October 9: The Nepal Development Update published by the World Bank contains a special focus on the Macroeconomic Impacts of Climate Change.

According to the report released on October 6, Nepal is highly vulnerable to climate change and must adapt to global warming, even though it is a negligible contributor to global greenhouse gases. The new analysis of the World Bank presented in the update finds that negative impacts are expected to accelerate sharply in the second half of the century, with GDP contracting 24 percent relative to the baseline projections by 2100.

A list of 32 actionable steps that Nepal can take now to reduce these impacts and reinforce its Green, Resilient, and Inclusive Development (GRID) pathway is provided in the recently released Nepal Country Climate and Development Report, the World Bank said in a statement. 

“Nepal’s GDP and other macroeconomic losses in the first three decades of the 21st century are small to begin with, but are expected to accelerate quickly in the second half of the century as temperatures and climate events reach higher levels of intensity,” the statement quoted World Bank’s Country Director for the Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos as saying.

“These findings underscore the urgency of implementing measures aligned with the country’s Green, Resilient, and Inclusive Development (GRID) pathway, to increase Nepal’s adaptive capacity to climate-related shocks.”

Earlier in the Country Climate and Development Report, the World Bank had warned that climate change would continue to jeopardize gains in Nepal’s human development and poverty reduction without comprehensive and scaled-up climate action.

To respond to this challenge, Nepal is already implementing steps to recalibrate its economy by adopting a Green, Resilient, and Inclusive Development (GRID) approach. In 2021, Nepal adopted the Green, Resilient and Inclusive Development (GRID) approach as a national vision to guide long-term green growth and build resilience to climate and other shocks that are barriers to Nepal’s development ambitions, the report added.

Under Nepal’s federal structure, the local governments are placed at the center of climate resilience and development efforts with extensive implementation responsibilities and play a crucial role in translating the GRID strategy into action.

According to the report, Nepal has pledged to achieve net zero emissions by 2045 and to significantly scale up hydropower investment in the coming decade. Nepal has begun to put in place the necessary policy framework, such as the 2019 National Climate Change Policy, the 2022 Solid Waste Management Policy, the 2022 Forest Regulation and the 2022 Land Use Regulation, the World Bank Report stated. “However, implementation of this reform agenda and prioritization of investments is incipient. Moreover, enhanced prioritization and efficiency of public expenditure are required to maximize climate and development benefits.”