Economic impact assessment of climate change for key sectors in Nepal

This executive summary describes a study commissioned by the Government of Nepal to assess the economic impacts of climate change on agriculture, hydroelectricity, and water-induced disasters. It estimates that current climate variability already costs Nepal 1.5% to 2% of its GDP annually, with future costs potentially adding another 2% to 3% of current GDP by mid-century.

• Current climate variability and extreme events in Nepal result in annual economic costs estimated between 1.5% and 2% of GDP, which can rise to 5% or more during extreme years. Including indirect and macro-economic costs could increase these estimates by 25% to 100%.
• By mid-century, the additional economic costs of climate change across the agriculture, hydroelectricity, and water-induced disaster sectors could equal 2% to 3% of current GDP per year, a level that may hinder Nepal's growth and development goals.
• Agricultural impacts by the 2070s are estimated at annual net losses of approximately US$140 million, or 0.8% of current GDP. These impacts are expected to be particularly high for rice and wheat production in the Terai region, while effects in the mountains and hills are more varied.
• Climate change is projected to increase the risk and cost of water-induced disasters, with direct annual national economic costs estimated at an additional US$100–200 million (0.6–1.1% of current GDP) by mid-century.
• The hydroelectricity sector faces uncertain but potentially large impacts. One climate model suggests a decrease in dry season flows would require an additional 2,800 MW of capacity by 2050, increasing investment costs by US$2.6 billion in present value.
• To address these risks and build resilience in agriculture, hydroelectricity, and water-induced disaster management, the study estimates a required investment of US$2.4 billion by 2030 (present value).

APA

Climate and Development Knowledge Network (2014). Economic impact assessment of climate change for key sectors in Nepal. https://cdkn.org/resource/economic-assessment-nepal

Chicago

Climate and Development Knowledge Network. Economic impact assessment of climate change for key sectors in Nepal. 2014. https://cdkn.org/resource/economic-assessment-nepal.

Wikipedia

{{cite report |author=Climate and Development Knowledge Network |title=Economic impact assessment of climate change for key sectors in Nepal |date=29 April 2014 |url=https://cdkn.org/resource/economic-assessment-nepal |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climateanddevelopmentknowledgenetwork2014economic, author = {{Climate and Development Knowledge Network}}, title = {{Economic impact assessment of climate change for key sectors in Nepal}}, institution = {Climate and Development Knowledge Network}, year = {2014}, month = apr, url = {https://cdkn.org/resource/economic-assessment-nepal}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }