KATHMANDU: Various statistics indicate that the global impact of climate change is intensifying. In Nepal as well, research shows that in recent years, climate change has caused annual losses of up to two percent of the country’s Gross Domestic Product (GDP).
Although developed nations are largely responsible for greenhouse gas emissions through industrialization and development, various international agencies have recently initiated efforts to mitigate, adapt to, and compensate for the effects of climate change. However, statistics reveal that Nepal’s involvement and effectiveness in such programs remain limited.
To support the upcoming “Sagarmatha Dialogue” (Sagarmatha Sambaad) scheduled by the Government of Nepal from May 16-18, the Institute for Strategic and Socio-Economic Research (ISSR) organized a two-day workshop in Kathmandu recently.
The workshop, titled ‘Multi-Stakeholder Dialogue on Climate Change: A Strategic Voice for Nepal’, was hosted by ISSR—a thinktank and an academic body engaged in policy studies, research, and dialogue on socio-economic issues.
The primary goal was to assist Nepal’s preparation for the Sagarmatha Dialogue and to contribute strategic insights for Nepal’s participation in COP-30 and other international climate forums—especially during negotiations and agreement processes.
Data from 2021 shows that, excluding earthquake-related losses, climate change accounts for around 2 percent of Nepal’s GDP loss each year—a figure that is steadily rising.
Four key sessions were held over the two days, focusing on: Climate Justice, Climate Finance, Climate Trading, and Transition to a Carbon-Neutral Economy.
The inaugural session was addressed by Chief Guest Vice President Ram Sahay Prasad Yadav, Acting Chief Justice Sapana Pradhan Malla, Minister for Forests and Environment Ain Bahadur Shahi Thakuri, and UN Resident Coordinator in Nepal Hana Singer Hamdy.
Environmental expert and former Secretary Dr. Pem Kandel and ISSR President Shankar Das Bairagi presented on the current state and impacts of climate change in Nepal and recommended strategic policy actions for the future.
The first day’s session on Climate Justice featured a presentation by former Supreme Court Justice Ananda Mohan Bhattarai.
Other contributors throughout the conference included Dr. Bimal Regmi, Raju Pandit Chhetri, Popular Gentle Bhusal, Madhu Marasini, Shobhakar Dhakal, Nawaraj Dhakal, Dr. Bindunath Lohani, Rosi Joshi, Sunita Dangol, Binita Nepali, Ghanashyam Gurung, Yogendra Kumar Karki, Nirwan Chaudhary, Suman Joshi, Ganesh Karki, and others.
Facilitators included former Chief Secretary and Bairagi, former Chief Secretary Baikuntha Aryal, and former Secretaries Kewal Prasad Bhandari and Anup Kumar Upadhyay.
According to an ISSR press release, the conference emphasized sectors crucial for a carbon-neutral economy: energy, water management, sustainable forest management, industry, construction, agriculture, transportation, waste management, urban development, and the circular economy.
Nepal has the potential to lead in areas like renewable energy, nature-based climate adaptation, water diplomacy, eco-friendly infrastructure, eco-tourism, and the conservation of cultural heritage.
The government was urged to act seriously in these areas, especially by promoting local leadership and community-based natural resource management.
Closing the event, former Chief Justice Kalyan Shrestha commended ISSR’s role in organizing the conference. He stressed the importance of developing national capacity and holding major global carbon emitters accountable at the international level through diplomatic efforts.
Maheshwor Dhakal, Member-Secretary of the Sagarmatha Dialogue Secretariat, expressed hope that the insights and recommendations from the conference would significantly contribute to Nepal’s preparations for the upcoming dialogue and help shape future strategies for climate negotiations.
The conference saw participation from climate-focused organizations, private sector representatives, and students from the Department of International Relations at Tribhuvan University.
Following the discussions, ISSR announced it will compile and submit concrete policy recommendations to the Government of Nepal on climate strategy.
Workshop participants and researchers emphasized that climate change is already having serious effects on Nepal and warned that these impacts are likely to worsen in the future unless further action is taken—particularly in the areas of policy, infrastructure, coordination, and program implementation.
