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Tag: Climate Change

OP-EDs and Columns

Climate change: G7 leaders must scale up commitments and cooperation with the developing world


This commentary originally appeared in the South China Morning Post on 27 April 2023. Read the original commentary here.

The Group of Seven (G7) leaders are set to meet in Hiroshima next month to contest daunting global challenges. The host city was hit by an atomic bomb almost 78 years ago, resulting in a historical tragedy. Those who visit the city will see a message to humanity etched on the Hiroshima Memorial Cenotaph: “Let all the souls here rest in peace, for we shall not repeat the evil.”

Today, we face another human-induced threat in climate change. As the world seeks to prevent the full-scale damage climate change is capable of, it seeks the kind of determination Hiroshima showed while rebuilding itself into a resilient, prosperous city. That is why it is vital to promote international cooperation, and G7 leaders must come to an agreement to scale up efforts on climate action.

The G7 bears the responsibility for leading efforts to reduce global carbon dioxide emissions as developed Western countries have emitted most of the world’s greenhouse gases since the start of the Industrial Revolution. We hope the G7 leaders can focus on having meaningful discourse on climate change, reaffirm their prior climate commitments and allow for the emergence of new commitments to help escape another human catastrophe.

The G7 also needs to accept that its members alone cannot limit global warming to 1.5 degrees Celsius. Recent scientific estimates show that doing so would require emissions reductions of around 43 per cent by 2030, relative to 2019 levels.

Therefore, the group needs to coordinate with developing countries. However, the reality is that geopolitical tensions between China and the United States, and Russia’s invasion of Ukraine, have hampered global emission-reduction efforts. Last year’s G7 summit in Germany included a pledge that the war would not hinder climate and biodiversity goals, and we hope the group proposes bold, pragmatic and tangible initiatives to achieve that.

Rising emissions from developing countries such as China and India are also complicating climate negotiations. It is imperative the G7 understands that these countries have their own growth concerns around emissions reductions. However, the group can encourage initiatives that promote climate-smart growth in developing countries. Bringing these initiatives to life will require the G7 and emerging economies to enhance communication and cooperation on climate finance, and research and development.

The G7 must also support low-income and vulnerable countries. It should propose establishing climate funds in coordination with major developing countries with high emissions to support climate initiatives in low-income economies. The Group of 20 meetings are an appropriate forum for expanding such cooperation.

In addition, the group should review the progress of its commitment to deliver US$100 billion per year through to 2025, made at the UN climate change conference in Copenhagen in 2009. Unfortunately, it has yet to fulfil this commitment on climate financing.

The G7 must take substantive steps to live up to this pledge and extend it well beyond 2025. It should also encourage countries – some of which are major emitters and close political allies – to align their nationally determined contribution with the 1.5-degree pathway if they have not yet done so.

G7 countries have agreed to uphold the Glasgow Climate Pact and phase down the use of coal power and inefficient subsidies for fossil fuels, hoping to achieve this by 2030 at the latest. They have committed to decarbonise their electricity sectors by 2035 and highly decarbonise road transport sectors by 2030. These commitments are crucial for achieving carbon neutrality, so the G7 should roll out further details of these plans and come up with ways to track progress on previous commitments.

Despite some shortcomings and a failure to deliver on its commitments, the G7’s vision for emissions reductions and commitment to decarbonisation are valuable and should not be forgotten. As a result, the team at the Asian Development Bank Institute is working to develop a dashboard to keep track of those visions and commitments.

Similarly, to support G7 commitments to fight climate change, the ADB has initiatives such as the Energy Transition Mechanism, a scalable, blended-finance instrument to step up the retirement of coal-fired power plants in the Asia-Pacific region. Towards that end, the ADB has joined the Global Energy Alliance for People and Planet to pledge US$35 million to help improve energy access and boost the green energy transition in South and Southeast Asia.

