training manual introduction to tools/ techniques required for developing green ... ·...

Training Manual Introduction to tools/ techniques required for developing Green Climate Fund proposal

July 2017

Table of Contents

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Training Manual - Introduction to tools/ techniques required for developing Green Climate Fund proposal

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Acknowledgements

First of all, we would like to convey our sincere gratitude to the United Nations Development Programme (UNDP) and the Ministry of Finance, Nepal for taking the initiative of conducting climate change vulnerability and disaster risk assessment of fragile mountain ecosystems and appraising the cost of adaptation and mitigation solutions to address climate risks under the Green Climate Fund Readiness Programme. We take this opportunity to thank the entire project team led by the National Project Director of Green Climate Fund Readiness Programme, Nepal for their continuous support and necessary inputs during the execution of the entire assignment. Last but not the least, we would like to express our heartfelt gratitude to all the experts and team members who have helped in various ways for the completion of this manual.


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Acronyms

ADB Asian Development Bank

CBS Central Bureau of Statistics

DADO District Agriculture Development Office

DEM Digital Elevation Model

DHM Department of Hydrology and Meteorology

DOI Department of Industry

DoLIDAR Department of Local Infrastructure Development and Agricultural Roads

FRA Forest Resources Assessment Nepal

GCF Green Climate Fund

GLOF Glacial Lake Outburst Flow

ICIMOD International Centre for Integrated Mountain Development

IPCC Intergovernmental Panel on Climate Change

IWMI International Water Management Institute

KoMM Koshi Mid Mountain

MASL Meters Above Sea Level

MoAD Ministry of Agricultural Development

MoF Ministry of Finance

MoFALD Ministry of Federal Affairs and Local Development

MoFSC Ministry of Forest and Soil Conservation

MoHA Ministry of Home Affairs

MoPE Ministry of Population and Environment

MoST Ministry of Science and Technology

NAP National Adaptation Plan

NAPA National Adaptation Programme of Action

NDVI Normalized Difference Vegetation Index

SRTM Shuttle Radar Topography Mission

UNDP United Nations Development Programme

UNOCHA United Nations Office for the Coordination of Humanitarian Affairs

VDC Village Development Committee

http://unfccc.int/resource/docs/napa/npl01.pdf


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Notes

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Table of Contents

Preface 7

About the manual 9

1. About climate change and GCF 11

1.1. Impacts of climate change in Nepal 11

1.2. Need for adaptation and mitigation measures 13

1.3. Financing adaptation and mitigation measures 14

1.4. Role of Green Climate Fund 14

1.5. Investment plan for Green Climate Fund 15

2. Assessment of vulnerability 19

2.1. Steps/ techniques for vulnerability assessment 19

2.2. Illustration of vulnerability assessment of Dholakha and Ramechapp districts 26

2.3. Illustration of spatial analysis of Dholakha and Ramechapp districts 31

2.4. Validation of findings through field visits 33

2.5. Identification of potential adaptation & mitigation measures based on spatial analysis and field visits findings 35

2.6. Illustration of the process of identification of potential adaptation & mitigation for Dholakha and Ramechapp 36

2.7. Measure 1 - Sustainable Water Management practices in Ramechapp 37

2.8. Measure 2 - Sustainable Forest Management practices in Dholakha 38

2.9. Illustration 3 – Other interventions 40

2.10. Prioritization of the identified measures 41

2.11. Illustration of prioritization of identified measures through E&S and Gender assessment 42

2.12. Cost Benefit Analysis – General Methodology 46

2.13. Climate Change relevance of a project 49

2.14. Illustration of measure wise CBAs – with and without climate benefits 50

2.15. Findings of the sub-national consultation 56

2.16. Requirements of reforms and institutional mechanisms 59

3. Preparing the investment plan 61

3.1. Sections of investment proposal 62

3.2. Linkages with background work covered in section 2 63

References 64


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Preface

Climate Change is now a scientifically established fact. The average temperature of the earth’s surface has risen

by 0.74 degrees C since the late 1800s (IPCC, 2007). It is expected to increase by another 1.8°C to 4°C by the

year 2100 - a rapid and profound change -- should the necessary action not be taken. Even if the minimum

predicted increase takes place, it will be larger than any century-long trend in the last 10,000 years. The

principal reason for the mounting thermometer is a century and a half of industrialization: the burning of ever-

greater quantities of oil, gasoline, and coal, the cutting of forests, and the practice of certain farming methods.

