Training Manual Introduction to tools/ techniques required for developing Green Climate Fund proposal
July 2017
Table of Contents
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Training Manual - Introduction to tools/ techniques required for developing Green Climate Fund proposal
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Acknowledgements
First of all, we would like to convey our sincere gratitude to the United Nations Development Programme (UNDP) and the Ministry of Finance, Nepal for taking the initiative of conducting climate change vulnerability and disaster risk assessment of fragile mountain ecosystems and appraising the cost of adaptation and mitigation solutions to address climate risks under the Green Climate Fund Readiness Programme. We take this opportunity to thank the entire project team led by the National Project Director of Green Climate Fund Readiness Programme, Nepal for their continuous support and necessary inputs during the execution of the entire assignment. Last but not the least, we would like to express our heartfelt gratitude to all the experts and team members who have helped in various ways for the completion of this manual.
Training Manual - Introduction to tools/ techniques required for developing Green Climate Fund proposal
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Acronyms
ADB Asian Development Bank
CBS Central Bureau of Statistics
DADO District Agriculture Development Office
DEM Digital Elevation Model
DHM Department of Hydrology and Meteorology
DOI Department of Industry
DoLIDAR Department of Local Infrastructure Development and Agricultural Roads
FRA Forest Resources Assessment Nepal
GCF Green Climate Fund
GLOF Glacial Lake Outburst Flow
ICIMOD International Centre for Integrated Mountain Development
IPCC Intergovernmental Panel on Climate Change
IWMI International Water Management Institute
KoMM Koshi Mid Mountain
MASL Meters Above Sea Level
MoAD Ministry of Agricultural Development
MoF Ministry of Finance
MoFALD Ministry of Federal Affairs and Local Development
MoFSC Ministry of Forest and Soil Conservation
MoHA Ministry of Home Affairs
MoPE Ministry of Population and Environment
MoST Ministry of Science and Technology
NAP National Adaptation Plan
NAPA National Adaptation Programme of Action
NDVI Normalized Difference Vegetation Index
SRTM Shuttle Radar Topography Mission
UNDP United Nations Development Programme
UNOCHA United Nations Office for the Coordination of Humanitarian Affairs
VDC Village Development Committee
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Notes
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Training Manual - Introduction to tools/ techniques required for developing Green Climate Fund proposal
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Table of Contents
Preface 7
About the manual 9
1. About climate change and GCF 11
1.1. Impacts of climate change in Nepal 11
1.2. Need for adaptation and mitigation measures 13
1.3. Financing adaptation and mitigation measures 14
1.4. Role of Green Climate Fund 14
1.5. Investment plan for Green Climate Fund 15
2. Assessment of vulnerability 19
2.1. Steps/ techniques for vulnerability assessment 19
2.2. Illustration of vulnerability assessment of Dholakha and Ramechapp districts 26
2.3. Illustration of spatial analysis of Dholakha and Ramechapp districts 31
2.4. Validation of findings through field visits 33
2.5. Identification of potential adaptation & mitigation measures based on spatial analysis and field visits findings 35
2.6. Illustration of the process of identification of potential adaptation & mitigation for Dholakha and Ramechapp 36
2.7. Measure 1 - Sustainable Water Management practices in Ramechapp 37
2.8. Measure 2 - Sustainable Forest Management practices in Dholakha 38
2.9. Illustration 3 – Other interventions 40
2.10. Prioritization of the identified measures 41
2.11. Illustration of prioritization of identified measures through E&S and Gender assessment 42
2.12. Cost Benefit Analysis – General Methodology 46
2.13. Climate Change relevance of a project 49
2.14. Illustration of measure wise CBAs – with and without climate benefits 50
2.15. Findings of the sub-national consultation 56
2.16. Requirements of reforms and institutional mechanisms 59
3. Preparing the investment plan 61
3.1. Sections of investment proposal 62
3.2. Linkages with background work covered in section 2 63
References 64
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Preface
Climate Change is now a scientifically established fact. The average temperature of the earth’s surface has risen
by 0.74 degrees C since the late 1800s (IPCC, 2007). It is expected to increase by another 1.8°C to 4°C by the
year 2100 - a rapid and profound change -- should the necessary action not be taken. Even if the minimum
predicted increase takes place, it will be larger than any century-long trend in the last 10,000 years. The
principal reason for the mounting thermometer is a century and a half of industrialization: the burning of ever-
greater quantities of oil, gasoline, and coal, the cutting of forests, and the practice of certain farming methods.
These activities have increased the amount of “greenhouse gases” in the atmosphere, especially carbon dioxide,
methane, and nitrous oxide. Many experts have termed climate change as a “wicked problem” which is
characterized by “a host of underlying nested, intractable and unforeseen predicaments” (Dixit, 2016). It has
been predicted that the problems such as droughts, forest fires, flooding with increasing frequency and intensity
will increase.
Climate change will affect everyone in the world. But developing countries will be hit the hardest, soonest and,
moreover these countries have the least capacity to respond. South Asia is particularly more vulnerable to its
impacts. For South Asian countries, the average loss and damage estimate from the impact of climate change
has been estimated to be about 6% of the GDP of South Asian countries by 2050 (Ahmed & Suphachalasai,
2014), as arrived from an analysis published by ADB. Some of the impacts are already being witnessed in Nepal
in the form of drought, downstream flooding, intense rainfall, shifting of monsoon period etc. Nepal has a
varied climate mainly due to presence of valleys and high altitude mountain ranges transitioning within a short
distance. Climate risk assessment studies carried out by Asian Development Bank (ADB) indicated three major
risks for the country- i) threat to quantity and quality of water ii) impacts on agricultural yield and food security
iii) threat to biodiversity and natural resources. Below is a summary of projected trends and possible impacts
arrived at from different climate models till 2080 (CDKN, 2014).
Climatic phenomenon
Projection
Impact
Rainfall
Intensify (but highly uncertain due to altitude variation)
Increased extreme events, flood, landslides
Temperature
Increase; Number of days with extreme heat - increase
Water scarcity, alteration in vegetation pattern in high altitude
Increased invasive species in forests, increased forest fire
Increased burden of vector borne diseases
Loss in productivity of humans
Retreating glaciers, glacier melt Increase Reduced flow of water for agricultural use
Flash floods due to Glacial Lake Outburst Flow (GLOF)
In view of the above, it is extremely important for Nepal to chart out a climate responsible and climate resilient
development trajectory. Both mitigation and adaptation are integral parts of such a development pathway.
However, given the issues of poverty and various other development challenges in Nepal, it is important that
Government of Nepal adopts strategies whereby development projects have substantial climate benefits and
vice versa, i.e. climate projects that generate development gains.
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UNDP considers Ecosystem based Adaptation (EbA) in the watersheds of Nepal as one of the most appropriate
solutions to some of these climate change adversities as it is more aligned to the livelihood and aesthetics of the
local community who can continue to implement the measures on their own in the long term without any
requirement of capital intensive engineering solutions and skill sets. UNDP implemented EbA in the
watersheds of Harpan in Panchase area, identified as one of the hotspots due to severe impacts of climate
change observed during stakeholder consultations in terms of water scarcity, pest infestation in crops, the area’s
proximity to Phew lake- a Ramsar site and diversity of orchid species in the region.
The principle of common but differentiated responsibility requires that countries across the world undertake
actions that respond to the threats from climate change. These actions should not only target GHG emission
reduction (mitigation strategies) but must also increase the resilience of vulnerable communities to withstand
the adverse impacts of climate change (adaptation strategies). However, such actions require financial
commitments from both the government and the private sector. There are also numerous challenges for
financing such interventions (Ghosh & Ghosh, 2016), (Hamilton, 2009).
UNDP acting through Ministry of Finance, Government of Nepal has commissioned M/s
PricewaterhouseCoopers for the study of ‘Climate change vulnerability and disaster risk assessment of fragile
mountain ecosystems and appraising the cost of adaptation and mitigation solutions to address climate risks’.
The present assignment, as a part of Green Climate Fund (GCF) Readiness Programme in Nepal, becomes a
natural extension of the activities already being carried out by UNDP in the mountain ecosystem of Nepal.
Consequently, the assignment aims at identifying further watershed hotspot in Nepal, selecting the adaptation
and mitigation options for the identified hotspot based on cost benefits and preparing an investment framework
for the options aligned to GCF’s long term vision of contributing to the overall green growth of the country.
The Green Climate Fund (GCF) is a new global fund created to support the efforts of developing countries to
respond to the challenge of climate change. GCF helps developing countries limit or reduce their greenhouse
gas (GHG) emissions and adapt to climate change. Subsequent to the 2015 Paris Agreement, the GCF was given
an important role in serving the agreement and supporting the goal of keeping climate change well below 2
degrees Celsius. GCF aims to catalyze a flow of climate finance to invest in low-emission and climate-resilient
development, driving a paradigm shift in the global response to climate change. Government of Nepal is also
planning to access GCF funding for which it needs to be equipped with the tools/ techniques acceptable to GCF.
A detailed proposal is required to be submitted for the same as per the extant guidelines of GCF. Therefore, as
part of this assignment, M/s PricewaterhouseCoopers have developed this training manual to demonstrate the
tools/ techniques as illustrations/ case study for Dholakha and Ramechapp districts in the Tamakoshi
watershed. The manual comprises of the description of the tools/ techniques followed by the illustration of its
application in the Dholakha and Ramechapp districts.
This training manual is intended for the National level Government agencies who will be involved in
implementing the adaptation and mitigation measures to address climate risks and reduce vulnerability of the
identified project area (mountain ecosystem), monitoring progress of the implementation activities and
assessing outcomes of these measures. The manual will contribute towards enhancing the understanding of
application of vulnerability assessment tool to assess vulnerable ecosystems and build climate resilient future.
The objective of this manual is to help the different stakeholders involved in GCF proposal development process
with the understanding of the tools/ techniques for project development through a discussion on the general
methodology involved and demonstrate the application of the same through the illustrations of Dholakha and
Ramechapp case studies.
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About the manual
The training manual is divided into three main sections as presented in the diagram below:
Figure 1: Structure of the training manual
Each section covers the general methodology for developing the participants understanding on the subject
followed by the illustration of the Dholakha and Ramechapp case studies. The broad coverage of content in each
section is detailed out below.
Section 1: About climate change
Impacts of climate change in Nepal
Need for adaptation and mitigation measures
Financing adaptation and adaptation measures
About Green Climate Fund
Investment plan for Green Climate Fund
Section 2: Assessment of vulnerability - tools/techniques, institutional mechanisms
a) Vulnerability Assessment Framework
o Vulnerability assessment methodology
o Illustration of vulnerability assessment at Dholakha and Ramechapp districts
o Illustration of Spatial analysis at Dholakha and Ramechapp districts
o Validation of findings of spatial analysis through field visits
b) Process of identifying potential adaptation and mitigation measures
o Identification of potential adaptation & mitigation measures based on spatial analysis and field visits
findings
o Prioritization of identified measures through E&S and Gender assessment
1About climate change & GCF
Assessment of vulnerability -tools/techniques, institutional mechanisms
Prepairing the investment plan
Cost –Benefit analysis
2 3
This training manual
discusses the methodologies
to be adopted and further
aids the learning process
through illustrations of the
case of Dolakha and
Ramechhap districts.
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c) Cost-Benefit Analysis (CBA)
o Introduction to CBA methodology
o Climate change relevance of a project
o Illustration of measure wise CBAs – with and without climate benefits
o Findings of the sub-national consultation
d) Requirements for reforms and institutional mechanisms
Section 3: Preparing the investment plan
o Sections of investment proposal
o Linkages with background work covered in Section 2
11
1. About climate change and GCF
1.1. Impacts of climate change in Nepal
Rapid changes in the altitude and aspect along the latitudes have made strong gradient in the spatial as well as
temporal patterns of climatic conditions in Nepal (Nayava, 1974). The temperature trends analysis of about 30
years shows that maximum temperatures in Nepal are increasing at an alarming rate. Department of Hydrology
and Metrology, Govt. of Nepal conducted the trend analysis of the temperature data with more recent data and
was found that although the warming trend is continuing at a rather high rate (0.5 0C/year). The warming is
found to be more pronounced in the higher altitude regions of Nepal such as middle-mountain and Himalaya,
while the warming is significantly lower or even lacking in Terai and Siwalik regions. Further, warming in the
winter is more pronounced compared to other season (National Capacity Self-Assessment:Nepal).