In October 2021, the ADB committed to provide US$100 billion in cumulative climate financing from its own resources to its developing member countries from 2019 to 2030. Multilateral agencies such as the ADB can support the G7 by bringing in new climate programmes and carrying out existing ones on climate finance in emerging economies.

The ADB is committed to working with the G7 and other partners to support climate-resilient growth and recovery in the Asia-Pacific region. Strong commitment, broader cooperation and concerted efforts at every level possible are the only way to reduce greenhouse gas emissions and ensure we do not “repeat the evil” – an important message that Hiroshima continues to provide.

OP-EDs and Columns

जलविद्युत् र हाइड्रोजन ऊर्जाको उपयोग

– निश्चल ढुङ्गेल

यो लेख १६ फेब्रुअरी २०२३ मा प्रकाशित भएको थियो। मूल लेख यहाँ पढ्नुहोस्

जलवायु परिवर्तनमा नवीकरणीय ऊर्जाले गति लिइरहँदा विश्वको ध्यान नवीकरणीय ऊर्जा स्रोतलाई दोब्बर बनाउनेतर्फ केन्द्रित छ । सन् १९६५ मा ९४१ टेरावाट घन्टाबाट सन् २०२१ मा ७,९३१ टेरावाट घन्टामा नवीकरणीय स्रोतको उत्पादनमा उल्लेखनीय वृद्धि भयो । यस सन्दर्भमा धेरै नदी र खोला भएको नेपाल दक्षिण एसियाका लागि ऊर्जा सुरक्षाको आधारशिला बन्न सक्छ । देशको अप्रयुक्त जलविद्युत्ले भविष्यको ऊर्जा आपूर्तिमा महत्वपूर्ण भूमिका खेल्न सक्छ । साथै, भारत र बंगलादेशको कार्बन फुटप्रिन्टलाई पनि कम गर्न सक्छ ।

ऊर्जा विकासको मार्गचित्र कार्यान्वयन गर्न नेपालले ऊर्जा तथा जलस्रोत दशक (२०१८–२८) घोषणा गरेको छ । नेपाल अहिले विद्युत् उत्पादनमा आत्मनिर्भर छ । सन् २०१३ मा ४,२५८ गिगावाटबाट ०२२ मा ११,०६४ गिगावाट उत्पादनका साथ उल्लेखनीय वृद्धि भएको छ । अरुण चौथो (क्षमता ४९०.२ मेगावाट), पश्चिम सेती (७५० मेगावाट), अरुण तेस्रो (९०० मेगावाट) र तल्लो अरुण (७६९ मेगावाट) प्रमुख जलविद्युत् आयोजना हुन्, जसले सन् २०३० देखि०३५ सम्म वितरण सुरु गर्नेछन् । ऊर्जा उत्पादन र निर्यातमा वृद्धि र ऊर्जा आयात घटेको छ । हामीले यो अतिरिक्त ऊर्जा कहाँ प्रयोग गर्ने ?

आदर्श जवाफ यो परम्परागत वा गैरनवीकरणीय ऊर्जा प्रतिस्थापन गर्न प्रयोग हुनेछ । भारतले दक्षिण एसियामा व्यापार विस्तार गर्ने लक्ष्य राखेको इन्डियन इनर्जी एक्सचेन्जमा सहभागी हुने नेपाल दक्षिण एसियाकै पहिलो देश बनेको छ । आज देशको कुल आयातको १४.१ प्रतिशत पेट्रोलियम पदार्थको हुन्छ । यसलाई विद्युत्ले सजिलै प्रतिस्थापन गर्न सकिन्छ । नेपालको जलविद्युत्ले दक्षिण एसियाको एकतिहाइ भागलाई गैरनवीकरणीयबाट नवीकरणीय ऊर्जा उपभोगमा परिणत गर्न सक्छ । यसो गर्दा सन् ०४० सम्म विश्वभर हुने कुल हरितगृह ग्यास उत्सर्जनको झन्डै ३.५ प्रतिशत घट्नेछ ।

