Nepal is one of the most vulnerable countries to impacts from climate change. The erratic weather patterns, unpredictable rains, poor snowfall at high altitudes, and recurrent droughts have adversely affected agriculture and livelihoods of small farmers and vulnerable groups.

In 2012, the Poverty-Environment Initiative supported the Government of Nepal to undertake a Climate Public Expenditure and Institutional Review (CPEIR).Generating information to effectively track climate expenditure and maintaining financial records to build a climate financing framework are instrumental in accessing global climate funds. To do so requires the establishment of a financial system that provides a well-documented record showing climate investments in a transparent and accountable manner.

The Ministry of Finance in collaboration with the National Planning Commission (NPC) has now introduced a climate budget code to allow tracking of climate expenditure.The climate budget code also allows for the analysis of climate programmes in relation to other priority indicators related to poverty reduction and gender equality. The NPC’s planning guidelines have further incorporated the directive that makes coding of each development programme for climate relevance mandatory in the national budgetary process.

These efforts have led to an allocation of 10.34% of Nepal’s 2013-2014 budget for climate funding. This will allow Nepal to mitigate impacts of climate change that adversely affect vulnerable groups and contribute to the achievement of national development goals. On August 3rd, the online magazine SciDev.Net further highlighted this progress in the article ‘Nepal Budget Focuses on Climate Funding.’