Source: Department of Hydrology and Metrology, Govt. of Nepal
For developing a
common knowledge
base of the
audience, this
section briefly
describes the
impacts of climate
change in Nepal
12
Source: Department of Hydrology and Metrology, Govt. of Nepal
Generally, the precipitation trend in Nepal is affected by the altitude. According to the data presented by DHM,
GoN, up to about 3000 m, annual rainfall increases with altitude and thereafter, annual rainfall totals decrease
with increasing altitude.
Source: Department of Hydrology and Metrology, Govt. of Nepal
The analysis on precipitation data across Nepal does not present a distinct trend (Devkota, 2004) as in the case
of the temperature. According to the Ministry of Environment, Science and Technology, Govt. of Nepal’s
National Capacity Self-Assessment report, the analysis of precipitation trends suggests complex processes in
precipitation extremes but at the same time there is indication that more weather related disasters, for example,
floods and landslides.
13
The climatic changes impacts projected to occur in the future are likely to have impacts on different sectors of
Nepal. The impact of climate change could be across sectors such as water resources (GLOF, changes in
hydrological regime), agriculture, biodiversity, health, livelihood etc.
Figure 2: Impacts of climate change
1.2. Need for adaptation and mitigation measures
Climate change is an ongoing phenomena and the historical and present level of emissions due to
anthropogenic activities (along with certain geo-physical factors) has triggered the process. (IPE Global, 2015)
Climate scientists have developed two approaches to deal with issue of climate change:
Learn about the
two key
approach to
address climate
change
14
Mitigation - All actions targeted towards reducing the concentration of GHG emissions in the atmosphere by reducing the emissions contribution from different sectors such as energy generation, transport, agriculture, etc. This requires an alternate low carbon development pathway of economic activities through novel & new technologies for improved energy efficiency/ use of renewable energy.
Adaptation – Taking into account the foreseeable future the impacts of climate change will continue to affect societies and economies, action must be directed at increasing resilience and lessening the impacts. This could be done through awareness generation, introducing technologies, etc.
However, the two recommended actions are not mutually exclusive and both actions need to be enacted
simultaneously!
1.3. Financing adaptation and mitigation measures
Climate finance refers to local, international or transnational financing, which may be drawn from public,
private and alternative sources of financing. Climate finance is critical to addressing climate change because
large-scale investments are required to reduce GHG emissions.
Climate finance is equally important for adaptation, for which significant financial resources will be similarly
required to allow countries to adapt to the adverse effects and reduce the impacts of climate change. The
following key aspects should be considered while financing climate change projects:
Robust financing plan for creation of physical assets that can deliver mitigation goals and adaptation
opportunities
Financing plan needs to include all possible sources, Government, private and those from multilateral
and bilateral financing organizations. The financing plan should also address issues like cost recovery,
returns to investors, etc.
To facilitate the provision of climate finance, the United Nations Framework Convention on Climate Change
(UNFCCC) was established to provide funds to developing countries. Subsequent to the Paris Agreement in
2015, the Green Climate Fund (GCF) was given an important role in serving the agreement and supporting the
goal of keeping climate change well below 2 degrees Celsius.
1.4. Role of Green Climate Fund
The Green Climate Fund (GCF) is a new global fund created to support the efforts of developing countries to
respond to the challenge of climate change. GCF is a fund established within the framework of the UNFCCC to
assist developing countries in adaptation and mitigation practices to counter climate change. The objective of
the Green Climate Fund is to "support projects, programmes, policies and other activities in developing country
Parties using thematic funding windows".
GCF helps developing countries limit or reduce their greenhouse gas (GHG) emissions and adapt to climate
change. GCF aims to catalyze a flow of climate finance to invest in low-emission and climate-resilient
development, driving a paradigm shift in the global response to climate change. Government of Nepal is also
planning to access GCF funding for which it needs to be equipped with the tools/ techniques acceptable to GCF.
A detailed proposal is required to be submitted for the same as per the extant guidelines of GCF.
How to finance
climate change
projects?
15
1.5. Investment plan for Green Climate Fund
Developing the investment plan for GCF is a five step approach as represented by the chart below.
Figure 3: Five step approach of developing investment plan for GCF
Theory of Change: Given the goals of sustainable development, the economies are striving to evolve a holistic
growth and development trajectories. It is suggested that economies must try to achieve a ‘transformative
change’ and not ‘incremental change’ since the challenges faced by the economies in the world are numerous,
nested and intricate (Rip, 1998). Also, since 2000, the countries, at the behest of the UN, had taken a pledge to
cover the three essential pillars of development – economy, society and environment. This was first pronounced
as Millennium Development Goals and, later, in 2015, the countries again came together to declare that
Sustainable Development Goals (SDGs) so that most countries of the world are guided by a uniform objective of
development. Nepal is also a signatory to MDGs and SDGs declared by the United Nations
Given this perspective, it transpires that the economies need to intervene – through policies, programmes,
technology deployment and other means so that radical changes are visible in the form of economic gains
(increase in productivity, employment), social reforms (gender equity, increase in social capital) and
environmental sustainability (reduction in GHG emissions, increased resilience). It also means that any
project/programme to address economy must also address the social and environmental gains, and vice-versa.
No longer, one can look at the three important dimensions of development in an isolated manner. They have to
be considered and addressed simultaneously. However, this is easier said than done. (Weiss, 1995) proposes a
framework for designing, implementing and monitoring for bringing in transformative changes.
It proposes the following:
All decisions to be data driven and information intensive as much as possible
Outputs should be visible and outcomes must be measureable
Compulsory stakeholder consultation at each step of programme implementation
Government assumes an enabling role in bringing together all stakeholders/ actors thinking and working in unison
Learning is passed on to the society and the future generations
Theory of Change also suggests need for reforms and rethinking on institutional mechanisms in order to
achieve the desired transformative changes.
How to develop
an investment
grade proposal
for climate
change projects?
16
GCF funding proposal development process is based on their extant guidelines. It requires the project
proponent to address the following points in their funding proposal.
Table 1: Components of GCF investment proposal
Section Particulars Detailed description
A Project/ programme summary Project/ programme title
Basic information like executive summary, contact point, project focus (adaptation/ mitigation/ cross cutting) project size & lifespan
B Financing cost/ information Description of financial elements of the Project / Programme - project financing information like co-finance, loans, GCF financing etc.
C Detailed project/ programme description Political/ institutional information
Policy & institutional set-up
Objectives w.r.t baselines
Impact on climate change
Barriers address by the project/ programme
Project/ programme management structure
D Rationale for GCF involvement Value added by GCF involvement
Exit strategy
E Expected performance against investment criteria
Impact potential - Potential of the project/programme to contribute to the achievement of the Fund’s objectives and result areas
Paradigm Shift Potential - degree to which the proposed activity can catalyze impact beyond a one-off project/programme investment
Potential for knowledge and learning
Environmental, social and economic co-benefits, including gender-sensitive development impact
Country Ownership - beneficiary country (ies) ownership of, and capacity to implement, a funded project or programme
F Appraisal summary Economic and Financial Analysis
Technical evaluation
Environmental, Social Assessment, including Gender Considerations
Financial management and procurement
G Risk assessment and management Risk Assessment Summary
17
Section Particulars Detailed description
Risk Factors and Mitigation Measures
H Results monitoring and reporting Paradigm Shift Objectives and Impacts at the Fund level
Outcomes, Outputs, Activities and Inputs at Project/Programme level
Arrangements for Monitoring, Reporting and Evaluation
I Annexes Supporting Documents for Funding Proposal, such as Feasibility Study, Environmental and Social Impact Assessment & Management Plan, Gender Analysis and Action Plan, Timetable of project/programme implementation, Economic analysis etc.
18
19
2. Assessment of vulnerability
Vulnerability Assessment is the first step for preparing an investment plan for GCF. The need for vulnerability
assessment is 1) to identify the climate risks, 2) to assess the extent of loss and damage and 3) to understand
how the system works and to identify key intervention points where vulnerability is greatest or adaptation
action could be most useful.
This section on vulnerability assessment is organized as follows:
Explanation of detailed methodology
Illustrations of vulnerability assessment as case studies for Dholakha and Ramechapp districts in the
Tamakoshi watershed
2.1. Steps/ techniques for vulnerability assessment
Vulnerability assessment methodology using IPCC AR5 approach: It is recommended that the
vulnerability assessment methodology for Nepal is conceptually aligned to the framework being followed under
National Adaptation Plan (NAP). The NAP framework is in line with the IPCC-AR5 and it follows the risk based
approach where risk is the function of hazard, exposure and vulnerability. The social context is emphasized
explicitly, and vulnerability is considered independent of physical events.
Figure 4: Risk as a function of hazard, exposure and vulnerability
Risk = f (hazard, exposure, vulnerability)
Now lets us learn how
to undertake
vulnerability
assessment with the
illustration of Dolakha
and Ramechhap.
20
The framework assumes that the risk of climate-related impacts results from the interaction of climate-related
hazards with the exposure and vulnerability of human and natural systems. Changes in the climate system
(trends and scenarios), biophysical system, and socioeconomic processes (including governance and adaptation
and mitigation actions) are drivers of hazards, exposure, and vulnerability.
At this point it is important to understand the following IPCC definitions of hazard, exposure, vulnerability and
risk are central to understanding the framework.
Hazard: The potential occurrence of a natural or human-induced physical event or trend or physical impact
that may cause loss of life, injury, or other health impacts, as well as damage and loss to property,
infrastructure, livelihoods, service provision, ecosystems, and environmental resources. For the purpose of GCF
investment plan, the term hazard may be referred to as climate-related physical events or trends or their
physical impacts.
Exposure: The presence of people, livelihoods, species or ecosystems, environmental functions, services, and
resources, infrastructure, or economic, social, or cultural assets in places and settings that could be adversely
affected.
Vulnerability: The propensity or predisposition to be adversely affected. Vulnerability encompasses a variety
of concepts and elements including sensitivity or susceptibility to harm and lack of capacity to cope and adapt.
Adaptive capacity (in relation to climate change impacts): The ability of systems, institutions,
humans, and other organisms to adjust to potential damage, to take advantage of opportunities, or to
respond to consequences of climate change.
Sensitivity: Predisposition of society and ecosystems to suffer harm as a consequence of intrinsic and
context conditions making it plausible that such systems once impacted will collapse or experience major
harm and damage due to the influence of a hazard event.
Risk: The potential for consequences where something of value is at stake and where the outcome is uncertain,
recognizing the diversity of values. Risk is often represented as probability of occurrence of hazardous events or
trends multiplied by the impacts if these events or trends occur. Risk results from the interaction of
vulnerability, exposure, and hazard.
Figure 5: Drivers of hazards, exposure and vulnerability
21
Assessing vulnerability methods: An effective assessment of ecosystems and human well-being cannot be
conducted at a single temporal or spatial scale. Changes in ecosystem that may have little impact on human
well-being over days or weeks (drying sources, for instance) may have pronounced impacts over years or
decades (declining agricultural productivity). Similarly, changes at a local scale may have little impact on some
services at that scale (as in the local impact of forest loss on water availability) but major impacts at large scales
(forest loss in a river basin changing the timing and magnitude of downstream flooding). Ecosystem processes
and services are typically most strongly expressed, are most easily observed, or have their dominant controls or
consequences at particular spatial and temporal scales. They often exhibit a characteristic scale—the typical
extent or duration over which processes have their impact.
Ecosystems provide a variety of benefits to people, including provisioning, regulating, cultural, and supporting
services. Provisioning services are the products people obtain from ecosystems, such as food, fuel, fiber, fresh
water, and genetic resources. Regulating services are the benefits people obtain from the regulation of
ecosystem processes, including air quality maintenance, climate regulation, erosion control, regulation of
human diseases, and water purification. Cultural services are the nonmaterial benefits people obtain from
ecosystems through spiritual enrichment, cognitive development, reflection, recreation, and aesthetic
experiences. Supporting services are those that are necessary for the production of all other ecosystem services,
such as primary production, production of oxygen, and soil formation.