नयाँ विद्युत् ऐन कहिले पारित होला ? :  डेढ दशक बितिसक्दा पनि नेपाल सरकारले नयाँ विद्युत् ऐन ल्याउन सकेको छैन । कानुन निर्माणमा भएको ढिलासुस्तीले देशको ऊर्जा क्षेत्रको अपेक्षित विकासमा बाधा पु¥याएको छ । अहिले विद्युत् ऐन–१९९२ संशोधन गर्ने विधेयक राष्ट्रिय सभाको कार्यक्षेत्रमा छ । विद्युत् ऐन–१९९२ लाई संशोधन गर्ने विधेयकमा विद्यमान विद्युत् ऐनलाई परिमार्जन र एकीकृत गर्ने परिकल्पना गरिएको छ ।

निजी क्षेत्रलाई देशभित्र र बाहिर विद्युत्को व्यापार गर्न लाइसेन्स दिने प्रावधान राखेको छ । तर, विधेयक संसद्मा टुंगो लाग्न सकेको छैन । सम्बन्धित ऐन नहुँदा नेपाल विद्युत् प्राधिकरणले नयाँ विद्युत् खरिद सम्झौता गर्न नसकेको, निजी क्षेत्रले विद्युत् व्यापारको स्वीकृति लिन नसकेको र मुलुकले विद्युत् बजार विस्तार गर्न दुवै पक्ष असफल भएको छ । देशको ऊर्जा क्षेत्रमा रहेका विद्यमान समस्या समाधानका लागि नयाँ सरकारले प्रभावकारी भूमिका खेल्न अपरिहार्य छ ।

हाइड्रोजन ऊर्जाको उत्कृष्ट उपयोग :  नेपालले जलविद्युत् र हाइड्रोजन ऊर्जाको उपयोग गर्नतिर ध्यान दिनुपर्छ, जुन ऊर्जा व्यापारमा तुलनात्मक लाभ छ । हरित हाइड्रोजन पानीलाई हाइड्रोजन र अक्सिजनमा विभाजन गरी नवीकरणीय ऊर्जा र इलेक्ट्रोलाइजर भनिने प्रविधि प्रयोग गरेर उत्पादन गरिन्छ । जलविद्युत्को रूपमा नवीकरणीय ऊर्जाको प्रचुर मात्रामा भएकाले नेपाल हाइड्रोजन उत्पादनका लागि अनुकूल अवस्थामा छ ।

सार्वजनिक र निजी निकायबाट प्राप्त प्रतिवेदनअनुसार नेपालमा सन् २०३० सम्म कम्तीमा १० हजार मेगावाट जलविद्युत्को माग  हुनेछ । ०४० सम्म कुल क्षमता ३९ हजार मेगावाट हुने अपेक्षा गरिएको छ । यसरी, अतिरिक्त जलविद्युत्लाई प्रतिस्पर्धी मूल्यमा हरित हाइड्रोजन उत्पादन गर्नका लागि च्यानल गर्न सकिन्छ । ०५० सम्ममा हरित हाइड्रोजन उत्पादनको लागत प्रतिकिलोग्राम एक डलरभन्दा कम हुने अनुमान गरिएको छ ।

अतिरिक्त स्रोतको उपयोग गर्नुका साथै हरित हाइड्रोजनलाई इन्धनको प्राथमिक स्रोतको रूपमा प्रयोग गर्दा नेपालले आफ्नो आर्थिक विकासको कथालाई परिवर्तन गर्न अनुमति दिनेछ । किनकि, हरित हाइड्रोजनको व्यावसायिक प्रयोगले रासायनिक उद्योग, यातायात, ऊर्जा–सघन उद्योगहरू (फलाम र स्टिल) का साथै आवासीयजस्ता विभिन्न क्षेत्रलाई समेट्छ । यद्यपि, सम्बन्धित क्षेत्रमा हरित हाइड्रोजन ल्याउनुअघि पूर्वाधार र प्राविधिक बाधालाई ध्यान दिनु आवश्यक छ । युरियालगायत अमोनियममा आधारित मल उत्पादन गर्न रासायनिक उद्योगमा हरियो हाइड्रोजन प्रयोग गर्न सकिन्छ ।

