7. Agriculture, livelihoods, and forests: climate impacts and systemic constraints

Agriculture remains the backbone of Khyber Pakhtunkhwa’s rural economy—contributing 30% of provincial GDP and employing 32% of the labour force. KP hosts 45% of Pakistan’s forest cover and contributes over 50% to the country’s carbon sink—yet receives little recognition or fiscal compensation for its stewardship role.

Forest conservation, reforestation, and sustainable land-use initiatives remain underfunded and excluded from federal climate finance frameworks.

Beyond the divide: rethinking federal-provincial collaboration for economic transformation—I

Despite constitutional devolution, KP lacks the fiscal autonomy and institutional access to key instruments such as green climate funds, carbon markets, and agricultural risk insurance schemes.

Without flexible financing, targeted climate adaptation resources, and greater programmatic authority, the province remains constrained in addressing both the short-term needs of farmers and the long-term challenge of climate change.

One of the gravest flaws in Pakistan’s fiscal governance is the siloed preparation of budgets. Federal and provincial budgets are formulated in isolation, without integrated data or joint economic planning. Decisions like changes in property taxation, sales tax, etc., are taken unilaterally by the federal government, with little regard for provincial fiscal autonomy or local economic realities.

The Pakistan Bureau of Statistics (PBS), central to data generation, remains under federal control—leaving provinces dependent on potentially outdated or misaligned datasets for planning and investment.

The current National Finance Commission (NFC) Award—structured predominantly around population size — has become........

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