Deploying AR5 framework in Nepal the vulnerability assessment should consider ecosystem services and users
of ecosystem services as the “System of concern”. The ecosystem services in different places in Nepal is mostly
derived from water, forest and agriculture. So the focus of this assessment should be the provisioning ecosystem
services derived from these different sources, people and livelihood.
22
Figure 6: Climate Change Vulnerability Assessment and Risk Assessment Framework
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Assessing hazard: This excercise is aimed at characterizing the disaster patterns by means of relevant
metrics (e.g. temperature and precipitation) coming from trend analysis and investigating different scenarios.
Ascertaining the climate trend and climate change scenario: The trend in temperature and
precipitation was assessed in conjunction with future scenario investigation. The annual average rainfall and
temperature should be considered for trend analysis. As far as possible the climate change future scenario
should be investigated using AR5 RCP scenario of 2040-2060. Necessary corrections may be done by
interpolating data from different sources.
Climate Threshold: The threshold level of both temperature and precipitation that can lead to extreme
events can be arrived at by through literature review and data analysis. This exercise can give an indication of
potential occurrence of a disaster that may impact the ecosystem services and livelihood of people.
Table 2: Some indicators for hazard assessment in Nepal
Elements of risk Indicators Data source(s)
Hazard Climate trend from temperature and precipitation observed in historic datasets
Dept. of Hydrology and Meteorology (DHM), Measured Data
AR5, RCP climate scenario in watershed World Bank Climate Portal
Climate threshold for flood, landslide and drought
DHM Climate and Flood Forecasting Division Research Paper
No. of extreme rainfall and disaster event DHM- MoHA
No. of water induced hazards, storm, flood, landslide, GLOF, drought
DHM, ADB TA 7984, IWMI
Figure 7: The method of hazard assessment
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Assessment of vulnerability: Vulnerability assessment is aimed at evaluating the degree to which
ecosystem services and their users (system of concern) could be effected by climate change based on site-
specific information.
System of Concern: is a regularly interacting or interdependent group of items forming a unified whole.
Every system is delineated by its spatial and temporal boundaries, surrounded and influenced by its
environment, described by its structure and purpose and expressed in its functioning. For the purpose of this
study, the ecosystem services and their users were considered as system of concern. In Tamakoshi, ecosystem
services are primarily derived from water, forest and agriculture. So the focus of the assessment was the
provisioning services derived from these ecosystems and socioeconomic system of the considered region.
Sensitivity: Area under forest and its growth was the key indicator to assess sensitivity. As forest regulates and
prevents adverse physical impacts, the extent of its coverage can significantly affect the sensitivity. The forest
area from 2016 digital map was overlaid with NDVI to assess the forest density. People in the considered region
with low household income are more dependent on forest and forest related products. Therefore, proxy
indicators which indicate number of low income households were considered for analysis. Population
dependent on forest products were indirectly assessed using energy used and house type data from CBS 2011.
Another indicator was population settled in high slope which are more sensitive to adverse physical impacts.
The indicator was indirectly extracted from SRTM 30 m DEM and UNOCHA settlement map (based on CBS
data). The physical and socioeconomic data was analyzed together to arrive at the sensitivity index.
Adaptive Capacity: The key indicators that were used for assessing the adaptive capacity are road network,
housing type, age group, literacy rate, female population, irrigated land, economic status of household. The data
on area of land under irrigation was taken from 2016 DoI map. All the other indicators were extracted from CBS
2016.
Table 3: Some indicators for vulnerability assessment in Nepal
Elements of risk Indicators Source
Vulnerability Sensitivity Fire wood consumption CBS 2011
Household water use CBS 2011
Figure 8: Vulnerability assessment
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Elements of risk Indicators Source
Population density (Agriculture dependent population- high vulnerability if pop density is high)
CBS 2011
House type (house built from local forest resources)
CBS 2011
Settlement distributed on slopes (landslide vulnerability)
CBS 2011
Settlement close to flood plain (flood vulnerability
CBS 2011
Income disparity CBS 2011
Topography SRTM DEM
Adaptive capacity
Road density DDC, DoLIDAR, DoI
Housing type CBS 2011
Availability of electricity CBS 2011
Age group with gender CBS 2011
Literacy rate CBS 2011
Economic activity CBS 2011
Exposure: Exposure assessment was aimed at identifying the elements at risk. In this step primarily land use
(agriculture area) and land cover (forest area) data sets were analyzed for the localization of people, ecosystem
resources, and social, economic and cultural assets that could be adversely affected. The area under agriculture
and forest area were extracted from DoI 2016 digital map.
Table 4: Some indicators for exposure assessment in Nepal
Elements of risk Indicators Source
Exposure Forest area and quality (NDVI) FRA/DOI 2016
Water resources ((Specific discharge, river density)
DOI 2016/DHM
Area under agriculture (cultivated land) DADO, DOI 2016
Overall risk mapping: The final risk is assessed considering the risk as the combination of hazard, exposure
and vulnerability. In this methodology the physical environmental dimensions of risk was assessed by
considering its hazard, exposure and vulnerability components by means of an integrated approach.
Risk assessment combines the information about hazard scenario with the exposure and susceptibility of the
examined human-environment ecosystem, providing an evaluation of risks through the computation of a
relative (risk) score. Risk scores varies from 0 (i.e. no risk) to 1 (i.e. highest risk for the considered area). Under
Risk =Hazard X Vulnerability X Exposure
Where, Vulnerability = Sensitivity / Adaptive
Capacity
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this framework the probability scale of 0-1 was categorized in terms of “High probability”, “Medium
Probability” and “Low Probability”.
The overall risk is mapped in Q GIS. All the layers of indicators and sub indicators were analyzed and
normalized in the form of a 0-1 score and reclassified into High-Low-Medium. The data is available in different
formats – number, point, raster, vector, etc. For the ease of analysis and comparability all the data can be
converted into 5x5 km grid raster map. The analysis from different layers of maps generated would lead to
assessment of the extent of exposure and the extent of vulnerability to a particular hazard which eventually lead
to identification of the most suitable adaptation and mitigation measures.
2.2. Illustration of vulnerability assessment of Dholakha and Ramechapp districts
To begin with, the entire country was divided into a matrix of 9 grids using 3 mega basin influenced areas from
East to West and 3 physiographic regions from North to South. The grid so developed is shown in the figure given
below.
9 grids across 3 mega basin influenced areas from East to West and 3 physiographic regions
from North to South
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A) How the most vulnerable grid has been selected
The following steps were followed to identify the most vulnerable grid:
Figure 9: Steps for vulnerability assessment
Out of these 9 grids, the most vulnerable grid was selected using ecosystem services related; geo-physical and
biological and socioeconomic indicators. The 13 parameters chosen for the assessment of 9 grids were:
1. Forest area
2. Specific discharge
3. River density
4. Annual rainfall (total)
5. Rainfall extreme (24 hours)
6. Annual rainfall trend
7. Protected area coverage
8. Agriculture productivity
9. Population density
10. Population without access to safe water
11. No. of disaster events
12. Disaster related property losses
13. Per capita income
The point data for all the above 13 parameters were converted into raster format for analysis. The raster data
was normalized to a non-dimensional unit and rescaled to 0-1 score. A combined score and ranking was then
generated by assigning equal weightage to all the indicators.
First level of screening
• based on physiographic, landcover and climatic parameters
Second level screening
• Socio economic and disaster loss parameters added for further screening
Data conversion from vector to
raster
Raster data normalized to
non dimensiolal unit and rescaled
to 0-1 score
Weighing each parameter
equally as 1/13
Conbined score and ranking
Applying mountain fragileness
Total 13 parameters in
first and second level of
screening
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The final analysis was a combination of combined ranking method and elimination method. Elimination was
based on mountain fragileness. The three physiographic regions of Terai Siwalik (TS), Middle Mountain
(MM) and High Mountain (HM) were given weightage basis the area occupied by mountains. In the TS
region, approximately 40% of the area is occupied by mountains and 60% of the area is near plain. Similarly
in the MM & HM regions 80% of the area is occupied by mountains and 20% of the area is near plain.
Higher the area occupied by mountains, higher the fragility of that region and consequently more is the
vulnerability of the watersheds falling in that region. Therefore, mountain fragility is represented as an
inverse function of the stable watershed. So following were the weightages assigned to the three region:
TS = 1 – (% area occupied by mountain) = 1 – 0.4 = 0.6
MM = 1 – (% area occupied by mountain) = 1 – 0.8 = 0.2
HM = 1 – (% area occupied by mountain) = 1 – 0.8 = 0.2
The combined score was coupled with the fragility of the three physiographic regions - TS, MM and HM to
select the grid for further analysis. The grid Koshi Mid Mountain (KoMM) with lowest final score was
considered for identification of the most vulnerable watershed.
Table 5: Output Table
Region-Grid
Combined Score
(a)
Vulnerability without
mountain fragility
Weightage of the region
(b)
Final score
(a x b)
Vulnerability with
mountain fragility
KTS 0.454315 High 0.6 0.86 Low
KoTS 0.484384 High 0.6 0.92 Low
NTS 0.524853 High 0.6 1 Low
KoMM 0.563565 Medium 0.2 0.35 High
NMM 0.587921 Medium 0.2 0.37 High
KMM 0.616821 Medium 0.2 0.39 High
KHM 0.666269 Low 0.2 0.42 Medium
NHM 0.671514 Low 0.2 0.42 Medium
KoHM 0.696783 Low 0.2 0.44 Medium
The grid KoMM-Koshi mid mountain with lowest final score is considered for further analysis for identification
of the most vulnerable watershed.
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B) How the most vulnerable watershed has been selected:
The major watersheds identified within the KoMM are Indrawati, Bhotekoshi, Tamakoshi, Likhu, Dudh Koshi,
Arun and Tamor
Watersheds in KoMM
Same steps as for the selection of the most vulnerable grid were
followed for screening of the identified watersheds in KoMM.
Seven critical parameters were chosen for vulnerability analysis
of the watersheds within KoMM. The data against each
parameter were then normalized to a non dimensiolal unit and
rescaled to 0-1 score. Equal weightage was assigned to all the 7
parameters and a combined score was obtained. Table below
shows the combined ranking of the watersheds based on the
assessment:
Based on the assessment, the three lowest scored i.e., the most vulnerable watersheds were ranked as follows:
1. Tamakoshi
2. Bhotekoshi and
3. Indrawati
1) Agriculture Productivity 2) Extreme Rainfall 3) Specific Discharge 4) Forest Cover 5) Population density 6) Disaster Events 7) Watershed area
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Watershed vulnerability score and map:
In terms of vulnerability score, Tamakoshi and Bhotekoshi are close. However, it is observed that amongst these
three:
The impacts of mountain hazards (flood and landslide), particularly landslides, are most severe in Tamakoshi.
Number of people affected by landslide in Tamakoshi has been twice that of Bhotekoshi
Besides, Tamakoshi rivers are source of water for some major hydro-power projects in the country. In Tamakoshi the settlements are more evenly distributed.
Consequently, Tamakoshi has been chosen as the most vulnerable watershed.
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2.3. Illustration of spatial analysis of Dholakha and Ramechapp districts
The VA methodology delineated in the section 4.2 was used to carry out the spatial analysis. The analysis was
carried at the VDC level by assessing the Hazard, Exposure and Vulnerability using ecosystem based, climatic
and socio-economic indicators. The point data for all the indicators were converted into raster format for
analysis. The raster data was normalized to a non-dimensional unit and rescaled to a 0-1 score. The analysis
was done at a VDC scale for each of the indicators. The scoring methodology used for spatial analysis of each of
the indicators and its data source is presented in the below table. The resultant maps against each of the
indicator is provided in the annexure.
