appraising cost of options - gcf readiness programme · measures that take into account the role of...

Appraising Cost

of Options Conduct a climate change

risk and vulnerability

assessment of agro-

ecological zones of Nepal

and appraising climate

change adaptation

measures in agriculture

March 2018

1

Acronyms

ADB Asian Development Bank

AEZ Agro Ecological Zone

CAPEX Capital Expenditure

CEA Cost Effectiveness Analysis

DFI Development Financing Institution

eCBA Extended Cost Benefit Analysis

EOCC Economic Opportunity Cost of Capital

ENPV Economic Net Present Value

FIRR Financial Internal Rate of Return

FNPV Financial Net Present Value

GCF Green Climate Fund

GGGI Global Green Growth Institute

GoN Government of Nepal

IPCC AR5 Intergovernmental Panel on Climate Change Fifth Assessment Report

MoAD Ministry of Agricultural Development

MoLD Ministry of Livestock Development

NAP National Adaptation Plan

UNDP United Nations Development Programme

VA Vulnerability Assessment

VDC Village Development Committee

VRA Vulnerability and Risk Assessment

WACC Weighted Average Cost of Capital

WB World Bank

2

Table of contents Acronyms 1

Glossary 6

1. Economic profile of Nepal 8

1.1 Role of agriculture in Nepal’s economy 9 1.2 Ecosystem services 11 1.3 Impact of climate change in AEZs 14 1.4 Socio-economic profile of the watersheds 15

1.4.1 Mugu-Karnali Watershed 15

1.4.2 Lohare watershed 15

1.4.3 Babai Watershed 16

1.5 Findings of field level survey 17

1.5.1 Mugu Karnali Watershed 17

1.5.2 Lohare Watershed 17

1.5.3 Babai Watershed 17

1.6 Identification of potential adaptation measures 18

2. Adaptation options 21

2.1 Sustainable Agriculture Management 21 2.2 Sustainable Water Management 23 2.3 Sustainable Livestock Management 25 2.4 Sustainable Forest Management 26

3 CBA of adaptation options 28

3.1 Case study of a subset of Mugu Karnali watershed that includes AEZs in Mugu district 29 3.1.1 Sustainable Agriculture Management 29 3.1.2 Sustainable Water Management 30 Table 12: Adaptation benefits for Mugu district (Mugu Karnali watershed) from Sustainable Water

Management 33 3.1.3 Sustainable Livestock Management 35 3.2. Case study of a subset of Lohare watershed that includes AEZs in Dailekh district 37 3.2.1. Sustainable Agriculture Management 37 3.2.2. Sustainable Water Management 39 3.2.3. Sustainable Livestock Management 43 3.2.4. Sustainable Forest Management 45 3.3. Case study of a subset of Babai watershed that includes AEZs – in Bardiya district 50 3.3.1. Sustainable Agriculture Management 50 3.3.2. Sustainable Water Management 52 3.3.3. Sustainable Livestock Management 56 3.3.4. Sustainable Forest Management 58

4 Priortization of EbAs 64

3

4.1 Prioritization of EbA measures based on the outcome of CBA 64

Annexure: Local Prices 66

References 67

4

List of figures

Figure 1: GDP trend of Nepal at constant prices (source: Central Bureau of Statistics, Nepal) ................................8 Figure 2: Contribution to GDP (source: Economic Survey 2016-17) ........................................................................... 9 Figure 3: Agriculture Growth Rate (in percent) for last ten years (Source: Economic Survey) ............................... 10 Figure 4: Composition of Agriculture GDP ................................................................................................................. 10 Figure 5: Type of ecosystem services (Source: Ecosystem and Human Well-being: Assessment) ...........................11 Figure 3 Mugu Karnali Watershed............................................................................................................................... 18 Figure 4 Lohare Watershed .......................................................................................................................................... 19 Figure 5 Babai Watershed ........................................................................................................................................... 20 Figure 8: Logical framework for selecting Sustainable Agriculture Management as a strategy .............................. 21 Figure 9: Logical framework for selecting Sustainable Water Management ............................................................24 Figure 10: Logical framework for selecting Sustainable Forest Management as a strategy .....................................26 Figure 11: Outcomes of SFM......................................................................................................................................... 27

5

List of tables

Table 1: Key Deliverables of a Climate Project ............................................................................................................ 12 Table 2: Assessment Matrix Model of Climate Projects ............................................................................................. 13 Table 3: AEZs identified in Mugu Karnali watershed ................................................................................................. 14 Table 4: AEZs identified in Lohare watershed ............................................................................................................ 14 Table 5: AEZs identified in Babai waterhed ................................................................................................................ 15 Table 6: Possible impacts of temperature and rainfall trend in the agro-ecological zones ...................................... 16 Table 7: Findings in Mugu Karnali Watershed ........................................................................................................... 18 Table 8: Findings in Lohare Watershed ...................................................................................................................... 19 Table 9: Findings in Babai Watershed ......................................................................................................................... 19 Table 10: Forestry – climate benefits ......................................................................................................................... 28 Table 11: Adaptation benefits from Sustainable Agriculture Management for Mugu district (Mugu Karnali

watershed) .................................................................................................................................................................... 30 Table 12: Adaptation benefits for Mugu district (Mugu Karnali watershed) from Sustainable Water Management

........................................................................................................................................................................................ 33 Table 13: CBA for Sustainable Water Management for Mugu district (Mugu Karnali watershed) ......................... 34 Table 14: Adaptation benefits from Sustainable livestock management in Mugu district (Mugu Karnali

watershed) ..................................................................................................................................................................... 36 Table 15: CBA of Sustainable Livestock Management for Mugu district (Mugu Karnali watershed) ...................... 36 Table 16: Adaptation benefits from Sustainable Agriculture Management for Dailekh district (Lohare watershed)

....................................................................................................................................................................................... 38 Table 17: CBA for Sustainable Agriculture Management for Dailekh district (Lohare watershed) ........................ 38 Table 18: Adaptation benefits for Dailekh district (Lohare watershed) from Sustainable Water Management ..... 41 Table 19: CBA for Sustainable Water Management in Dailekh district (Lohare watershed) ...................................42 Table 20: Adaptation benefits from Sustainable Livestock Management for Dailekh district (Lohare watershed)

........................................................................................................................................................................................44 Table 21: CBA for Sustainable Livestock Management in Dailekh district (Lohare watershed) ............................. 45 Table 22: Adaptation benefits from Sustainable Forest Management in Dailekh district (Lohare watershed) .... 48 Table 23: CBA for sustainable forestry management in Dailekh district (Lohare watershed) ............................... 50 Table 24: Adaptation benefits from Sustainable Agriculture Management in Bardiya district (Babai watershed) 51 Table 25: CBA for Sustainable Agriculture for Bardiya district (Babai watershed) .................................................. 52 Table 26: Adaptation benefits from Sustainable Water Management in Bardiya district (Babai watershed) ........ 54 Table 27: CBA for Sustainable Water Management in Bardiya district (Babai watershed) ..................................... 56 Table 28: Adaptation benefits from Sustainable Livestock Management in Bardiya district (Babai watershed) .. 57 Table 29: CBA for Sustainable Livestock Management in Bardiya district (Babai watershed) ...............................58 Table 30: Adaptation benefits for Bardiya district (Babai watershed) from Sustainable Forest Management ...... 61 Table 31: CBA for SFM measures in Bardiya district (Babai watershed) .................................................................. 63 Table 32: Prioritized list of EbAs for the three watersheds ........................................................................................64 Table 33: Mugu Karnali watershed ..............................................................................................................................64 Table 34: Lohare watershed ......................................................................................................................................... 65 Table 35: Babai watershed ........................................................................................................................................... 65

of 71

Glossary

Agro Ecological Zones (AEZs) – AEZs may be defined as geographical areas exhibiting

similar climatic conditions that determine their ability to support rained agriculture. At a regional scale, AEZs

are influenced by latitude, elevation, and temperature, as well as seasonality, and rainfall amounts and

distribution during the growing season.

Climate, soil characteristics and land forms are factors that determine how productive any piece of land can

be. Similarly, these are what can limit the productivity of any land area. AEZ in turn uses these factors as a

basis for dividing a given area into agro-ecological zones. The process of AEZ can therefore assist the

Government and regional planners when it comes to how land use should be utilized in the present and in

the future.

The Vulnerability Assessment Report submitted on 9th February 2018 outlines the methodology adopted for

identifying AEZs in the study and is based on the Agro-ecological Zoning –Guidelines document published

by FAO (Food and Agriculture Organisation, 1996). As per this method, temperature, moisture index,

topography (elevation and slope) and soil order data are used to identify AEZs.

Extended Cost Benefit Analysis (eCBA) - An extended Cost-Benefit Analysis (eCBA) is a special tool (for economic analysis of project1s) that captures the range of economic, social and environmental impacts together with factoring in external costs and benefits, if any, throughout the life of the project, to arrive at an overall ‘net impact’ of the intervention. The results are used to facilitate an informed and sound decision making (GGGI, 2014). Ecosystem Based Adaptation (EbA) - Climate change adaptation measures that are more aligned to the livelihood and have promising approaches to reduce social vulnerability for sustainable and efficient adaptation to climate change. EbA is a part of an overall adaptation project and takes into account multiple social, economic and cultural co-benefits for the local communities. It encompasses adaptation policies and measures that take into account the role of ecosystem services in reducing societal vulnerability, through multi-sectoral and multi-level approaches. (Andrade, et al., 2012).

Financial Net Present Value (FNPV) - Is the present discounted value of the net cash flow from a project

over the entire economic life of the project. The net cash flow is equal to the difference between cash inflow

and cash outflow. A suitable discount rate, expressed as the percentage per annum, is used to discount the

net cash flows to arrive at the FNPV.

Financial Internal Rate of Return (FIRR) - Is the discount rate at which the FNPV=0. It is a metric

used in capital budgeting to ascertain the profitability from projects over its economic life.

Hurdle rate - Is the targeted internal rate of return for the entity implementing the project. In other words,

it is the anticipated rate of return from the project.

Weighted Average Cost of Capital (WACC) - Is the cost of capital calculated as weighted average of the

costs of debt and equity, weights being proportional to the share of debt and equity in the capital structure

designed to finance the project.

Economic Net Present Value (ENPV) - Economic net present value is the measure of net economic gains

accruing to the economy and society from a project over the entire economic life of the project. It is calculated

as the present discounted value of net economic benefits (i.e. economic benefits – economic costs),

discounted by economic opportunity cost of capital.

1 The word “project” in this document means any climate change adaptation and /or mitigation intervention

of 71

Economic Internal Rate of Return (EIRR) - Is the rate of discount at which the ENPV=0. This is the

rate at which net economic benefits accrue from a project annually.

CAPEX - Represents the Capital Expenditure of a project. It is the initial investment required for

implementing a project

1. Economic profile of Nepal

Nepal is one of the least developed countries of the world. As per the preliminary result of the last Population

Census 2011, among 26.4 million people of the country 82.9% people live in the rural areas. The country has a

literacy rate of 48.6% of which 62.7% are males and 34.9% are females. (UNDP, 2017)

Figure 1: GDP trend of Nepal at constant prices (source: Central Bureau of Statistics, Nepal)

It is a challenging task to reduce dependency on foreign employment by creating employment opportunities at

home and reaping demographic dividend by developing human resources as per the National needs and demand.

Nepal faces a challenging task of attaining economic prosperity by addressing plethora of economic issues, inter

alia poverty, inequality, unemployment, weak infrastructure and domestic production, low domestic savings and

investment, weak investment friendly environment, informal economic sector, low capital expenditure, high

trade deficit, brain drain and remittance oriented economy. There is a pressing need for creating the foundation

for the mobilization of resources as well as the availability, assurance and equitable distribution of the means and

resources at the federal, provincial and local levels in line with new federal governance system. As per the new

federal structure, investments on socio-economic infrastructure need to be guaranteed through proper

distribution of means and resources. Nepal in the past has been adversely affected by failing to boost public

expenditure on productive sectors moreover there has been huge surplus owing to inability of the Government to

make timely capital expenditure. (Economic Survey , 2016-17)

As per the 14th plan of the National Planning Commission, Nepal has set the target of graduating to middle

income Country by the year 2030 through high economic growth with employment oriented and equitable

distribution system thereby ultimately creating the base for sustainable economic prosperity. It is a challenging

task for the Government achieve the Sustainable Development Goals by ending poverty, inequality,

unemployment and dependency through high, sustained and broad-based inclusive growth. The Government of

Nepal, in collaboration with various development funding partners, is undertaking measures by implementing

projects to increase coping capacity and resilience of the community and maximize gains from adaptation. While

these projects are termed as climate change projects, they also have a potential for delivering economic and social

gains. Together, some of such projects also aim at leveraging co-benefits in the form of mitigation potential

embedded in the project design and implementation plan. Hence, many of the climate projects are able to deliver

economic, social and environmental gains and, thus, help Nepal to remain on the trajectory of sustainable

development.2

Nepal is in the very last leg of the years-long political transition, with political stability & policy clarity and a

federal Government structure with accountability across levels, the Government of Nepal is well poised towards

implementation of climate adaptation measures to address the economic as well as developmental challenges

through innovative measures.

2 As a corollary, many standard development projects can have social and environmental (and/or adaptation, mitigation benefits) gains. It is important that during the appraisal of the project, such gains are captured in the analysis.

of 71

1.1 Role of agriculture in Nepal’s economy

Agriculture is the mainstay of the economy accounting for one third of GDP. (Statistical Year book of Nepal,

2015). In the fiscal year 2016-17, the real GDP at basic prices is estimated to grow by 6.94 percent against its

growth rate of 0.01 percent in the previous year. The economy that contracted due to the earthquake and

disruption in border points is in the stage of recovery and expansion. However, Nepal has been witnessing a

structural change in its economy. The contribution of agriculture and industry sectors to GDP is declining while

that of the services sector is rising. Contribution of the agriculture sector to real GDP, which stood at 36.6 percent

in fiscal year 2001-02 which dropped to 31.6 percent in FY 2015-16. The share of agricultural sector to GDP is

estimated to be around 29.37 percent per annum and is expected to grow by 5.29 percent per annum in the fiscal

year i.e. FY 2016-17. (Economic Survey , 2016-17). The primary sector that had expanded by 4.7 percent per

annum in the fiscal year 2015-16 and is expected to grow by 2 percent per annum in FY 2016-17. Likewise, the

secondary sector grew by 7.2 percent per annum in previous fiscal year is estimated to decrease by 7.5 percent

per annum in the fiscal year 2016-17, and the service sector that recorded a growth of 4.4 percent per annum in

FY 2015-16 is projected to grow by 11.6 percent per annum in fiscal year 2016-17. The chart below presents the

GDP break-up for Nepal.

