Economic impact assessment of climate change for key sectors in Nepal

The report estimates that current climate variability costs Nepal 1.5% to 2% of its annual GDP, with future climate change potentially adding another 2% to 3% by mid-century. Analysis of three key sectors reveals significant risks: agricultural losses are projected at US$140 million per year by the 2070s, hydroelectricity may require an additional US$2.6 billion in investment by 2050 due to decreased dry season flows in some models, and water-induced disasters could cost an additional US$100–200 million annually by mid-century. To address these risks, the study estimates a total investment requirement of US$2.4 billion by 2030 across these sectors.

• Current climate variability and extreme events already impose an annual economic cost on Nepal estimated between 1.5% and 2% of GDP, a figure that can rise to 5% or more during extreme years. Indirect and macro-economic costs could further increase these estimates by 25–100%.
• By mid-century, the additional economic costs of climate change across the agriculture, hydroelectricity, and water-induced disaster sectors are projected to be equivalent to 2–3% of current GDP per year, which may hinder Nepal's growth and development objectives.
• In the agriculture sector, net losses are estimated at approximately US$140 million per year (0.8% of current GDP) by the 2070s, with the most severe impacts occurring in the Terai region for rice and wheat production.
• Climate change impacts on hydroelectricity are uncertain, but one model indicates a decrease in dry season flows that would require an additional 2,800 MW of capacity by 2050, increasing investment costs by US$2.6 billion in present value.
• Water-induced disasters, specifically floods, are expected to increase in frequency and intensity, resulting in additional direct annual economic costs of US$100–200 million (0.6–1.1% of current GDP) by mid-century.
• To build resilience and address the adaptation deficit in the three assessed sectors, a total investment of US$2.4 billion is estimated to be required by 2030 in 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} }