NDC update: In December 2020, Nepal submitted a second NDC. Our analysis of its new target is here.
While the Nepali government is showing progress in implementing its climate mitigation policies in some sectors, it will need to take significant additional action to meet the sectoral targets it has set under the current Paris Agreement 2030 target, especially in the energy and transport sectors. Due to the COVID-19 pandemic, emissions have shrunk in 2020, compared to 2019, but we expect they will bounce back and continue their upward trend, once the economy recovers. Nepal expects to submit an updated NDC to the UNFCCC by the end of 2020. The country’s current NDC does not include an economy-wide emissions reduction target, so we have not been able to rate it.
According to our assessment, Nepal’s emissions in 2020 would be 0.7-2.4% lower than in 2019. This is attributed to the economic impacts of the COVID-19 pandemic and two rounds of lockdown periods throughout 2020. In particular, tourism is expected to decline by 60% this year, impacting several other sectors like accommodation, food, entertainment and recreation, resulting in economic losses estimated at USD 400 million. To date, the government’s response to the pandemic has focused mainly on strengthening the health care system by increasing health-related spending and social assistance. Some measures have also been in place to support informal sector workers, small and medium-sized enterprises, and the tourism sector. Nepal has not yet put in place any recovery measures that can be labelled as either high or low carbon measures.
Nepal appears to be slow in implementing policies needed to achieve some of its sectoral NDC targets, particularly in the energy and transport sectors. Specifically, Nepal’s current 3.2% share of renewables in total energy consumption is far from its pledged 20% by 2020. Similarly, the share of EVs currently stands at less than 1%, while continuing to increase its dependency on fossil fuels in the transport sector. In the forestry sector, however, Nepal seems to be keeping its promise to maintain 40% of the total area of the country under forest cover and is implementing its REDD+ National Strategy, which is expected to reduce about 14 MtCO2e by 2020, by addressing the drivers of deforestation.
Nepal’s NDC includes several targets on clean energy, afforestation, sustainable transport systems, climate friendly practices in agriculture, waste management and building codes, but it does not include an economy-wide greenhouse gas (GHG) emission reduction target. Therefore, we could not quantify Nepal’s emissions reduction contribution and we could not rate the NDC. Nepal is currently preparing an updated NDC for submission to the UNFCCC this year, and we encourage the government to provide more clarity on its climate change targets in this next submission, including a clear economy-wide 2030 emissions reduction target.
Emissions have continued to grow in Nepal, going from about 26 - 54 MtCO2e between 1990 and 2016. While the government is showing some progress in the implementation of its mitigation policies, under current policies, emissions are expected to increase between 31-36% 2030, above current levels. Civil society studies further indicate that the level of policy implementation is far from that needed to meet some their sectoral targets, especially in the energy and transport sectors (CEN, 2020). The government published the ‘Kathmandu Valley Air Quality Management Action Plan-2020’ to reduce air pollution and the Low Carbon Economic Development Strategy is waiting to be approved by the Cabinet (see Current Policy Projections).
Due to the economic impacts of the COVID-19 pandemic and two rounds of lockdowns, our assessment shows that Nepal’s 2020 emissions will be between 0.7-2.4% lower than in 2019. Since March 2020, the government has had intermittent lockdown periods that lasted until September 2020. In particular, tourism is expected to decline by 60% this year, impacting several other sectors like accommodation, food, entertainment and recreation, resulting in economic losses estimated at USD 400 million (UNDP, 2020). A recent study from the World Bank highlights that socio-economic impacts in Nepal can magnify depending on how things develop for three key elements: i) tourism, trade, and foreign employment; ii) potential collapse of the inadequate health infrastructure and availability of a vaccine; and iii) Nepal’s heavy geo-economic reliance on India and China (World Bank, 2020b).