Nepal

Since our last update in 2021, Nepal has released its Long-Term Strategy, an important step in enhancing its strategy to achieve carbon neutrality, after releasing its second NDC in 2020. Under a scenario in its LTS, if borne out, Nepal intends to reach carbon neutrality by as soon as 2045, if its carbon sink is included. The CAT’s rating of Nepal’s climate targets and action remains “Almost sufficient”.

In its latest NDC, Nepal has set an activity-based target for both its unconditional and conditional targets. However, given it has no absolute emissions reduction in the unconditional target, the CAT instead uses Nepal’s current policy projections as its unconditional target and rates this as “1.5°C compatible” compared to Nepal’s fair share. The CAT estimates Nepal’s conditional target as 59–64 MtCO₂e in 2030, which Nepal will achieve easily with current policies. We rate this as “Critically Insufficient” compared to its modelled domestic pathway.

As a least developed country, Nepal would need significant international support to increase its climate ambition and implement more stringent policies to enable deep decarbonisation aligned with a global least cost 1.5°C compatible domestic emissions pathway. Nepal needs to enhance the ambition of its NDC targets beyond the level of current policies to drive real world emission reductions and expand its LTS beyond CO₂ emissions, since around 54% of national emissions are from methane, mostly from the agriculture sector.

Nepal’s electricity generation comes from 100% renewable energy sources since 2015. The government plans to expand more of hydroelectricity and all types of renewable energy. For instance, in 2023, the Nepal Electricity Authority (NEA) signed power purchase agreements (PPAs) for 1.5 GW of run-of-the-river hydropower projects, and these are expected to continue until they reach a cumulative 6.75 GW by 2028. Nepal additionally supplies its neighboring countries with renewable energy, reducing their carbon intensity.

Nepal has pushed forward with rolling out electric vehicle (EV) policies in 2022. There are several fiscal incentives i.e. for EV purchase and road tax exemption. EV imports have greatly increased and a considerable number of charging stations have been installed. Through its NDC, the government of Nepal aims to phase out petrol-diesel vehicles with EVs by 2031. In its new budget (FY 2022-2023), the government plans to install 500 charging stations throughout the country, although currently only around 50 are operational. Nepal government also announced a renewal and tax waiver for EVs for the next five years.

The CAT rates Nepal’s climate targets and action as “Almost sufficient”. The “Almost sufficient” rating indicates that Nepal’s climate policies and commitments are not yet consistent with the Paris Agreement’s 1.5°C temperature limit but could be with moderate improvements. While Nepal’s updated NDC is a step in the right direction, Nepal needs to strengthen its conditional target further, with international support.

Nepal’s current policies and action are 1.5°C compatible when compared to its fair share contribution. The “1.5°C compatible” rating indicates that Nepal’s climate policies and action are consistent with limiting warming to 1.5°C. Nepal’s climate policies and action.

Emissions have continued to grow in Nepal, going from about 35-49 MtCO₂e between 2010 and 2020, based on CAT calculation from historical emissions data. While the government is showing some progress in the implementation of its mitigation policies, under current policies, emissions are expected to increase by about 10% above current levels by 2030. Current policies and actions are not sufficient to meet the lower end of Nepal’s updated conditional target, nor are they where Nepal needs to be when compared with modelled domestic pathways. Nepal needs to implement more stringent policies, for which it will need international support.

The full policies and action analysis can be found here

Nepal's current "Critically insufficient" rating indicates that its conditional 2030 target reflects minimal to no action and is not at all consistent with limiting warming to 1.5°C, when compared to modelled domestic pathways. If all countries were to follow Nepal’s approach, warming would exceed 4°C.

We haven't included all sectoral measures in our assessment of Nepal’s conditional target because the NDC provided limited details on some of the sectoral target, so it was not possible to estimate the impact of all of them. Nepal is encouraged to provide further information on the quantification of its NDC and to improve this target with international support.

Nepal’s unconditional target is “1.5°C compatible”. The “1.5°C compatible” rating indicates that Nepal’s fair share target is consistent with limiting warming to 1.5°C. Nepal’s latest NDC doesn’t provide clear quantification of the unconditional target, hence the CAT has rated it against emissions under current policies and action.

In Nepal, land use and forests served as carbon sink from 1997–2015 and was a carbon source from 2016–2021. The CAT estimated that LULUCF emissions were about 14 MtCO₂e/yr in 2021. Nepal would need significant international support to achieve carbon neutrality by 2045, as Nepal relies highly on a LULUCF carbon sink in their carbon neutrality scenario. In addition, Nepal aims to maintain 45% forest cover (including other wooded land limited to less than 4%) by 2030. As of its enhanced NDC 2020, the forest coverage percentage in 2020 has reached approximately 44.7%.

Nepal announced a 2045 net zero carbon emissions target at COP26. In 2021, Nepal released its Long-term Strategy, aimed at reaching carbon neutrality by 2045 or sooner and negative carbon emissions by 2050. We evaluate the target as "Average".