Climate change status, funding and access in the world
At a recent program focused on climate finance, access, and global status, former Government of Nepal Secretary and environmentalist Prem Kandel shared insights on the mechanisms and challenges of climate funding.
Kandel explained that climate finance refers to funds received from public, private, and alternative sources to address the impacts of climate change.
These funds are crucial to work across the three main pillars of climate response: mitigation, adaptation, and addressing loss and damage.
He emphasized that the effects of climate change vary widely across countries. Vulnerable nations, especially those with limited capacity to prevent or respond to climate impacts, should be supported based on the level of risk they face.
Sources of climate finance
According to Kandel, public sources of climate finance include national governments, international and multilateral organizations, the Green Climate Fund (GCF), and the Global Environment Facility (GEF), among others.
Private sources involve investments by non-governmental organizations, companies, and institutions working in mitigation and adaptation efforts.
Kandel noted that the Green Climate Fund is currently the largest global source of climate finance, with a strong focus on mitigation activities.
He pointed out that developing and least developed countries have relatively greater access to GCF support, although the funds are generally routed through third-party agencies.
GCF support comes in various forms—grants, loans, equity, and investment instruments. According to Kandel, the fund mobilizes up to $100 billion annually, and its total volume is steadily growing. In Nepal, more than $90 million has been allocated to various climate-related projects such as those in the Chure region, the Gandaki River Basin, and clean energy access initiatives.
Global commitments and future needs
Kandel explained that the Kyoto Protocol established an Adaptation Fund, which typically provides up to $10 million per project. He also highlighted other financial mechanisms currently in operation to support climate initiatives globally.
Under the “New Collective Quantified Goals on Climate Finance” proposed at COP-29, developed countries have committed to mobilizing $300 billion per year by 2035, even though global needs are estimated to reach $1.3 trillion. Funding under this mechanism has already begun.
Looking ahead, Kandel estimated that the world will require $4.3 trillion annually by 2030 to limit global warming to 1.5°C. This includes investments in sectors such as energy, industry, and transport to cut greenhouse gas emissions.
An additional $113 billion per year will be needed from 2030 onward for adaptation programs alone.
Of the total funding required for mitigation, adaptation, and addressing climate-induced loss and damage, Kandel said that 57 percent is expected to come from public sources, while 43 percent will need to come from private sector investment.
Notably, 39 percent of private sector investments in mitigation are currently focused on electric vehicles.
However, the global financing gap remains significant—79 percent for mitigation, 88.94 percent for adaptation, and 99 percent for loss and damage, according to Kandel’s data.
South Asia’s climate finance landscape
Within South Asia, only a small portion of climate funding comes from domestic sources. For example, Bangladesh mobilizes 12 percent, Bhutan 10 percent, and Nepal just 14 percent of their respective climate finance from within their national budgets.
Climate change researcher Rosy Joshi echoed similar concerns, highlighting that vulnerable communities are already facing severe impacts at the local level. She noted that local governments have not played a sufficient role in amplifying their voices.
Data from 2021 shows that, excluding earthquake-related losses, climate change accounts for around 2 percent of Nepal’s GDP loss each year—a figure that is steadily rising.
Kandel also warned that the withdrawal of the United States from the Paris Agreement could weaken the Global Climate Fund, potentially leading to reduced commitments from other developed nations, including those in Europe.
Kandel concluded by stating that Nepal should not solely rely on external support. Instead, he urged the government to allocate at least 50 percent of its climate finance from its national budget starting with the next fiscal year.
Discussion on Nepal’s climate finance efforts
Following Kandel’s presentation, program facilitator and former secretary Kewal Prasad Bhandari posed a question to Raju Pandit Chhetri, Executive Director of the Natural Resources Center, regarding Nepal’s current approach to securing international climate finance.
Chhetri responded that climate finance is the cornerstone for addressing Nepal’s climate challenges. He emphasized that developed countries have a responsibility to support developing nations in mitigating and adapting to climate change impacts. He also noted that Nepal is currently receiving both multilateral and bilateral support.
Importantly, Chhetri stressed that climate finance is not just a technical issue—it is a matter of climate justice.
