ids_nepal_brief.indd

This briefing summarizes a study requested by the Government of Nepal to estimate the economic costs of climate change across three key sectors: agriculture, hydroelectricity, and water-induced disasters. It employs an iterative risk-management approach to analyze current adaptation deficits and project future costs through the mid-century and beyond, emphasizing the high level of uncertainty in climate modeling and the need for scaled-up investment in resilience.

• Current climate variability and extreme events result in direct economic costs estimated at 1.5–2% of current GDP annually (approximately US$270–360 million/year in 2013 prices), which can rise to 5% or more during extreme years. Flood-related risks are the primary driver of these costs.
• The agricultural sector is highly sensitive to rainfall extremes because it accounts for about one-third of GDP and three-quarters of employment, with much of the farming being small-scale and rain-fed. For instance, droughts in 2006 and 2009 caused direct losses in agricultural output of 1.9% and 0.4%, respectively.
• By mid-century, the additional future economic costs of climate change for hydroelectricity, agriculture, and water-induced disasters are projected to be equivalent to 2–3% of current GDP per year.
• Long-term projections for the 2070s estimate net agricultural losses at approximately US$140 million per year, or 0.8% of current GDP equivalent. These impacts are expected to be most severe in the Terai region, particularly for wheat and rice production, though some benefits may occur in the mountains and hills.
• Future impacts on the hydroelectricity sector are highly uncertain and depend on the climate model used. One model projects a decrease in dry season flows, which would increase investment costs by US$2.6 billion by 2050 and increase greenhouse gas emissions due to a greater reliance on thermal power plants. Conversely, another model projects increased river flows, which would reduce investment costs by approximately US$170 million by 2050.
• Water-induced disasters are expected to increase in frequency and intensity by mid-century (2050s), with a projected 20–100% increase in high river flows. Events that currently occur once every 10 years may occur once every five years or less. The additional direct annual economic costs are estimated at US$100–200 million (0.6–1.1% of current GDP), with an upper estimate approaching 3%.
• To mainstream adaptation through 2030, the study estimates that an additional investment of US$2.4 billion (present value) is required across the three assessed sectors.

APA

Climate and Development Knowledge Network (n.d.). ids_nepal_brief.indd. https://cdkn.org/sites/default/files/files/EIA-Nepal-study-brief.pdf

Chicago

Climate and Development Knowledge Network. ids_nepal_brief.indd. n.d. https://cdkn.org/sites/default/files/files/EIA-Nepal-study-brief.pdf.

Wikipedia

{{cite report |author=Climate and Development Knowledge Network |title=ids_nepal_brief.indd |url=https://cdkn.org/sites/default/files/files/EIA-Nepal-study-brief.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climateanddevelopmentknowledgenetworkndidsnepalbriefindd, author = {{Climate and Development Knowledge Network}}, title = {{ids\_nepal\_brief.indd}}, institution = {Climate and Development Knowledge Network}, url = {https://cdkn.org/sites/default/files/files/EIA-Nepal-study-brief.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }