Climate and cash

  • All three tiers of Nepal’s government must make responsible use of climate change finance

Oct 5, 2018-

According to the 2017 Nepal Disaster Report, weather-related disasters in 2015 and 2016 resulted in the death of 710 people across the country and caused economic losses of around 3.32 billion rupees. The agriculture sector, which accounted for two-thirds of the economy in 2010, shrunk to contributing only 29 percent to the economy this year. Almost 60 percent of Nepalis are dependent on this sector, which is highly susceptible to climate change induced weather uncertainties such as an increase in temperature and erratic precipitation. Extreme climatic events account for an annual loss to the tune of 1.5 to 2 percent of the country’s GDP.

The Government of Nepal (GoN)’s initiatives such as National Adaptation Plan of Action, Local Adaptation Plan of Action and the Climate Change Policy 2011 aim at minimising climate- change induced vulnerabilities and losses. Climate change programmes that are implemented in the country also aim to effectively use funds by targeting climate-vulnerable households.

In 2013/2014, according to the Ministry of Finance (MoF), Nepal had allocated Rs 53.47 billion rupees (10.34 percent of the budget) to climate change actions. Five years later in 2017/2018, this amount increased to Rs 393.35 billion (30.76 percent of the budget). But how has the increased budget allocation helped in minimising vulnerabilities due to climate change induced floods, landslide, drought, forest fire and epidemic is a key question that needs to be answered.

Another important question that needs to be addressed is: what percentage of the allocated amount has actually reached vulnerable households? The 2011 climate change policy requires that 80 percent of the funds on climate change should reach the ones who need it. This policy provision appears optimistic given Nepal’s low public spending record. In 2016/2017, only about 30 percent of the total budget was spent as capital expenditure. Climate change programmes are no different: the 80 percent stipulated fund is not met in a majority of programmes implemented.

An examination of some of the ongoing programmes on climate change reinforces what we already know. Weak inter-agency coordination hampers the effectiveness of planned activities on both adaptation and mitigation. The Ministry of Population and Environment, the focal agency responsible for the country’s climate change actions, has now been merged with the Ministry of Forest, a much larger and powerful ministry. How will this reorganisation play out in improving climate change adaptive activities? The planning and designing of climate change activities is often a top-down process. The affected communities end up becoming ‘last mile actors’ than active partners in co-producing knowledge and programme design.

Issues of transparency, accountability, participation, responsiveness and rule of law key to effective governance are equally valid for programmes on climate change. The challenge lies in tweaking delivery mechanisms to suit emerging conditions spawned by climate change and their consequences cascading through the social and economic landscape. We must devise relevant monitoring indicators that track the use of finances, programmes, as well as coordinated workings of agencies at federal, provincial and local levels.

Nepal’s share of greenhouse gas emission, at around 0.022 percent, is minuscule compared to the global carbon budget (128 ppm higher compared to pre industrial era), yet the country is most vulnerable to its impacts. To minimise the impact of climate change, as well as meet development objectives without adding to the global carbon budget, Nepal needs support from developed countries in finances, technology and scientific knowledge to adapt and pursue a carbon neutral pathway.

Over the past several years, Nepal has received financial support from various international donors in implementing programmes aimed at minimising climate change induced vulnerabilities. How has this support helped achieve the intended objectives and increased adaptive capacity of the poor, marginalised and disadvantaged households against climate change are useful questions whose answers would help us meet policy objectives.

While additional resources to deal with climate change are prerequisite, mechanisms that ensure ‘additional value for additional money thus invested’ is absolutely essential. Making effective use of climate finance is an obligation and responsibility of Nepal’s federal, provincial and local governments. In this endeavour, Nepal’s Office of Auditor General that tracks the government’s budget expenditure need to become more involved and provide constructive insights on use of climate change finances.

Most climate change adaptation programmes implemented in Nepal are related to natural resource use, income generation and capacity development. These micro-level interventions help address vulnerabilities to some extent. At the same time, we need to identify and address structural drivers of underdevelopment and vulnerability so as to establish better synergy between micro-interventions and macro-systemic responses. This effort will require clarifying the links between ‘climate change adaptation’ and ‘development’. Lack of clarification means that we may end up including all development support as climate change finances. It is incumbent upon the GoN to create space in which analysts, practitioners, decision makers and affected group can come together and also help pave the way to transforms our economic system into one with low carbon footprint.

- Rabi Wenju

Wenju is a Research Officer at Institute for Social and Environmental Transition- Nepal (ISET-Nepal)

Published: 05-10-2018 07:17

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