Despite the decline, agriculture sector has been providing employment to 65.7% of the population and accounting

for over 50 % of Nepal’s exports. Therefore, to address Nepal’s developmental challenges the issues associated

with agriculture sector has to be addressed. Agriculture sector in Nepal has suffered due to low level of public and

private investment and the impact of natural calamities like floods, landslides, drought etc. (Karki, 2015). The

task of substituting imports of agro-products by increasing production and productivity of the agriculture sector

also remains a key concern.

Agriculture Growth rate averaged 2.9 % per annum during the last decade. Both of these figures are above the

population growth rate of 1.35 % per annum, but with huge year-on-year variation, the range being 5.8% per

annum in FY 2007-08 to 1% per annum in FY 2006-07 to 0.01% per annum in FY 2015-16, reflects high

dependence on the vagaries of nature and an underdeveloped sector. (Karki, 2015)

Figure 2: Contribution to GDP (source: Economic Survey 2016-17)

of 71

The challenge for Nepal is to achieve high and sustained economic growth by concentrating investment in one of

the key growth sectors of Nepal i.e. agriculture & allied activities (including livestock) which furthermore prone

to the impacts of climate change. Various studies have shown that Nepal, a low-income Himalayan country, is

exposed to a multitude of climate risks, apart from the pressing need for fostering economic development

(Chhetri, Chaudhary, Tiwari, & Yadaw, 2012), (The World Bank, 2011), (Nepal & Satdobato, 2009). Extreme

events associated with erratic and increased intensity of rainfall – floods, landslides, etc.; steady increase in

temperature and glacial meltdown are expected to have an adverse impact on the socio-economic fabric of Nepal.

Various sectors of the economy, particularly, agriculture and the associated eco-systems services are being

affected to a great extent.

The chart below presents the break-up of agriculture GDP of Nepal. As depicted by the chart, it is evident that the

cereal crops and livestock are key constituents of the agri-GDP of Nepal representing 49.41% and 25.68% of the

agri-GDP.

Figure 4: Composition of Agriculture GDP

Therefore, an important dimension of agriculture in Nepal has been development of livestock. Observation of

livestock situation reveals prosperity in terms of cattle density. Livestock productivity however, has been low.

Moreover, the number of commercial farms of dairy cows and buffaloes, poultry and pigs has grown in recent

period with growth in commercialization in the livestock sector.

As identified by the MoAD, some of the key priorities of the agricultural sector of Nepal include:

Increasing production and productivity of key agricultural crops

Promoting agriculture commercialization and modernization for increased efficiency and farm income

Addressing both food and nutrition security

Local economic development through agribusiness cluster development

Figure 3: Agriculture Growth Rate (in percent) for last ten years (Source: Economic Survey)

of 71

Alleviating poverty through smallholder agriculture development

In addition to the above, another key aspect is the weather patterns. Agricultural activities are directly affected

by the nature scenarios such as excess rain in the past have caused extensive damage to paddy, vegetables, maize,

fish ponds, fruits and approximately impacting 127,158 hectares of land area in FY 2016-17. Similarly, in previous

FY 2015-16, 60,520 hectares of land area that suffered such damage. (Economic Survey , 2016-17)

1.2 Ecosystem services

Ecosystem services are the benefits people obtain from ecosystems. These include provisioning services such as

food and water; regulating services such as flood and disease control; cultural services such as spiritual,

recreational, and cultural benefits; and supporting services, such as nutrient cycling, that maintain the conditions

for life on Earth as presented in the chart below.

Figure 5: Type of ecosystem services (Source: Ecosystem and Human Well-being: Assessment)

People seek many services from ecosystems and thus perceive the condition of an ecosystem in relation to its

ability to provide desired services. An assessment of the condition of ecosystems, the provision of services, and

their relation to human well-being requires an integrated approach. This enables a decision process to determine

which service or set of services is valued most highly and how to develop approaches to maintain services by

managing the system sustainably.

Any investment/intervention for addressing climate change does not only deliver environmental benefits, but

also have a broad range of impact on the society and economy. Climate change adaptation measures provide

several developmental benefits in addition to eco-system conservation & increased coping capacity to climate

change impacts and therefore holds the potential to serve as a basis for a sustainable economic model. This

integration can be achieved by including Ecosystem based Adaptation (EbA) to climate change, valuing the many

benefits nature provides to people, and including such values in economic decision-making. (UNEP, 2010)

An Ecosystem based Adaptation (EbA) approach offers a means to encourage development of cost efficient

policies and strategies that help people cope with the adverse impacts from climate change, through ecosystem

management, conservation and restoration. Conserving and managing nature protects the resilience of

ecosystems and the valuable benefits they provide society.

The following table shows some of the key deliverables of a project aimed at mitigating and/or adapting to climate

change. While it may not be possible to address all the deliverables at once or immediately (given the various

of 71

constraints operating), there must be a medium to long-range plan in place for ensuring delivery of these critical

deliverables (ADB, 2014), (UNDP, 2011). This, therefore, calls for a “prioritization” of objectives and strategies

while formulating plans, policies and programmes for addressing climate change issues.

Table 1: Key Deliverables of a Climate Project

Deliverable Some examples

Productivity

gains

Deliver a robust and feasible economic growth at the local/ sub-national/ national

level

An investment grade policy regime which attracts additional and further investment

Employment

opportunities

Sustainable employment and income opportunities at different levels of population

Encouraging Entrepreneurship in climate related goods and services

Development

of public

infrastructure

Develop physical infrastructure that is resilient to climate impacts and minimizes the

vulnerability of the hazard affected population. E.g. guaranteed access to clean

drinking water, seamless communication systems, early warning systems, etc.

Develop social infrastructure aimed at promoting intra-generational and inter-

generational equity. E.g. healthcare systems, educational institutions, etc.

Ensuring

asset

ownership by

communities

Psychological ownership of assets by communities at different levels

Generating capacity to guarantee the maintenance and sustainability of the created

assets

Leveraging

opportunities

from

ecosystem

services

Educating communities about the different ecosystem services

Empowering communities through putting to good use the gains that can be derived

from the proper utilization of ecosystem services

Improving

quality of

environment

Preservation of natural resources and bio-diversity

Mitigation measures to restrict, reduce GHG emissions

Abating local pollution

Compiled based on (ADB, 2014), (The World Bank, 2011), (UNDP, 2011), (McKinsey, 2010), (OECD, 2007)

There exist a large literature on methods and approaches for assessing the efficacy of projects in delivering climate

benefits (Hanley, Barbier, & Barbier, 2009), (Xing, Horner, El-Haram, & Bebbington, 2009), (Haapio &

Viitaniemi, 2008), (Naidoo, et al., 2006), (Bolund & Hunhammar, 1999), (McPherson, et al., 1997), (Lind, 1995).

The methods vary with respect to scope, focus and variables considered for evaluation of projects. The

geographical scale of evaluation ranges from global to local (Zavri & Zaren, 2010).

The variables considered by these different methods are either qualitative - indicators being evaluated

subjectively, or quantitative - indicators that can be calculated and/or measured. Some of the key questions

relevant for assessing efficacy and sustainability of climate projects have been captured in the Assessment Matrix

Model (Antunes, et al., 2006). The table below provides a snapshot of the questions being considered in the

Assessment Matrix Model.

of 71

Table 2: Assessment Matrix Model of Climate Projects

Environment Economy Society

What is the mitigation

potential of the project

What are the economic gains

from the project?

Is the project design bottom-

up?

Does it acknowledge user

needs?

Are the standards for air,

water, soil pollution, etc.

within the restrictions set

locally and internationally?

Are the pollution levels

decreasing?

Is the cost-effectiveness and/or

cost-benefits of the project

reasonable compared to other

projects?

Does the project decrease the

exposure and vulnerability to

hazards and promote well-

being of the communities?

Is the utilization of natural

resources (water, land, etc.)

reasonable compared to

other comparable projects?

What are the possible cost

recovery mechanisms?

How feasible and sustainable are

they?

Are the project phases and the

consequences thereof

transparent to and accepted by

the beneficiaries?

Is the project promoting,

among the beneficiaries, the

need for being responsible

towards environment and

climate change?

Is the project allowing the

sustenance and re-

generation of biodiversity in

and around the project

area?

Is the project allowing the

development of climate

resilient infrastructure in

and around the project

area?

Are plans for financing, operating

and maintaining the project cost-

effective and efficient?

Does the project have any

negative consequences?

In developing and emerging economies, the efficacy and adequacy of climate projects is not incumbent on

addressing environmental goals alone. Countries like Nepal have development objectives and aspirations that

need to be fulfilled. Guaranteeing optimal economic uplift and maximum social welfare gains has to be the key

for any undertaking. Simultaneously, given the increasing risk to climate hazard impacts, any project must also

reduce the vulnerability from climate impacts while safeguarding the threat to the environment.

of 71

1.3 Impact of climate change in AEZs

This assignment as a part of Green Climate Fund (GCF) Readiness Programme in Nepal, is a component of the

Ecosystem based Adaptation measures being undertaken by UNDP in the agro-ecological zones of Nepal. Overall,

the assignment aims at identifying vulnerable hotspots in Nepal, selecting the adaptation options for the

identified hotspot, assess their environmental and social impacts and gender responsiveness and prioritize them

based on their cost benefits and ultimately preparing an investment framework for the options aligned to GCF’s

long term vision of contributing to the overall climate resilient development of the Country.

The objective of this assignment is to develop National capacities of Nepal to identify, prioritize and appraise the

costs of adaptation options in Agro-ecological Zones (AEZs) that would lead to reduction of climate-induced

disaster risks. For the purpose of the assignment three pilot watersheds have been identified, namely:

1 Mugu Karnali Watershed 2 Lohare watershed 3 Babai watershed

Each watershed represents an ecological zone of the country i.e. Mountains (Mugu Karnali), Hills (Lohare) and

Terai (Babai) respectively. As every watershed comprises of a number of AEZs, the purpose of identifying AEZs

has been done in this study. It has been done to separate the areas with similar sets of potentials and constraints

for development. Further, climate change impacts will differ among the AEZs within the same watersheds

because of the differences in climate, soil type, landform and elevation among AEZs. Therefore, specific

adaptation measures can be formulated to provide the most effective support to each zone. AEZs can therefore

assist the government and regional planners when it comes to how land use should be utilized in the present and

in the future. The AEZs identified for each watershed has been presented in the tables below:

Table 3: AEZs identified in Mugu Karnali watershed

1 Non-arable glacial past glaciated mountain terrain under conifers and grazing 2 Non-arable glacial (arctic) shallow talus and bare rock slopes 3 Non-arable glacial complexes of moraine and glacio-alluvial-colluvial deposits under alpine

shrubs and meadows 4 Non-arable frigid complexes of moraine and glacio-alluvial-colluvial deposits under alpine shrubs

and meadows 5 Non-arable frigid (arctic) shallow talus and bare rock slopes 6 Non-arable frigid past glaciated mountainous terrain 7 Non-arable cold (arctic) shallow talus and bare rock slopes 8 Non-arable cold complexes of moraine and glacio-alluvial-colluvial deposits under alpine shrubs

and meadows 9 Arable cold terraced mountain terrain 10 Lake 11 Non arable cold past glaciated mountainous terrain 12 Arable temperate terraced mountain terrain 13 Non-arable temperate Past mountain glaciated mountain terrain 14 Non arable steep mountainous terrain under forest

Table 4: AEZs identified in Lohare watershed

1 Non arable cold past glaciated mountainous terrain 2 Non arable cold steep mountainous terrain under forest 3 Arable temperate terraced mountain terrain 4 Diverse crop arable sub-temperate recent alluvial plain 5 Non arable steep mountainous terrain under forest 6 Non-arable sub-temperate active depositional river terraces 7 Arable sub-temperate terraced mountain terrain 8 Non-arable sub-temperate terraced mountain terrain under

of 71

Table 5: AEZs identified in Babai waterhed

1 Arable temperate terraced mountain terrain 2 Diverse crop arable temperate recent alluvial plane 3 Non-arable temperate Past mountain glaciated mountain terrain 4 Non arable temperate steep mountainous terrain under forest 5 Non-arable sub-temperate dissected ancient depositional basin and river terrace under forest 6 Arable sub-temperate ancient depositional basin/river terrace and recent alluvial plain complexes 7 Arable sub-temperate terraced mountain terrain 8 Diverse crop arable sub-temperate recent alluvial plain 9 Non arable steep mountainous terrain under forest 10 Non arable sub-tropical dissected ancient depositional basin and river terrace under forest 11 Non arable sub-tropical steep mountain terrain 12 Non arable sub-tropical steep mountain terrain under forest 13 Non-arable subtropical active depositional river terraces 14 Paddy arable subtropical swales in recent alluvial plane

1.4 Socio-economic profile of the watersheds3

1.4.1 Mugu-Karnali Watershed

The field level survey that has been carried out during the course of this exercise has found that the area within

the Mugu Karnali watershed is faced with challenges like lack of proper irrigation, landslides and drought.

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. However, due to lack of economic and physical resources, locals do not construct

a proper cattle sheds. Traditionally, the communities have been depended on forests and grassland for fodder for

animals. As forests and grassland degrade, the communities are facing scarcity of food for the livestock. It is

observed that the number of livestock is decreasing over the years and thus, there is an adverse economic impact.

Owing to the geographic remoteness and difficult weather conditions there is a limitation of locals that can be

mobilized for skilled activities. Labour migration (men population moving out for seasonal employment in India)

is another aspect observed in this district. Traditional customs and conservative practice prevent women

members to participate actively in agriculture or other income generating activities.