आपूर्तिभन्दा तीन गुणा माग बढेसँगै नेपालमा रासायनिक मलको अभाव दीर्घकालीन समस्या बनेकाले आगामी दिनमा हरियो हाइड्रोजनको व्युत्पन्न रूपमा रासायनिक मल उत्पादनमा केन्द्रित हुनुपर्छ । उदाहरणका लागि तीन हजार मेगावाटको अतिरिक्त जलविद्युत्बाट करिब २१ लाख ५० हजार टन हरियो युरिया उत्पादन गर्न सकिन्छ ।

नेपालले आर्थिक वर्ष २०२१–२२ मा एक लाख ८० हजार टन अमोनियममा आधारित रासायनिक मल आयात गरेको थियो, जसमा ६० प्रतिशत युरिया हो । तसर्थ, रासायनिक उद्योगमा हरियो हाइड्रोजनको तत्काल प्रयोगले रासायनिक मलको बहुप्रतीक्षित स्वदेशी उत्पादनको थालनी गर्नेछ । साथै, नेपाल सरकारमाथिको वित्तीय भार पनि घटाउनेछ । सन् २०२१ मा सरकारले मल अनुदान कार्यक्रमका लागि १५ अर्ब रुपैयाँ विनियोजन गरेको थियो ।

हरियो हाइड्रोजनको आवासीय प्रयोग, विशेषगरी तताउन र खाना पकाउन दीर्घकालीन सम्भावना छ । आवश्यक टेक्नोलोजी अझै प्रारम्भिक चरणमा छ । हाइड्रोजनलाई घरेलु प्रयोगार्थ सम्भावित इन्धनका रूपमा परीक्षण गर्ने परियोजना विश्वव्यापी रूपमा सञ्चालनमा छन् । नेपालले पनि विश्वव्यापी प्राविधिक विकासका आधारमा घरेलु प्रयोगका लागि इन्धनको स्रोतको रूपमा हरित हाइड्रोजन प्रयोग गर्न सक्छ । प्राविधिक अवरोधबाहेक, हालको पूर्वाधार, आवासीय भवनहरू जस्तै, हाइड्रोजन अत्यधिक ज्वलनशील इन्धन भएकाले सुरक्षा चिन्ताको कारणले हाइड्रोजन प्रयोगलाई समर्थन गरिँदैन ।

जलवायु वित्त :  जलवायु परिवर्तनका प्राथमिकता र रणनीति सरकारी योजना र बजेट प्रक्रियामा समावेश भए पनि प्रत्यक्ष सरकारी लगानी निकै कम छ । कानुनी र व्यावहारिक अवरोधले प्रत्यक्ष वैदेशिक लगानी, निजी क्षेत्रको लगानी र द्विपक्षीय एवं बहुपक्षीय सहयोगमा असर पार्छ । 

आर्थिक वर्ष २०२०–२१ को मार्चसम्म ऊर्जासँग सम्बन्धित उद्योगले ५९.७ प्रतिशत लगानी प्रतिबद्धता पाए पनि वास्तविक लगानी ३५ प्रतिशत मात्रै आएको छ । जीवन्त ऊर्जा क्षेत्रमा थप विदेशी लगानी भित्र्याउन कानुनी अवरोधहरू खुकुलो पार्दै अनुकूल वातावरण सिर्जना गर्न आवश्यक छ ।

जलवायु उद्देश्य पूरा गर्न वित्तीय आवश्यकता ठूलो छ । हाल प्राथमिक जलवायु कोष सरकार, बहुपक्षीय कोष एजेन्सी र साना निजी क्षेत्रको योगदानबाट आउँछ । जलवायु बजेट २०१७–०१८ मा ३.७५ बिलियन डलरबाट २०२१–०२२ मा ४.६६ बिलियन पुगेको छ । सन् २०१० देखि नेपालले जलवायु परिवर्तनसम्बन्धी संयुक्त राष्ट्र फ्रेमवर्क कन्भेन्सनबाट मात्रै अन्तर्राष्ट्रिय जलवायु कोषमा  ३० करोड डलरभन्दा बढी प्राप्त गरेको छ ।

