Policies & action
Nepal’s current policies are 1.5°C compatible when compared to its fair-share contribution. The “1.5°C Paris Agreement 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 do not require other countries to make comparably deeper reductions.
However, Nepal is off track when compared with modelled domestic pathways and needs to implement more stringent policies, for which it will need additional support. Current policies are also not sufficient to meet the lower end of its Nepal’s conditional target.
The assessment below is the CAT’s 27 November 2020 analysis and has not been updated.
Nepal’s emissions excluding LULUCF doubled between 1990 and 2016, going from about 26 MtCO2e to 54 MtCO2e in that period. Under current policies, emissions are expected to increase between 31 -36% by 2030, compared to 2016 levels, reaching 70–73 MtCO2e in 2030. With this growth, the country’s per capita emissions would go from 2.0 tCO2e/cap in 2016 to 2.1–2.2 tCO2e/cap by 2030, but will remain well below the world’s current average emissions per capita of 4.8 tCO2e/cap (Ritchie, 2019).
Nepal is a least-developed country that is highly vulnerable to climate change. The government is currently developing its National Adaptation Plan (NAP) with a focus on seven thematic areas: i) Agriculture and food security, ii) Forests and biodiversity, iii) Water resources and energy, iv) Climate-induced disasters, v) Public health, vi) Tourism, natural and cultural heritage, and vii) Urban settlements and infrastructure (Government of Nepal, 2018c). In 2015, the Alternative Energy Promotion Centre (AEPC) drafted a Low Carbon Economic Development Strategy (LCEDS) for the country, which aims to catalyse concrete actions that would support low carbon development in the energy, agriculture, industry, transport, waste, residential and commercial sectors (Government of Nepal, 2016). Although the Ministry of Population and Environment (MoPE) already submitted the LCEDS to the Cabinet, the strategy has not yet been approved (CEN, 2020).
In March 2020, the government published the ‘Kathmandu Valley Air Quality Management Action Plan-2020’ to reduce air pollution levels (Himalayan News Service, 2020). This was also one of the targets listed in the NDC. Although the action plan is finally in place, no other major progress has been made and air pollution levels are still above the national quality standards (CEN, 2020).
Due to the economic impacts of the COVID-19 pandemic and two rounds of lock-down period, our assessment expects Nepal’s 2020 emissions to be 0.7-2.4% lower than in 2019. Informal businesses in Nepal make up to about 50% of enterprises and are the main source of income for most of the labour force. Seasonal and informal workers in both the formal and informal sectors represent close to 85% of the labour force and are among the most vulnerable, based on income, and their ability to sustain themselves through the economic slowdown. 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 worth USD 400 million (UNDP, 2020; World Bank, 2020b).
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). To date, the government’s response to the pandemic has focused mainly on strengthening the heath system by increasing health spending and social assistance. Some measures have also been in place to support informal sector workers as well as small and medium-sized enterprises and those in the tourism sector (IMF, 2020). Until now, Nepal has not put in place any recovery measures that can be labelled as either high or low carbon measures.
Energy-related emissions contributed about 37% to Nepal’s total emissions excluding LULUCF in 2016 (Government of Nepal, 2014; Sadavarte, P., 2019; Tribhuvan University, 2019). In the same year, about 91% of Nepal’s population had access to electricity. The Nepali electricity mix is dominated by hydropower, which accounts for nearly 90% of installed capacity and 99% of total electricity generation (Government of Nepal, 2014). The total energy supply on the other hand, is predominantly based on biofuels and waste with a growing share of oil since 2015. This is in conflict with one of Nepal’s NDC sectoral targets that aims to reduce its dependency on fossil fuels. Instead, the consumption of biofuels, waste, oil and coal have continued to increase steadily since 2015 (coal to a lesser extent) (IEA, 2020).
The National Rural and Renewable Energy Program (NRREP) was also referred to in the NDC, saying the programme would aim to reduce dependency on biomass by making its use more efficient. Although almost 1.5 million improved cooking stoves and about 400,000 biogas household systems have been set up since 2016, biomass consumption has continued to increase over recent years (CEN, 2020; Government of Nepal, 2012).