Mugu district within Mugu-Karnali watershed comprises of AEZs such as Non-arable glacial past glaciated

mountain terrain under conifers and grazing, Non-arable glacial (arctic) shallow talus and bare rock slopes, Non-

arable glacial complexes of moraine and glacio-alluvial- colluvial deposits under alpine shrubs and meadows,

Non-arable frigid complexes of moraine and glacio-alluvial- colluvial deposits under alpine shrubs and meadows,

Non-arable frigid (arctic) shallow talus and bare rock slopes, Non-arable frigid past glaciated mountainous

terrain, Non-arable cold (arctic) shallow talus and bare rock slopes, Non-arable cold complexes of moraine and

glacio-alluvial- colluvial deposits under alpine shrubs and meadows, Arable cold terraced mountain terrain, Lake,

Non arable cold past glaciated mountainous terrain, Arable temperate terraced mountain terrain, Non-arable

temperate Past mountain glaciated mountain terrain, Non arable steep mountainous terrain under forest etc.

1.4.2 Lohare watershed

Drought is a major problem in the Lohare watershed and food from farming sufficient only for 3-6 months only.

Irrigation and availability of drinking water in some areas of the district are primary concerns. A decreasing

trend in number of livestock owned by the farmers was also observed. The farming of non-timber forest products

3 Due to the data availability issue, the socio-economic data/ analysis presented in this report is at district level namely Mugu district in Mugu Karnali watershed, Dailekh in Lohare watershed & Bardiya in Babai watershed.

of 71

are in the verge of extinction primarily due to lack of access to a proper market for agri-produce. There have been

instances of intentional forest fires occur every year in dry season.

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,

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.

Dailekh district within Lohare watershed comprises of AEZs such as Non arable cold past glaciated mountainous

terrain, Non arable cold steep mountainous terrain under forest, Arable temperate terraced mountain terrain,

Diverse crop arable sub-temperate recent alluvial plain, Non arable steep mountainous terrain under forest, Non-

arable sub-temperate active depositional river terraces, Arable sub-temperate terraced mountain terrain, Non-

arable sub-temperate terraced mountain terrain under etc. The list AEZs is not exhaustive as Lohare watershed

covers only a part of Dailkeh district.

1.4.3 Babai Watershed

People in this region are mostly dependent on agriculture for income. However, due to droughts and floods

affecting these regions of the watershed there has been a continuous decline in income generated through

agricultural activities. Flood and drought situations have led to issues of food security due to the damage caused

to crops. Farmers residing within the flood plain area are most disadvantaged. Their main source of income: the

crops are being lost or damaged every year is resulting in a constant decline in agricultural incomes. Also,

productivity of the crops is decreasing due to the problem of sedimentation created that is a result of regular

floods affecting the region.

Bardiya district within Babai watershed comprises of AEZs such as Diverse crop arable temperate recent alluvial

plane, Non-arable temperate Past mountain glaciated mountain terrain, Non arable temperate steep

mountainous terrain under forest, Non-arable sub-temperate dissected ancient depositional basin and river

terrace under forest, Arable sub-temperate ancient depositional basin/river terrace and recent alluvial plain

complexes, Non arable steep mountainous terrain under forest, Non arable sub-tropical steep mountain terrain,

Non arable sub-tropical steep mountain terrain under forest Non-arable subtropical active depositional river

terraces, Paddy arable subtropical swales in recent alluvial plane etc.

Table 6: Possible impacts of temperature and rainfall trend in the agro-ecological zones

Watershed Possible impacts of temperature and rainfall trend on*: Crop yield Livestock Pest and diseases

Babai Watershed Rice (the staple crop) yield may be adversely impacted by the indicated temperature and rainfall trend. Yield of wheat (the second important food crop) may substantially decline in tropical and sub-tropical climate of Babai Watershed under the above mentioned trend.

Quality of milk from cattle, buffalo and meat from goat, sheep may be adversely affected by increasing temperature. Increased disease incidence is projected for livestock under the above mentioned temperature and rainfall trend.

Incidence of pest and diseases is likely to be most severe in Babai Watershed and it may shift to hills and mountains.

of 71

Watershed Possible impacts of temperature and rainfall trend on*: Crop yield Livestock Pest and diseases

Lohare Watershed Maize (the second important food crop) yield is likely to decline under increasing temperature trend. Adverse impact of evented temperature on wheat is slightly less in hills compared to that in Babai Watershed

The impacts on livestock and its products are likely to be similar in all AEZs

Some pathogens of important crops from Teral have adapted in hills and mountains (eg. rust and foliar blight) that may adversely affect the agricultural production.

Mugu Karnali Watershed

Increased rainfall has favorable impact on wheat yield under all temperature levels Potato yield is likely to suffer under increasing temperature. Maize may have a favorable response to increasing temperature in mountains.

The impacts on livestock and its products are likely to be similar in all AEZs

Mosquito from Terai and Hills are able to survive in the mountains leading to increase in vector borne diseases even in livestock.

*Source: (Climate Change and its impact on Nepalese Agriculture, 2008)

1.5 Findings of field level survey

1.5.1 Mugu Karnali Watershed

The major climatic hazards in the watershed are – Floods, Landslides and Drought. The existing reports from

the district management committee and FGDs affirmed the conclusion. It has been noted that the frequency of

all the above events are increasing in the watershed. However, within Mugu Karnali, the ‘Arable temperate

terraced mountain terrain’ AEZ will be most affected by landslides and droughts. Whereas the ‘Arable temperate

terraced mountain terrain’ AEZ will be majorly affected by landslides due to climate change.

1.5.2 Lohare Watershed

The major climate hazards in the watershed are – Landslide, Floods and Drought. Both the existing reports from

district management committee and FGDs point to the same conclusion. Within the Lohare watershed, the

‘Arable temperate terraced mountain terrain’ AEZ will be most affected by increasing frequency of landslides and

droughts. Whereas the ‘Arable sub-temperate terraced mountain terrain’ AEZ within Lohare watershed will be

majorly affected by increasing frequency of landslides due to climate change.

1.5.3 Babai Watershed

The major climate hazards in the watershed are – Drought, Flood, Cold waves and Hailstorm. Both the existing

reports from district management committee and FGDs hinted towards the same conclusion. The main hazard

the area faces is flooding during the monsoon season. According to the information gathered from the FGDs the

frequency of floods in this area has been noticeably increasing. In addition, the height of flood waters has also

increased due to the rise in river bed level. The riverbeds rave risen because of the occurrence of soil erosion and

landslides in the upstream regions on the Babai Watershed.

In this watershed due to continuous dry spells, high temperatures and low rainfall, the frequency of droughts is

increasing. The areas that are away from the rivers are prone to droughts. Cold waves and hailstorm incidents

are also increasing on a yearly basis. Officials during KIIs and locals during FGDs talked about crop losses

incurred due to increasing cold waves and hailstorm events.

of 71

In Babai watershed, the ‘Paddy arable subtropical swales in recent alluvial plane’ , ‘Diverse crop arable temperate

recent alluvial plane’ and ‘Arable sub-temperate ancient depositional basin/river terrace and recent alluvial plain

complexes’ AEZs will be most affected by increasing frequency of flooding. On the other hand, The ‘Arable sub-

temperate terraced mountain terrain’ AEZ will be affected by increasing frequency of cold wave conditions.

1.6 Identification of potential adaptation measures

Below is a summary presentation of the findings from spatial analysis and field assessments with a justification

of how for a particular watershed a set of adaptation measures has been chosen.

Table 7: Findings in Mugu Karnali Watershed

Findings from Spatial Analysis

Findings from Field Assessments

Adaptation Measures Proposed

The hazard posed by

landslide in this VDC is

Very High.

The hazard posed by Soil

Erosion has a “Medium”

rating.

The frost days will increase by 8-18 days per year in the period 2040-2059

The annual drought

likelihood in the in this

part increases by 16-20 %

per year in the period

2040-2059

The total rainfall due to 5-

day-continuous-rainfall-

episodes will increase by

15-30 mm

Locals have pointed to the increasing

trend in the incidence of landslides in

this area. Heavy rainfalls, the

incidence of which is increasing, lead

to landslides.

As per the locals and the officials who were interviewed for the KIIs, extreme rainfalls that lasted short durations have led to landslides and also soil erosion at a massive scale in the area.

As per locals, the incidence of droughts has been increasing. Many local crops such as beans are getting affected by droughts. Further, drinking water supply and sanitation are also taking a hit because of lack of availability of water during droughts.

Micro-irrigation: KII and

farmers verified

Management of spring

sources for irrigation

Plastic green house to

protect vegetables from

extreme cold weather.

Use of Biological Pests must

be promoted. ‘Botanical

Pesticides’, in particular,

and Bio-Pesticides could be

used to keep away pests.

Upstream areas of the

springs need to be revived

on a regular basis so that

people dependent on

‘gravity’ water have

perennial supply of water.

Figure 6 Mugu Karnali Watershed

of 71

Table 8: Findings in Lohare Watershed


Findings from Field Assessments

Adaptation Measures Proposed

The annual drought likelihood in the in this part increases by 16-20 % per year in the period 2040-2059

The frost days will increase by 8-18 days per year in the period 2040-2059

The annual drought likelihood in the in this part increases by 16-20 % per year in the period 2040-2059

Drought is a major problem facing the people of this area. Water resources, springs and spouts, are declining because of droughts. Agriculture productivity has reduced and also the capacity per farmer to maintain livestock has reduced because of poor availability of water.

Frost is another problem hi-lighted by locals. Increasing incidence of this phenomenon is leading to loss of standing crops.

Local mentioned that there has been increasing incidence of frost affecting crops in the area.

Promotion of drought tolerant varieties

Promotion of micro-irrigation to conserve water

Plastic green house to protect vegetables to avoid excess evaporation of water

Mulching: To cover the land with plastic sheets to stop water from evaporating.

Plantation of alfa-alfa, which can be a fodder substitute for cattle in the region.

Along with Alfa-alfa, tree grasses must be promoted as fodder.

Shed management must be promoted to provide protection to cattle from extreme weather conditions.

Promotion of poultry farming will serve two purposes 1) supplement incomes and 2) to improve local nutrition levels

Figure 7 Lohare Watershed

Table 9: Findings in Babai Watershed

of 71


Findings from Field Assessments Adaptation Measures Proposed

Frost days are likely to increase by 2-6 days per year in the period 2040-2059

The annual drought likelihood in the Northern part increases by 8-12 % and in southern part by 4-8% per year in the period 2040-2059

The flood hazard posed to Mohmmadpur gets the ‘highest Category’ rating as per the spatial analysis.

The area is prone to flooding

during monsoons and is also

affected by the problem of

sedimentation. Sedimentation is a

result of intense flooding in the

region. Also, it was pointed out by

the locals during the FGD that

flooding and sedimentation are

promoting each other.

Officials, during KIIs, and locals,

during FGDs, talked about crop

losses incurred due to increasing

frost and hailstorm events.

As per locals, the frequency of

droughts is increasing in the

region.

Locals also spoke about extreme

cold waves in the region which

destroy crops such as Mustard and

Legumes.

Also, other crops such as paddy

have also been destroyed due to

flood, as per locals

Plastic Tunnels

Promote growth of Zaid Crops

Promote use of botanical

pesticides

Sheds must be put up to

protect livestock from frost and hailstorm.

Fodder needs to be provided to cattle on a regular basis as grass meant for foraging is in short supply due to increasing incidence of drought.

As per the officials in the Forest Department in Bardiya, agro-forestry could be an income supplement for farmers in the region in the face of increasing risks posed by flooding and droughts.

Figure 8 Babai Watershed

of 71

2. Adaptation options

The adaptation measures/ coping mechanisms identified during field validation are classified under four

categories depending on the ecosystems and its services that are being addressed by the measures. The categories

are:

1. Sustainable Agriculture Management

2. Sustainable Livestock Management

3. Sustainable Forest Management

4. Sustainable Water Management

2.1 Sustainable Agriculture Management

i) Plastic tunnel

Tunnel farming is a simple and low cost practice to control the micro-climate surrounding crops by reducing

the impacts of temperature fluctuations. Tunnels also protect crops from unpredictable hailstorm and high

intensity rainfall spells. Tunnels are essentially greenhouses-hut-like structures covered with plastic sheets

that serve as protection areas, making it possible to grow vegetables off-season and securing the provision of

food supplies throughout the year. Crops such as cucumber, capsicum, tomato, pepper, bitter gourds, melons,

brinjal and water melon are highly valued vegetables that show significant increase in yield when grown in

tunnel farming4.

4 Tunnel Farming for off-season vegetable cultivation in Nepal – FAO. http://teca.fao.org/read/7714

Issues Interventions

• Water availability for irrigation

especially in dry seasons (drought

like situation)

• Lack of agricultural income

impacting livelihood

• Extreme weather conditions

impacting food security

Agro-forestry

Plastic tunnel,

mulching

Promoting Zaid

crops

Output

• Facilitate water conservation

• Availability of water in dry seasons

• Sustainable land management

• Increase in food security

• Improved livelihood – source of

cash income Incremental revenue

from off-season vegetable

cultivation

Climate tolerant

crop varieties/

Botanical pesticides

Tunnel will particularly be effective in countering the climate change risks in the ‘Arable sub-temperate

ancient depositional basin/river terrace and recent alluvial plain complexes’ and ‘Paddy arable subtropical

swales in recent alluvial plane’ AEZs of Babai. Tunnel farming can also be applied in Lohare (Dailekh) and

Mugu Karnali (Mugu), particularly in the AEZs of ‘Arable cold terraced mountain terrain’ and ‘Arable

temperate terraced mountain terrain’ of Mugu Karnali, to grow winter crops and also to protect crops from

extreme weather events.