These activities have increased the amount of “greenhouse gases” in the atmosphere, especially carbon dioxide,

methane, and nitrous oxide. Many experts have termed climate change as a “wicked problem” which is

characterized by “a host of underlying nested, intractable and unforeseen predicaments” (Dixit, 2016). It has

been predicted that the problems such as droughts, forest fires, flooding with increasing frequency and intensity

will increase.

Climate change will affect everyone in the world. But developing countries will be hit the hardest, soonest and,

moreover these countries have the least capacity to respond. South Asia is particularly more vulnerable to its

impacts. For South Asian countries, the average loss and damage estimate from the impact of climate change

has been estimated to be about 6% of the GDP of South Asian countries by 2050 (Ahmed & Suphachalasai,

2014), as arrived from an analysis published by ADB. Some of the impacts are already being witnessed in Nepal

in the form of drought, downstream flooding, intense rainfall, shifting of monsoon period etc. Nepal has a

varied climate mainly due to presence of valleys and high altitude mountain ranges transitioning within a short

distance. Climate risk assessment studies carried out by Asian Development Bank (ADB) indicated three major

risks for the country- i) threat to quantity and quality of water ii) impacts on agricultural yield and food security

iii) threat to biodiversity and natural resources. Below is a summary of projected trends and possible impacts

arrived at from different climate models till 2080 (CDKN, 2014).

Climatic phenomenon

Projection

Impact

Rainfall

Intensify (but highly uncertain due to altitude variation)

Increased extreme events, flood, landslides

Temperature

Increase; Number of days with extreme heat - increase

Water scarcity, alteration in vegetation pattern in high altitude

Increased invasive species in forests, increased forest fire

Increased burden of vector borne diseases

Loss in productivity of humans

Retreating glaciers, glacier melt Increase Reduced flow of water for agricultural use

Flash floods due to Glacial Lake Outburst Flow (GLOF)

In view of the above, it is extremely important for Nepal to chart out a climate responsible and climate resilient

development trajectory. Both mitigation and adaptation are integral parts of such a development pathway.

However, given the issues of poverty and various other development challenges in Nepal, it is important that

Government of Nepal adopts strategies whereby development projects have substantial climate benefits and

vice versa, i.e. climate projects that generate development gains.


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UNDP considers Ecosystem based Adaptation (EbA) in the watersheds of Nepal as one of the most appropriate

solutions to some of these climate change adversities as it is more aligned to the livelihood and aesthetics of the

local community who can continue to implement the measures on their own in the long term without any

requirement of capital intensive engineering solutions and skill sets. UNDP implemented EbA in the

watersheds of Harpan in Panchase area, identified as one of the hotspots due to severe impacts of climate

change observed during stakeholder consultations in terms of water scarcity, pest infestation in crops, the area’s

proximity to Phew lake- a Ramsar site and diversity of orchid species in the region.

The principle of common but differentiated responsibility requires that countries across the world undertake

actions that respond to the threats from climate change. These actions should not only target GHG emission

reduction (mitigation strategies) but must also increase the resilience of vulnerable communities to withstand

the adverse impacts of climate change (adaptation strategies). However, such actions require financial

commitments from both the government and the private sector. There are also numerous challenges for

financing such interventions (Ghosh & Ghosh, 2016), (Hamilton, 2009).

UNDP acting through Ministry of Finance, Government of Nepal has commissioned M/s

PricewaterhouseCoopers for the study of ‘Climate change vulnerability and disaster risk assessment of fragile

mountain ecosystems and appraising the cost of adaptation and mitigation solutions to address climate risks’.

The present assignment, as a part of Green Climate Fund (GCF) Readiness Programme in Nepal, becomes a

natural extension of the activities already being carried out by UNDP in the mountain ecosystem of Nepal.

Consequently, the assignment aims at identifying further watershed hotspot in Nepal, selecting the adaptation

and mitigation options for the identified hotspot based on cost benefits and preparing an investment framework

for the options aligned to GCF’s long term vision of contributing to the overall green growth of the country.