Table 6: List of indicators, data source and scoring methodology
S. No. Indicator /Sub-
indicator
Data Source Map Reference Scoring Methodology
1 Literacy rate CBS 2011 Annexure – Figure 8 Score = Literacy rate/100
2 Road density Road map google Annexure – Figure 9 Arc GIS tool, Kernel density
3 Economically
active population
CBS data 2001, Annexure – Figure 10 Score = (Economically active
population)/(total population)
4 Adaptive
Capacity
Calculated Annexure – Figure 11 Final Adaptive Capacity =
Average of (1,2,3)
5 House Density Dept. of Survey,
1995
Annexure – Figure 12 Score = (Number of
houses)/(VDC area)
6 No of Houses at
slope >150
Dept. of Survey,
1995 and SRTM
90 m DEM
Annexure – Figure 13 Score = (No of Houses at slope
>150/(Total Houses)
7 Gender ratio CBS 2011 Annexure – Figure 14 Score = Male/female
population
8 Sensitivity Calculated Annexure – Figure 15 Final Sensitivity = Average
of (5,6,7)
9 Vulnerability Calculated Annexure – Figure 16 Vulnerability = Sensitivity
(8) /Adaptive Capacity (4)
10 Agriculture
exposure
DoI land cover
2016
Annexure – Figure 17 Score = (Total cultivated land
area in VDC)/(area of VDC)
11 Forest exposure DoI land cover
2016
Annexure – Figure 18 Score = (Total forest land area
in VDC)/(area of VDC)
12 Stream Density SRTM generated
river network
Annexure – Figure 19 Arc GIS tool. Kernel density
13 Exposure Calculated Annexure – Figure 20 Exposure = Average of
(10,11,12)
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S. No. Indicator /Sub-
indicator
Data Source Map Reference Scoring Methodology
14 Drought Hazard District
Development
Rating, 2011
Annexure – Figure 21 Adopted from District
Development Rating,
15 Flood Hazard VDC boundary,
Dept. of Survey,
1995 and river
network
Annexure – Figure 22 Scoring of VDCs based on the
presence of major, medium and
small rivers
16 Landslide Google map 2017 Annexure – Figure 23 Number of landslides in VDCs
from satellite image in 2017
17 Drought Risk Calculated Annexure – Figure 24 Drought Risk = Drought
hazard x Exposure x
Vulnerability
18 Landslide Risk Calculated Annexure – Figure 25 Landslide Risk = Landslide
hazard x Exposure x
Vulnerability
19 Flood Risk Calculated Annexure – Figure 26 Flood Risk = Flood hazard
x Exposure x Vulnerability
The Tamakoshi basin was divided into upper and lower region for the sake of analysis. So, region wise major
findings of the spatial analysis are explained below
Upper Tamakoshi region:
Population in the upper Tamakoshi region has a high level of exposure to forest related ecosystem
services
Landslide is a major hazard in the upper Tamakoshi region
As compared m to lower Tamakoshi region, upper Tamakoshi region has more number of VDCs with high
risk of landslide.
Lower Tamakoshi region:
Drought is a major hazard in almost all the VDCs of the lower Tamakoshi region.
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As compared to upper Tamakoshi region, lower Tamakoshi region has more number of VDCs with high
risk of drought.
2.4. Validation of findings through field visits
Field visits were carried out to validate the findings of spatial analysis. The observations made during field visits
corroborated with the findings of the field visits. The main findings of the field visits can be categorized into three
key issues:
Figure 10: Key findings of the field visits
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Dependency on forest ecosystem in upper Tamakoshi region - The local people in the upper Tamakoshi area are highly dependent on forest related ecosystem services like - fire wo od from forest and grassland for grazing livestock. The key dependency of the locals are on the firewood for cooking/ heating purposes. Grazing land is another key ecosystem service as there are large numbers of livestock (goat, buffalo and cow) in the area that depend on grassland. The major changes in the forest ecosystem as observed by local people include incidents of forest fire, landslide and construction of roadways and HT transmission line of hydropower project. Also, the grassland area has been decreasing and as a result livestock population has been decreasing. Since livestock is the main source of income for people in some of the areas, there has been a decline in the family income.
Landslide hazard in upper Tamakoshi region – An increasing trend has been observed in the occurrence of landslide and flood related disasters in the upper Tamakoshi region. The FGD results identify landslide as the major cause of losses in terms of human mortality, death of livestock and property damages in the area. The reasons of landslides could be attributed to several factors such as – 1) High rain intensity on the fragile geolog ical structure, 2) Farming at more than 30o slope, 3) Unscientific land use, 4) Road works, 5) Earthquake etc. Due to landslide in the upstream region, debris flows with river water therefore river water is polluted and is not suitable for drinking purpose.
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Drought hazard in lower Tamakoshi region – Drought was observed to be a major hazard in the lower Tamakoshi region. Erratic and irregular rains have led to increase in drought conditions in the area. Majority of the VDCs in this region are drought prone. It was noted that the farm irrigation systems such as rain fed or traditional channel/kulo are decreasing that could be due to the decline in availability of water reserves or increase in soil erosion. It is directly impacting the livelihood of people of the entire region. The spring sources are also slowly drying up and people are drawing directly water from Tamakoshi using pumps. People in drought-hit areas of lower Tamakoshi region have been severely affected due to exorbitant power tariff as they are using electrical pumps to draw water from the rivers. All electricity based water lifting projects are witnessing increasing trend in operational cost. People are even paying to get water in the hills.
2.5. Identification of potential adaptation & mitigation measures based on spatial analysis and field visits findings
There exists a host of technologies and practices that addresses mitigation and/or adaption issues. However, not all are suitable for all regions and all communities. Therefore, selecting the right technology and practices holds the key to the sustainable development of an area. The technology selection is guided by a number of factors:
Emerging technological pathways: This is guided by the R&D that a nation has invested in to find solutions to climate change impacts on development; and also on the propensity of the State to transfer similar technologies from other external sources.
Feasibility of technology: This depends on the nature of impacts, spatial/ geographical characteristics of the vulnerable area, cost of the technology, etc.
Existing technology/ practices: It is not always necessary to create/ adopt new technologies. Existing technologies/ practices can also be employed to increase resilience. This is particularly true for adaptation, where long existing indigenous knowledge have often proved to be extremely effective. The challenge is to identify these practices and revive/ remodel them to address the present issue.
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Economic viability of technology and best practices: The successful deployment of any technology/ practice depends on its economic viability. Investors would hesitate to adopt the same if adequate returns – visible or invisible, are not forthcoming during the tenure of the project.
Willingness to adopt technologies: There are often psychological, physical, financial and other barriers that deter target communities from accepting a new technology/ practice. Therefore, to increase the adoption rate for a new system it is often important to undertake detailed stakeholder consultations at all levels, spatial analysis, field visits, focus group discussions, etc.
Prioritization of technologies on the basis of Environment & Social Safeguards/ Gender assessment: The objective of sustainable development is to maximize social, environmental and economic gains. Also, it is well established that the success of any development strategy – sustainable or otherwise, crucially hinges on its acceptance and adoption by the female members of a community – a most vulnerable group. Therefore, among the available technology/ practice set, the right choice must optimize socio-economic and environmental benefits. This can be ensured by carrying out environmental, social and gender assessment studies before the adopting a new technology/ practice.
2.6. Illustration of the process of identification of potential adaptation & mitigation for Dholakha and Ramechapp
The adaptation and mitigation measures were identified to address three most critical issues, as discussed in
the previous section 2.4 – 1) Dependency on forest ecosystem in the upper Tamakoshi region, 2) Hazard of
landslide and 3) Drought in upper and lower Tamakoshi region respectively. Using the findings from field
visits coupled with the spatial analysis, following potential interventions were identified.
Figure 11: Potential adaptation and mitigation interventions
Measure 1 –Sustainable
Water Management
Measure 2 -Sustainable
Forest Management
(SFM)
Measure 3 –Other
interventions
Energy management
Spring source management
Farming of less water intensive
fruits
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2.7. Measure 1 - Sustainable Water Management practices in Ramechapp
The lower Tamakoshi region has been suffering from water shortage due to decrease in rainfall. The FGDs
conducted in this region have confirmed that the situation is worsening as the springs and other natural sources
of water are drying up. Consequently, the local community – mostly the poor and marginalized groups, face
acute water stress, particularly during the dry seasons, as these natural systems are the only available potable
water source in the region. To cope with the stress, the community then has to either decrease their water
consumption or has to invest time and effort to ferry water from distant sources. Irrigation linked water
conservation can be an effective adaptation strategy in such a situation.
1. Largescale rooftop rainwater harvesting
Rain Water Harvesting (RWH) can be used for two primary purpose:
Storage for future use
Groundwater recharge
RWH involves collecting water that falls on roof of a house during rain storms and conveying it via drain or
collector to a nearby covered storage unit or cistern. The roof should be made of an impervious material
and the drainage pipe can be made of an aluminum, PVC, wood, plastic or any other local material
including bamboo. The size and surface of the catchment area greatly impacts the rainwater yield. More
impermeable the roofing material is higher is the quantity collected. A clean and smooth surface is vital to
avoid any contamination of the water.
The advantage with rainwater harvesting system is that it is decentralised and independent of topography
and geology of the region. Water is delivered directly to the household which reduces the burden of carrying
the water, especially for women and children. A sanitation and a rainwater harvesting project are similar in
terms of their on-site implementation. In both rainwater harvesting and sanitation, once the system is in
place, the ownership lies with household for its operation and maintenance.
Figure 12: Logic framework for selecting Sustainable Water Management for Ramechapp
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Household systems generally catch rain from the rooftops of homes and store it in tanks adjacent to the
homes. Water is drawn from the tanks by means of taps at the base of the tanks. In some cases rainwater
may be reticulated within a house using a pump/pressure system. Alternatively the tank may be partly
buried and a hand pump used to withdraw water. If no suitable catchment surface is available, a separate
catchment surface can be built adjacent to, or directly over, the water storage tank. Rainwater harvesting
systems can serve households or communities of various sizes. At an individual household level, it is a small
intervention but it can be very easily scaled up by involving more and more households. For e.g., if it can be
adopted by even 25% of the households in the drought prone Ramechhap district then total number of
rainwater harvesting system to be installed will exceed 10000.
2. Gravity surface water irrigation
This kind of irrigation scheme ensures water is available for irrigation during the period of no rain by using
water from the perennial sources. This basically uses gravity led surface water for irrigation. Water is
conveyed from the rivers and is distributed across individual fields through a system of permanent and
temporary diversions, using gravity as the driving force. The diversion is created by raising an obstruction
on the river stream and diverting water through the artificial channel. Such a system primarily requires two
major constructions – head works (obstruction) across the river and water distribution network. The river
discharge, if exceeding the capacity of the distribution network, can be stored by creating a reservoir or a
storage system. This stored water can then be used as per requirement in a dry season for irrigation.
3. River lifting through solar pumps
This type of irrigation system can be deployed where topography of land does not allow construction of
network of diversions with gravity flow irrigation schemes. Water is lifted from the river with the help of
water pump-motor sets and delivered to field through pipe line network. Wherever feasible, solar pumps
will be used for lifting of river water. The focus, however, remains on addressing the issue of water scarcity
for irrigation. So, if required, diesel or electric pumps will also be used. The detail of this intervention is
explained under the energy management measure.
4. Embankment
Embankment is nothing but a wall of earth or stone raised above the immediately surrounding land. It can
be a good structural measure to safeguard from flood. At the same time, this can help in recharging the
ground water. The water collected can then be used for irrigation.
2.8. Measure 2 - Sustainable Forest Management practices in Dholakha
Detailed scientific analyses carried out during the course of this exercise have found that the upper Tamakoshi
region is suffering from severe degradation of forests and grassland. This is one of the major reasons for
landslides and drought in this area. Additionally degradation of forests is causing economic hardship for the
population in this area – majority of which is dependent on forests for their livelihood, energy needs, etc.
Rearing of livestock is an important economic activity in this area. Traditionally, the communities have
depended on forests and grassland for fodder for animals. As forests and grassland degrade, the communities
are facing scarcity of food for the livestock. The FGDs have revealed that due to this problem, the number of
livestock is decreasing over the years. Thus, there is an adverse economic impact.
The discussions held with various stakeholders suggest that the problem has escalated and unless actions are
initiated, encroachment in and degradation of forests will reduce the forest and bio-diversity wealth of this area.
Also, due to these problems, the productivity of forests is rapidly decreasing. Dependence on forests, however,
does not decrease as there is not much scope for diversification of livelihoods for the people in this region.