Figure 9: Logical framework for selecting Sustainable Agriculture Management as a strategy

of 71

ii) Promoting Zaid crops

During heavy floods, river banks and land adjacent to rivers suffer from leaching and denudation, which

results in the loss of soil nutrients. Such land, due to loss of fertility, becomes unsuitable for the growth of

crops such as paddy, wheat, etc. The silty soil, however, is suitable for growth of Zaid crops like watermelon,

cucumber, pumpkin and gourds. These crops not only supplement the incomes of those farmers who have

suffered due to loss of soil nutrition but also provide essential nutrients and food security to local populations.

iii) Botanical pesticides

With climate change, Nepal will face increased number of droughts and floods as well as higher temperatures

and humidity. Under these conditions not only should crops need to be protected from droughts and flooding

but also from pest attacks. In fact, hot and wet climates are more prone towards proliferation of pests. In

order to protect crops from pests, farmers generally use chemical insecticides. However, chemical pesticides

lead to the indiscriminate elimination of both harmful pests as well as beneficial micro-organisms and

insects. Further, chemical pesticides also cause harm to farmers upon direct physical contact and also enter

food chain and disrupt local eco-systems. Given that with changing climate will result in more pest attacks

which in turn will lead to higher usage of chemical pesticides, there is a need to move away from the use of

chemical insecticides in order to protect the existing balance and the environment.

Botanical pesticides are an effective alternative to synthetic insecticides and enjoy many advantages. Firstly,

they are environmentally friendly and do not have negative effects on the health of farmers. Secondly,

botanical pesticides may be toxic to certain insects when applied but they break down into non-toxic

compounds when exposed to sunlight. Lastly, most botanical pesticides can be produced using ingredients

that could be found locally around the farmer’s house/village5.

iv) Introduction and promotion of pests and diseases resistant varieties

As already described above, the incidence of pest attacks is on the increase in districts like Bardiya, Dailekh

and Mugu because of increasing temperatures. Increasing temperatures lead to migration of pest and disease

species from surrounding regions. In addition to the adaptation measures such as introduction of Botanical

Pesticides to counter pest attacks, farmers can also adopt pest and disease resistant varieties of crops.

v) Climate Tolerant Crop Varieties

Rice is the main cereal crop that is grown in Babai watershed. Given that most of the rice grown, and other

crops, in this area is dependent on rain fed irrigation for cultivation, climate change poses will increasingly

affect crop yields in this region.

5 How to buffer impacts of climate variability and dry spells in home gardens by using botanical pesticides and liquid compost, Cambodia – FAO.

Zaid crops would particularly be relevant to the ‘Arable sub-temperate ancient depositional basin/river

terrace and recent alluvial plain complexes’ and ‘Paddy arable subtropical swales in recent alluvial plane’

AEZs of Babai Waterhed.

In this context, bio-pesticides can be an effective way of countering pest attacks in the future in Bardiya. AEZs

within the Babai watershed that are arable – ‘Arable sub-temperate ancient depositional basin/river terrace

and recent alluvial plain complexes’ and ‘Paddy arable subtropical swales in recent alluvial plane’- are

particularly suitable for the application of botanical pesticides.

Further, flooding, especially in regions close to rivers, is also a serious threat to crops in Babai watershed

especially the regions that lie within the ‘Paddy arable subtropical swales in recent alluvial plane’ AEZ and

the incidence of flooding is increasing. This was confirmed through the Vulnerability Assessment carried out

for Bardiya and validated through Field Assessments and Stakeholder Consultations.

.

of 71

vi) Promote mulching

Mulching is essentially covering land with plastic sheets or ‘fils’ to minimize water from evaporating. This is

done by farmers with an aim to conserve soil moisture. This promotes efficient use of water.

In such a scenario farmers have to use water conserving techniques such as mulching to ensure efficient use

of water and save crops in the face of unpredictable weather conditions. Further, in Mugu, where there is

snowfall in winter, mulching can be used to protect bases of bushes and plants from snow.

vii) Promote agroforestry

Agroforestry is the integration of trees into agricultural systems. It is one of the most promising strategies for

agricultural diversification for adaptation to climate change. Agroforestry has been proposed as a strategy

not only for adapting to climate change, but also for mitigating and addressing issues of food security and

environmental degradation in agricultural systems6.

2.2 Sustainable Water Management

Climate change impacts affects the fresh water availability due to decrease/ erratic nature of rainfall. The FGDs

conducted 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.

6 ICIMOD – Case Study on tree crop diversity in China, Nepal and Pakistan http://lib.icimod.org/record/28330/files/WP_13-3.pdf

Climate change has led to shortening of rain spells and increase in temperatures. These conditions have led

to severe drought like conditions persisting in Lohare (Dailekh District) and Mugu Karnali (Mugu District)

watersheds for long periods in a year. In AEZs within Mugu Karnali (‘Arable temperate terraced mountain

terrain’ and ‘Arable cold terraced mountain terrain’) and Lohare watersheds (Arable sub-temperate

terraced mountain terrain) the drought conditions are so severe that even drinking water supplies to local

communities have been hit.

.

Agro-forestry will be a relevant adaptation measure for the regions of the Babai watershed that lie within the

‘Arable sub-temperate ancient depositional basin/river terrace and recent alluvial plain complexes’ AEZ.

of 71

i) Rain water harvesting

Rain Water Harvesting (RWH) can be used for two primary purposes 1) Storage for future use and 2)

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.

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.

ii) Promotion of micro-irrigation

Most people who participated in the FGDs were small holder farmers who are dependent on rain fed

irrigation for cultivation of their crops. Changes in rainfall patterns and increasing temperatures are

increasing the vulnerability of such farmers as availability of water becomes a problem. Through micro

irrigation system the water will be supplied to the roots of the crops whereas through sprinkler irrigation the

water will be sprinkled to the crop, hence enhancing the optimal use of water without any water loss during

irrigation. Micro irrigation as an adaptation measure is most applicable to AEZs where water is in short

supply especially for farming communities residing within AEZs in Mugu Karnali such as ‘Arable temperate

The water problem is getting particularly acute in the Mugu Karnali watershed. AEZs within this

watershed such as ‘Arable temperate terraced mountain terrain’ would benefit immensely from water

harvesting measures.

Figure 10: Logical framework for selecting Sustainable Water Management

Issues Interventions

• Water scarcity in dry seasons

• Topography of the region – need to

travel long distance to fetch water

• Lack/ poor irrigation infrastructure

- like canal etc.

• High intensity rainfall for short

duration leading to flood and soil

erosion

• Abandonment of agricultural land

Rainwater

Harvesting

Improvement in

Gravity surface

water irrigation

Promoting micro

irrigation

Spring source

management

Output

• Availability of water in dry seasons

• Increase in irrigated land area

• Groundwater recharge

• Saving of time and labor,

especially for women, as they will

not have to travel long distance to

fetch water

• Reduced surface runoff of

rainwater

of 71

terraced mountain terrain’ and ‘Arable sub-temperate terraced mountain terrain’ would benefit from

introduction of micro-irrigation.

iii) Improvement of existing gravity irrigation system

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.

iv) Management of available spring sources

FGDs conducted, especially in Mugu and Dailekh, showed that water from spring source is the major source

of water for drinking and household purposes. During discussions it emerged that the households in the local

communities are dependent on this key ecosystem service. Through the FGDs it was observed 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 like

Mugu and Dailekh. 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.

The economic evaluation of cost-benefits of the prioritized options is presented in the next chapter for detailed

understanding of the economic benefits of the options. This will also serve as an input to building the investment

logic framework in the subsequent stage.

2.3 Sustainable Livestock Management

i) Poultry farming (fodder bank)

This adaptation measure is particularly significant from a gender point of view. Women face prevailing socio-

economic inequalities including lack of property rights, lack of access to information, employment, unequal

access to resources etc. The persistent gender inequality experienced by women is making them more

vulnerable to the adverse impacts of climate change and also limits their capacity to cope with them. In this

context, it may be noted that, women and their children in Nepal are particularly dependent on small animal

rearing for their nutritional and financial security. When the vulnerability of livestock in Nepal increases, the

effects are disproportionately felt by the poor, rural women in Nepal. This has been particularly noticed in

regions where the population of small backyard animals has fallen because of the focus on cross-bred

cow/buffalo farming. Therefore, it is necessary that poultry farming be promoted so that not only farmer

incomes are supplemented and nutrition levels are improved, but also because it makes female members of

communities more resilient to climate change.

ii) Construction and improvement of cattle shed

Appropriate sheds are an important element of livestock management in the face of climate change. Animal

sheds often lack ventilation, sanitation and the conditions necessary for the animals’ comfort. Goat sheds

should be improved to provide more floor space and separate enclosures for different age groups and use

categories of goats. The roofs of sheds should be raised, to minimize heat stress (applicable specifically to

of 71

AEZs in Babai watershed) and provide adequate ventilation. Frequent cleaning of sheds, including beneath

the floor slats, can improve goats’ health and productivity, and the provision of feeding racks and watering

places is also important. There should also be manure pits, roof-water collection tanks, and shade trees

around the shed to improve hygiene and reduce the impacts of extreme weather conditions.

These measures will not only protect livestock, which are important assets for farmers, but also ensure that milk

produce, etc. is not affected due to extreme weather conditions. Due to increasing incidences of drought induced

by climate change, grass for grazing is in short supply. Fodder banks and storage of dried fodder such as silage

and hay need to be set up which will provide a steady supply of fodder during droughts and floods. This measure

will be particularly relevant to ‘Paddy arable subtropical swales in recent alluvial plane’ AEZ within Babai

watershed.

2.4 Sustainable Forest Management

Forest is a major natural resource of the country as 40 percent of the total land area of Nepal is covered under

forest. It provides more than 50 percent of fodder to the livestock. Several industries in the country are based on

forest products for their raw materials. Forestry, typically, has a long gestation period – it takes time for the trees

to mature and be available for becoming sources of revenue for the communities (Kumar, 2002). Also, in the case

of many species, trees live a life of 35 – 40 years and are available for realizing benefits from logging and carbon

sequestration (Acharya, 2002). Hence, in the case of sustainable forestry, the life of the project may be considered

to be long term i.e. 35 – 40 years. While some of the benefits of Sustainable Forest Management (SFM) start

accruing over a short term, some benefits are delayed. But the benefits continue to accrue over a long time

horizon.

Sustainable Forest Management has the 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.

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 11: Logical framework for selecting Sustainable Forest Management as a strategy

of 71

Figure 12: Outcomes of SFM

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

Direct Benefits from SFM

Literature identifies a host of benefits accruing due to SFM (GoN, 2014), (GoN, 2015), (Kanel & Niraula, 2017).

While some of the benefits can be valued easily, some others – particularly social benefits like reduction in

morbidity and mortality, community cohesion, psycho-cultural improvements, etc. are difficult to value. Hence

for the purpose of this analysis, the incremental economic gains and environmental gains have only been

considered. Environmental benefits have been kept limited to mitigation of GHG and adaptation benefits. Due to

the paucity of epidemiological statistics on local pollution (air, water, etc.), the same has not been considered for

analysis.

Sustainable Forest Management (SFM) can be a strategy to achieve the goals of increasing coping capacity of the

population residing by 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.

i) Agroforestry

According to Bardiya District Forest Office, agro-forestry could be an income supplement for farmers in the

district in the face of increasing risks posed to crops by flooding and droughts. Local species has to be

promoted in the agro-forestry, otherwise encroachment or invasion by alien species might take place on one

hand. Furthermore, mono-culture has to be discouraged for plantation to make the forests resilient to

diseases.

ii) Measures to reduce forest fires

Forest Management practices may prefer certain species to others. Ethno-botanically or commercially

important species will enjoy an advantage over other species, thus resulting in reduction of biodiversity.

Therefore local biodiversity should be understood and incorporated into the forest managements.

of 71

3 CBA of adaptation options

With increasing demand for ecosystem services and the need for protecting the ecosystem, CBA is becoming an

important tool for choosing policies among alternative options (Pearce, 2006); (Daily, 2009) . The ecosystem is

assumed as a natural capital and stream of benefits flowing from this stock as interest to the society (Carpenter,

2009). The flow then combines with the created infrastructures to provide full stream of benefits that are

experienced by humans (MA, 2003) (Fisher, 2006).

Attempts at valuing ecosystem services gained momentum after the publication of Millennium Ecosystem

Assessment (MA 2003). “Comprehensive assessment of the World’s ecosystem services and their implications

for human well-being, and such popularity provided renewed scientific and political thrust for ambitious

environmental CBA ventures” (Wegner, 2011). These include, among others, Stern Review on the Economics of

Climate Change (Stern, 2006). Further, ‘The Natural Capital Project’ (Polasky, 2009) developed a framework

and software for ‘Integrated Valuation of Ecosystem Services and Tradeoffs’ (InVEST) to assess the impacts of

changes in ecosystem change in several regions of the world. Later, there have been attempts by The World Bank,

The Asian Development Bank and other development funding institutions have tried and are mainstreaming CBA

in their development funding and investment appraisals

Valuation of adaptation measures is still an uncertain area. However, as (Allan, et al. 2016) suggests, even

developmental projects may have significant adaptation components as such projects can build long term

resilience and coping capacity among communities. From the point of view of adaptation any outcome

(incremental benefit) from a project may be classified as “high”, “medium” and “low”. Accordingly they may be

assigned an additional 30%, 20% and 10% weight respectively due to their ability to enhance resilience. Based on

this approach, the adaptation benefits have been calculated.

A climate project has effects on the society, environment and economy at large. Therefore, it is not prudent to

view any such project in isolation. The Extended 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. A

project aimed at forestry, for example, can give rise to a series of costs and benefits to the surrounding

geographical space. A few examples of such benefits and their climate drivers are presented in the below table.

Table 10: Forestry – climate benefits

Type of Benefit Climate/Anthropogenic Drivers impacting benefit

Fuel wood cultivation Drought; Forest Fire; Human Encroachment; landslides

Agro-forestry Erratic rainfall; landslides; Rising temperature

Step Cultivation Erratic rainfall; landslides; Rising temperature

Livestock rearing Rising temperature; erratic rainfall; degradation of grasslands; forest fire

Groundwater recharge Drought, Erratic Rainfall

A cost benefit analysis without considering the “external” benefits and costs as outlined above, and relying solely

on the internal (specific) costs and benefits tends to provide an incomplete picture of the project as a whole,

particularly from the welfare point of view. Most importantly, 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.

A comprehensive economic analysis is, therefore, not an isolated and independent exercise. It embodies technical

specifications, socio-economic and environmental impacts of all the stakeholders. For 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 71

of selecting inappropriate components, reduces the chance of mal-adaptation and ensures sustainability of the

project over a long time horizon.