The Green Climate Fund (GCF) is a new global fund created to support the efforts of developing countries to

respond to the challenge of climate change. GCF helps developing countries limit or reduce their greenhouse

gas (GHG) emissions and adapt to climate change. Subsequent to the 2015 Paris Agreement, the GCF was given

an important role in serving the agreement and supporting the goal of keeping climate change well below 2

degrees Celsius. GCF aims to catalyze a flow of climate finance to invest in low-emission and climate-resilient

development, driving a paradigm shift in the global response to climate change. Government of Nepal is also

planning to access GCF funding for which it needs to be equipped with the tools/ techniques acceptable to GCF.

A detailed proposal is required to be submitted for the same as per the extant guidelines of GCF. Therefore, as

part of this assignment, M/s PricewaterhouseCoopers have developed this training manual to demonstrate the

tools/ techniques as illustrations/ case study for Dholakha and Ramechapp districts in the Tamakoshi

watershed. The manual comprises of the description of the tools/ techniques followed by the illustration of its

application in the Dholakha and Ramechapp districts.

This training manual is intended for the National level Government agencies who will be involved in

implementing the adaptation and mitigation measures to address climate risks and reduce vulnerability of the

identified project area (mountain ecosystem), monitoring progress of the implementation activities and

assessing outcomes of these measures. The manual will contribute towards enhancing the understanding of

application of vulnerability assessment tool to assess vulnerable ecosystems and build climate resilient future.

The objective of this manual is to help the different stakeholders involved in GCF proposal development process

with the understanding of the tools/ techniques for project development through a discussion on the general

methodology involved and demonstrate the application of the same through the illustrations of Dholakha and

Ramechapp case studies.


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About the manual

The training manual is divided into three main sections as presented in the diagram below:

Figure 1: Structure of the training manual

Each section covers the general methodology for developing the participants understanding on the subject

followed by the illustration of the Dholakha and Ramechapp case studies. The broad coverage of content in each

section is detailed out below.

Section 1: About climate change

Impacts of climate change in Nepal

Need for adaptation and mitigation measures

Financing adaptation and adaptation measures

About Green Climate Fund

Investment plan for Green Climate Fund

Section 2: Assessment of vulnerability - tools/techniques, institutional mechanisms

a) Vulnerability Assessment Framework

o Vulnerability assessment methodology

o Illustration of vulnerability assessment at Dholakha and Ramechapp districts

o Illustration of Spatial analysis at Dholakha and Ramechapp districts

o Validation of findings of spatial analysis through field visits

b) Process of identifying potential adaptation and mitigation measures

o Identification of potential adaptation & mitigation measures based on spatial analysis and field visits

findings

o Prioritization of identified measures through E&S and Gender assessment

1About climate change & GCF

Assessment of vulnerability -tools/techniques, institutional mechanisms

Prepairing the investment plan

Cost –Benefit analysis

2 3

This training manual

discusses the methodologies

to be adopted and further

aids the learning process

through illustrations of the

case of Dolakha and

Ramechhap districts.


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c) Cost-Benefit Analysis (CBA)

o Introduction to CBA methodology

o Climate change relevance of a project

o Illustration of measure wise CBAs – with and without climate benefits

o Findings of the sub-national consultation

d) Requirements for reforms and institutional mechanisms

Section 3: Preparing the investment plan

o Sections of investment proposal

o Linkages with background work covered in Section 2

11

1. About climate change and GCF

1.1. Impacts of climate change in Nepal

Rapid changes in the altitude and aspect along the latitudes have made strong gradient in the spatial as well as

temporal patterns of climatic conditions in Nepal (Nayava, 1974). The temperature trends analysis of about 30

years shows that maximum temperatures in Nepal are increasing at an alarming rate. Department of Hydrology

and Metrology, Govt. of Nepal conducted the trend analysis of the temperature data with more recent data and

was found that although the warming trend is continuing at a rather high rate (0.5 0C/year). The warming is

found to be more pronounced in the higher altitude regions of Nepal such as middle-mountain and Himalaya,

while the warming is significantly lower or even lacking in Terai and Siwalik regions. Further, warming in the

winter is more pronounced compared to other season (National Capacity Self-Assessment:Nepal).