Degradation of forests is likely to increase the run-off along the slopes increasing the probability landslides and,
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in some cases, floods. Therefore, quick planned actions are required for not only protecting forests but also
turning forests into sources of revenue – from agro-forestry, timber logging and step-cultivation, together with
tourism. Needless to say, forests are also the source of carbon sequestration that aids to mitigation of Green
House Gases (GHG).
SFM can be a strategy to achieve the goals of increasing coping capacity of the population residing in the upper
Tamakoshi region through leveraging benefits of eco-system services of forests. Further, the promotion of
sustainable forest management practices in the region has potential to generate a host of climate benefits
including other developmental benefits.
SFM has dual advantage of safeguarding against forest degradation and deforestation while providing direct
social & environmental benefits. On the social front, it provides ecosystem services by contributing to
livelihoods and sources of revenue of the locals. On the environmental front, it acts as a carbon sink and
contributes to biodiversity, water and soil conservation. Forests provide defensive mechanism during extreme
weather events by preventing topsoil run-off and protecting people, animals and physical infrastructure.
Majority of the people living in the upper Tamakoshi region depend on fuelwood, charcoal and various other
forms of renewable wood-based energy for cooking and heating. Firewood is often the only domestically
available and affordable source of energy. Some of the potential interventions to increase the sustainability of
firewood production from forest include establishing dedicated woodlots for energy production; effective use of
wood wastes; and improving forest management. Wood production can also be increased by providing
incentives for management of degraded forests; adoption of agroforestry; and reforestation of fallow or
degraded land. Other measures include improvement of tree harvesting techniques, better planning and
monitoring, and selection of appropriate species. It is critical to incorporate local stakeholders, their knowledge,
interests and cultural values in the forest management plan to ensure successful implementation of SFM.
Figure 13: Logic framework for selecting Sustainable Forest Management for Dholakha
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2.9. Illustration 3 – Other interventions
Figure 14: Logic framework
A. Spring source management at Ramechapp
FGDs conducted in the project area showed that water from spring source is the major source of water for
drinking and household purposes. Majority of the local population (up to 92% in one of the VDCs) is dependent
on this key ecosystem service. Through the discussions it was found that the spring sources near the settlements
are drying so the local population, especially women, now have to travel longer distance to fetch water from the
next nearest spring source. It is therefore vital to revive and maintain drying springs through spring source
management.
Spring source management is a feasible adaptation intervention particularly in drought prone areas. The basic
aim is to reduce the surface runoff of rainwater and allow more water to percolate down to recharge
underground aquifers thereby ensuring increased discharge from springs. Some of the potential activities to
increase spring discharge include developing springs-sheds, restoring lakes to function as recharge medium,
terracing sloping lands and improving water storage infrastructure. The process involves mapping of resources,
preparing village spring atlas, identification of recharge areas of various springs and streams based on local
geohydrology and finally laying of contour trenches and preparing for rainwater harvesting of various springs
and lakes.
B. Energy Management at Dholakha and Ramechapp
In the upper and lower Tamakoshi region, the unavailability of proper infrastructures and reliable sources of
electrical energy has created many problems related to quality of life. The locals, having settlements far from
the water sources and at much higher altitudes, have to walk for long hours to fetch water to perform household
chores. People in the project area are also highly dependent on carbon intensive fossil fuels for domestic energy
requirements like lightning and agro-processing needs. Renewable energy technologies like solar, wind,
micro/mini hydro, etc. can not only help in overcoming these challenges but can also contribute in reducing
GHG emissions. Usage of renewable energy sources can reduce dependency on traditional sources like diesel
mills, kerosene lamps.
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Solar PV pumping system - The issue of availability of water at higher altitudes far from the water sources
can be overcome by installing two water tanks: one situated near the water source to collect water from the
running source (like rivers) and the other near the village situated at a higher altitude with required head. With
the help of a high efficiency solar DC or AC pump water can be lifted from lower tank to the upper. The water
collected at upper tank can then be circulated through normal pipelines as per requirement. Solar energy is
available in abundance at many of these remote sites. So, an array of solar photovoltaic modules can be
installed at these sites to pump water from the lower regions.
Wind energy technology – According to the Alternative Energy Promotion Centre, Nepal, there are
predominantly two types of modern wind power technology that are currently being used in Nepal – a) Vertical-
axis wind turbines (VAWT), and b) Horizontal-axis wind turbines (HAWT). In a VAWT, the shaft is mounted on
a vertical axis, perpendicular to the ground. VAWTs are always aligned with the wind, unlike their horizontal-
axis counterparts, so there's no adjustment necessary when the wind direction changes; but a VAWT can't start
moving all by itself. It needs a boost from its electrical system to get started. Instead of a tower, it typically uses
guy wires for support, so the rotor elevation is lower. Lower elevation means slower wind due to ground
interference, so VAWTs are generally less efficient than HAWTs. On the upside, all equipment is at ground level
for easy installation and servicing; but that means a larger footprint for the turbine, which is a big negative in
farming areas. VAWTs may be used for small-scale turbines and for pumping water in rural areas, but all
commercially produced, utility-scale wind turbines are horizontal-axis wind turbines (HAWTs).
Mini/Micro hydro technology – Mini hydro is the hydro-power system that generates electric power from
100 kW to 1MW capacity and serves nearby households through a mini-grid. Micro hydro consist of
hydroelectric generating units with capacities ranging above 10 to 100 kW. Micro-hydro has the potential to be
a major source of energy for rural areas. Micro-hydro provides a more practical and cost effective alternative to
the national grid.
C. Farming of less water intensive fruits at Dholakha and Ramechapp
The parts of Tamakoshi basin where water availability is an issue can shift to less water intensive fruits which
are also commercially lucrative. For e.g. Kiwi can be considered in Dolakha district. Kiwi fruit cultivation can
help prevent soil erosion and is a sustainable land management practice. This high value crop introduces
biodiversity and improves livelihoods by providing a source of cash income. This fruit is cultivable from the
elevation of 1000 to 2500 meters from the sea level. Loamy soil is best preferred soil for kiwi plantation.
Orchards are easy to establish and farmers can readily learn what is needed for kiwi cultivation - awareness and
training programmes can help farmers quickly learn what is needed for kiwi cultivation. This is a good
alternative for sloping land management. This can also reduce downstream flooding. The approximate annual
income from kiwi production is USD 11,765/ha/year. The technology provides on-farm employment
opportunities for both men and women. As per DoAD, kiwi farming in Dolakha can start generating profit from
the 5th year onwards and over a 10 year cycle can generate a benefit to cost ratio of 3.7. In Ramechhap the
benefit to cost ratio over a 10 year cycle for kiwi farming is 3.65. Another fruit with similar benefits and which
can provide good returns is pomegranate. This is more suited for Ramechhap. Farming of this fruit in
Ramechapp can start generating profit from the 5th year onwards and over a 10 year cycle can generate a benefit
to cost ratio of 3.1.
2.10. Prioritization of the identified measures
Let us learn about the
approach adopted for
prioritizing the
identified measures
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The identified measures were prioritized on the basis of following parameters:
E&S and Gender assessment: E&S and gender related issues were assessed for each of the measures to
identify any adverse impacts because of these measures. Relevant environmental issues like water
contamination, usage of renewable energy, biodiversity, etc. and social issues like child labor, impact on
community, cultural heritage, etc. were assessed for all the proposed interventions. Gender related issues
were assessed to map vulnerability of women and marginalized groups to these interventions. Based on the
assessment, it was found that Irrigation and SFM have no major adverse impacts and with appropriate
safeguards in place minor adverse impacts can be easily mitigated.
Scalability: The measures were assessed on their scalability and their reach to stakeholders. Irrigation and
SFM will have widespread benefits and are easily scalable. Whereas measure like spring source
management for water conservation is location specific. Moreover, the underlining climate driver of
drought can be more comprehensively addressed with irrigation linked measures which also has benefits
like water conservation.
Climate drivers: The number of climate drivers behind an intervention was a key factor for prioritization.
Irrigation and SFM were found to have multiple climate drivers like drought, landslides, flood,
temperature, rainfall, etc. Hence these two interventions were prioritized over measure like “Energy
Management” which is primarily a mitigation measure with less number of climate drivers. Energy
management would also need significant policy support and therefore may not be a feasible option for
implementation in the short term.
Sustainability: Whether a particular intervention can be a long term solution or not was also one of the
criteria for prioritization. Measure like “farming of less water intensive fruits” require extensive market
assessment, both local and global, as the success of this intervention is market linked. In absence of suitable
market forces, this measure may not be viable.
2.11. Illustration of prioritization of identified measures through E&S and Gender assessment
E&S and gender assessment was carried out for all the identified measures. The assessment was used to map
the vulnerability of women and marginalized groups and prioritize the identified options. The prioritization was
also corroborated with the findings of the field assessment.
Figure 15: Approach to prioritization of interventions on the basis of E&S and Gender assessment
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Measure 1 – Sustainable Water Management
E&S assessment The key issues to be considered from an E&S perspective are as follows:
Water contamination:
o Irrigation canal itself might not be a source of pollution. However, two scenarios can be expected – a) if
the river carries large concentration of silt or chemicals, then these pollutants can get transported
through irrigation and contaminate the fields; and b) the chemicals used in the fields might leach and
get washed to the irrigation canal and contaminating the rivers.
o The rainwater harvesting consists of collecting rainwater through roof, terrace, etc. The sanitary
condition of the roof, terraces, etc., therefore, is an important factor that determines utility of water. It
is recommended that the water should only be used for irrigation and household purposes (other than
drinking).
Water conservation - Rainwater harvesting has been considered a viable solution for conservation of
water in Nepal. Nepal receives large amount of water in short period of monsoon, and remains relatively
drier in other seasons, hence, the rainwater harvesting provides an ample opportunity to collect water.
Storage of water, however, poses a constraint. How much can be stored at the household level and for how
long, are two challenges that have to be addressed for success of the rainwater harvesting.
Usage of renewable energy - Use of solar energy for pumps is an excellent example of usage of
renewable energy. This will avoid pressure to the national grid electricity, which is currently a scarce
resource. However, life of the battery, to be used in the solar panels, and its safe disposal will have to be
planned to mitigate any adverse impact on the environment. If feasible, direct use of solar energy without
battery charge can also be considered.
Child labour - Child labor might be employed for construction of the schemes because of (a) easy
availability of workforce, (b) relatively cheaper, and (c) controlling children to maximize effectiveness is
relatively easier. So, safeguards need to be provided to prevent child labour.
Cultural perspective:
o Water conservation and reuse are practiced is Nepal, particularly, the area where water is scarce.
Rainwater has been collected in utensils, and sometimes in ponds for later use. However, this has not
done in a systematic manner. Therefore, the rainwater harvesting can be successful in Nepali society.
o The construction of irrigation scheme might disturb existing heritage sites. It is important to (a) avoid
such disturbance by altering the location of the project component, (b) repair and maintain those
structure if damaged, (c) relocate and/or compensate if avoidance and repair is not viable.
Labour working condition - Construction of the irrigation schemes requires large number of workers of
different skill levels. Their employment will require compliance with national labor laws.
Impact on the community:
o Surface irrigations require diversion of water from the river/stream towards the fields. This will cause
reduction in water discharge downstream from the diversion site. The river morphology, water quality
and organisms in that stretch of river might suffer from the diversion. Furthermore, Nepal has some
migratory fishes such as Asala and Sahar. Population of these fishes might reduce due to obstruction
by the diversion structure and reduce water quantity as well as deteriorating water quality.
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o Construction of irrigation components such as diversion weir, canal etc. requires acquisition of land on
permanent or temporary basis. This means existing land use pattern will change. There are existing
practices on compensating forest, agriculture, and private lands, which will have to be followed.
o Site clearance to start the construction, might result in removal of vegetation and cause disturbance to
the habitat.
o Construction of irrigation canals on the steep slope with weak geology has to be carefully planned. The
exposure of water in weak slope results in instigation of slope failure.
