The Government of Nepal, Ministry of Finance endorsed the country’s first Climate Change Financing Framework (CCFF) in Dec 2017. The Framework lays out a road map for improvements required to strengthen the public financing system as well as the roles of key ministries for improved coordination in planning and budgeting climate responses. This is viewed by experts as a way to continue to position the country as a global leader in the fight against climate change.
“The Framework links Nepal’s climate policy with budgeting processes. It lays out a reform roadmap to realign funding to critical policy objectives and to improve the effectiveness of sectoral climate responses,” said Mr. Kewal Prasad Bhandari, Chief of the International Economic Cooperation Coordination Division, Ministry of Finance, Nepal. “In this way, our public spending can be more climate focused, transparent and targeted to where it is most needed.”
Nepal consistently ranks among the most vulnerable countries in the world to the effects of climate change. In recent years the country has experienced an increase in flash floods, glacial outbursts, heat waves and cold waves, and extreme events of rainfall, landslides and droughts.
To address these issues, over time Nepal has earmarked an increasing percentage of state resources to respond. In the 2017/18 budget, 5 percent of allocations were classified as highly relevant to climate change, whereas 26 percent of allocations —a five-fold increase compared to 2014/15 – were classified as moderately relevant. Much of the increase can be attributed to higher allocations for reconstruction following the 2015 earthquake and the rise in grants provided to the new local governments, which include spending on things like water management, disaster risk reduction, and generating alternative energy.
The CCFF will assist in further streamlining, monitoring, and leveraging existing government spending, and integrating more evidence of funding gaps and priorities into planning processes, at various levels.
“Nepal has been a consistent innovator on climate finance, having been the first country to enact a budget code for it. With this policy framework now ready to be rolled out, it can take the next step to show its leadership role and to increase its climate finance readiness and to engage in negotiations and mobilize international resources,” said Renaud Meyer, Country Director, UNDP Nepal.
Nepal’s CCFF was developed with the support of the UK Government and through UNDP’s Governance of Climate Change Finance Programme, which has been supporting the Government of Nepal since 2014.
For more information about UNDP’s work on energy, environment and climate change finance in Nepal go to:
Climate Change Financing Framework: A road map to systematically strengthen climate change mainstreaming into planning and budgeting
CFADE Nepal Page