Source: Department of Hydrology and Metrology, Govt. of Nepal

For developing a

common knowledge

base of the

audience, this

section briefly

describes the

impacts of climate

change in Nepal

12


Generally, the precipitation trend in Nepal is affected by the altitude. According to the data presented by DHM,

GoN, up to about 3000 m, annual rainfall increases with altitude and thereafter, annual rainfall totals decrease

with increasing altitude.


The analysis on precipitation data across Nepal does not present a distinct trend (Devkota, 2004) as in the case

of the temperature. According to the Ministry of Environment, Science and Technology, Govt. of Nepal’s

National Capacity Self-Assessment report, the analysis of precipitation trends suggests complex processes in

precipitation extremes but at the same time there is indication that more weather related disasters, for example,

floods and landslides.

13

The climatic changes impacts projected to occur in the future are likely to have impacts on different sectors of

Nepal. The impact of climate change could be across sectors such as water resources (GLOF, changes in

hydrological regime), agriculture, biodiversity, health, livelihood etc.

Figure 2: Impacts of climate change

1.2. Need for adaptation and mitigation measures

Climate change is an ongoing phenomena and the historical and present level of emissions due to

anthropogenic activities (along with certain geo-physical factors) has triggered the process. (IPE Global, 2015)

Climate scientists have developed two approaches to deal with issue of climate change:

Learn about the

two key

approach to

address climate

change

14

Mitigation - All actions targeted towards reducing the concentration of GHG emissions in the atmosphere by reducing the emissions contribution from different sectors such as energy generation, transport, agriculture, etc. This requires an alternate low carbon development pathway of economic activities through novel & new technologies for improved energy efficiency/ use of renewable energy.

Adaptation – Taking into account the foreseeable future the impacts of climate change will continue to affect societies and economies, action must be directed at increasing resilience and lessening the impacts. This could be done through awareness generation, introducing technologies, etc.

However, the two recommended actions are not mutually exclusive and both actions need to be enacted

simultaneously!

1.3. Financing adaptation and mitigation measures

Climate finance refers to local, international or transnational financing, which may be drawn from public,

private and alternative sources of financing. Climate finance is critical to addressing climate change because

large-scale investments are required to reduce GHG emissions.

Climate finance is equally important for adaptation, for which significant financial resources will be similarly

required to allow countries to adapt to the adverse effects and reduce the impacts of climate change. The

following key aspects should be considered while financing climate change projects:

Robust financing plan for creation of physical assets that can deliver mitigation goals and adaptation

opportunities

Financing plan needs to include all possible sources, Government, private and those from multilateral

and bilateral financing organizations. The financing plan should also address issues like cost recovery,

returns to investors, etc.

To facilitate the provision of climate finance, the United Nations Framework Convention on Climate Change

(UNFCCC) was established to provide funds to developing countries. Subsequent to the Paris Agreement in

2015, the Green Climate Fund (GCF) was given an important role in serving the agreement and supporting the

goal of keeping climate change well below 2 degrees Celsius.

1.4. Role of Green Climate Fund

The Green Climate Fund (GCF) is a new global fund created to support the efforts of developing countries to

respond to the challenge of climate change. GCF is a fund established within the framework of the UNFCCC to

assist developing countries in adaptation and mitigation practices to counter climate change. The objective of

the Green Climate Fund is to "support projects, programmes, policies and other activities in developing country

Parties using thematic funding windows".

GCF helps developing countries limit or reduce their greenhouse gas (GHG) emissions and adapt to climate

change. GCF aims to catalyze a flow of climate finance to invest in low-emission and climate-resilient

development, driving a paradigm shift in the global response to climate change. Government of Nepal is also

planning to access GCF funding for which it needs to be equipped with the tools/ techniques acceptable to GCF.

A detailed proposal is required to be submitted for the same as per the extant guidelines of GCF.

How to finance

climate change

projects?

15

1.5. Investment plan for Green Climate Fund

Developing the investment plan for GCF is a five step approach as represented by the chart below.