The Government’s “white paper” on Nepal’s energy sector sets the target of generating 10 GW of electricity in the next decade (Government of Nepal, 2018b). On top of this, the government marked the years 2018–2028 as the Energy Decade, and will focus on the “development and expansion of hydroelectricity and all types of renewable energy to provide clean energy to all Nepali households within the coming three years and to avail electricity to all households per demand within the next five years” (Government of Nepal, 2018a). However, a recent study on progress towards the implementation of the NDC reports that the targets set by both the “white paper” and the NDC (20% of renewables in the energy mix) are far from being achieved as the current share of renewables stands at 3.2% (CEN, 2020).
As a landlocked country, road transport accounts for over 90% of the domestic movement of passengers and freight in Nepal. Because of rapid urbanisation, rising incomes and increased road access in rural areas, the total number of registered vehicles increased significantly, as did GHG emissions levels.
In October 2018, the Prime Minister of Nepal launched the ‘National Action Plan for Electric Mobility’ which assesses the current state of the transport sector and explores various scenarios for electrification in line with the targets in the NDC of increasing the share of electric vehicles up to 20% above 2010 levels and reducing fossil fuel dependency in transport by 50% by 2050 (CEN, 2020; Government of Nepal, 2016). Specific plans to ban fossil-fuelled vehicles in some major cities and the sale and distribution of fossil-fuelled vehicles after 2028 were announced that same year (Onlinekhabar, 2018). However, according to civil society studies, while electric vehicles imports are increasing, at less than 1%, their share is still negligible, there’s very few charging stations and the transport sector’s dependency on fossil fuels is still increasing, putting the NDC targets far from reach (CEN, 2020; IEA, 2020).
The NDC also included the plan to develop an electrical (hydro-powered) rail network (Government of Nepal, 2016). The 945km Mechi-Mahakali Electric Railway is being developed, although it remains unclear when will the railway come into operation (CEN, 2020).
The majority of emissions in Nepal are non-CO2 GHG emissions from the agriculture sector. In 2016, methane and nitrous oxide contributed to 60% of total GHG emissions, excluding LULUCF. The largest share of these emissions come from rice cultivation, enteric fermentation and agricultural soils (Government of Nepal, 2014). Some studies have been carried out to explore potential to implement Climate Smart Agriculture (CSA) in Nepal, which would contribute to both mitigating and adapting to the effects of climate change (CIAT; World Bank; CCAFS and LI-BIRD, 2017). However, to date, little information was found on whether any of these CSA actions are being implemented.
In Nepal, land use and forests are a significant emissions sink.
In January 2020, The Ministry of Forests and Environment launched the Integrated Landscape Management to secure Nepal’s protected areas and critical corridors (ILaM) with the aim of building national capacity and creating an enabling environment for cross-sectoral coordination to promote forest and landscape conservation (GEF news, 2020).
At the beginning of 2019, a study by the Forest Research and Training Centre in Nepal found that the country’s forest area has nearly doubled, from 26% of land area in 1992 to 45% in 2016 (Forest Research and Training Centre, 2019). This makes Nepal an exception to the global trend of deforestation. But new research conducted by a NASA-funded team found that, on average, more new forests have been established than have been cut down, resulting in a net forest gain (Forest Research and Training Centre, 2019). This net increase in forest cover allows Nepal to fulfil its NDC targets of maintaining 40% of the total area of the country under forest cover and enhancing carbon sequestration and forest carbon storage (CEN, 2020).
The NASA-funded report further found that areas with high rates of community forest membership experienced the most forest recovery, implying that decentralised forest management has played a key role in Nepal’s reforestation (Nepali Times, 2019). After substantial deforestation between 1950 and 1980, in part due to a growing rural population that cut trees to harvest timber and convert land to agriculture, the government began handing over hectares of national forest land to communities to manage. Local communities were seen to have a vested interest in preserving forest resources for long-term, sustainable use. They also were better positioned to monitor forests and enforce rules for harvesting forest products.
In 2018, Nepal developed its REDD+ National Strategy, in line with its promise in the NDC to reduce about 14 MtCO2e by 2020 addressing the drivers of deforestation and forest degradation. The REDD+ National Strategy as well as the Emission Reduction Program Document (ERPD) are currently in the process of being implemented (Government of Nepal, 2018d).