As one of the most affected countries in the world on the Climate Risk Index, Nepal’s population faces extreme vulnerability to climate change, with the threat of floods, air pollution, heatwaves, droughts and more increasing. Aligning Nepal’s development planning with climate finance flows is critical to building resilience against these risks.
Nepal has made significant efforts towards low-emission development, using government tools to encourage finance flows towards climate action. However, achieving its ambitions will be difficult given current financing and capacity levels. The quantities needed to support Nepal’s climate goals are substantial, with both domestic and international finance playing key roles in addressing climate vulnerability.
This report examines Nepal’s progress towards low-carbon and climate-resilient development pathways, asking what institutional barriers exist to financing climate action, how policy, government tools and legislative provisions have addressed climate change and the challenges and opportunities that arise when financing Nepal’s green and inclusive development goals. Focussing on both Article 9 and Article 2, paragraph 1(c) of the Paris Agreement, the paper provides an evaluation of Nepal’s progress towards its climate ambitions so far.
The country urgently requires increased domestic and financial resources to achieve its climate goals. This report makes a series of recommendations to support the flow of finance to climate actions that tackle the vulnerability of Nepal’s citizens to the plethora of climate risks they face.