Figure 3: Five step approach of developing investment plan for GCF

Theory of Change: Given the goals of sustainable development, the economies are striving to evolve a holistic

growth and development trajectories. It is suggested that economies must try to achieve a ‘transformative

change’ and not ‘incremental change’ since the challenges faced by the economies in the world are numerous,

nested and intricate (Rip, 1998). Also, since 2000, the countries, at the behest of the UN, had taken a pledge to

cover the three essential pillars of development – economy, society and environment. This was first pronounced

as Millennium Development Goals and, later, in 2015, the countries again came together to declare that

Sustainable Development Goals (SDGs) so that most countries of the world are guided by a uniform objective of

development. Nepal is also a signatory to MDGs and SDGs declared by the United Nations

Given this perspective, it transpires that the economies need to intervene – through policies, programmes,

technology deployment and other means so that radical changes are visible in the form of economic gains

(increase in productivity, employment), social reforms (gender equity, increase in social capital) and

environmental sustainability (reduction in GHG emissions, increased resilience). It also means that any

project/programme to address economy must also address the social and environmental gains, and vice-versa.

No longer, one can look at the three important dimensions of development in an isolated manner. They have to

be considered and addressed simultaneously. However, this is easier said than done. (Weiss, 1995) proposes a

framework for designing, implementing and monitoring for bringing in transformative changes.

It proposes the following:

All decisions to be data driven and information intensive as much as possible

Outputs should be visible and outcomes must be measureable

Compulsory stakeholder consultation at each step of programme implementation

Government assumes an enabling role in bringing together all stakeholders/ actors thinking and working in unison

Learning is passed on to the society and the future generations

Theory of Change also suggests need for reforms and rethinking on institutional mechanisms in order to

achieve the desired transformative changes.

How to develop

an investment

grade proposal

for climate

change projects?

16

GCF funding proposal development process is based on their extant guidelines. It requires the project

proponent to address the following points in their funding proposal.

Table 1: Components of GCF investment proposal

Section Particulars Detailed description

A Project/ programme summary Project/ programme title

Basic information like executive summary, contact point, project focus (adaptation/ mitigation/ cross cutting) project size & lifespan

B Financing cost/ information Description of financial elements of the Project / Programme - project financing information like co-finance, loans, GCF financing etc.

C Detailed project/ programme description Political/ institutional information

Policy & institutional set-up

Objectives w.r.t baselines

Impact on climate change

Barriers address by the project/ programme

Project/ programme management structure

D Rationale for GCF involvement Value added by GCF involvement

Exit strategy

E Expected performance against investment criteria

Impact potential - Potential of the project/programme to contribute to the achievement of the Fund’s objectives and result areas

Paradigm Shift Potential - degree to which the proposed activity can catalyze impact beyond a one-off project/programme investment

Potential for knowledge and learning

Environmental, social and economic co-benefits, including gender-sensitive development impact

Country Ownership - beneficiary country (ies) ownership of, and capacity to implement, a funded project or programme

F Appraisal summary Economic and Financial Analysis

Technical evaluation

Environmental, Social Assessment, including Gender Considerations

Financial management and procurement

G Risk assessment and management Risk Assessment Summary

17


Risk Factors and Mitigation Measures

H Results monitoring and reporting Paradigm Shift Objectives and Impacts at the Fund level

Outcomes, Outputs, Activities and Inputs at Project/Programme level

Arrangements for Monitoring, Reporting and Evaluation

I Annexes Supporting Documents for Funding Proposal, such as Feasibility Study, Environmental and Social Impact Assessment & Management Plan, Gender Analysis and Action Plan, Timetable of project/programme implementation, Economic analysis etc.

19

2. Assessment of vulnerability

Vulnerability Assessment is the first step for preparing an investment plan for GCF. The need for vulnerability

assessment is 1) to identify the climate risks, 2) to assess the extent of loss and damage and 3) to understand

how the system works and to identify key intervention points where vulnerability is greatest or adaptation

action could be most useful.