Gender assessment The following gender related issues can be considered for addressing the vulnerability of women
During Focus Group Discussion with local people and district level officials in the study area, the need
assessment of water resource management from the perspective of gender were carried out and
majority of them responded the urgent need of irrigation measures interventions
Rainwater harvesting will be carried out at the household level. Most of the times, household chores
are undertaken by women in a family. There is a possibility that operation and maintenance of
rainwater harvesting work can come under women's responsibility, thus, women's workload can be
increased with introduction of rainwater harvesting. However, this might not be significant increment
in workload.
Women are extensively utilized as agricultural labour in Nepal. Women, sometimes, have to complete
household work and join their male counterparts in fields as well. Watering the field has always been a
challenge in Nepali hills and mountains. The major rivers lie relatively in lower elevation than the
cultivated land. Operation of irrigation system, therefore, can reduce the drudgery work of fetching
water for irrigation, and/or rely of rainfall for cultivation. Solar pump system for lifting the river water
can further reduce women’s workload.
Improved access to water supply may release women from water-collection chores and might allow
women to invest more time in income-generating activities, such as agricultural production. If women
are farming their own plots and have access to irrigation technologies, then the productivity of female-
managed plots may increase, and income from the increase in productivity may also grow. They can
invest their income particularly for girls’ education. It will reduce the workload of women and
contribute to drudgery reduction. Hygiene and sanitation practices may also improve due to greater
water availability and lead to important health benefits.
During the functional stage of mitigation/adaptation measures, Water User Groups (WUG) of women
and marginalized groups can be formed to regulate the water resource management which can have
positive impact to fulfill their strategic needs providing access in decision making.
Measure 2 – Sustainable Forest Management
Environmental & Social assessment
The key issues to be considered from an E & S perspective are as follows:
Biodiversity conservation - The forest management can ensure conversation of biodiversity of forests.
Improvement of habitat can provide promote population of vegetation and wildlife.
Child labour - Child labor might be employed in forestry activities, such as plantation, maintenance of the
forests, etc. because of (a) easy availability of workforce, (b) relatively cheaper, and (c) controlling children
to maximize effectiveness is relatively easier. So, safeguards need to be provided to prevent child labour.
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Impact on the community:
o Forestry activities have tendency of promoting trees on the first hand, and further preferring species
that have better market value and/or easier to maintain. This tendency might result in pruning out of
vegetation other than tree, and tree species that have lower market value. Species richness of managed
forests might fall down. Hence sustainable forestry practices must prioritize diversity of a forest by
protecting native species of overall vegetation. It is vital to conserve biodiversity for the delivery of
environmental services that a forest provides, such as water, oxygen, aesthetics etc.
o Monoculture plantation might also be preferred for afforestation work, which shall also be avoided to
ensure biodiversity on one hand, whereas on the other hand to ensure the forest resistance to vectors of
diseases, and other calamities. Some tree species that are preferred in Nepal for plantation such as pine.
Pine trees have good timber value however it has tendency of modifying its environment. The needles
of pine create acidic soil in the area preventing other vegetation to grow.
o Community based forest management is a popular concept in Nepal such as community forestry,
leasehold forestry, etc. This concept has been successful in improving overall forest condition as well as
improving the accessibility of locals to forest resources in a sustainable manner. However, there have
been instances that culturally and economically disadvantaged groups within the communities are
discriminated from taking benefits of the forestry activities. The forestry management has to ensure
equitable participation in management and benefit sharing.
Gender assessment
The following gender related issues can be considered for addressing the vulnerability of women
During Focus Group Discussion with local people and district level stakeholder in the study districts, the
need assessment of forest resource management from the perspective of gender was carried out and
majority of them responded with the urgent need of intervention of sustainable forest resource
management to maintain ecological services and reduction of women’s drudgery.
Women are primary users of forests and harvesting products such as fodder, fuelwood, medicines and
foods. Women are usually also the primary care-givers - they use the products harvested from forests to
feed, shelter and heal their families and to earn income that they mostly spend on their families.
Through sustainable forest resource management, women can fulfill their practical needs such as
saving of time for fuel-wood collection, productive needs such as increased time for child care, leisure
and income generation and use of earned income and strategic needs such as women’s involvement in
decision making process at household and community level.
Women can be organized into user groups and involved in decision making to empower them. The
income generated through selling of wood and timber can be invested for the welfare of the women
members.
Measure 3 – Other interventions
E&S assessment
The key issues to be considered from an E&S perspective are as follows:
Child labour - Child labor might be employed for potential activities under spring source management like
developing springs-sheds, restoring lakes, terracing sloping because of (a) easy availability of workforce, (b)
relatively cheaper, and (c) controlling children to maximize effectiveness is relatively easier. So, safeguards
need to be provided to prevent child labour.
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Gender assessment
The following gender related issues can be considered for addressing the vulnerability of women
Through spring source management, access to water supply will be increased which reduce the time of
women for water fetching. This will allow women to invest more time in income-generating activities,
such as high value crops production. They can invest their income in productive sectors. It will reduce the
workload of women and contribute to drudgery reduction. Hygiene and sanitation practices may also
improve due to greater water availability and lead to important health benefits in maternal and child
health.
Energy interventions can have significant gender benefits particularly reducing the time of women
collecting fuel wood and processing cereals. It will also help to increase the education status of girls.
Equally, it will contribute to better health status of women. There is potentially scope for increasing
women’s employment in income generating activities by better energy management.
Farming of less water intensive fruits can have positive impacts on earning of women. It can be quite cost
effective as it can be even grown in the abandoned land. Through income generation, women can enhance
their social prestige and be more influential in the decision making at household and community level.
The income generated through fruit farming can be invested for better education and health. This
ultimately will increase the productive capacity of women.
Based on the E&S and gender assessment, Sustainable Water Management and Sustainable Forest
Management were finally shortlisted and considered for Cost Benefit Analysis (CBA), that is discussed in the
subsequent section.
2.12. Cost Benefit Analysis – General Methodology
In relation to the economic analysis of projects (or, for that matter, any new project), there exists two distinct
approaches to cost-benefit analysis – the financial cost benefit analysis and the economic cost benefit analysis.
In the case of financial CBA (FCBA), the profitability (or return) from the project is of interest. On the other
hand, in the case of economic CBA (ECBA), all externalities, positive and negative, in relation to the economy,
society and environment are considered as benefits and costs respectively. Though both the financial and
economic analyses necessarily analyzes “profit” from an investment, there is a distinction between “financial
profit” and “economic profit”. While the financial profit accrues to the project operating entity, the economic
profit is essentially the contribution of the project to the economy as a whole (ADB 2017), (The World Bank
2010), (ADB 1997).
For the projects which are planned with the objective to increase welfare – e.g. adaptation benefits, ECBA is
considered to be more robust and desired method (ADB 2017). ECBA captures costs and benefits accruing to
the different stakeholders of the project (over the life-time of the project) and, thus, justifies the efficacy of the
investment from the social, economic and the environmental point of view. With the goals of sustainable
Weighing the cost
vs the
benefits….the final
step for project
selection
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development becoming the desired outcomes of plans and policies, various development funding institutions
like UNDP, The World Bank, the Asian Development Bank, etc. stress on carrying out a comprehensive ECBA
as a decision criteria for undertaking an investment which are planned by the government.
A climate project with has effects on the society, environment and economy at large. Therefore, it is not prudent
to view any such project in isolation. The economic cost benefit analysis (ECBA) views the project in relation to
the entire economy (local, regional and global) and internalizes all the visible and invisible costs and benefits in
the calculation. This is a more robust tool for better resource allocation when competing projects are present.
Further, most development funding agencies (The World Bank, Asian Development Bank, Japan International
Cooperation Agency, etc.) while appraising a project for investment, puts a lot of stress on this analysis.
A project aimed at water shed management or agriculture, for example, can give rise to a series of costs and
benefits to the surrounding geographical space. A few examples of such benefits and costs are presented in the
table below. A cost benefit analysis without considering such “external” costs and benefits, and relying solely on
the internal (specific) costs and benefits (like the ones considered in the FCBA) tends to provide an incomplete
picture of the project as a whole, particularly from the welfare point of view. More important, such external
costs (and benefits) are not a one-time affair but continue to accrue over the life of the project. Therefore, a
properly done ECBA points to how a project (such as a project for increasing adaptive capacity of beneficiaries)
affects the surrounding population over its lifetime.
Given the global goal of mitigating environmental degradation and follow an alternative pathway for
development (which is carbon neutral and climate friendly), it is important to understand how the design and
plan of adaptation project reduces GHG emissions. Such reduction has an overwhelming effect on the climate
change – the harshest reality facing the mankind today (ADB 2017). The benefits of such GHG reductions are to
be considered while calculating net benefits for the ECBA of a new urban space which is green and carbon
neutral. The money value of reduction in emissions may be derived from the framework of Clean Development
Mechanism (CDM) and/or prices for carbon credits in different exchanges – Chicago Climate Exchange,
European Climate Exchange, etc.
Table 7: Example of External Costs and Benefits: Adaptation Project
Issue Economic benefits Economic costs
Incremental Livelihood Creates incremental income for the beneficiaries – productivity gains, conservation of resources
Loss of existing occupation due (e.g. loss of land, etc.)
Incremental accessibility to services from infrastructure developed
Beneficiaries can access the infrastructure (physical and social)
Issues concerning development induced displacement
Incremental opportunity to economic activities
Economic agents can engage in trade and commerce
Out-migration, if any, due to loss of opportunities
Incremental abatement of emission/pollution
Incremental value of the carbon sinks created through the project
Any direct/indirect emissions
Incremental bio-diversity Incremental value of eco-system services
Losses, if any arising due to loss of bio-diversity
The benefits and costs related to the ECBA are, at times, invisible and pertain to measures for adaptation and
mitigation and are most commonly, non-traded goods and services – for example, biodiversity preservation,
benefits of pollution free environment, social effects from improved infrastructure, etc. In such situations, the
method of Willingness to Pay (WTP) may sometimes be deployed to impute a monetary value to such goods and
services. ECBA is widely prevalent method in assessing the economic viability of investment projects,
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particularly, development projects and are mandatory exercises for proposals made to the development funding
institutions like UNDP, ADB, The World Bank, etc.
The following table lists steps in carrying out the ECBA. For details, one may please refer to (ADB 2017), (OECD
2007), (The World Bank 1998), (ADB 1997).
Table 8: Economic Cost Benefit Analysis: Key Steps
Step Description Key Activities
1 Defining the objective of the project This is the first step in the economic analysis. Clearly defined objective(s) is essential to reduce the number of alternatives considered, and to select the tools of analysis and the performance indicators of success.
Objectives of a project could be narrow to broad.
2 Deciding on the least cost design without compromising on the overall objective
Examination of alternatives solutions is necessary. The alternative (technically feasible solutions) could be alternative technical specifications policy/institutional reforms (different tax regimes), geographical locations or differences in scale of the project envisaged.
The exercise helps planners and policy makers to come up with a port-folio of alternatives, with associated costs and benefits, so that the most optimal solution is chosen for implementation.
3 Identification of Beneficiaries Normally, not everyone benefits from the outcomes of a project and some sections of the society may lose. Moreover, groups that benefit from a project are not necessarily those that incur the costs of the project. Identifying those who will gain, those who will pay, and those who will lose gives an insight into the incentives that various stakeholders have to be guaranteed so that the project is implemented as designed.
4 Assessment of fiscal impacts How and to what extent will the costs of the project be recovered from its beneficiaries?
What changes in public expenditures and revenues will be attributable to the project?
What will be the net fiscal effect for the central government and for local governments?
Will the cost recovery arrangements affect the quantities demanded of the services provided by the project?
Are these effects being properly taken into account in designing the project?
5 Assessing the Financial Sustainability Is adequate finance available for the project and maintenance of the same throughout its life?
What is the cost of capital? Are their opportunities to minimize the cost of capital?
What are the other costs (other than the cost of capital) for arranging finance for the project through its lifetime?
6 Distribution of Costs and Benefits among stakeholders
The exercise involves looking at the project from the view-point of the different stakeholders – government, private entities, society at large, etc. and then distributing the costs and benefits among these various stakeholder groups.
