Climate finance: tackling loss and damage – a call for Nepal’s strategic action

This paper contextualizes Loss and Damage (L&D) as a third pillar of climate response, distinct from mitigation and adaptation, and argues for its strategic integration into Nepal’s climate policy landscape. The study underscores the inadequacy of current climate finance to address Nepal’s growing L&D burden, despite the presence of several international mechanisms like the Green Climate Fund, Adaptation Fund, and Global Environment Facility. It critically reviews Nepal’s policy responses, including the National Framework on Climate-Induced L&D and Nationally Determined Contribution 3.0, while identifying institutional and operational gaps.

The paper proposes a comprehensive funding strategy centered on diversified finance sources, locally grounded project design, and robust coordination mechanisms. It emphasizes the pivotal role of the National Disaster Risk Reduction and Management Authority (NDRRMA) in spearheading L&D governance, data management, and direct access to global funds. Establishing a national L&D fund, enhancing inter-sectoral collaboration, and mainstreaming L&D into development planning are key recommendations. By positioning L&D within climate justice and equity frameworks, this paper calls for Nepal to strengthen its institutional readiness, negotiation strategy, and implementation capacity to secure its fair share of climate finance, transforming vulnerability into resilience and ensuring no one is left behind in the era of escalating climate risk.