The CBA has been carried out following extant methodologies as suggested by (ADB, 2017), (ADB, 1997), (The

World Bank, 1998). Costs – both CAPEX and operation and maintenance costs that recur year after year have

been considered. The analysis has been carried out considering financial costs at constant prices. Benefits have

been identified and have been valued at constant prices.7

While some costs are lumpy in nature, certain other costs are recurrent. Benefits have been identified after

consulting relevant scientific literature and performance reports of various projects and programmes in the

forestry sector of Nepal.

3.1 Case study of a subset of Mugu Karnali watershed that includes AEZs like arable cold terraced mountain terrain, Lake, arable temperate terraced mountain terrain within Mugu district

3.1.1 Sustainable Agriculture Management

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Agriculture Measures in the region.

The following assumptions have been deployed in carrying out the analysis:

S. No. Parameter UoM Value

1 Total Agri land Ha 5854 2 % of Total Arable Land Targeted

2.1 Total Area under Temporary Crops Ha 5646 2.2 Area Under Temporary Crops Targeted Ha 80% 2.3 Total Area under Temporary Crops Targeted Ha 4517

3 Cost of Plastic Tunnel

3.1 Cost of Production in Plastic Tunnel NPR/Ha 3519500

3.2 Area targeted for intervention % of total Area

45%

4 Revenue per ha - Plastic Tunnels NPR/Ha 4625000

5 Masuli Seeds

5.1 Masuli Seed Requirement Kg/Ha 50.00 5.2 Cost of Masuli Seeds NPR/Kg 350 5.3 Increase in yield Kg./Ha 2 5.4 Price of Masuli NPR/Kg 350


45.00%

6 Vegetables - Pumpkin, Gourd, etc. 6.1 Average seed Requirement Kg/Ha 5.00 6.2 Average cost of Seeds NPR/Kg 18200 6.3 Other costs NPR/Ha 1055850 6.4 Revenue per Ha NPR/Ha 2312500

7 Use of constant prices weeds out the effect of any price impacts.

of 71


10

Table 11: Adaptation benefits from Sustainable Agriculture Management for Mugu district (Mugu Karnali watershed)

S.

No.

Type of Benefit Relative

importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1

Incremental revenue

from off-season

vegetable cultivation

High Drought, extreme

weather conditions

Helps in utilizing the land during

dry seasons thereby augmenting

income sources. Therefore, this

measure is rated as “High”.

2 Facilitate water

conservation Low Drought

Provides for additional irrigation

source during dry season in the

High mountain region. Therefore

this measure is rated as “Low”.

3 Increase in food security

High Drought

Nepal is net importer of food, with impacts of climate change the food security is threatened. Therefore this measure is rated as “High”.

Using the social discount rate of 5% p.a., the present values of net benefits have been calculated for 5-10 years

(short term), 10-20 years (medium term) and 20-35 years (long term). The results are presented in the table

below.

Table 6: CBA for Sustainable Agriculture for Mugu district (Mugu Karnali watershed)

Particulars UOM Tenure (in years)

5 10 15 20 25 30 35

ENPV of costs NPR

Million 1,039.02 41,743.85 73,637.14 98,626.38 118,206.10 133,547.32 145,567.57

ENPV of benefits NPR

Million - 59,692.38 119,384.77 179,077.15 238,769.53 298,461.92 358,154.30

Present Value of cost per hectare

NPR Million/

ha 32.23

Present Value of benefits per ha

NPR Million/

ha 79.29

Benefit to Cost Ratio

Ratio 2.46

EIRR over the project lifetime

% p.a. 26%

Climate Change % % 17%

Payback period for initial investment

Years 5

3.1.2 Sustainable Water Management

Assumption & CAPEX:

of 71

A quick appraisal is carried out for understanding the efficacy of Sustainable Water Management measures in the region. The following assumptions have been deployed in carrying out the analysis:

i) Rain Water Harvesting System

S. No. Particulars UoM Value

1 % of Population Covered

1.1 Mugu % 50

2 % of Rural Population Covered

2.1 Mugu % 21

3 Total % of population covered

3.1 Mugu % 10.25

4 Life of RWH Systems Years 20

5 Water Demand

5.1 Water Demand lpcd 100

5.2 No. of Dry Days of Requirement for storage

No. 180

6 Cost of RWH System

6.1 Cost of Storage System NPR/Litre 1667

6.2 Cost of Accessories NPR/HH 1,50,000

6.3 Capacity of the storage system Litres/HH 500

6.4 O&M Cost % of

CAPEX 0.67

7 Price of water Purchased NPR/Litre 0.56

8 Proportion of Households suffering from Water borne diseases

% 21

9 Monthly Expenditure by households in treating water borne diseases

NPR 720

10 Proportion of Population engaged in collecting Water

% 19

11 Income

11.1 Annual Per-Capita Income of Nepal NPR 88656.70

11.2 Share of Agriculture in GDP % 30

11.3 Daily Per Capita Income (from Agriculture)

NPR 72.87

12 Proportion of Working Time Spent in Collection of Water

% 10.42

ii) Gravity irrigation


1 Unirrigated Area under Agriculture

of 71


1.1 Mugu ha 84,783

2 % of agricultural area considered for Intervention (Gravity Surface Water Irrigation)

% 57%

3 Capex Cost NPR/Ha 62500

4 Storage Cost (Plastic Pond) : 20m x 20m

4.1 Digging Cost NPR/Tank 1,80,000

4.2 Material Cost NPR/Tank 20,000

4.3 Total Installation Cost of the Tank NPR/Tank 2,00,000

4.4 Area irrigated by 1 Tank ha 0.6

4.6 Number of tanks required Nos. 80,614

5 Total CAPEX (including storage) NPR

Million 3,023

6 O&M Expenses % of

Capex 2%

7 Main Crops Yield

7.1 Paddy Kg/Ha 3026.79

7.2 Wheat Kg/Ha 1376.16

7.3 Maize Kg/Ha 1839.02

7.4 Millet Kg/Ha 1035.51

7.5 Potato Kg/Ha 12370.63

7.6 Mustard Kg/Ha 837.6

8 % Area under Main Crops

8.1 Paddy % 13%

8.2 Wheat % 9%

8.3 Maize % 41%

8.4 Millet % 18%

8.5 Potato % 7%

8.6 Mustard % 3%

9 Net Profit (Farm Gate)

9.1 Paddy NPR/Ha 37268

9.2 Wheat NPR/Ha 19173

9.3 Maize NPR/Ha 15707

9.4 Millet NPR/Ha 15707

9.5 Potato NPR/Ha 168694

9.6 Mustard NPR/Ha 21663

10 Increase in Productivity due to irrigation

% 27

of 71

Table 12: Adaptation benefits for Mugu district (Mugu Karnali watershed) from Sustainable Water Management

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1 Savings in costs

incurred for

purchasing water.

High Drought, erratic

rainfall

Access to clean drinking water is a

growing concern, according to the

Government of Nepal’s survey

data around 84% of the basin’s

population use improved water

sources such as piped, tubewell

and well water (CBS 2014b).

However, due to multiple sources

of consumption and the possible

impact of climate change, natural

springs are drying up. Hence,

from the point of adaptation, this

benefit has been categorized as

“High”.

2 Savings in health

costs due to water

borne diseases.

Low Drought In the absence of readily available

drinking water, the affected

communities collect and store -

often in unhygienic conditions,

water for future use. This practice

leads to the incidence of various

water borne diseases (jaundice,

gastro-intestinal disorders, reflux

disease, etc.). Approximately 45%

of household suffer from such

health impacts (ADB, 2012).

There have been reports of

increase in mosquito infestation,

pests and diseases due to

increasing temperature. However,

there is limited benefit from a

RWH structure for avoiding water

borne diseases. Therefore, this has

been accorded a status of ‘Low’

benefit from the point of view of

adaptation and resilience.

3 Avoided loss of

agricultural income

due to time spent in

collecting water.

High Drought Traditionally, the rural population

at Mugu have been dependent on

agricultural revenue as their main

source of income. With climate

change and anthropogenic

activities (encroachment) leading

to increase in time investment in

collecting water from far off

of 71

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

sources like springs etc. is

impacting their productive time.

This is expected cause

tremendous hardship among the

poor rural population. On the

other hand SWM-RWH helps to

restore and augment this

additional source of earnings.

Hence, from the point of

adaptation, this benefit has been

categorized as “High”.



below.

Table 13: CBA for Sustainable Water Management for Mugu district (Mugu Karnali watershed)


5 10 15 20 25 30 35

Present Value of costs

NPR Million

7,078.56 14,521.78 20,353.75 24,923.24 25,528.93 26,003.51 26,375.35

Present Value of benefits

NPR Million

2,111.51 4,332.37 6,072.47 7,435.88 7,617.59 7,759.97 7,871.52

Cost per capita for RWH system (over project life of 20 years)

NPR Million/ Capita

0.18

Value of benefits per capita for RWH System (over project life of 20 years)

NPR Million/ Capita

0.40

Cost per ha. for Gravity irrigation system

NPR Million/

ha 0.07

Value of benefits per ha. for Gravity irrigation system

NPR Million/

ha 0.33


Ratio 0.30


% p.a. 25

Climate Change % % 25

Payback period of initial investment

Years 3-4

of 71

3.1.3 Sustainable Livestock Management

Assumption & CAPEX: A quick appraisal is carried out for understanding the efficacy of Sustainable Livestock Management measures in the region. The following assumptions have been deployed in carrying out the analysis:

i) Construction and improvement of cattle shed


1 No. of Cattle Sheds

1.1 Average no. of Cattle and Buffalo (last 5 years)

Nos. 42,928

1.2 No. of Cattle per shed No. 2

2 Cost of an improved Cattle Shed NPR 15,000

2.1 Total CAPEX NPR Million 321.96

2.2 O&M Cost % 10

3 Loss avoided due to decrease in mortality and morbidity of cattle

% 40

4 Milk production per cattle per day litre/cattle/day 5

5 Lactation period per cattle days/ year 250

6 Percentage of milch cattle % 55

ii) Poultry farming (fodder bank)


1 Total Agri/Grass Land in Mugu ha. 20,729

1.1 % of area under agri/grass land considered for intervention

% 5

2 CAPEX

2.1 Land Cost NPR/Ha 1,50,000

2.2 Labour Cost NPR/Day 600

2.3 Labour required per day Nos./day/Ha 8

2.4 Total Land Cost NPR

Million/ha 0.15

2.5 Total Labour Cost NPR

Million/ha 1.44

2.6 Plantation Cost per Ha NPR

Million/Ha 0.023

2.7 Total Capex NPR Million 1,671

3 Operation and Maintenance Cost as % of CAPEX

% 5

4 Increase in yield of Milk % 60

of 71




7 No. of milch cattle covered No. 23,610

8 Proportion of population engaged in collecting fodder

% 50

9 Proportion of working time Spent in Collection of Fodder

% 60

10 No. of Days spent in collecting fodder

No. 180

Table 14: Adaptation benefits from Sustainable livestock management in Mugu district (Mugu Karnali watershed)

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1

Avoided loss due to

mortality and

morbidity of milch

cattle


weather conditions

With climate change the instances

of heat/ cold spells are expected to

increase. Therefore this measure is

rated as “High”

2

Incremental income

due to increased

milk production

(due to

improvement in

lactation rate)

High Drought

During summer season, it caters to the fodder requirement. Also it acts as a supplemental nutrient through composite feeding. Therefore, this measure it is rated as “High”.

3

Avoided loss of agricultural income due to time spent in collecting water/fodder for livestock.

Medium Drought, extreme

weather conditions

The incidents of such extreme weather events are limited and therefore, this measure is rated as “Medium”.



below.

Table 15: CBA of Sustainable Livestock Management for Mugu district (Mugu Karnali watershed)


5 10 15 20 25 30 35

ENPV of costs NPR

Million 2,096.96 2,489.65 2,797.33 3,038.40 3,227.29 3,375.29 3,491.25


Million 756.92 2,655.52 4,562.36 6,490.35 8,499.28 10,747.37 13,772.65

of 71


5 10 15 20 25 30 35

Present Value of cost of improved cattle shed

NPR Million/

cattle shed 0.04

Present Value cost of fodder bank

NPR Million/

ha 2.64

Present Value of benefits of improved cattle shed

NPR Million/

cattle shed 0.22

Present Value of benefits of fodder bank

NPR Million/

ha 8.78


Ratio 3.95


% p.a. 15



Years 3-4

3.2. Case study of a subset of Lohare watershed that includes AEZs like arable temperate terraced mountain terrain, diverse crop arable sub-temperate recent alluvial plain, arable sub-temperate terraced mountain terrain within Dailekh district

3.2.1. Sustainable Agriculture Management

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Agriculture Measures in the region. The following assumptions have been deployed in carrying out the analysis:



2.1 Total Area under Temporary Crops Ha 18777 2.2 Area Under Temporary Crops Targeted Ha 50% 2.3 Total Area under Temporary Crops Targeted Ha 9389


3.1 Cost of Production in Plastic Tunnel NPR/Ha 35,19,500


45%

4 Revenue per ha - Plastic Tunnels NPR/Ha 46,25,000

5 Masuli Seeds

5.1 Masuli Seed Requirement Kg/Ha 50.00 5.2 Cost of Masuli Seeds NPR/Kg 350

of 71


5.3 Increase in yield NPR/Ha 2 5.4 Price of Masuli NPR/Kg 350


45%

6 Vegetables - Pumpkin, Gourd, etc. 6.1 Average seed Requirement Kg/Ha 5 6.2 Average cost of Seeds NPR/Kg 18,200 6.3 Other costs NPR/Ha 10,55,850 6.4 Revenue per Ha NPR/Ha 23,12,500


10

Table 16: Adaptation benefits from Sustainable Agriculture Management for Dailekh district (Lohare watershed)

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1

Incremental revenue

from off-season


High Drought, intense heat





2 Facilitate water




Hilly region. Therefore this

measure is rated as “Low”.


High Drought

Nepal is net importer of food, with impacts of climate change the food security in threatened. Therefore this measure is rated as “High”.



below.

