Experts say the budget, which focuses on economic growth and infrastructure, has not given sufficient priority to the climate crisis, NDC implementation, and social inclusion.
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The budget, which seems to be more focused on economic growth and physical infrastructure construction, has failed to address the climate crisis and social inclusion that Nepal is facing.
Although the issues of making roads climate-friendly and reducing water scarcity in Madhesh by recharging the Chure are positive from an adaptation perspective, the budget has not been able to assimilate 'climate smart agriculture' and climate-related insurance, and the construction of climate-friendly infrastructure. Although the budget mentions risk transfer, it is not clear whether it is the transfer of climate-related risks or just general insurance.
Although the budget for 2083-84 includes innovative programs such as creating an AI hub and mobilizing finances in the energy sector, the government has failed to integrate them with the national strategy for climate resilience and disaster risk reduction.
The budget itself has not been able to prioritize the achievement of the goals set in the third NDC. Experts have pointed out that Nepal may lose the huge opportunity of highly concessional loans and green investment that can be obtained from the international forum if it fails to provide a 'climate-friendly cover' for the budget's target of more than 2.5 trillion foreign loans and more than 4 trillion domestic loans.
According to climate finance expert Raju Pandit Chhetri, Nepal does not seem to have prepared a budget strategically in the current situation where climate finance and foreign grants are decreasing at the international level. A closer look at the budget for the upcoming fiscal year announced by the government shows that it understands climate change only as a separate and limited area, whereas it should have covered multifaceted areas such as agriculture, energy and disasters.
'Climate change does not cover just one area, it covers all different areas from agriculture to energy and disasters.' Although Nepal is currently suffering from the effects of climate change and climate-related disasters, we also have the capacity to manage immense green energy,' he said. 'Looking at both these aspects, it seems that this budget has not done justice to the climate problem from a climate perspective.'
Although the announcement of extensive financial mobilization for green energy production in the energy sector is positive, Chhetri commented that its priority is more towards exporting from a commercial perspective than increasing domestic consumption. He commented that although the National Independent Party has placed climate change as one of the 'nine pillars' in its manifesto, its real reflection is not seen in the government's budget.
'Although the government has adopted a policy of issuing clean energy bonds and diaspora bonds and making maximum use of the available climate fund, it seems to be focused only on the objective of building capital in energy production,' he said.
He argues that Nepal has missed a big opportunity to attract foreign aid through this budget at a time when climate finance is declining in international forums. He stressed the need for Nepal to establish a large and dedicated 'Climate Change Fund' for effective mobilization of climate finance.
Climate and disaster expert Dharmaraj Upreti commented that the government has failed to link some of the latest aspects of technology in the budget with disaster management. Despite talking about the use of AI and digital infrastructure, the failure to link them with disaster management and early warning systems has made it feel like the government has not understood the climate-related problems.
'The aspect of building climate-friendly roads is very good. The budget has been merged into the budget of the Ministry of Forests. It is not clear how much budget has been allocated for climate alone. But there are some good aspects in it, including filling water in Chure,' he said. 'The issue of expanding the early warning system and providing access to early information for everyone has been left out in the budget.' NDC implementation has also been neglected. Even though climate change is causing huge damage to the agricultural sector, agricultural insurance has not been included.’
Although the budget mentions risk transfer, it is still unclear whether it is climate-related risk transfer or just general insurance. He said that considering Nepal’s geographical situation and the increasing risk of landslides, it is imperative to make road infrastructure climate-friendly.
‘This year, there is a high risk of winter and monsoon drought due to Super El Nino, which is directly affecting the rice pocket areas of Sudurpaschim and Lumbini. At such a time, the budget seems to have completely failed to use AI technology to increase the capacity of the Department of Hydrology and Meteorology and the ‘Early Warning for All’ strategy announced by the United Nations Secretary-General,’ Upreti said.
Even though Nepal has made international commitments to implement the Paris Agreement and NDC, the neglect of these issues in the budget has increased the risk that donor agencies may question Nepal's priorities. She emphasizes the need to introduce a supplementary budget or special programs to improve the shortcomings seen in the areas of climate and disaster management.
Gender, social inclusion, environment and climate and sustainability expert Samjhana Bista said that the budget has given a balanced and positive message as it covers the areas of renewable energy, forest management, disaster management and green agriculture as a whole. She argued that the budget should be viewed from a more liberal and positive perspective and that the climate budget should not be limited to the budget of the ministry only.
'The budget that comes to the Ministry of Environment is the budget for the environment, the budget for environmental protection.' We should think a little more liberally,' she said, 'If we look only at the budget of the Ministry of Forests, it is very low, it is not enough.' But since climate change is a multifaceted issue, if the ministries of agriculture, energy and physical infrastructure also work on it in the mainstream, we can include many activities. ’
Since the direct impact of climate change will be felt by the disadvantaged, women, Dalits, indigenous peoples, children, senior citizens and gender minorities, the detailed plans to be made now should specifically target these groups.
The government has allocated a budget of Rs 12.31 billion for the forest and environment sector. Support prices for herbs and non-timber products will be determined, and an herb processing center will be established in Karnali. About Rs 1 billion has been allocated to conserve water resources and conduct activities such as pond construction, landslide control and embankment construction to make the water cycle of the Chure and Terai Madhesh regions sustainable.
The government has mentioned in the budget that it will use drones and satellites to exchange real-time information for fire control, and that it will run a human-wildlife coexistence program in vulnerable areas. The government plans to run a result-based Red Plus program for emission reduction by prioritizing local communities in the benefits received from carbon emission reduction. It has been said that arrangements will be made for the private sector to access the concessional capital of the International Climate Fund. Similarly, it is mentioned that the air pollution measurement center and the central environmental laboratory will be upgraded in major cities.
