The World Bank has projected that Nepal’s gross domestic product (GDP) would fall due to climate change.
It has been shown that the negative impact of climate change could reduce the GDP by 25 percent after 70 years.
The World Bank made such a projection while making public the report ‘Nepal development update’, on Monday.
It has been said in the report that its impact will also depend on the model and parameters adopted by Nepal to control the effects of climate change.
That is why, the World Bank has drawn the attention of the government to formulate the policy by observing the changes in the climate.
The World Bank stressed on the change in policy as it can affect the construction of infrastructure and foreign employment in Nepal as well.
The World Bank has handed the micro fiscal model over to the Nepal government for the same.
It has been learnt that this model is also being used in the preparation of Nepal development update.
This model is being used in the analysis of economic and monetary facts.
If Nepal adopts the model emphasized by the World Bank, it will help in policy making, economists said.
According to the report, Nepal has mentioned the options to make environment-friendly policies in the future and to protect the rivers from the risk of drying in the country which has a huge contribution in hydroelectricity.
Economist and ICIMOD Program Coordinator Dr Mani Nepal said that the formulation of a good policy would help reduce the risk in the future.
It has been mentioned in the report the ways to control the impact of climate change on agriculture and on labor and employment and infrastructure among other sectors.
Nepal said that it would help to avoid risks if Nepal changes the policy on such issues.
Meanwhile, the World Bank has suggested Nepal to lift the ban on imports.
Instead, Nepal has been suggested to increase the policy interest rate based on needs and loan facility.
By doing so would subdued external demand and discourage imports, the World Bank said.