Akademik Məlumat İdarəetmə Sistemi
Environment, Development and Sustainability, 2025 (SCI-Expanded, Scopus)
Climate damage always adversely impacts all tiers of government across multiple dimensions. Climate change put pressure on the subnational government’s ability to deliver essential public services. Pakistan’s contribution to GHG and economic development is moderate, but it frequently smashes the climate. Despite governmental challenges and climate-related risks, it received limited research attention in Pakistan. This study analyzed the fiscal, environmental, and economic factors that increase the climate damage risks and challenges for subnational governments in Pakistan. Structural Vector Autoregressive (SVAR) modeling and Impulse Response Function (IRF) techniques were employed on annual data spanning from 1982 to 2023. The empirical results revealed that fiscal decentralization has a positive influence on climate damages and upsurges over time, suggesting that higher decentralization contributes to climate damages. It indicates that institutional asymmetry and weak governance at the provincial level may pose challenges for the federal government in Pakistan. GDP per capita positively affects climate damage, which depicts a rising income level that has led to environmental degradation, particularly in the developing stage. A positive coefficient of 0.78 indicates a robust association between Greenhouse Gases (GHG) and climate damage, aligning with ecological degradation theories. Higher emission levels directly contribute to environmental degradation, which triggers climate damage. The provincial government’s revenue and spending assignments are affected by frequent incidences of climate damage, at least in the medium and short run. These effects are distinct, specifically for the spending side, rather than for revenue, and differ among an extensive range of damages. Policymakers integrated a framework emphasizing effective green decentralization reforms alongside the adoption of robust environmental policies to strengthen Pakistan’s institutional capacity for climate risk management.