A sub national consultation workshop can be conducted to get suggestions from the district and
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Step Description Key Activities
village level institutional officers on the appraised cost and benefits for more precise analysis
Typically, the externalities are distributed between the stakeholders all through the life of the project. Valuation of external costs and benefits is an important issue and there exists different approaches to valuation (The World Bank, 1998).
The exercise also helps to ascertain the incentives to be designed and interventions required so that the project reaches the social optimum.
7 Is the project worthwhile? Once the aforesaid activities are completed the “economic benefits” from the project are compared with the economic costs. ADB (1997) refers to a measure called EIRR (Economic Internal Rate of Return). A project is considered worthwhile when the economic benefits are far greater than economic costs.
Alternately, a Cost-Benefit-Ratio (CBR) may be calculated and compared to a benchmark
8 Sensitivity Analysis and Risk Mitigation Strategy Altering scenarios and observing the impacts on the net economic benefits.
The analysis also points to the sources of risk and thereby helps in formulating appropriate risk mitigation mechanisms
Source: (ADB 2017), (OECD 2007), (The World Bank 1998), (ADB 1997)
A comprehensive economic analysis is, therefore, not an isolated and independent exercise. It embodies
technical specifications, socio-economic and environmental impacts of all the stake holders. For a projects
aiming at reducing climate-risks, the analysis must be the FIRST STEP for planning and designing. Decisions
(with respect to components, features and technologies) taken on the basis of a robust economic analysis
reduces the possibility of selecting inappropriate components, reduces the chance of mal-adaptation and
ensures sustainability of the project over a long time horizon.
2.13. Climate Change relevance of a project
When projects are intented to be financed through pooling of finances from dedicated climate funds (e.g. GCF,
Adaptation Fund, etc.), it is extremely important to highlight the CC relevance of a project. Action of Climate
Today (ACT) has developed a framework to find out this relevance. The methodology stems out of CBA. In this
sub-section, a brief description of the method is presented.
A project, while having development benefits, may also have benefits in the form of adaptation and/or mitigation
(Allan, et al. 2016). Conceptually,
Total Benefits = Economic growth (EG%)+Social development (SO%)+Environmental benefits (EV%)+
Adaptation benefits (AD%)+Mitigation benefits (MI%)
Climate relevance (CC%) = AD% + MI%
CC% = (B-A)/B, where B = CBR with climate benefits and A = CBR without climate benefits
Hence, a properly conducted CBA can also lead to ascertaining the climate relevance of the projects.
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2.14. Illustration of measure wise CBAs – with and without climate benefits
Illustration of CBA of Sustainable Forest Management at Dholakha
Sustainable Forest Management (SFM) can be an effective strategy to realize the goals of increasing coping
capacity and resilience of the population residing in the selected areas of the Tamakoshi Watershed, in the face
of climate change. SFM also aims at leveraging maximum benefits arising due to the potential eco-system
services of forests.
This chapter discusses the Cost-Benefit-Analysis of SFM, as a climate intervention and also explores the climate
relevance of the intervention.
Environmental Problems & Impacts: Detailed scientific analyses carried out during the course of this
exercise have found that the upper Tamakoshi region is suffering from severe degradation of forests and
grassland. This is one of the major reasons for landslides and drought in this area. The FGDs carried out in this
area also confirm this finding.
It has been found that there are several factors contribute to landslides in this area. The following are the major
reasons:
• Degradation of forests and grasslands
• Presence of barren lands
• Erratic rainfall, floods and GLOF
SFM: A Possible Strategy
In the literature, there has been a lot of evidence that sustainable forest management practices in Nepal can
generate adequate economic, social and environmental returns. Sustainable forest management (SFM)
leverages many benefits of ecosystem services for the local and national economy (Kanel & Niraula, 2017),
(GoN, 2015), (Acharya, 2002).
Figure 16: Outcomes of SFM
Reduce degradation & deforestation
Improve carbon sequestration
Improve resilience of wildlife
Empower local communities
Improve adaptability of forestry eco-systems
and dependent communities
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In view of the above, as a policy action, it is recommended that actions be initiated for:
Securing forests
Stopping encroachment and degradation
Promote SFM to realize mitigation benefits and increase adaptive gains for the population
Such actions needs to be started immediately.
Further given the issue of climate change, the climate relevance of the intervention has been analysed following
(Allan, Resch, Alvarez, & Nicholson, 2016). Mitigation and adaptation benefits have been calculated and two
Benefit-to-Cost Ratios (BCR) have been arrived at – (a) one without Climate Change (CC); (b) another with CC
abatement measure. The two BCRs have been compared to analyse the CC relevance of the intervention, termed
as CC%.
Table 9: Benefits and their relative importance
S.
No.
Type of
Benefit
Relative
importance
from the
point of view
of adaptation
Climate/Anthropogenic
Drivers impacting benefit
Explanation
1 Logging of
industrial
timber
High Drought; Forest Fire; Human
Encroachment; landslides
Traditionally, the rural population
at Dolakha have supplemented
their earnings from agriculture and
livestock with revenues from the
sale of industrial timber. With
climate change (leading to damage
of forest areas, degradation of the
quality of forests) and
anthropogenic activities
(encroachment, illegal felling of
trees), this additional and
important source of revenue is
expected to be extinct. This is
expected cause tremendous
hardship among the poor rural
population. On the other hand SFM
helps to restore and augment this
additional source of earnings.
Hence, from the point of
adaptation, this benefit has been
categorized as “High”.
2 Fuel wood
cultivation
High Drought; Forest Fire; Human
Encroachment; landslides
There is a high correlation between
access to energy and development
of social capital. In South Asia
universal energy access is still a
challenge. About 20% of the rural
population in Nepal depends on
fuel wood, biomass, etc. for meeting
their energy needs for lighting,
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S.
No.
Type of
Benefit
Relative
importance
from the
point of view
of adaptation
Climate/Anthropogenic
Drivers impacting benefit
Explanation
cooking. It has also been found that
for the rural population who have
access to electricity, the quality of
supply is erratic and unreliable.
Poor people at Dolakha continue to
depend on forests for fuel wood,
dried leaves, etc. Degradation of
forests would aggravate their woes
as this relatively inexpensive source
of energy will dry up and additional
expenditure needs to be incurred in
order to procure, transport fuel
wood from other places. Hence,
sustainability of availability of fuel
wood has been categorized as
“High” from the point of view of
adaptation.
3 Agro-
forestry
High Erratic rainfall; landslides;
Rising temperature
In Dolakha, at some places agro-
forestry has been promoted on a
pilot basis. Cardamoms, turmeric,
fodder, multi-purpose trees and
crop species are being planted as a
part of community based forestry
programmes launched by FAO and
IFAD. Scaling up such programmes
is extremely essential as agro-
forestry provides increased income
opportunities, together with
binding the soil and preventing
landslides and erosion. The
benefits from the agro-forestry,
being incremental in nature, have
been classified as High
4 Step
Cultivation
Medium Erratic rainfall; landslides;
Rising temperature
Winter rice, winter wheat, maize
are some of the crops which may be
cultivated in this mode. This
additional source of income for the
poor rural communities and
marginal farmers. SFM provides an
opportunity to the community to
earn an additional income from
these sources and hence, offset
some of the losses that may be
accrue in the case of principal
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S.
No.
Type of
Benefit
Relative
importance
from the
point of view
of adaptation
Climate/Anthropogenic
Drivers impacting benefit
Explanation
economic activities, in the face of
climate change. Given the limited
potential of this incremental
income, the benefit from step
cultivation has been classified as
“Medium”.
5 Livestock
rearing
High Rising temperature; erratic
rainfall; degradation of
grasslands; forest fire
The community of Dolkha depends
heavily on the income from
livestock. Due to climate change
and anthropogenic activities,
grasslands are being encroached
upon, proportion of barren lands
are increasing. As a result, severe
food shortage for livestock has
been reported. Consequently, not
dependence on livestock is
reducing but also the villagers have
to incur extra expenses to maintain
livestock. Hence the adaptation
gains have been considered to be
“High”
6 Avoided loss
due to
damage of
Properties
High Landslides, Erratic Rainfall;
Degradation of Forests
In Dolakha, the incidences of
landslides are increasing – causing
both loss to life and property.
Considering the magnitude of the
loss, the gains are classified as
“High”.
7 Ground
water
recharge
Low Drought, Erratic Rainfall Dolakha is a drought-prone area.
Further most of the population are
dependent on agriculture. In the
event of less than adequate ground
water recharge, the area will
continue to reel under water
shortage and escalated costs of
water harvesting. However, since
there are parallel programmes for
water conservation, the
incremental gains have been
considered as low.
Results and Discussions
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Using a discount rate of 10% p.a., the present values of net benefits have been calculated for 5 (short term), 10
(medium term) and 35 (long term) years. The results have been furnished in table
Table 10: Summary Results – Sustainable Forest Management
S. No. Particulars NPV 5 Years NPV 10 Years NPV 35 Years
1 Net Benefits without CC NPR
Million
(499.82) 13.75 814.96
2 Net Benefits with CC NPR
Million
(378.88) 277.81 1,301.83
3 Total Cost of the Project NPR
Million
961.99 999.54 1,055.37
4 Benefits without CC NPR
Million
462.16 1,013.29 1,870.33
5 Benefits with CC NPR
Million
583.10 1,277.35 2,357.21
6 BCR (without CC) Ratio 0.48 1.01 1.77
7 BCR (with CC) Ratio 0.61 1.28 2.23
8 CC% [(7-6)/7] 21% 21% 21%
The following observations are important to note:
The intervention is financially viable in the medium run and long run. Since forests take time to
develop, all benefits do not accrue in the short term.
Considering CC related benefits – mitigation and adaptation, the intervention becomes financially
viable in the medium term
The climate relevance of the intervention is approximately 21% - out of the total net benefits from the
intervention, 79% accrues from development benefit and the remaining 21% is attributable to climate
benefits.
Out of the 21% attributable to climate benefits, 20.97% accrues from adaptation while the remaining
marginal value is on account of mitigation.
Therefore, this is not just an ordinary development project but promotes the harnessing of ecosystem services
and leverages climate benefits.
Illustration of CBA of Sustainable Water Management at Ramechapp:
Ramechhap district have been suffering from drought like situation due to decrease in rainfall. The FGDs
conducted in this region, particularly hilly/mountainous areas, have confirmed that the situation is worsening
as the springs and other natural sources of water are drying up. Consequently, the local community – mostly
the poor and marginalised groups, face acute water stress, particularly during the dry seasons, as these natural
systems are the only available potable water source in the region. To cope with the stress, the community then
has to either decrease their water consumption or has to invest time and effort to ferry water from distant
sources. Sustainable Water Management can be an effective adaptation strategy in such a situation and our
approach to Sustainable Water Management comprises of 4 elements i.e.
Rain water harvesting
Gravity surface water irrigation
River lifting through solar pumps
Embankment
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Figure 17: Sustainable Water Management strategy for Ramechapp
Table 11: Benefits and their relative importance
S. No.
Type of Benefit Relative importance from the point of view of adaptation
Climate/Anthropogenic Drivers impacting benefit
Explanation
1
Avoided loss due to reduction in productivity of Paddy
High Drought, land-use change
Agriculture‐forest based livelihoods are dominant in the Basin (ICIMOD). Hence, from the point of adaptation, this benefit has been categorized as “High”.
2
Avoided loss due to reduction in productivity of Wheat
High Drought, land-use change
3
Avoided Loss due to reduction in productivity of Maize
High Drought, land-use change
4
Avoided Loss due to reduction in productivity of Millet
High Drought, land-use change
5
Avoided Loss due to reduction in productivity of Potato
High Drought, land-use change
6
Avoided Loss due to reduction in productivity of Mustard
High Drought, land-use change
Sustainable Water Management
Rooftop Rainwater
Harvesting
Gravity surface water
irrigation
River lifting through
solar pumps
Embankment
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Results and Conclusion:
Using a discount rate of 10% p.a., the present values of net benefits have been calculated for 5 (short term), 10
(medium term) and 30 (long term) years. The results have been furnished in the table below.
