As Nepal looks towards the hydropower sector to generate future growth, Dr. Divas B Basnyat, Team Leader, Nepal Development Research Institute (NDRI) reports on a CDKN-funded technical assistance project to the Government of Nepal. He outlines how Nepal’s climate change policy and hydropower development in the country are inextricably linked.

Nepal’s current climate change and hydropower policies recognise the risks of climate change but do not adequately address the needs to assess and mitigate these climate induced risks. The main policy framework governing the hydropower sector remains the Hydropower Development Policy (2001), which identifies 42,000 MW of technically and commercially realisable capacity in the country. The policy does not have any reference to the potential impacts of climate change on hydrological flows or competing water demands, but does make provisions if hydrological conditions become more adverse than anticipated when the original licences were granted.

The Nepal Development Vision (2030), sets out the longer-term aspiration for Nepal becoming an upper middle-income country by 2030, and envisions hydroelectricity as a key driver for growth. The focus on electricity means that any effect of climate change on hydroelectricity generation will affect growth. There is also an anticipated move away from the current dominance of agriculture, reducing from the current GDP contribution of 35% to 21% by 2030.

To further explore Nepal’s options, a well-attended mini-workshop on “Climate Change Policy and Hydropower” was held on 19 August 2015 in Lalitpur, Nepal as part of the CDKN funded Technical Assistance (TA) Project entitled "Adaptation to Climate Change in the Hydroelectricity Sector in Nepal" to discuss the linkages between Nepal’s climate change policy and hydropower development in the country.

The project will provide inputs into policy design for adaptation to climate change and climate compatible development in the hydropower sector through the following:

(i) developing a strong evidence base on the vulnerability of the hydroelectricity sector to climate change;
(ii) identifying viable adaptation options that enhance resilience;
(iii) understanding and address the challenges of mainstreaming adaptation in the sector; and
(iv) building the capacity and help enable adaptation action amongst policy makers.

Due to deep uncertainties regarding climate change projections, the project has adopted a "bottom-up" decision scaling approach rather than the traditional top-down General Circulation Model (GCM) based approach.

Prof. Govind Nepal, Honorable Member of the National Planning Commission (NPC), spoke on the previous economic impact of climate change in hydropower development and the deed for the present study. The professor, who also led a previous CDKN study on ‘Economic Impact Assessment of Climate Change in Nepal’, provided a summary of the findings of that study which estimated the need for an additional capacity of 2,800 MW over a thirty year period due to the impact of climate change. He highlighted a major issue - that due to contradictory viewpoints of previous studies, the present study was important in establishing a strong evidence base to support climate change adaptation in the hydropower sector, with the outputs beneficial for the upcoming Fourteenth Five-year National Plan. He concluded by saying that the support of the NPC was there, while the close consultation with sectoral agencies such as the Ministry of Energy (MOE), Ministry of Science, Technology and Environment (MOSTE), Water and Energy Commission Secretariat (WECS) should be continued.

Mr. Ram Hari Panta, Under Secretary and Chief of the Climate Change Section of MOSTE, discussed the "Climate Change National Policy and Debate on National and International Scenario". He said that several past studies under MOSTE had highlighted the important issues of hydropower development and its environmental impact. He also pointed out that the present Environmental Impact Assessment  framework does not directly address climate change issues; the concept of "Payments for Ecosystem Services", use of local indigenous knowledge, development of early warning systems and the different sectoral and national policies provide an important background for designing adaptation options in the hydropower sector.

The team Senior Energy Specialist spoke on the "Low-carbon Economic Development Strategy and Climate Compatible Developmentin the Hydroelectricity Sector", and thehydropower development scenario under Nepal’sLow-Carbon Economic Development Strategy (LCEDS). In his opinion, climate compatible development does not consider mitigation, adaptation and development in isolation; it looks to minimise the harm caused by climate impacts, while maximising the many human development opportunities presented by a low emission, more resilient future. LCEDS, he said, is not only about reducing fossil fuel consumption but making use of more efficient use of fossil fuel technologies for those countries where it’s a primary source and focusing and focusing on decreasing carbon intensity while increasing energy intensity. Hydropower development thus can be a major tool for low carbon and climate compatible development in Nepal.

Opening the discussion to take in the views of those present, the following issues were raised and discussed:

• Environmental Impact Assessment would be an appropriate tool to mainstream climate compatible development in the hydro sector. Hence, a manual or guideline should be prepared to integrate "climate risk" tests in the EIA process.
• Strategic Environment Assessment (SEA) should be a part of the Fourteenth National Plan which should also consider "climate risk" tests.
• There is a need for the Climate Change Policy to be linked with the sectoral policy. Policies and regulations development for hydropower development in the 1990s and 2001 are still in place and the newly drafted acts are yet to be approved.
• The thirteenth Three-year Plan specifically requires "mandatory consideration of climate change impacts in all hydropower development projects" but no standard methodology/guidelines are available to do so.
• The issue of who and how will the "cost of adaptation" be borne should also be considered. Private sector may not necessary have an incentive to adapt as their economic planning horizon is rather short.

In his closing remarks, Dr. Sanjaya Sharma, Joint Secretary of the Ministry of Energy and Chairperson of the Project Advisory Committee, said he was pleased to note that the expected outcomes was to "build the capacity of decision makers" and research using selected GCMs. He also said that adapting to climate change may also require focusing on other renewable energy forms, and on storage projects. Dr. Sharma recommended that the modelling work should be supported by robust and sound scientific evidence.

For further information, contact Dr. Divas B. Basnyat, NDRI, divas@ndri.org.np

Picture courtesy: commons.wikimedia