पछिल्लो तथ्यांकअनुसार सन् २०१५–०२० को बीचमा नेपालले अन्तर्राष्ट्रिय विकास बैंकबाट जलवायु वित्तमा २.५९ अर्ब डलर प्राप्त गरेको छ, जसमा सन् २०२० मा १.२ अर्ब डलर (समन तथा अनुकूलन कोषबाहेक) हुन आउँछ । अधिकांश स्वदेशी बैंकले स्थानीय मुद्रा ऋणमा जलविद्युत् आयोजनालाई वित्तपोषण गर्छन् । तर, ठूलो मात्रामा ऋण दिने उनीहरूको क्षमता सीमित छ । 

नेपालको ऊर्जा क्षेत्रमा सन् २०१० देखि २०१७ सम्म वार्षिक औसतमा ५२ करोड ७० लाख डलरको लगानी आएको थियो । ऊर्जा उत्पादन क्षेत्रले धेरैजसो रकम (७० प्रतिशतभन्दा बढी) प्राप्त गरेको छ । यसमध्ये लगभग सबै जलविद्युत् आयोजनामा गएको छ । जलविद्युत् उत्पादनमा लगानीका आधारमा स्थानीय स्वतन्त्र ऊर्जा उत्पादक र नेपाल विद्युत् प्राधिकरण क्रमशः दोस्रो र तेस्रो मा पर्दछन् । सन् २०१८–२०४० को अवधिमा विद्युत् क्षेत्रमा कुल २९ देखि ४६ अर्ब डलर लगानी आवश्यक पर्ने अपेक्षा गरिएको छ । ठूलो रकम भए पनि वार्षिक आवश्यकता पूरा गर्न अपर्याप्त छ ।

ऊर्जामा लगानी :  यसबाहेक, निर्यातकेन्द्रित जलविद्युत् परियोजना वार्षिक रूपमा ०.५–१.० अर्ब डलरको वृद्धिशील लगानी चाहिन्छ । धेरै आशावादी अनुमानअन्तर्गत पनि वित्तीय क्षेत्रका क्षमता सीमित छन् र थप लगानी आवश्यक छ । निर्यातमुखी परियोजनाको अन्तर्निहित अर्थशास्त्र र ऊर्जा वाणिज्यका लागि ठोस संस्थागत र नियामक वातावरणको सृजनाले राष्ट्रिय अर्थतन्त्रमा योगदान पु‍र्‍याउन लगानीको सफलता निर्धारण गर्नेछ । विकास साझेदार पहिले नै बोर्डमा छन् ।  विश्व बैंक, मिलेनियम च्यालेन्ज कोअपरेसन कम्प्याक्टका साथै भारत र चीन पनि ऊर्जा लगानीमा आकर्षित नभएका होइनन् ।

सरकारले  ऊर्जा लगानीमा गति बढाउनुपर्छ र अन्तर्राष्ट्रिय समुदायबाट थप समर्थन प्राप्त गर्नुपर्छ । साथै, अन्तर्राष्ट्रिय समुदायले यस क्षेत्रको दीर्घकालीन जलवायु लक्ष्यमा योगदान पु‍र्‍याउन सक्ने नेपालको अप्रयुक्त ऊर्जा क्षमतालाई बुझ्न जरुरी छ । आगामी वर्षमा लगातार बढ्दो विद्युत् उत्पादनको उपभोग गर्न घरेलु खपत (औद्योगिक र घरायसी) मात्र पर्याप्त हुनेछैन ।

