The Future for Climate Finance in Nepal

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December 2011
Document Type: 
Sector/Thematic Document
Government Entity: 
National Planning Commission
United Nations Development Programme (UNDP), United Nations Environment Programme (UN Environment), Capacity Development for Development Effectiveness Facility for Asia Pacific (CDDE)

Financing climate change development needs, which are increasingly demanding more financial resources, is as much a challenge as developing both short- as well as long-term programmes for effective climate adaptation and mitigation. Several issues from securing globally available funds to channelling it to various programs transparently and to the highest international accountability standards are crucial in climate financing. The fund has to reach the local people who are most affected by the climate change impacts. Existing public financing arrangement must accommodate these needs as climate funding grows in future. Informed planning and decision making require improved access to information on various sources of climate finance in order to integrate climate finance with the national budgetary system. Hence, the Government of Nepal (GoN) carried out the study on the future for climate financing in Nepal so as to identify critical areas for improvement.

This study, The Future for Climate Finance in Nepal, examined the development effectiveness dimensions of climate finance in Nepal. The analysis is based on the premise that the management of climate finance should build on relevant examples of good practice in other areas of public finance management, recognising the likely need for a variety of instruments to deliver climate change programming. As climate finance is at an early, formative stage in Nepal, this paper offers a forward-looking perspective on how climate finance may be administered in the years ahead. The paper focuses on the public financing component of climate finance and the role of international support.