emissions while upholding steady economic growth. Under CPEC 2.0, Firstly, Pakistan should learn from China how it balanced both of these aspects. Secondly, an engagement through policy dialogues and expert-level discussions with China to understand the policies, technologies, and strategies to decouple growth from emissions. This learning process will be invaluable as Pakistan's economy grows, leading to a potential rise in emissions unless preemptive measures are taken. This process is ongoing, but the implementation of this learning is more important within the country.

A few years back, we all knew that the big urban centers in China were under a severe smog crisis. And now many of Pakistan's big urban centers are ranked among the top 20 most polluted cities globally, with severe repercussions on the economy and health.

One of China's technologies is carbon capture towers, which offer both direct and indirect benefits in reducing air pollution. Pakistan should explore opportunities for collaboration with China to implement similar solutions. This could include technology transfer agreements, knowledge sharing, and joint ventures aimed at combating smog and improving air quality in Pakistan’s most polluted cities. Such initiatives will not only address the environmental crisis but also contribute to broader public health and economic stability. Moreover, Chinese industries operating in Pakistan need to adopt low-emission production technologies.

The Integration of EVs

Given the global environmental concerns, a shift to clean energy sources and electric vehicles is most obvious. China is playing an important role in the EV industry. Pakistan should explore and expand avenues for potential collaboration. The first step may be the import of EVs from China, but a long-term strategy could involve establishing an EV production industry in Pakistan. This would create jobs for local people, reduce production costs, and consequently emissions in the country. A group from China with a local partner has pledged $340 million in investment (Pakistan today, 2025). Although EV imports from China to Pakistan have begun. But, for a successful EV integration, a parallel need for charging infrastructure is of supreme importance.

This requires a detailed country-wide assessment to determine where charging infrastructure will be needed most, for example, highways, transit routes, and urban centers. Establishing charging stations strategically will encourage EV adoption. While planning big infrastructure-related projects, establishing charging infrastructure should be given importance.

Pakistan often has an excess electricity supply during the winter months, which could be harnessed to support the EV charging infrastructure. A targeted plan to utilize this surplus power for EV charging stations would not only optimize energy use but also support the economic and environmental goals of reducing reliance on imported fossil fuels.

This multi-step approach, mapping the needs, exploring collaboration with China, building charging infrastructure, and utilizing excess electricity, will lay a solid foundation for a sustainable and scalable EV ecosystem in Pakistan.

Addressing Pakistan’s Air Quality Monitoring Infrastructure

Pakistan faces a serious deficit in the infrastructure needed to effectively measure air pollution (PIDE, 2024). Reliable evidence is crucial for efficient and effective planning, making it essential to rapidly install additional air quality monitoring systems. These systems will provide accurate data on pollution levels, allowing for better spatial planning and identification of congestion hotspots. In turn, this data will significantly improve transport and environmental planning. To accelerate the deployment of these systems, assistance from China could be sought. Chinese companies like Hanwei Electronics Group, Huawei Environmental Technologies, and Nova PM Sensors produce low-cost and high-quality sensors and equipment. Further leveraging Huawei’s IoT and AI technologies for predictive air quality modeling and real-time air quality monitoring. China’s expertise could assist Pakistan in establishing a comprehensive air quality monitoring network also enabling more precise and informed decision making.

Waste Management

Waste management is another big environmental concern in Pakistan, with almost 30 million tons of solid waste generated each year. Further, waste disposal practices are not adequate due to lower infrastructure, and almost 50 to 60 percent of waste is collected in urban areas (UNEP, 2020). Solid waste, even in big urban centers, is usually left uncollected, if collected, dumped in open spaces. This causes land and water pollution and a big health burden. This contributes to the spread of diseases, affects biodiversity, and worsens the overall quality of life for residents.

Pakistan should focus on recycling and circular economy initiatives. For plastic, electronics, and hazardous waste, collaboration with Chinese recycling companies will be a good way forward to set up material recovery facilities. As electronic waste is growing in Pakistan, the establishment of recycling plants related to e-waste is more important based on Chinese models.

Waste-to-energy projects can be instrumental in better waste management due to the bulk of potential. Under CPEC 2.0, Chinese expertise can be utilized to establish WTE plants in major cities to reduce landfill dependency. China's models related to biogas and composting can be implemented in Pakistan for the management of food and agricultural waste. China’s methane capture technologies can also be adopted to reduce the GHG emissions from landfills. To monitor and regulate hazardous waste material from industries, China’s industrial waste tracking system can be leveraged. Research collaborations with Chinese universities and institutions, especially in recycling innovation and waste treatment for sustainable waste management, is another big opportunity that must be considered under CPEC 2.0

Advance Water Management and Recycling

Despite being a water-stressed country, and most likely a water-scarce country by 2040 (WRI, 2024), Pakistan’s approach to water management is highly unsustainable. Water management in the country can be characterized by inefficiency and over-extraction, largely due to the absence of economic water pricing. Water is almost treated as a free commodity, leading to excessive and wasteful consumption in various sectors, especially in agriculture, where water-intensive crops are cultivated with little regard for efficient use. With Pakistan facing increasing water scarcity due to climate change, population growth, and inefficient irrigation systems, the current trajectory is unsustainable and calls for urgent reforms. Pakistan also faces urban flooding, water scarcity, and poor drainage, especially in cities like Karachi, Lahore, and Rawalpindi. China’s experience in water recycling and conservation, such as its “Sponge Cities” initiative, could provide a roadmap for Pakistan to address its water scarcity challenges. Sponge city idea can help in reducing urban flooding by implementing rain gardens, wetlands, and permeable pavements in flood-prone areas, harvesting and reusing rainwater, increasing green spaces, and eco-friendly infrastructure. This can help in building climate-resilient cities and better management of water resources.

Conclusion

As Pakistan advances into the next phase of development under CPEC 2.0, aligning economic ambitions with environmental sustainability is no longer optional, it is imperative. The country stands at a critical juncture where unchecked industrialization and infrastructure expansion could intensify existing ecological and climate vulnerabilities. However, CPEC 2.0 also presents a rare opportunity to embed green principles at the heart of Pakistan’s development strategy. By learning from China’s successful emissions-reduction models and embracing technology transfer in key sectors such as clean energy, electric vehicles, air quality monitoring, and waste-to-energy solutions, Pakistan can pivot toward a low-carbon, resilient growth trajectory.

Strategic investments in green infrastructure, EV charging networks, sustainable water management, and circular economy models will not only mitigate environmental degradation but also unlock long-term socio-economic gains. Enhancing air quality monitoring, adopting carbon capture and methane reduction technologies, and modernizing waste and water systems can foster healthier cities, protect biodiversity, and promote climate resilience.

Ultimately, the success of "Greening CPEC 2.0" hinges on visionary policymaking, effective implementation, and strong bilateral collaboration. By placing environmental stewardship at the core of its development agenda, Pakistan can chart a future that is economically vibrant, ecologically sound, and socially equitable, benefiting both current and future generations.

References: Economic Survey of Pakistan; EPI; Pakistan today; PIDE; UNEP; WRI

Please note that the views expressed in this article are of the author and do not necessarily reflect the views or policies of any organization.

The writers are affiliated with Pakistan Institute of Development Economics and can be reached at faisalali@pide.prg.pk 

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