भारत र बंगलादेशले विशेष गरी क्षेत्रीय ऊर्जा जडानलाई छलफल, प्रतिबद्धता र सहकार्यको केन्द्रमा ल्याएर यस क्षेत्रलाई ऊर्जा गरिबीबाट बाहिर निकाल्न र वातावरणीय उद्धारतर्फ औंल्याउने नेपालको प्रचुर ऊर्जा क्षमतामा चासो राखेको देखिन्छ । तसर्थ, नेपाल सरकारले ऊर्जा व्यापारलाई ध्यानमा राखी यसलाई बढावा दिनुपर्ने देखिन्छ । 

OP-EDs and Columns

A green techno-economic paradigm

– NISCHAL Dhungel

The opinion piece originally appeared in The Kathmandu Post on 4 Jan 2022. Please read the original article here.

Globally, there has been a shift toward a low-carbon economy and a developing green “techno-economic paradigm.” British economist Chris Freeman and British-Venezuelan scholar Carlota Perez coined the term “techno-economic paradigm,” an innovation-based theory of economic and societal development that remains at the centre of the capitalist development process. Least developed countries (LDCs) like Nepal face enormous challenges pivoting towards green techno-economic transformation compared to advanced economies. Although LDCs have contributed the least to climate change, they are at the forefront of the crisis—over the past 50 years, LDCs accounted for 69 percent of all deaths resulting from climate-related disasters.

Compared to pressing infrastructure and poverty alleviation demands in LDCs, a robust pro-climate agenda may seem counterproductive and anti-development. At the same time, there is a developing transition toward a low-carbon economy, which some authors have referred to as a “green techno-economic paradigm.” There is a shift of productive resources from high-emission industries (sunset industries) to lower-emission ones (sunrise industries). LDCs are often condemned to be technological laggards, with the development of modern technologies remaining strikingly concentrated in advanced economies. Sunrise industries may encourage productivity and strengthen intersectoral productive lineages due to the formation of a new green-techno-economic paradigm, which may offer new and more sustainable pathways to LDCs and developed countries. Nepal, for instance, can emulate India’s growth in the renewable energy sector.

Nepal contributes roughly 0.1 percent of global greenhouse gas (GHG) emissions. Most of Nepal’s energy comes from hydroelectricity, a remarkable achievement that has created a strong base for future climate-smart prosperity. One of the richest water-resource countries in the world with more than 6,000 rivers and rivulets, Nepal can become the bedrock of energy security for South Asia, using renewable means. The country can significantly uplift one-third of South Asia from non-renewable to renewable energy consumption, reducing approximately 3.5 percent of the total GHG emissions worldwide by 2040.

Green structural transformation

It is high time LDCs shifted toward strengthening resilience, moving away from fossil fuel, and aligning national objectives for sustainable green structural transformation. The Doha Programme of Action reflects the continued importance of structural change and productive capacities for LDCs. Despite placing greater emphasis on increasing production capacity and facilitating economic diversification, most LDCs have made little progress in changing the structure of their economies. The disastrous effects of Covid-19 on trade, investment and production in LDCs, and its broader economic and social effects have further slowed progress.

The prospects of structural transformation are available to LDCs through internal structural change, targeted policy decisions, or exogenous changes in the international setting. The structural transformation occurred in developed or emerging economies shifting from agriculture to manufacturing to the service sector. In Nepal, a structural transformation occurred directly, shifting from agriculture to the service sector following the contribution to Gross Domestic Product (GDP). Agriculture, which accounts for two-thirds of the workforce and one-third of GDP, has to undergo reforms to increase productivity, reduce poverty and free up labour for new sources of economic growth. The broad-based reforms Nepal implemented between 1986 and 1996 made a positive impact on the economy. The share of industry in GDP and exports, as well as the share of manufacturing, virtually doubled. This led to an increase in the economy’s openness and diversification. Compared to the manufacturing and agriculture sectors, the structural restructuring of Nepal’s economy over the previous decade has resulted in tremendous growth in the service sector. Besides, a knowledge-based economy cannot be sustained without the support of an expanding manufacturing industry.

