Country Climate and Development Report for Nepal

Objective and scope

The Country Climate and Development Report (CCDR) identifies ways that Nepal can achieve its overall development objectives while fostering its strategic ambition to transition to a greener, more resilient, and inclusive development pathway. It identifies the major risks and opportunities that climate change presents for Nepal’s economic growth and poverty reduction and shows how investments in climate actions are good for sustainable development and vice versa. This CCDR is a contribution to an evolving analytical agenda on climate and development in Nepal. While it does not address all dimensions of climate and development, it proposes an overall framework, recommends selected priority actions to enhance synergies and manage trade-offs between development and climate objectives, and identifies areas for further research.

This report is organized as follows:

• Chapter 1 captures the current situation in the country with respect to climate impacts and risks, emission sources, and opportunities for integrated climate change adaptation and mitigation.
• Chapter 2 describes the government’s response, through sectoral and economywide commitments, laws, and regulations.
• Chapter 3 assesses the impacts of climate change on the macroeconomy and road transport systems, given their critical role to connectivity. It also analyzes the links between climate change and air pollution, poverty, health, social inclusion, and community resilience.
• Chapter 4 presents pathways to transition to resilience, looking at integrated management of landscape systems comprising water, agriculture, and forests as well as strengthening climate and disaster risk management governance.
• Chapter 5 analyzes pathways to transition to decarbonization, primarily the potential for hydropower expansion domestically and in the region. It also looks at transport and urban opportunities to reduce emissions while enhancing resilience and adaptation co-benefits.
• Chapter 6 discusses how to scale up financing for resilience, hydropower, and other opportunities, given the limitations of the country’s fiscal space.
• Chapter 7 presents a prioritization framework for the most transformational climate action with seven ‘policy packages’—one for each priority transition and each key enabler—that contain specific recommendations for how to move from analysis to action.

Key Messages

Nepal has achieved significant development progress in recent decades. Due in large part to steady inflows from remittances, the country has expanded access to electricity and drinking water, improved youth literacy, raised primary and secondary school enrollment, and reduced infant mortality.
Development gains may be at risk due to climate change. Nepal is highly vulnerable to climate and disaster risks. Rising temperatures, melting glaciers, and more intense rainfall are expected to increase climate-related hazards, particularly river flooding and landslides. Women, indigenous people, and other marginalized groups are often excluded from mainstream development and suffer from cumulative and cascading impacts of climate change and disasters.

Nepal is a negligible contributor to global greenhouse gas (GHG) emissions, but emissions are rising. Virtually all of Nepal’s population is reported to be exposed to unsafe levels of air pollution, with significant negative impacts on health, productivity, and economic output.

There are many low-carbon and climate-resilient opportunities in Nepal, including development of hydropower to fuel its own growth and for export to neighbors, clean cooking solutions, electric vehicles, and solar energy. Bringing in the private sector by improving the business environment and financing avenues will be critical to helping Nepal achieve its ambitious climate goals.