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The Weekend Read: How international donors failed Nepal

In conversation with climate finance expert Raju Pandit Chhetri

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Lou Del Bello

Jan 31 2021

7 mins read

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Welcome to this weekend’s edition of Lights On, a newsletter that brings you the key stories and exclusive intel on energy and climate change in South Asia.

If you haven’t got the chance to read it, head to my Friday’s letter where I explore the untold energy story behind the farmers’ protest that since November has been making headlines in India and beyond.

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The aftermath of Nepal’s earthquake in 2015 - Image credit: Flickr/The Sanitation and Hygiene Fund

Every day, in some corner of the planet, a battle against climate change is lost. Local environments are changed forever, animal and plant species go extinct, and humans face the reality that life won’t be the same again. Year after year, the world awakens to new climate change impacts that we can no longer avoid.

In 2009, developed nations promised to rise to the challenge and set aside $100 billion a year by 2020 to help vulnerable countries cope with climate change. Half of that money would be earmarked for climate adaptation. The deadline has passed, and rich countries have failed to deliver in many ways. The finance pledged is still too low, reaching US$78.9 billion in 2018, according to the Organisation for Economic Cooperation and Development (OECD). More worryingly, a big slice of the total is counted twice or allocated for projects which don’t address climate change.

According to a new report by the nonprofit CARE, “current official figures for adaptation finance are severely overstated and far too high”. CARE teamed up with civil society organisations from six vulnerable countries to understand what manipulating the books means for their communities on the ground.

In Nepal, one of the countries investigated, the World Bank’s Earthquake Housing Reconstruction Project provided support for rebuilding after a major earthquake in 2015. The analysts found that “although the project is primarily a response to a geohazard which is unrelated to climate change, 86 percent of its budget is reported as finance for climate change adaptation”. Here, Raju Pandit Chhetri, director of the Prakriti Resources Centre in Kathmandu and a collaborator with CARE on the report, tells the story of how international donors failed one of the small nations most at risk from climate change.

Let’s start with your investigation, and your findings.

Well, I think it was a very striking experience for us, we did look into some of our very key projects. While we did not go to the grassroots level, we liaised with the people who implemented each project, and we found a lot of discrepancies between what was marked as climate adaptation and what is happening on the ground. This is because a lot of the projects are marked as 'adaptation' even if they just look like it, maybe there is an element that could be seen as adaptation action. Our criteria is that if you want to use the adaptation tag, you must do a climate analysis first. The project should respond to certain climate induced disasters or climate induced impacts. And if these impacts are not being taken into consideration, then it just becomes a development intervention. 

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Adaptation finance as reported by donors and assessed by civil society organisations, including estimates of over- and underreporting based on 112 project-level assessments (in USD billions). Image credit - CARE International

Can you give me one example of this process?

In 2015 Nepal suffered a huge earthquake and the World Bank provided about a half a billion dollars of assistance for the relief, to build houses, infrastructure and things like that. And what we realised is that most of the section of that money is counted as adaptation financing money. For us, you could still call all that adaptation finance, if you actually did an analysis of the climate impacts in that particular area, and while rebuilding you thought about how to do it in a climate sensitive way. 

What does this mean in practice for Nepal?

That earthquake brought a huge devastation. Over 9,000 people died and hundreds of thousands of houses were damaged, mostly in rural areas that are already climate vulnerable.

Nepal's unique geography means we have plains, hills and high peaks in a small area, and in a short of span of time you may have landslides, flooding, heavy rains and prolonged drought. The country has to respond to these climate induced disasters. Now, for a poor country like Nepal, a huge amount of budget that could have been spent on health, education, poverty reduction, livelihood options, is having to be diverted to address these disasters which are increasing every year. 

The 2015 earthquake relief work was focused on restoring monuments and our cultural heritage, while helping communities rebuild their homes and livelihood, but the climate aspect was hardly considered. Six years down the line Nepal is spending hundreds of millions of dollars to cope with issues such as abnormally heavy snowfall and landslides. The post quake relief would have been the chance to move some of the communities or some of the villages to a safer location. Because they did not do that, and the houses were built in landslide prone areas, a number of disasters hit the same communities. This is, I think, one of the opportunities we really lost. 

What does planning in a climate sensitive way look like?

Let's take a flood prone area. Here, you first have to establish whether the flood is exacerbated by climate change and it's not, for example, a manmade flood. Sometimes it's a dam bursting somewhere, and that could be a mix of the two. But then if you discover climate change played a part, you must address different questions: Is it likely to happen again in the future? How do you ensure the community is safe? Do you just have them adapt to their local context [or do you intervene in other ways]?

Just because you choose to support communities that are poor or have been hit by a disaster, you can't automatically label it as a climate intervention. But what we found is that there is a huge effort to dilute the boundaries between adaptation and development assistance.

Help me understand why this difference matters. On the face of it, this looks like a semantic debate - but if it's such a widespread practice there must be more to it.

To put this in context, Oxfam came out with a similar report where they say that of the estimated $59.5 billion of public climate finance reported by developed countries between 2017 and 2018, climate specific donations were only around $20 billion, the rest was in fact just recounting of development assistance. But if developed countries are to meet their Paris Agreement obligations of providing $100 billion per year, those should be in addition to the development assistance they are already providing.

To make things worse we also realised that quite a lot of money is coming in the form of loans. Now a poor country like Nepal bears hardly any historical responsibility for climate change. But if you are providing loans to help adapt to its impacts, this is money we have to pay back in the future with our budget, including interest. That may be fine as long as a project has returns. But if it's a disaster management project, how can a country really commit to giving the money back when there's no financial return? That's what we call a double burden for small nations like ours.

Do you think that the monitoring work you are doing will eventually lead to change in the way climate finance is allocated? Are rich nations paying attention?

I think developed countries are increasingly realising that they must meet their promises because climate adaptation is becoming an issue for the whole world, not just for developing countries. And they realise that if adaptation costs billions for them, it will definitely cost more to poorer nations. So in a way, [with the worsening situation] comes greater awareness for developed countries.

This interview has been lightly edited for length and clarity

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