Remittance is the mainstay of Nepal’s economic activities and the largest source of foreign exchange earnings for the country. According to the Nepal Rastra Bank (NRB), the country received 1.007 trillion rupees in remittances in 2021, or 20.8 percent of its GDP, and it is expected to increase to 22 percent in 2022. Given the noticeable increase in remittances, they are probably the main driver of the improvement in living standards seen in Nepal, directly (households receiving remittances) and indirectly (increased labour income of those that remained). To escape the out-migration and remittance trap, a clear set of plans and policies to increase domestic employment should be the top priority of the federal, provincial and local governments. Large-scale migration is a symptom of underlying, long-standing issues rather than a sign of strength. It is a monumental task switching from foreign to domestic employment. Without rethinking its development model, Nepal cannot prosper or graduate into a middle-income country. More human capital must be put to productive use for Nepal to continue on a more robust and sustainable growth path.

The structural change could be strengthened by accelerating the development of productive capacities, which will trigger an organic process whereby investment (i.e. capital expansion) is accompanied by a gradual shift of labour and production inputs towards more advanced and higher-value-added industries. A virtuous cycle of catching up with advanced economies could result from a structural process, which could increase labour productivity within the industry and through structural change, and reinforce the profit-investment nexus. Nepal’s plan for industrial growth and how trade, infrastructure, exchange rates, and other economic policies can help with industrial development is still not clear.

In their book Creating A Learning Society, Noble Laureate Joseph Stiglitz and Columbia University professor Bruce C Greenwald stressed that a nation’s comparative advantage is influenced by the products it creates. Governments must constantly evaluate how well their industrial policies are working and whether they are being “captured” by special interests. Governments must also continuously work to implement industrial policies more effectively, and industrial policy design must reflect the capacities and capabilities of the government. For example, LDCs can employ the same technologies (computerisation, information technology), labour management, and inventory control procedures (such as just-in-time production) that maximise productivity growth in different sectors.

One crucial thing to take away from developed nations like the USA is that they have institutionalised learning as they go along. For instance, in July 2022, the US Congress passed the CHIPS Act to address new challenges, supply chain disruption on semiconductors arising from the Covid-19 pandemic and the Russia-Ukraine war. The Act aims to strengthen US domestic semiconductor manufacturing, design and research. Industrial policies that function in one environment and at one level of development do not function in another. LDCs should learn a lesson from developed countries to enact and implement policies targeting a specific sector that maximises productivity growth.

The biggest market failure the world economy is currently dealing with is arguably climate change. With rare exceptions, it has proven challenging to persuade nations to enact carbon pricing or cap and trade, which would prevent people and businesses from considerably reducing their carbon emissions. Industrial policies that promote renewable energy and dissuade carbon-intensive companies and technologies can help developing nations decrease their carbon emissions. Lastly, creating green jobs in the industrial sector of the LDCs is a step in the right direction toward replacing carbon-intensive industries.

OP-EDs and Columns

Nepal Needs to Invest in Climate-Resilient Infrastructure

– ANUSHA Basnet

The opinion piece originally appeared in the 2022 November Issue of New Business Age Magazine. Please read the original article here.

As a developing country in the global south, Nepal is one of the most vulnerable countries to climate change. Various reports have shown that it is often the lower-income countries that are at greater risk due to climate change as they have a lower capacity to adapt to the changes. While Nepal only contributes 0.027% of global greenhouse emissions, it is positioned high on the list of countries most vulnerable to the impact of climate change.

According to a report from the Asian Development Bank (ADB), Nepal could lose up to 2.2% of its annual GDP by 2050 due to the impact of climate change. The country has already begun to see the devastating effects of climate change like decreasing agricultural output, change in crop rotation, change in rainfall patterns leading to an increase in frequency of natural disasters including droughts, floods and landslides resulting in great loss of lives and properties. As a result, the government has been acting to ensure that the negative effects of climate change are minimised. The country is part of the Paris Climate Agreement and the government has been working to meet the Sustainable Development Goals by 2030. Investing in climate-resilient infrastructures is a major step that can be taken by the government to tackle this problem. Multilateral agencies such as the World Bank and the ADB have also been providing financial backing to the country for adaptation to climate change.