Table 17: CBA for Sustainable Agriculture Management for Dailekh district (Lohare watershed)


5 10 15 20 25 30 35

ENPV of costs NPR

Million 2,153.27 86,510.44 152,606.49 204,394.47 244,971.71 276,765.04 301,675.94


Million 0.00 124,075.00 248,149.99 372,224.99 496,299.98 620,374.98 744,449.98

of 71


5 10 15 20 25 30 35


NPR Million/

ha 32.13


NPR Million/

ha 79.29


Ratio 2.47


% p.a. 28%



Years 5-6

3.2.2. Sustainable Water Management

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Water Management measures in the

region. The following assumptions have been deployed in carrying out the analysis:

i) Rain Water Harvesting System


1 % of population covered

1.1 Dailekh district % 50%

2 % of Rural population covered

2.1 Dailekh district % 21%


3.1 Dailekh % 10.25%

4 Life of RWH Systems years 20

5 Water demand



No. 180



6.2 Cost of Accessories NPR/HH 1,50,000


6.4 Total Initial Investment NPR

Million/HH 0.98

6.5 O&M Cost % of

CAPEX 0.67


of 71



% 21


NPR 720


% 19

11 Income


11.2 Share of Agriculture in GDP % 30


NPR 72.87


% 10.42

ii) Gravity irrigation


1 Unirrigated Area under Agriculture

1.1 Dailekh Ha 31005

2 % of agricultural area considered for Intervention (Gravity Surface Water Irrigation)

% 93%

3 Capex Cost NPR/Ha 62500

4 Storage Cost (Plastic Pond) : 20m x 20m

4.1 Digging Cost NPR/Tank 180000

4.2 Material Cost NPR/Tank 20000

4.3 Total Installation Cost of the Tank NPR/Tank 200000

4.4 Area irrigated by 1 Tank Ha 0.6

4.6 Number of Tanks required Nos. 48074

5 Total CAPEX (including storage) NPR

Million 1803

6 O&M Expenses % of

Capex 2%

7 Main Crops Yield

7.1 Paddy Kg/Ha 3026.79

7.2 Wheat Kg/Ha 1376.16

7.3 Maize Kg/Ha 1839.02

7.4 Millet Kg/Ha 1035.51

7.5 Potato Kg/Ha 12370.63

7.6 Mustard Kg/Ha 837.6

8 % Area under Main Crops

8.1 Paddy % 13%

of 71


8.2 Wheat % 9%

8.3 Maize % 41%

8.4 Millet % 18%

8.5 Potato % 7%

8.6 Mustard % 3%

9 Net Profit (Farm Gate)

9.1 Paddy NPR/Ha 37268

9.2 Wheat NPR/Ha 19173

9.3 Maize NPR/Ha 15707

9.4 Millet NPR/Ha 15707

9.5 Potato NPR/Ha 168694

9.6 Mustard NPR/Ha 21663

10 Increase in Productivity due to irrigation %

27%

Table 18: Adaptation benefits for Dailekh district (Lohare watershed) from Sustainable Water Management

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1 Savings in costs

incurred for

purchasing water.


rainfall



Government of Nepal’s survey

data around 84% of the Basin’s


sources such as piped, tubewell

and well water (CBS 2014b).

However, due to multiple sources

of consumption and the possible


springs are drying up. Hence,

from the point of adaptation, this

benefit has been categorized as

“High”.

2 Savings in health

costs due to water

borne diseases.

Low Drought In the absence of readily available








disease, etc.). Approximately 45%

of household suffer from such

health impacts (ADB, 2012).

There have been reports of

of 71

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

increase in mosquito infestation,

pests and diseases due to

increasing temperature. However,

there is limited benefit from a

RWH structure for avoiding water

borne diseases. Therefore, this has

been accorded a status of ‘Low’

benefit from the point of view of

adaptation and resilience.

3 Avoided loss of

agricultural income


collecting water.

High Drought Traditionally, the rural population

at Dailekh have supplemented

their earnings from agriculture

with revenues from the sale of

industrial timber. With climate

change and anthropogenic

activities (encroachment) leading

to increase in time investment in

collecting water from far off

sources like springs etc. is

impacting their productive time.

This is expected cause

tremendous hardship among the

poor rural population. On the


restore and augment this

additional source of earnings.

Hence, from the point of

adaptation, this benefit has been




below.

Table 19: CBA for Sustainable Water Management in Dailekh district (Lohare watershed)


5 10 15 20 25 30 35


NPR Million

49,663.14 50,989.72 52,029.12 52,843.53 52,902.36 52,948.46 52,984.57


NPR Million

29,311.55 58,952.32 82,176.65 100,373.51 100,733.09 101,014.83 101,235.58

Cost per capita for RWH system (over project life of 20 years)

NPR Million/ Capita

0.18

Value of benefits per capita for RWH System

NPR Million/ Capita

0.35

of 71


5 10 15 20 25 30 35

(over project life of 20 years) Cost per ha. for Gravity irrigation system

NPR Million/

ha 1.84

Value of benefits per ha. for Gravity irrigation system

NPR Million/

ha 3.51


Ratio 1.91


% p.a. 27



Years 4-5

3.2.3. Sustainable Livestock Management

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Livestock Management measures in

the region. The following assumptions have been deployed in carrying out the analysis:





Nos. 1,99,146

1.2 No. of cattle per shed No. 2



2.2 O&M Cost % 10


% 20








% 5

2 CAPEX


of 71





Million/ha 0.15


Million/ha 1.44


Million/Ha 0.034



% 10






% 20

9 Proportion of Working Time Spent in Collection of Fodder

% 10


No. 180

Table 20: Adaptation benefits from Sustainable Livestock Management for Dailekh district (Lohare watershed)

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1

Avoided loss due to

mortality and

morbidity of milch

cattle

High

Drought, hail storm,

intense heat/ cold

wave




rated as “High”

2

Incremental income

due to increased

milk production

(due to

improvement in

lactation rate)

High

Drought


3

Avoided loss of agricultural income due to time spent in collecting


weather conditions


of 71

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

water/fodder for livestock.



below.

Table 21: CBA for Sustainable Livestock Management in Dailekh district (Lohare watershed)


5 10 15 20 25 30 35

ENPV of costs NPR

Million 5,647.77 6,432.27 7,046.95 7,528.57 7,905.93 8,201.60 8,433.27


Million 4,357.75 15,276.61 26,226.96 37,256.43 48,579.84 60,719.89 75,277.10


NPR Million/

cattle shed 0.04


NPR Million/

ha 2.70


NPR Million/

cattle shed 0.60


NPR Million/

ha 8.41


Ratio 8.93


% p.a. 27



Years 3-4

3.2.4. Sustainable Forest Management

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Forest Management measures in



1 Forest, Grassland, Meadows & Barren Land areas Ha

109404

2 % of forest area considered for intervention % 100

3 Total Area Considered for Intervention Ha 109404

4 Cost of Prevention of Encroachment in the lower Himalayas

Million NPR/Ha

1

5 Premium for Upper Himalays % 30%

of 71


6 Cost of Prevention of Encroachment in the upper Himalayas

NPR/Ha 1.3

7 Total Cost of Securing Forests NPR Million

1,42,225

8 Expected timeframe for securing Forests Years

5

9 Cost of Plantation

9.1 Aided Natural Regeneration NPR/Ha 5000

9.2 Artificial Regeneration NPR/Ha 12000

9.3 Bamboo Plantation NPR/Ha 10000

9.4 Mixed Plantation of Trees NPR/Ha 1100

9.5 Rengeneration of Perrenial Herbs NPR/Ha 10000

10 No. of Trees Planted

10.1 Aided Natural Regeneration Nos./Ha 200

10.2 Artificial Regeneration Nos./Ha 16000

10.3 Bamboo Plantation Nos./Ha 1600

10.4 Mixed Plantation of Trees Nos./Ha 1000

10.5 Rengeneration of Perrenial Herbs Nos./Ha 17500

10.6 Total No. of Trees Planted Nos./Ha 36300

11 Weighted Average Cost of Plantation NPR/Ha 10609

12 Area under Saal and other Industrial Timber Cultivation

% of the secured

forest area 40%

13 Proportion of Surface under Saal and other Industrial Timbers cultivated from 5 years onwards

% 25%

14 Proportion of Surface Area Under Saal Cultivation

% 15%

14.1 Saal Volume (M3/Ha) Cu.m/ha 193

15 Price of Saal and Industrial Wood (Rs./m3) NPR/cu.m 162544.17

16 Cost of Harvesting (Organized) NPR/ha 4,000.

17 Cost of Harvesting (UnOrganized) NPR/ha 4000.00

18 Revenue from Fuelwood Plantation

18.1 Average Revenue NPR/Ha 2000000

18.2 Proportion of Area underfuel wood plantation 34%

19 Revenue from Agro-Forestry

19.1 Proportion of Area under Agro-Forestry 7%

19.2 Proportion of Area under Integrated Agro-forestry System

50%

19.3 Average Annual Revenue from Integrated Agro-forestry (Rs./Ha)

NPR/Ha 336000

of 71


19.4 Proportion of Area of Agro-forestry under Rainfed Agro-Forestry System

50.00%

19.5 Average Annual Revenue from Rainfed Agro-forestry (Rs./Ha)

NPR/HA 100000

20 Revenue from Jhum Cultivation

20.1 Area under Jhum Cultivation 20%

20.2 Increase in Productivity of Unirrigate Winter Rice (Kg/Ha)

1.5

20.3 Increase in Productivity of Un-irrigate Winter Wheat (Kg/Ha)

1.5

20.4 Increase in Productivity of Rapeseed and Mustard (Kg/Ha)

0.5

20.5 Price of Un-irrigated Winter Rice (Rs./Kg) 50

20.6 Price of Un-irrigated Winter Wheat (Rs./Kg) 35

20.7 Price of Un-irrigated Mustard and Rapeseed (Rs./Kg)

65

20.8 Proportion of Area under Jhum Cultivation dedicated to each of Winter Rice, Winter Wheat, Rapeseed & Mustard

33.33%

21 Income from Tourism % of

Direct Benefits

5.00%

22 Net Carbon Sequestration tCo2e/ha/

yr 1.5

22.1 Carbon Price - Spot USD/MT 10

22.2 Carbon Price - Spot NPR/MT 1028.5

23 Livestock holding

23.1 Goat Nos. & Price

(NPR) 4520; 600

23.2 Cow Nos. & Price

(NPR).

1350; 35,000

23.3 Bull Nos. & Price

(NPR)

1350; 35,000

23.4 Buffalo Nos. & Price

(NPR)

1550; 60,000

of 71

Table 22: Adaptation benefits from Sustainable Forest Management in Dailekh district (Lohare watershed)

S.

No.

Type of

Benefit

Relative

importance

from the

point of view

of adaptation

Climate/Anthropogenic

Drivers impacting benefit

Explanation

1 Net income

from

systematic

logging of

industrial

timber

High Drought, Human

Encroachment, landslides

Traditionally, the rural population at

Dailekh have supplemented their

earnings from agriculture and livestock

with revenues from the timber logging.

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 Sustainable Forest

Management helps to restore and

augment this additional source of

earnings for the locals. Hence, from the

point of adaptation, this benefit has been


2 Net income

from fuel

wood

cultivation

High Drought, 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,

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 Dailekh

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.

of 71

S.

No.

Type of

Benefit

Relative

importance

from the

point of view

of adaptation



Explanation

3 Net income

from agro-

forestry and

step

cultivation

High Erratic rainfall; landslides In Dailekh, 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 Net income

from

livestock

resources

Medium Rising temperature; erratic

rainfall; degradation of

grasslands; forest fire

The community of Dailekh 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, the

dependence on income generated from

livestock rearing is reducing as the

villagers have to incur extra expenses to

maintain livestock. Hence the adaptation

gains have been considered to be

“Medium”

5 Avoided loss

due to

damage of

Properties

High Landslides, erratic rainfall,

degradation of Forests

In Dailekh, 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 Dailekh 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 water conservation programmes

the incremental gains have been

considered as “Low”.

of 71



below.

Table 23: CBA for sustainable forestry management in Dailekh district (Lohare watershed)


5 10 15 20 25 30 35

ENPV of costs NPR

Million 187,460.86 237,772.14 277,205.31 308,112.38 332,336.83 351,323.55 366,205.03

ENPV of benefits

NPR Million

33.27 1,687,822.95 3,375,771.75 5,064,114.95 6,753,898.91 8,447,556.36 10,152,135.51

Present Value of cost per ha

NPR Million/

ha 3.35


NPR Million/

ha 92.79


Ratio 27.72


% p.a. 54.69

Climate Change %

Ratio 37.11


Years 5-6

3.3. Case study of a subset of Babai watershed that includes AEZs like arable sub-temperate ancient depositional basin/river terrace and recent alluvial plain complexes, paddy arable subtropical swales in recent alluvial plane within Bardiya district

3.3.1. Sustainable Agriculture Management

The main climate induced hazards that the agriculture sector in Bardiya faces are increasing incidence of

droughts, intense rainfall spells, hailstorms and extreme cold waves. The variation in high and low temperatures

and the spells of intense rain and hailstorms can affect crop yields. In addition to dealing with climatic variations,

there is also the challenge of growing off season crops needed to be grown in areas like Bardiya to ensure year

round food supplies in a region. Agroforestry is important for Bardiya in the context of extensive loss of

biodiversity to forest fires in the region. Agroforestry could be used as a means to restore the lost biodiversity.

Further, agroforestry can also be a source of fodder to livestock in Bardiya.

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Agriculture Measures in the region.

The following assumptions have been deployed in carrying out the analysis:



2.1 Total Area under Temporary Crops Ha 44228 2.2 Area Under Temporary Crops Targeted Ha 50%

of 71


2.3 Total Area under Temporary Crops Targeted Ha 22114


3.1 Cost of Production in Plastic Tunnel NPR/Ha 35,19,500


45%

4 Revenue per ha - Plastic Tunnels NPR/Ha 46,25,000

5 Masuli Seeds

5.1 Masuli Seed Requirement Kg/Ha 50 5.2 Cost of Masuli Seeds NPR/Kg 350 5.3 Increase in yield NPR/Ha 2 5.4 Price of Masuli NPR/Kg 350


45%

6 Vegetables - Pumpkin, Gourd, etc. 6.1 Average seed Requirement Kg/Ha 5 6.2 Average cost of Seeds NPR/Kg 18,200 6.3 Other costs NPR/Ha 10,55,850 6.4 Revenue per Ha NPR/Ha 23,12,500


10

Table 24: Adaptation benefits from Sustainable Agriculture Management in Bardiya district (Babai watershed)

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1

Incremental revenue

from off-season


High Drought, intense heat





2

Incremental revenue

from cultivation of

Zaid crops

Medium Drought, intense heat

Helps in utilizing the dry areas

covered with sediments in the

flood plains thereby augmenting


measure is rated as “Medium”.

