Data from the BIPAD portal, the central disaster information management system of the Nepal government, shows that compared to other forms of natural disasters, climate-related floods and landslides have been steadily increasing in Nepal causing economic losses as well as loss of lives.
Other forms of extreme- and slow-onset climate impacts such as glacier melt and outburst floods, forest fires, droughts and cold waves are also on the rise. The increasing frequency and severity of various hazards indicates that climate change impact in the country is growing.
A 2014 ICIMOD study shows that Nepal’s glacier area decreased by 24% between 1977-2010 and another 2019 study shows that even if global warming is limited to 1.5°C increase, the mountains in the region will warm by 2°C degrees and the glaciers will lose a third of their volume. This will have a significant impact on the nearly two billion people living in the region and downstream, including in Nepal.
It is estimated that Nepal will experience on average a 13% reduction in its GDP by 2050 and a 33% reduction by 2100 due to climate impact even in the 1.5°C scenario. This will increase on average to around 20% reduction by 2050 and 65% reduction by 2100 under current climate policies.
These are conservative estimates that do not take into account all forms of climate impacts, and are in addition to the non-economic loss and damage the country will face.
The loss and damage fund agreed at COP27 is huge given that to date no finance had been made available through existing processes within the UNFCCC to address it.
While a fund was established building on the momentum from Glasgow, the specifics of what the fund looks like, where it will be placed, how it will be sourced and how it will function remains to be decided. The way forward to design and operationalise the fund is important.
A transitional committee tasked to work on the design of the fund will meet three times next year to deliberate on these matters, and will present recommendations for the consideration of countries at COP28 in UAE next year so it will be operational by end 2023.
The process has begun to nominate members of the transitional committee, which will comprise 14 members from developing countries and 10 members from developed countries. Under the developing countries category, three members will be nominated from the Asia and the Pacific region and two from the Least Developed Countries LDCs.
It is vital that the new loss and damage fund sits in parallel with existing funds like the Global Environment Facility (GEF) and the Green Climate Fund (GCF) as an operating entity under the UNFCCC and Paris Agreement. It should expedite and have flexible disbursement of resources to ensure support immediately in the aftermath of a climate event. This would not be possible if the fund were to sit under the GEF and the GCF which follow a program-based approach.
At COP27, LDCs negotiated on loss and damage as a part of the Group of 77 and China — the negotiating bloc comprising 134 developing countries. There is a view from the developed countries that the funding arrangements to respond to loss and damage should include other loss and damage financing initiatives outside of the UNFCCC as well.
While the LDC Group welcomes any support on loss and damage, proposals outside of the UNFCCC are seen as falling outside of the mandate of the climate negotiations, and the governments that take part in them. They are, therefore, seen as not being not pertinent to the negotiations ongoing under the Convention and Paris Agreement.
Nepal needs to work on further strengthening its institutions and policies to better document and respond to climate impacts, and coordinate with agencies already engaged on disaster- and humanitarian-related support.
Currently the BIPAD portal tracks both climate-related and other disasters together. Now more thought needs to be given on how the data can be disaggregated to demonstrate climate change impact. Furthermore, establishing climate linkage and collecting information and data on slow onset events remains key.
Nepal has a special role to play in the design of the loss and damage fund in the coming year. We are best positioned to amplify voices on the accelerated impacts of climate change in the highlands.
It will also be important to continue to build on Nepal’s expertise on climate change to maintain leadership at both the national and international levels and to steward the negotiations so the loss and damage fund can respond effectively to the urgent needs of the world’s most vulnerable.
Manjeet Dhakal is Head of LDC Support Team at Climate Analytics (CA) and Director for Climate Analytics South Asia office. Sneha Pandey is Sneha Pandey is a loss and damage expert with the LDC Support Team at Climate Analytics.