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Kuznets and Nepal’s Climate Goals

Mamata Aryal

November 17, 2021

6 MIN READ

Kuznets and Nepal’s Climate Goals

With the agenda of combating climate change, the Conference of Parties (COPs) is being annually held since 1995. This year Glasgow, UK hosted the 26th edition (COP26). Nations all over the world took part in the COP 26 making commitments from their side for curbing emissions to combat climate change.

India aimed to be carbon neutral by 2070 while China by 2060. Along with its neighboring nations, Nepal declared to have cumulatively net-zero carbon emission from 2022-2045, and be carbon negative from then onwards.

Even though the county had committed to having net zero-emission in National Determined Contributions (NDCs) in COP21, the time frame wasn’t mentioned until this pledge in Glasgow. The question now arises: will Nepal be successful at this?

The economy of a country plays is one of the major determinants of the level of Green House Gases(GHGs) that it emits.

Environmental Kuznets Curve (EKC) hypothesizes that the income per capita of the country follows Gaussian distribution with the environmental degradation.

In other words, with a rise in the per capita income of the citizens of the nation, environmental degradation occurs(with a positive slope) up to a point, and with further economic development, there will be a decrease in the degradation(with a negative slope).

The point where the environmental degradation starts to decrease is known as the kink point of the Environmental Kuznets Curve.

While there are cases in which countries do not follow the EKC hypothesis, but let’s assume that with the policies that Nepal has committed, it will follow the EKC in the future. But when?

In simple terms, when a country is in the developing phase it uses all its resources for its economic wellbeing. Even the technologies that the county uses might not be environmentally friendly which causes more emissions thus degrading the environment.

Gradually, when the country reaches a certain level of economic development, the country starts to invest in eco-friendly technologies, thus the emission might diminish and additionally the environmental degradation.

Even then, it is possible for countries to not follow this hypothesis and environmental degradation would occur uncontrollably.

Out of many factors for environmental degradation, the factor considered in EKC is carbon dioxide emission, a greenhouse gas.

Nepal, with a gross per capita income of $ 1,155.15 in 2020 falls under the category of Least Developing Countries, thus on the left side of the EKC with the carbon emissions in 2017 at 7.8 million tons.

Observing the trend, the values of these two factors are increasing exponentially in the past decade, and with the ongoing developmental projects all over the country, both are expected to increase in the future.

Nepal is planning to join the group of high-income countries by 2044 and on the other, Nepal aims to be carbon negative from 2045. Both of these are seemingly contradictory and the only way out is to implement development activities with the least amount of emission as possible.

For the upliftment of the economic condition, Nepal has targeted to increase the per capita income to USD 1400 by 2024.

Similarly, ADB has projected that only in 2022 there will be 4.1% of growth in GDP.  This economic development is much needed for Nepal for sustaining itself in the global economy but an increase in developmental activities will, on the other hand, lead to higher emissions of the GHGs.

While there are cases in which countries do not follow the EKC hypothesis, but let’s assume that with the policies that Nepal has committed, it will follow the EKC in the future. But when?

In a study conducted by researchers from Thailand, the kink points and their respective GDP per capita were estimated for countries that followed EKC (shown in adjacent bar graph).

On average of these 7 nations, the kink point was nearly at a GDP of 36,000 USD per capita.

In comparison, Nepal has a per capita GDP of only 1155 USD as of 2020. This means Nepal has a long way to go to reach the theoretical kink point from which the emission might go down.

Although Nepal comes under one of the countries with the least amount of carbon emission and the forests in Nepal have huge potential of carbon sequestration, achieving the aforementioned economic pinnacle and controlling the rate of emission side by side is going to be an arduous task.

On one hand, Nepal is planning to join the group of high-income countries by 2044 and on the other, Nepal aims to be carbon negative from 2045. Both of these are seemingly contradictory and the only way out is to implement development activities with the least amount of emission as possible.

While other countries praise the declaration Nepal has made, the practicality of it will be a question. Let’s hope that government officials have cut the coat according to the size of the cloth.

Only time can tell if Nepal will achieve the carbon negative target, the economic target, both, or none. As a citizen let’s try our best to control the emission in our daily lives and support the government for its resolution.

(Aryal is a graduate student at the Central Department of Environmental Science, Tribhuvan University)

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