Table 12: Summary Results for CBA of Gravity Surface Water Irrigation
S.No Particulars NPV 5 Years NPV 10 Years NPV 30 Years
1 Net Benefits without CC NPR
Million (1,583.57) 605.65 3,621.23
2 Net Benefits with CC NPR
Million (815.30) 2,113.65 6,143.66
3 Total Cost of the Project NPR
Million 4,201.65 4,561.90 5,051.90
4 Benefits without CC NPR
Million 2,618.08 5,167.56 8,673.14
5 Benefits with CC NPR
Million 3,386.35 6,675.55 11,195.56
6 BCR (without CC) Ratio 0.62 1.13 1.72
7 BCR (with CC) Ratio 0.81 1.46 2.33
8 CC% [(7-6)/7] 23% 23% 23%
The following observations are important to note:
The intervention is financially viable in the medium term (i.e. >10 years) mainly due to the returns
from agricultural produce
The climate relevance of the intervention is approximately 23% - out of the total net benefits from the
intervention and the remaining 77% accrues from the development benefits.
With a conservative estimate of benefits accruing from the 3rd year of the intervention, it becomes
economically viable in both the scenarios i.e. with & without considering climate change benefits.
Considering anticipated climate change, it is found that intervention promotes adaptation and is
moderately climate relevant with a CC percentage of 23% during the life of the intervention. It may also
be noted that mitigation benefits have not been considered here. When such benefits are considered,
the climate relevance is expected to increase further.
2.15. Findings of the sub-national consultation
A sub national consultation workshop was conducted each in the districts of Ramechhap and Dolakha on 7th
and 8th July respectively. The attendance sheet and the feedback form is appended in the annexure. The
objective of these workshops was to get suggestions from the district and village level institutional officers on
the appraised cost and benefits of the two interventions – Irrigation and Sustainable Forest Management. The
suggested inputs and subsequent modification in the existing assessment is presented in the below table:
Table 13: Outcome of the sub-national consultation workshop
Intervention Suggested Input Outcome
Irrigation Implement rooftop rainwater
harvesting measure in the villages
It is recommended that rooftop
rainwater harvesting should be
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Intervention Suggested Input Outcome
where the average annual rainfall
exceeds 1000 mm.
implemented in the areas where
rainfall is more than 1000 mm
Values for some of the costs
associated with the solar water
pumping were discussed during
consultation.
As there has been no largescale
river lifting through solar pump
projects being implemented in the
area, the costs associated with it
hasn’t been standardized and it’s
also difficult to substantiate.
Hence, we are sticking to the
original calculation as the values
used have been taken from
authentic sources.
Expressed concerns regarding
practicality of gravity based
surface water irrigation in the
drought prone areas of
Ramechhap
It is recommended that a pilot
project should still be
implemented and then the
feasibility can be evaluated to
assess the scalability of the
measure
Sustainable Forest
Management
Modifications were suggested in
values (Numbers/Ha) of
following items:
Artificial regeneration
Bamboo plantation
Mixed plantation of trees
Regeneration of perennial
herbs
Cost-benefit calculations were
accordingly modified. Final
results as per original and revised
calculations is presented below as
separate tables. However, no
material change in the final
results were observed.
Following non-wood species were
suggested that can be considered
to generate revenue and
additional benefits:
Taxusspps
Swertia Chirayita
Daphne Bholua
Asparagus Recemosa
Valerina Jatamansi
Cardamom
Broom Grass
The costs (associated with
plantation of non-wood species)
considered for original
calculations were very
conservative in nature. Moreover,
costs associated with each of the
suggested species is not readily
available. Hence, there is no
change in the CBA calculations
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Table 14: Original CBA - Summary Results – Sustainable Forest Management
S. No. Particulars NPV 5 Years NPV 10 Years NPV 35 Years
1 Net Benefits without CC NPR
Million
(499.82) 13.75 814.96
2 Net Benefits with CC NPR
Million
(378.88) 277.81 1,301.83
3 Total Cost of the Project NPR
Million
961.99 999.54 1,055.37
4 Benefits without CC NPR
Million
462.16 1,013.29 1,870.33
5 Benefits with CC NPR
Million
583.10 1,277.35 2,357.21
6 BCR (without CC) Ratio 0.48 1.01 1.77
7 BCR (with CC) Ratio 0.61 1.28 2.23
8 CC% [(7-6)/7] 21% 21% 21%
9 Benefits with CC (excluding
adaptation)
NPR
Million
463.33 1,015.74 1,874.70
10 BCR (excluding adaptation) Ratio 0.48 1.02 1.78
11 CC% (Excluding adaptation) % 0.3% 0.2% 0.2%
Table 15: Revised CBA - Summary Results – SFM (incorporating the inputs of sub-national level consultation)
S. No. Particulars NPV 5 Years NPV 10 Years NPV 35 Years
1 Net Benefits without CC NPR
Million
(512.98) (0.22) 799.77
2 Net Benefits with CC NPR
Million
(392.04) 263.84 1,286.65
3 Total Cost of the Project NPR
Million
975.14 1,013.51 1,070.56
4 Benefits without CC NPR
Million
462.16 1,013.29 1,870.33
5 Benefits with CC NPR
Million
583.10 1,277.35 2,357.21
6 BCR (without CC) Ratio 0.47 1.00 1.75
7 BCR (with CC) Ratio 0.60 1.26 2.20
8 CC% [(7-6)/7] 21% 21% 21%
9 Benefits with CC (excluding
adaptation)
NPR
Million
463.33 1,015.74 1,874.70
10 BCR (excluding adaptation) Ratio 0.48 1.00 1.75
11 CC% (Excluding
adaptation)
% 0.3% 0.2% 0.2%
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2.16. Requirements of reforms and institutional mechanisms
The cost benefit analysis is the first step after the portfolio of the feasible options and strategies has been
identified. Further, for ensuring the inter-generational continuity of projects, it is necessary to design an
economic plan that incorporate policy instruments that uses both market based tools and command-and-
control principles. This may require a detailed analysis and review of existing policies so as to initiate, if
necessary, policy reforms and institutional overhauling. In light of the above, there are numerous questions that
may arise during analysis. Some of the questions are given below – these questions are indicative but not
exhaustive.
Table 16: Problems and issues for consideration
S. No. Key question Sub- question 1 Is the project a
revenue project or non-revenue project?
If revenue project:
What should be the structure of fees and taxes?
Wat will be the rates of fees and taxes?
What is the mechanism of revenue collection?
Is there a need for a specific institution for collecting revenue? etc.
If non-revenue project:
What mechanisms would attract non-government finance?
Can there be subsidies to cover O&M expenses?
Which ministries/ departments will provide subsidies? 2 How will the CAPEX
be financed? Is there need for co-financing?
Who are the co-financing partners?
Will private sector be interested in financing CAPEX?
What will be the mechanism for lending finances from different sources?
3 How will the O&M expenses be financed?
Should this be left to the government or financed by beneficiaries?
Is there a need for co-financing?
How to motivate beneficiaries to finance O&M expenses? 4 Are changes required
in national/ sub-national budgets?
How should the changes be mainstreamed?
Are all ministries/ departments willing to carry out changes?
5 Is the mechanism for delivery of benefits adequate and robust?
Are changes required in the supply chain to ensure continuity of projects?
How to ensure last mile connectivity? Source: Based on (Ghosh & Ghosh, 2016), (The World Bank, 2005), (The World Bank, 2011)
Deciding on strategies to overcome barriers to financing: In view of the above questions, to ensure the
adoption and continuity of projects, it is therefore necessary to plan for strategies to remove possible barriers to
financing of projects. These strategies/ policies ought to work at national, sub-national and local levels. Some
such strategies are:
Exploring different sources of finance: There exist bilateral, multi-lateral and private institutions who
finance climate projects. However, each institution has their own requirements and rationale for financing
projects. Therefore the project, at the design stage, must imbibe the requirements so as to facilitate co-
financing.
Adopting a multi-sector approach: Climate change project benefits are spread across various sectors and
governance levels. Therefore there must be inbuilt mechanisms to involve, integrate and coordinate
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ministries/ departments to work together so as to maximize the gains from the project at all levels –
national, sub-national and local.
Developing an effective and efficient value chain: The strategies have to be devised involving all
stakeholders so that an effective and efficient value chain can be created that will ensure the adaptability
and continuity of the projects in the future.
Initiating institutional reforms: There may be need to create new entities and/ or aboliosh old entities in
order to carry forward climate projects. Therefore institutional reforms – at national, sub-national and local
levels, are an integral part of the system.
Initiate fiscal reforms: Tax/ subsidy reforms maybe needed to attract public and private actors to
participate actively in climate projects (The World Bank, 2005).
Mainstreaming climate considerations at all levels of governance: Unaware of climate impacts on
development objectives, traditional governance has often concentrated on development priorities only. In
the backdrop of climate change it is necessary to factor in climate considerations in development strategies
at all levels of governance, to generate more robust development results.
Fostering an investment grade policy regime: The returns from climate related projects are slow and accrue
over a long term. They are also sensitive to policy volatility. Therefore, there is a need for government to
adopt an investment grade policy regime (Hamilton, 2009) that would ensure climate projects to be
sufficiently attractive to bilateral, multi-lateral development financing institutions and private investors.
The dimensions of the policy depend on the sector in which the project is undertaken.
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3. Preparing the investment plan
3.1. Sections of investment proposal
GCF funding proposal development process is based on their extant guidelines. It requires the project
proponent to address the following points in their funding proposal.
Table 17: Sections of a GCF funding proposal
Section Particulars Detailed description
A Project/ programme summary Project/ programme title
Basic information like executive summary, contact point, project focus (adaptation/ mitigation/ cross cutting) project size & lifespan
B Financing cost/ information Description of financial elements of the Project / Programme - project financing information like co-finance, loans, GCF financing etc.
C Detailed project/ programme description Political/ institutional information
Policy & institutional set-up
Objectives w.r.t baselines
Impact on climate change
Barriers address by the project/ programme
Project/ programme management structure
D Rationale for GCF involvement Value added by GCF involvement
Exit strategy
E Expected performance against investment criteria
Impact potential - Potential of the project/programme to contribute to the achievement of the Fund’s objectives and result areas
Paradigm Shift Potential - degree to which the proposed activity can catalyze impact beyond a one-off project/programme investment
Potential for knowledge and learning
Environmental, social and economic co-benefits, including gender-sensitive development impact
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Section Particulars Detailed description
Country Ownership - beneficiary country (ies) ownership of, and capacity to implement, a funded project or programme
F Appraisal summary Economic and Financial Analysis
Technical evaluation
Environmental, Social Assessment, including Gender Considerations
Financial management and procurement
G Risk assessment and management Risk Assessment Summary
Risk Factors and Mitigation Measures
H Results monitoring and reporting Paradigm Shift Objectives and Impacts at the Fund level
Outcomes, Outputs, Activities and Inputs at Project/Programme level
Arrangements for Monitoring, Reporting and Evaluation
I Annexes Supporting Documents for Funding Proposal, such as Feasibility Study, Environmental and Social Impact Assessment & Management Plan, Gender Analysis and Action Plan, Timetable of project/programme implementation, Economic analysis etc.
3.2. Linkages with background work covered in section 2
The discussions in the preceding section show that an investment proposal prepared for GCF must incorporate
the Theory of Change and should justify the rationale for GCF involvement in the project. Since, the objective of
GCF is to address climate considerations, the proposal must highlight the gains in terms of environment, while
also highlighting the gains accruing to the economy and the society. In many cases, these three types of gains
are interrelated. Further, the investment proposal is required to highlight economic returns so that the
investment is justified.
Taking the example of Dolakha and Ramechaap, this training manual has shown the necessary steps required
for carrying out vulnerability assessment, selection of options and cost benefit analysis of options to fortify the
rationale, climate impact abatement potential and attractiveness of the investment. Therefore, preparing a
proposal for GCF is an intensive process and must be supported through a detailed technical and economic
analysis. The analysis requires to be strengthened by the theory of change which requires specifying existing
problems, intended outputs, expected outcomes and assessing the attractiveness of economic returns. The
analysis must also highlight to what extent the mitigation and adaptation objectives are fulfilled by the project.
This has been adequately described taking the case of Dolakha and Ramechaap. Needless to mention, a quality
proposal can only be prepared when all stakeholders have been consulted, detailed technical analysis have been
performed and, environmental, social and economic gains have been considered.
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