Opinion | The case for pricing climate risks now
Summary
Nepal faces significant economic losses from climate-induced disasters, with annual costs reaching $18 million and potential losses up to 10% of GDP by 2100. Despite budget allocations tagged for climate, actual impactful spending remains low, risking continuous rebuilding rather than growth.
Key Points
- Nepal incurs an average annual economic loss of $18 million from climate-induced disasters, potentially rising to 10% of GDP by 2100 without action.
- Climate-proofing infrastructure costs less than 1% extra but saves $4 for every $1 spent in avoided losses, yet Nepal’s projects often overlook these risks.
- Although Nepal's budget has a high share labelled as climate-relevant, actual utilisation and impact of climate funding remain low and poorly directed.
- Key policy recommendations include transparent green tax use, mandatory climate risk assessments for projects, statutory EV policies, and effective use of climate finance mechanisms.