3 Facilitate water




Terai region however there are

parallel water conservation

programmes and therefore due to

of 71

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

the incremental gain this measure

is rated as “Low”.


High Drought

Nepal is net importer of food, with impacts of climate change the food security in threatened. Therefore this measure is rated as “High”.



below.

Table 25: CBA for Sustainable Agriculture for Bardiya district (Babai watershed)


5 10 15 20 25 30 35

ENPV of costs NPR

Million 5,086.97 204,375.53 360,523.34 482,869.23 578,730.44 653,840.20 712,690.67


Million 0.00 292,250.57 584,501.14 876,751.70 1,169,002.27 1,461,252.84 1,753,503.41

Present Value of cost per ha

NPR Million/

ha 32.23


NPR Million/

ha 79.29


Ratio 2.46


% p.a. 26%



Years 5-6

3.3.2. Sustainable Water Management

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Water Management measures in the

region. The following assumptions have been deployed in carrying out the analysis:

iii) Rain Water Harvesting System


1 % of Population Covered

1.1 Bardiya % 50%

2 % of Rural Population Covered

2.1 Bardiya % 21%


3.1 Bardiya % 10.25%

of 71


4 Life of RWH Systems Years 20

5 Water Demand



No. 180



6.2 Cost of Accessories NPR/HH 150000


6.4 Total Initial Investment NPR

Million/HH 0.98

6.5 O&M Cost % of

CAPEX 0.67%



% 21


NPR 720.00


% 19.00%

11 Income


11.2 Share of Agriculture in GDP % 30.00%


NPR 72.87


% 10.42

iv) Micro-irrigation (embankment)


1 Total Length of Rivers Considered for Embankment

km 1

2 % of population Covered

2.1 Bardiya % 10%

2.3 % of area covered for intervention 100%

3 Cost of Embankment

3.1 Cost of Embankment (149 m (l) x 8 m (h))

NPR Million

53.4

of 71

3.2 Total cost of Embankments covering a length of 1.0 Km (with height = 8 m)

NPR Million

717

4 O&M Cost % 10%

5 Income

5.1 Annual Per Capita Income of Nepal USD 862

5.2 Annual Per Capita Income of Nepal NPR 88656.7

5.3 Proportion of Agricultural Income % 30

5.4 Annual Agricultural Income per Capita

NPR 26597.01

6 Loss of Agricultural Income

6.1 Cropping Cycle No./year 3

6.2 Loss - One Cycle 1

6.3 % of Loss of Agricultural Income % 33.33%

7 Proportion of Population Residing in Kacchi Houses

% 32%

8 Proportion of Population Residing in Pucci Houses

% 68%

9 Per Capita availability of house

No. per Capita

0.32

10 Repair cost of Pucci House

NPR/house 50000

11 Proportion of Houses Destroyed each year due to Flood

% 2%

12 Average Time taken for treating waterborne diseases

Months 3

14 Construction Cost of Kacchi House NPR 425000

Table 26: Adaptation benefits from Sustainable Water Management in Bardiya district (Babai watershed)

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1 Savings in costs

incurred for

purchasing water.


rainfall population

growth



Government of Nepal’s survey data

around 84% of the Basin’s


sources such as piped, tubewell and

well water (CBS 2014b). However,

due to multiple sources of

consumption and the possible


springs are drying up. Hence, from

of 71

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

the point of adaptation, this benefit

has been categorized as “High”.

2 Savings in health

costs due to water

borne diseases.

Medium Drought, increase in

temperature

In the absence of readily available








disease, etc.). Approximately 45% of

household suffer from such health

impacts (ADB, 2012). There have

been reports of increase in mosquito

infestation, pests and diseases due

to increasing temperature.

However, there is limited benefit

from a RWH structure for avoiding

water borne diseases. Therefore,

this has been accorded a status of

‘Medium’ benefit from the point of

view of adaptation and resilience.

3 Avoided loss of

agricultural income


collecting water.

High Drought, excessive

extraction

Traditionally, the rural population

at Bardiya have supplemented their

earnings from agriculture with

revenues from the sale of industrial

timber. With climate change and

anthropogenic activities

(encroachment) leading to increase

in time investment in collecting

water from far off sources like

springs etc. is impacting their

productive time. This is expected

cause tremendous hardship among

the poor rural population. On the


restore and augment this additional

source of earnings. Hence, from the

point of adaptation, this benefit has

been categorized as “High”.



below.

of 71

Table 27: CBA for Sustainable Water Management in Bardiya district (Babai watershed)


5 10 15 20 25 30 35


NPR Million

80,495.22 82,241.57 83,609.89 84,682.00 84,798.96 84,890.60 84,962.40


NPR Million

55,165.72 140,560.85 226,016.82 311,622.16 313,657.59 317,106.55 324,386.45

Cost per capita NPR

Million/ Capita

0.22

Benefits per capita NPR

Million/ Capita

0.82


Ratio 3.82


% p.a. 22



Years 4-5

3.3.3. Sustainable Livestock Management

Assumption & CAPEX

A quick appraisal is carried out for understanding the efficacy of Sustainable Livestock Management measures in






Nos. 2,30,592

1.2 No. of cattle per shed No. 2



2.2 O&M Cost % 2


% 20







of 71



% 5

2 CAPEX





Million/ha 0.18


Million/ha 1.44


Million/Ha 0.023



% 2






% 25

9 Proportion of Working Time Spent in Collection of Fodder

% 20


No. 90

Table 28: Adaptation benefits from Sustainable Livestock Management in Bardiya district (Babai watershed)

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

1 Avoided loss due to

mortality and

morbidity of milch

cattle


weather conditions




rated as “High”

2 Incremental income

due to increased

milk production

(due to

improvement in

lactation rate)

High Drought


of 71

S.

No.


importance from

the point of view

of adaptation

Climate

/Anthropogenic

Drivers impacting

benefit

Explanation

3 Avoided loss of agricultural income due to time spent in collecting water/fodder for livestock.


weather conditions




below.

Table 29: CBA for Sustainable Livestock Management in Bardiya district (Babai watershed)


5 10 15 20 25 30 35


NPR Million

8,059.47 8,630.58 9,078.05 9,428.66 9,703.37 9,918.61 10,087.26


NPR Million

7,314.36 25,636.50 44,003.71 62,481.54 81,358.61 101,282.63 124,044.07


NPR Million/

cattle shed 0.01


NPR Million/

ha 1.96


NPR Million/

cattle shed 0.60


NPR Million/

ha 12.72


Ratio 12.30


% p.a. 32



Years 3-4

3.3.4. Sustainable Forest Management

Assumption & CAPEX:

A quick appraisal is carried out for understanding the efficacy of Sustainable Forest Management measures in



1 Forest, Grassland, Meadows & Barren Land areas Ha

109404

2 % of forest area considered for intervention % 100

3 Total Area Considered for Intervention Ha 109404

of 71


4 Cost of Prevention of Encroachment in the lower Himalayas

Million NPR/Ha

1

5 Premium for Upper Himalays % 30%

6 Cost of Prevention of Encroachment in the upper Himalayas

NPR/Ha 1.3

7 Total Cost of Securing Forests NPR Million

1,42,225

8 Expected timeframe for securing Forests Years

5

9 Cost of Plantation

9.1 Aided Natural Regeneration NPR/Ha 5000

9.2 Artificial Regeneration NPR/Ha 12000

9.3 Bamboo Plantation NPR/Ha 10000

9.4 Mixed Plantation of Trees NPR/Ha 1100

9.5 Rengeneration of Perrenial Herbs NPR/Ha 10000

10 No. of Trees Planted

10.1 Aided Natural Regeneration Nos./Ha 200

10.2 Artificial Regeneration Nos./Ha 16000

10.3 Bamboo Plantation Nos./Ha 1600

10.4 Mixed Plantation of Trees Nos./Ha 1000

10.5 Rengeneration of Perrenial Herbs Nos./Ha 17500

10.6 Total No. of Trees Planted Nos./Ha 36300

11 Weighted Average Cost of Plantation NPR/Ha 10609

12 Area under Saal and other Industrial Timber Cultivation

% of the secured

forest area 40%

13 Proportion of Surface under Saal and other Industrial Timbers cultivated from 5 years onwards

% 25%

14 Proportion of Surface Area Under Saal Cultivation

% 15%

14.1 Saal Volume (M3/Ha) Cu.m/ha 193

15 Price of Saal and Industrial Wood (Rs./m3) NPR/cu.m 162544.17

16 Cost of Harvesting (Organized) NPR/ha 4,000.

17 Cost of Harvesting (UnOrganized) NPR/ha 4000.00

18 Revenue from Fuelwood Plantation

18.1 Average Revenue NPR/Ha 2000000

18.2 Proportion of Area underfuel wood plantation 34%

19 Revenue from Agro-Forestry

19.1 Proportion of Area under Agro-Forestry 7%

19.2 Proportion of Area under Integrated Agro-forestry System

50%

of 71


19.3 Average Annual Revenue from Integrated Agro-forestry (Rs./Ha)

NPR/Ha 336000

19.4 Proportion of Area of Agro-forestry under Rainfed Agro-Forestry System

50.00%

19.5 Average Annual Revenue from Rainfed Agro-forestry (Rs./Ha)

NPR/HA 100000

20 Revenue from Jhum Cultivation

20.1 Area under Jhum Cultivation 20%

20.2 Increase in Productivity of Unirrigate Winter Rice (Kg/Ha)

1.5

20.3 Increase in Productivity of Un-irrigate Winter Wheat (Kg/Ha)

1.5

20.4 Increase in Productivity of Rapeseed and Mustard (Kg/Ha)

0.5

20.5 Price of Un-irrigated Winter Rice (Rs./Kg) 50

20.6 Price of Un-irrigated Winter Wheat (Rs./Kg) 35

20.7 Price of Un-irrigated Mustard and Rapeseed (Rs./Kg)

65

20.8 Proportion of Area under Jhum Cultivation dedicated to each of Winter Rice, Winter Wheat, Rapeseed & Mustard

33.33%

21 Income from Tourism % of

Direct Benefits

5.00%

22 Net Carbon Sequestration tCo2e/ha/

yr 1.5

22.1 Carbon Price - Spot USD/MT 10

22.2 Carbon Price - Spot NPR/MT 1028.5

23 Livestock holding

23.1 Goat Nos. & Price

(NPR) 4520; 600

23.2 Cow Nos. & Price

(NPR).

1350; 35,000

23.3 Bull Nos. & Price

(NPR)

1350; 35,000

23.4 Buffalo Nos. & Price

(NPR)

1550; 60,000

of 71

Table 30: Adaptation benefits for Bardiya district (Babai watershed) from Sustainable Forest Management

S.

No.

Type of

Benefit

Relative

importance

from the

point of view

of adaptation



Explanation

1 Net income

from

systematic

logging of

industrial

timber

High Drought, human

Encroachment, landslides

Traditionally, the rural population at

Bardiya 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 Net income

from 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,

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 Bardiya

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 Net income

from agro-

forestry and

Medium Erratic rainfall; landslides;

Rising temperature

In Bardiya, at some places agro-forestry

has been promoted on a pilot basis.

Cardamoms, turmeric, fodder, multi-

purpose trees and crop species are being

of 71

S.

No.

Type of

Benefit

Relative

importance

from the

point of view

of adaptation



Explanation

step

cultivation

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 Net income

from

livestock

resources

Medium Rising temperature; erratic

rainfall; degradation of

grasslands; forest fire

The community of Bardiya 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 “Medium”

5 Avoided loss

due to

damage of

Properties

High Landslides, Erratic Rainfall,

Degradation of Forests

In Bardiya, 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 Bardiya 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”.



below.

of 71

Table 31: CBA for SFM measures in Bardiya district (Babai watershed)


5 10 15 20 25 30 35

ENPV of costs NPR

Million 145,224.51 184,290.42 214,910.50 238,910.69 257,722.17 272,466.71 284,023.56


Million 63.67 1,619,616.86 3,239,366.83 4,859,604.54 6,481,624.00 8,108,433.69 9,748,749.95


NPR Million/

ha 2.71


NPR Million/

ha 93.14


Ratio 34.32


% p.a. 61

Climate Change % % 35.01


Years 5

of 71

4 Priortization of EbAs

It is a major challenge to justify the utilization of public resources by assuring the prioritization of expenditure

and revenue distribution among federal, provincial and local levels in the management of federal system.

Moreover, enhancing fiscal utilization capacity of multi-tier Governments for optimum utilization of means and

resources remains an administrative challenge. Therefore, prioritization of EbAs is a critical element in policy

decision making process. Based on the feasibility assessment carried out in the earlier report, the following

features are observed which may be considered for prioritization of the options in the three watersheds:

Sustainable agricultural management is the most beneficial option for all three watershed in the long

term

Amongst the three watersheds sustainable agricultural management is the most beneficial option for

Mugu Karnali

Sustainable forestry and livestock management is the least beneficial option amongst all the options,

between Lohare and Babai watershed, it is more beneficial in Babai

Sustainable water management is most beneficial in Mugu Karnali followed by Lohare watershed

Table 32: Prioritized list of EbAs for the three watersheds

Watershed Prioritised EbAs

Mugu-Karnali Sustainable Agriculture Management, Sustainable Water Management

Lohare Sustainable Agriculture Management, Sustainable Water Management

Babai Sustainable Agriculture Management,, Sustainable Forestry and

Livestock Management

Another way of prioritization that could be considered is based on the outcome of Cost Benefit Analysis of the

EbA options. For adaptation options, where the return accruals from the intervention is desired at faster rate

than the intervention with higher EIRR should be opted however, if the consideration is of recovering the initial

investment than another option the intervention with relatively shorter break-even8 should be considered. The

table below presents the prioritization on the scale of Very high to Medium or low.