Climate change experts urge clarity, local action, and accountability in climate finance
Continuing the discussion, Pem Kandel emphasized that the first priority in addressing climate-induced loss and damage is preparation. While there is general clarity on the causes, policies, and guidelines related to loss and damage, he noted that Nepal still lacks a clear roadmap for investment.
He highlighted the need to reassess institutional structures and ensure access to resources for those most affected by climate change.
Another expert, Popular Gentle Bhusal, stated that while Nepal has made some progress in policy and legal frameworks, the country needs approximately $6.2 billion annually to meet its mitigation and adaptation goals.
“But in the last 12 years, Nepal has received only $322 million in total—less than the losses caused by last year’s floods in Kathmandu,” he said.
Promote unified national action: Adopt a ‘One Nation, One Concept’ approach to climate change. Strengthen coordination among government agencies and establish a high-level executive body with special climate representatives.
Despite the insufficient flow of climate finance to Nepal, donor agencies have often raised concerns about the ineffective use of available funds. Bhusal pointed out that much of the climate funding in Nepal has gone to commercial agencies instead of being invested in risk-reduction and climate resilience.
“More money was spent on business agencies than on actually reducing climate risks,” he remarked.
He also criticized the government for not implementing many of its own climate commitments, attributing this to a centralized mindset. “We have the policies, structures, and practices, but they need serious reconsideration and improvement,” he added.
Climate change researcher Rosy Joshi echoed similar concerns, highlighting that vulnerable communities are already facing severe impacts at the local level. She noted that local governments have not played a sufficient role in amplifying their voices.
Bhusal further revealed that while Nepal’s Climate Fund aims to allocate 80 percent of its resources at the local level, only 10 percent has actually reached local communities—and of that, a mere 2 percent has been accessed by women.
He stressed the need for greater empowerment of local governments, coordinated action among all levels of government, and a more equitable distribution of resources.
Suggestions to the government: Establish a high-level mechanism for climate governance
The following key conclusions and recommendations emerged from the discussion:
Mainstream national climate goals: The Nationally Determined Contribution (NDC) and National Adaptation Plan (NAP) should be incorporated into the policies, programs, and budgets of all levels of government and implemented as a priority.
Access the Loss and Damage Fund: Prepare and regularly update comprehensive data on loss and damage across different sectors to access financial support from the Loss and Damage Fund.
Support carbon trading: Develop regulatory frameworks to encourage private sector participation in carbon trading.
Ensure food security: Strengthen the agricultural sector and boost food production to address climate-related food insecurity.
Demand climate justice: Promote the concept that delayed climate justice is a denial of human existence (“Survival Denied”). Call for moral, political, and financial accountability from major carbon-emitting countries.
Protect vulnerable groups: Launch targeted programs to support poor, marginalized, and high-risk communities affected by climate change.
Close legal gaps: Enact necessary laws and policies that reflect Supreme Court decisions and ensure climate justice within the country.
Promote unified national action: Adopt a ‘One Nation, One Concept’ approach to climate change. Strengthen coordination among government agencies and establish a high-level executive body with special climate representatives.
Enhance diplomatic capacity: Form a permanent and capable national negotiation team. Strengthen Nepal’s diplomatic presence in climate negotiations.
Strengthen institutions for finance access: Build the capacity to draft compelling proposals and engage with international climate finance mechanisms.
Foster regional cooperation: Study the interlinkages between mountains and oceans and conduct regional research on water, agriculture, health, and biodiversity. Nepal should initiate a sub-regional climate alliance and contribute to shaping a regional climate perspective.
Lead global mountain advocacy: Position Nepal as a leader of mountainous countries and advance the Save Mountains Campaign at the international level.
Hold major emitters accountable: Push industrialized nations to honor the Paris Agreement and take ambitious climate action. Nepal should prepare and publish an evidence-based national climate position.
Advocate for environmental equity: Highlight Nepal’s environmental contributions and seek recognition, financial assistance, and technical support based on ecological vulnerability.
Push for climate finance reform: Advocate for simplified and equitable access to international climate finance, including strong diplomatic efforts to mobilize funds for the Loss and Damage Fund.
Demand climate justice: Promote the concept that delayed climate justice is a denial of human existence (“Survival Denied”). Call for moral, political, and financial accountability from major carbon-emitting countries.
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