Climate-resilient infrastructure includes infrastructure that has been designed and built to prepare and adapt to the changing climate conditions. With climate-resilient infrastructure, the danger of risks emanating from climate-related disasters is reduced. It is important to note that building climate-resilient infrastructures will not completely stop the impact of climate change, but it will greatly mitigate the risks posed by climate change. In terms of impact from climate change, the rise in average temperature causing heat waves, the change in rainfall patterns leading to droughts, floods, and rainfall, and the threats of glacier lake outbursts are the few major threats that Nepal currently faces. The current and future infrastructures being built in the country should take these factors into account and build infrastructure that can minimise the damage caused by these threats. It is especially important for climate resiliency to be taken into account while developing new infrastructure projects because the government has been increasing investment in the infrastructure sector with an aim to accelerate the economic growth of the country.

Major infrastructure projects such as Nagdhunga tunnel, Sikta Irrigation Project and West Seti hydropower project are all under construction or are slated to start construction soon. If climate change effects are not taken into account for these projects, then the investment made into these projects may end up going to waste. Thus, factors such as the increase in temperature, the water level at river sources, and glacial movements should all be taken into account before starting these mega projects.

Climate resilience also includes the maintenance of the existing infrastructure so that they are less vulnerable to the impacts of climate change. Floods and landslides have been causing extensive damage to different infrastructure in the country. While rebuilding these damaged infrastructure, climate resilience should be taken into account. Some things that can be done include building proper drainage systems to decrease the impact of flooding, rebuilding roads that can withstand higher temperatures, and rebuilding residential buildings with adequate ventilation to combat the effects of rising temperatures. Building infrastructures that can support the growing population of urban areas including roads, proper drainage systems, and waste management systems was a major topic of discussion at the recently held Nepal Infrastructure Summit 2022.

As rising temperatures and subsequent droughts will increase the demand for water for irrigation and drinking purposes, reservoirs should be built to address these problems. The government should also increase the monitoring of the current infrastructure systems so that required maintenance can be done on time. The government and the private sector are also eyeing green hydrogen as an alternative to petroleum products and chemical fertilisers.

Multilateral partners have been providing support to Nepal for building infrastructures that are climate resilient. Recently, Nepal and the World Bank signed a concessional financing agreement for $100 million for Green, Resilient, and Inclusive Development (GRID) with an aim to support the sustainable and productive use of natural capital and resilience of urban and rural areas. Two further instalments of funds are slated to be available through this agreement. Asian Development Bank has also provided financial support to the government for tackling climate change. Last month, the bank provided $70 million in loans to improve livelihood and climate resilience of 30,000 horticulture farmers across five provinces. During his visit to Nepal in March 2022, ADB’s Director General for South Asia Kenichi Yokoyama mentioned that the bank would maintain financial support amounting to $500- 600 million per year for the next three years for supporting the government’s aim of achieving sustainable growth.

Although the government has taken steps to create climate-resilient infrastructure in the country much is yet to be done especially in regards to management of the climate resiliency of the existing infrastructure. In addition to focusing on the climate-resiliency of newer infrastructure projects, the government needs to create solution-oriented policies that can minimise the negative impact of climate change on existing infrastructure. Further, instead of just taking loans from the development partners, the government needs to find other sources of funding as the burden of paying the debt is ultimately passed on to citizens impacted by climate change.

The concept of climate reparations could be applied here. The concept is a call for money to be paid by Global North to Global South to address the historical and current contributions made by Global North to cause climate change. Thus, the Nepal government could evoke this concept to request the development partners to provide grants instead of loans to combat the negative impact of climate change. Mobilising domestic funding through implementation of green financing can also be another option of raising funds.