4.1 Prioritization of EbA measures based on the outcome of CBA

The adaptation options for each of the three pilot districts have been ranked on the basis of the outcome of the

Cost-Benefit Analysis. Rank 1 signifies the most favorable option to Rank 4 being the least as per the basis of

prioritization consideration i.e. Benefit Cost Ratio/ Climate Change %/ EIRR/ Payback period. For ease of

reference, the outcomes for each of the watershed have been presented in the tables below.

Table 33: Mugu Karnali watershed

Suggested Measure

Basis of prioritization

Benefit-Cost Ratio

Climate Change %

EIRR Payback period

Sustainable agriculture

management 2 3 1

3

8 Break-even period is the time period at which present value benefits just exceeds the costs, both being discounted at economic opportunity cost of capital.

of 71

Suggested Measure


Benefit-Cost Ratio

Climate Change %

EIRR Payback period

Sustainable water management 3 1 2 1

Sustainable livestock

management 1 1 3

1

Table 34: Lohare watershed

Suggested Measure


Benefit-Cost Ratio

Climate Change %

EIRR Payback period


management 3 4 2

3

Sustainable water management 4 2 3 2


management 2 3 3

1

Sustainable forest management 1 1 1 3

Table 35: Babai watershed

Suggested Measure


Benefit-Cost Ratio

Climate Change %

EIRR Payback period


management 4 4 3

3

Sustainable water

management 3 2 4

2


management 2 2 2

1

Sustainable forest

management 1 1 1

3

of 71

Annexure: Local Prices

Seeds Prices (in NPR)

Sava Masuli 1 seeds 350/kg




pumpkin seeds 1500/kg(local seed), 18000/kg

gourds seeds Bottle-gourd(hybrid)- 10000/kg

Bitter-gourd(hybrid)-20000/kg

Sponge-gourd(hybrid)-18000/kg

25-30 gm seeds needed for (508 sq.m2=1 ropani=5476 sq.ft) land

cucumber seeds 25000/kg (hybrid)

Alfa-alfa grass seeds 500/kg

1 kg is needed for 508 m2 land

Crofton weed (Banmara Tree) 1500 plant per 508 m2 land

asuro (malabara tree) 500 plants

neem 20/ plant

500 trees for 508 m2

Titepati (Mugwort) 132.27736 $/ Kg (https://www.vermontwildflowerfarm.com/wildflower-seed.html)

Timur (Nepali Pepper) 50/sapling


Persian Lilac (Bakaino) 4000/kg


Field Mint (Patina) 5/ plant

1000 sapling for 508 m2

plastic mulch 5000 for (400*1.2)m 25 micron plastic

pump unit 8000 to 22000 which can cover 1.016-1.27 ha land

Control head (valves) 1450 /valve with double union 1 valve can cover 508 m2 land

Main pipes 130/m

lateral pipe 17-30/m

emitters or drippers 7-10/piece 1 piece for small plants and 3-4 piece for big trees (depends on the tree size)

fuelwood 1500/40 kg

bamboo 150-250/ piece depending on the bamboo type/species

https://www.vermontwildflowerfarm.com/wildflower-seed.html

https://www.vermontwildflowerfarm.com/wildflower-seed.html

of 71

References

(2017). Retrieved from Food and Agriculture Organization:

http://www.fao.org/docrep/003/x6906e/x6906e09.html

(2017). Retrieved from Saksham: http://sakchyam.com.np/work-area/district-profile/

Acharya, K. P. (2002). Twenty-four years of community forestry in Nepal. International Forestry Review, 4(2),

149-156.

ADB. (1997). Guidelines for the Economic Analysis of Projects. Manila: Asian Development Bank.

ADB. (2014). Assessing the costs of climate change and adaptation in South Asia. Manilla: Asian Development

Bank.

ADB. (2017). Guidelines for the Economic Analysis of Projects. Manila: Asian DEvelopment Bank.

Agro-eco zones of Nepal. (2017). Retrieved from Food and Agriculture Organization:

http://www.fao.org/ag/agp/agpc/doc/counprof/nepal/figure3_agroeco.htm

Allan, S., Resch, E., Alvarez, L. G., & Nicholson, K. (2016). Progress with Climate Change Financing

Frameworks in selected South Asian countries. New Delhi: Action on Climate Today. Retrieved April 7,

2017, from http://www.actiononclimate.today/wp-content/uploads/2016/09/ACT-Progress-with-

CCFFs-in-selected-South-Asian-countries.pdf

Amod S. Dhakal, R. C. (2003). Long-term modelling of landslides for different forest management practices.

Earth Surface Processes and Landforms.

Barnekow Lillesø, J.-P. S. (2005). The map of potential vegetation of Nepal: a forestry/agro-

ecological/biodiversity classification system. Hørsholm: Center for Skov Landskab og

Planlægning/Københavns Universitet. (Development and Environment; No. 2/2005).

Bolund, P., & Hunhammar, S. (1999). Ecosystem services in urban areas. Ecological Economics, 29(2), 293-

301.

Carpenter, S. H.-Y. (2009). Science for managing ecosystem services: Beyond the Millennium Ecosystem

Assessment. Proceedings of the National Academy of Sciences (PNAS) 106(5): 1305-1312.

Chhetri, N., Chaudhary, P., Tiwari, P. R., & Yadaw, R. B. (2012). Institutional and technological innovation:

understanding agricultural adaptation to climate change in Nepal. Applied Geography, 33, 142-150.

Choice/IFPRI, H. (n.d.). Harvest Choice. Retrieved from https://harvestchoice.org/maps/agro-ecological-

zones-sub-saharan-africa

(2015). Climate and climatic variability of Nepal. Department of Hydrology and Meterology.

Climate Change and its impact on Nepalese Agriculture. (2008). The Journal of Agriculture and Environment.

Country Pasture/Forage Resource Profiles: Nepal. (2017). Retrieved from Food and Agriculture Organization:

http://www.fao.org/ag/agp/agpc/doc/counprof/nepal/nepal.htm#climate

Dahal, R. (2009). Causes of large-scale landslides in the Lesser Himalaya of central Nepal. Environmental

Geology.

of 71

Daily, G. S. (2009). Ecosystem services in decision making: time to deliver. . Frontiers in Ecology and the

Environment, 21-28.

DHM. (2017).

Dinshaw, A., Dixit, A., & McGray, H. (2012). Information for Climate Change Adaptation: Lessons and Needs in

South Asia. Working Paper, World Resource Institute.

(2016-17). Economic Survey . Ministry of Finance.

Fisher, J. K. (2006). Scales of environmental justice: combining GIS and spatial analysis for air toxics in West

Oakland, California. Health & Place 12: 701-714.

Food and Agriculture Organisation. (1996). Agro-ecological Zoning Guidelines. Rome: Food and Agriculture

Organisation.

Gabet, E. (2004). Rainfall thresholds for landsliding in the Himalayas of Nepa. Geomorphology.

GGGI. (2014). Extended Cost Benefit Analysis - Scoping Paper. Seoul, South Korea: Global Green Growth

Institute.

GoN. (2014). Churia forest of Nepal: Forest resource assessment. Kathmandu: Department of Forest Research

and Survey, MoFSC, GoN.

GoN. (2015). Promoting Sustainable Forest Management in Nepal's Forests Contributing to Local and

National Economy. Kathmandu: Ministry of Forests and Soil Conservation, Government of Nepal.

Retrieved June 13, 2017, from

http://www.msfp.org.np/uploads/publications/file/Promoting%20Sustainable%20Forest%20Manage

met%20in%20Nepal's%20Forest%20Contributig%20to%20Local%20and%20National%20Economy_

20151231083824.pdf

Haapio, A., & Viitaniemi, P. (2008). A Critical Review of Building Environmental Asessment Tools.

Environmental Impact Asessment Review, 28, 469-482.

Hanley, N., & Spash, C. L. (1993). Cost-benefit analysis and the environment (Vol. 9). Cheltenham: Edward

Elgar.

Hanley, N., Barbier, E. B., & Barbier, E. (2009). Pricing nature: cost-benefit analysis and environmental

policy. Edward Elgar Publishing.

Kanel, K. R., & Niraula, D. R. (2017). Can rural livelihood be improved in Nepal through community forestry?

Banko Janakari, 14(1), 19-26.

Karki, Y. K. (2015). Nepal Portfolio Performance Review. Retrieved from

http://www.mof.gov.np/uploads/document/file/Agriculture_NPPR-2015_20150913011507.pdf

Kumar, S. (2002). Does “participation” in common pool resource management help the poor? A social cost–

benefit analysis of joint forest management in Jharkhand, India. World Development, 30(5), 763-782.

Lind, R. C. (1995). Inter-generational equity, discounting and the role of cost benefit analysis in evaluating

global climate policy. Energy Policy, 23(4-5), 379-389.

Liu, X. a. (2000). Climatic Warming in the Tibetan Plateau during Recent Decades. International Journal of

Climatology.

MA. (2003). Ecosystems and Human Well-being: A framework for assessment. Millennium Ecosystem

Assessment. . Washington DC: WRI.

of 71

Manandhar, N. (1989). Ethnobotanical notes on some Piscicidal plants of Nepal. Ethnobotany 1, 57-59.

McKinsey. (2010). India's Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth.

McKinsey Global Institute.

McPherson, E. G., Nowak, D., Heisler, G., Grimmond, S., Souch, C., Grant, R., & Rowntree, R. (1997).

Quantifying urban forest structure, function, and value: the Chicago Urban Forest Climate Project.

Urban Ecosystems, 1(1), 49-61.

Mercy Corps Nepal. (2012). Climate Change, Agriculture, & Food:

Developing Adaptation Strategies and Cultivating .

Naidoo, R., Balmford, A., Ferraro, P. J., Polasky, S., Ricketts, T. H., & Rouget, M. (2006). Integrating economic

costs into conservation planning. Trends in Ecology and Evolution, 21(12), 681-687.

(2010). National Capacity Self-Assessment:Nepal. Government of Nepal, Minstry of Environment Science &

Technology.

Nayava. (1974).

Nayava, J. (1974). Heavy Monsoon Rainfall in Nepal. Weather.

Nepal, F., & Satdobato, L. (2009). Agro biodiversity management: An opportunity for mainstreaming

community-based adaptation to climate change. Journal of Forest and Livelihood, 8, 1.

Network, H. D. (2012/13). Mapping Philippine Agro-Ecological Zones Technical Notes. Human Development

Network.

(2017). Observed Climate Trend Analysis in the Districts and Physiographic Zones of Nepal (1971-2014).

Kathmandu: Government of Nepal, Ministry of Population and Environment, Department of Hydrology

and Meterology.

OECD. (2007). Handbook for Appraisal of Environmental Projects Financed from Public Funds. Paris:

Organization for Economic Co-operation and Development.

Pariyar, D. (1998). Methodologies observation on recording techniques in range system studies.

Patel, N. (2003). Remote Sensing and GIS Application in Agro-Ecological Zoning In: Satellite Remote Sensing

and GIS Applications in Agricultural Meteorology: Proceedings of a Training Workshop, 7-11 July

2003, Dehra Dun, India. Agricultural Meteorology Programme.

Pearce, D. G. (2006). CBA and the Environment: Recent developments. Paris: OECD.

Polasky, T. H. (2009). Mapping and valuing ecosystem services as an approach for conservation and natural-

resource management. . Annals of the New York Academy of Sciences , 1162: 265-283.

Sharma, K. (2017). Crop Diversification in Nepal. Retrieved from Food and Agriculture Organization:

http://www.fao.org/docrep/003/x6906e/x6906e09.htm

Shrestha, C. P. (1999). Maximum Temperature Trends in the Himalaya and Its Vicinity: An Analysis Basedon

Temperature Records from Nepal for the Period 1971–94.

Statistical Year book of Nepal. (2015). CBS.

Stern, N. (2006). The Stern Review: The economics of climate change. . Cambridge: Cambridge University

Press.

Sweeney, M. (n.d.).

of 71

(2009). Temporial and Spatial Variability of Climate Change over Nepal. Practical Action Nepal.

(2010). The Role of Ecosystems in Developing a Sustainable ‘Green Economy’. UNEP.

The World Bank. (1998). Handbook on Economic Analysis of Investment Opertaions. Washington D.C.: The

World Bank.

The World Bank. (2011). Vulnerability, risk reduction, and adaptation to climate change: Nepal. Washington

D.C.: The World Bank.

UNDAF DISTRICT PROFIL: DAILEKH. (2017). Retrieved from

https://www.google.com.np/url?sa=t&rct=j&q=&esrc=s&source=web&cd=10&cad=rja&uact=8&ved=

0ahUKEwierZ75zZ3YAhUN2o8KHbuOCT4QFghLMAk&url=http%3A%2F%2Fun.info.np%2FNet%2F

NeoDocs%2FView%2F4201&usg=AOvVaw3QDyO_fDymPnjm0xzaYpAT

UNDAF DISTRICT PROFILE: MUGU. (2017). Retrieved from http://un.org.np/district_profile/mugu

UNDP. (2009). Handbook of planning, monitoring and evaluating for development results. New York: United

Nations Development Programme.

UNDP. (2011). Catalyzing Climate Finance: A Guidebook on Policy and Financing Options to Support Green,

Low-Emission and Climate-Resilient Development. United Nations Development Programme (UNDP).

UNDP. (2017). World Population Prospects. Retrieved from

http://worldpopulationreview.com/countries/nepal-population/

Upreti, B. (n.d.). The Physiography and Geology of Nepal and their bearing on landslid problem. Kathmandu:

Department of Geology, Tribhuvan University.

Wegner, G. U. (2011). Cost-Benefit Analysis in the Context of Ecosystem Services for Human Well Being: A

Multidisciplinary Critique. Nairobi: UNEP.

(2017). World Bank.

Xing, Y., Horner, R. M., El-Haram, M. A., & Bebbington, J. (2009). A Framework Model for Assessing

Sustainability Impacts of Urban Development. Account Forum, 33, 209-224.

Zavri, M. S., & Zaren, M. T. (2010). Sustainability of Urban Infrastructure. Sustainability, 2, 2950-2964.

appraising cost of options - gcf readiness programme · measures that take into account the role of...

Documents