This section on vulnerability assessment is organized as follows:

Explanation of detailed methodology

Illustrations of vulnerability assessment as case studies for Dholakha and Ramechapp districts in the

Tamakoshi watershed

2.1. Steps/ techniques for vulnerability assessment

Vulnerability assessment methodology using IPCC AR5 approach: It is recommended that the

vulnerability assessment methodology for Nepal is conceptually aligned to the framework being followed under

National Adaptation Plan (NAP). The NAP framework is in line with the IPCC-AR5 and it follows the risk based

approach where risk is the function of hazard, exposure and vulnerability. The social context is emphasized

explicitly, and vulnerability is considered independent of physical events.

Figure 4: Risk as a function of hazard, exposure and vulnerability

Risk = f (hazard, exposure, vulnerability)

Now lets us learn how

to undertake

vulnerability

assessment with the

illustration of Dolakha

and Ramechhap.

20

The framework assumes that the risk of climate-related impacts results from the interaction of climate-related

hazards with the exposure and vulnerability of human and natural systems. Changes in the climate system

(trends and scenarios), biophysical system, and socioeconomic processes (including governance and adaptation

and mitigation actions) are drivers of hazards, exposure, and vulnerability.

At this point it is important to understand the following IPCC definitions of hazard, exposure, vulnerability and

risk are central to understanding the framework.

Hazard: The potential occurrence of a natural or human-induced physical event or trend or physical impact

that may cause loss of life, injury, or other health impacts, as well as damage and loss to property,

infrastructure, livelihoods, service provision, ecosystems, and environmental resources. For the purpose of GCF

investment plan, the term hazard may be referred to as climate-related physical events or trends or their

physical impacts.

Exposure: The presence of people, livelihoods, species or ecosystems, environmental functions, services, and

resources, infrastructure, or economic, social, or cultural assets in places and settings that could be adversely

affected.

Vulnerability: The propensity or predisposition to be adversely affected. Vulnerability encompasses a variety

of concepts and elements including sensitivity or susceptibility to harm and lack of capacity to cope and adapt.

Adaptive capacity (in relation to climate change impacts): The ability of systems, institutions,

humans, and other organisms to adjust to potential damage, to take advantage of opportunities, or to

respond to consequences of climate change.

Sensitivity: Predisposition of society and ecosystems to suffer harm as a consequence of intrinsic and

context conditions making it plausible that such systems once impacted will collapse or experience major

harm and damage due to the influence of a hazard event.

Risk: The potential for consequences where something of value is at stake and where the outcome is uncertain,

recognizing the diversity of values. Risk is often represented as probability of occurrence of hazardous events or

trends multiplied by the impacts if these events or trends occur. Risk results from the interaction of

vulnerability, exposure, and hazard.

Figure 5: Drivers of hazards, exposure and vulnerability

21

Assessing vulnerability methods: An effective assessment of ecosystems and human well-being cannot be

conducted at a single temporal or spatial scale. Changes in ecosystem that may have little impact on human

well-being over days or weeks (drying sources, for instance) may have pronounced impacts over years or

decades (declining agricultural productivity). Similarly, changes at a local scale may have little impact on some

services at that scale (as in the local impact of forest loss on water availability) but major impacts at large scales

(forest loss in a river basin changing the timing and magnitude of downstream flooding). Ecosystem processes

and services are typically most strongly expressed, are most easily observed, or have their dominant controls or

consequences at particular spatial and temporal scales. They often exhibit a characteristic scale—the typical

extent or duration over which processes have their impact.

Ecosystems provide a variety of benefits to people, including provisioning, regulating, cultural, and supporting

services. Provisioning services are the products people obtain from ecosystems, such as food, fuel, fiber, fresh

water, and genetic resources. Regulating services are the benefits people obtain from the regulation of

ecosystem processes, including air quality maintenance, climate regulation, erosion control, regulation of

human diseases, and water purification. Cultural services are the nonmaterial benefits people obtain from

ecosystems through spiritual enrichment, cognitive development, reflection, recreation, and aesthetic

experiences. Supporting services are those that are necessary for the production of all other ecosystem services,

such as primary production, production of oxygen, and soil formation.

Deploying AR5 framework in Nepal the vulnerability assessment should consider ecosystem services and users

of ecosystem services as the “System of concern”. The ecosystem services in different places in Nepal is mostly

derived from water, forest and agriculture. So the focus of this assessment should be the provisioning ecosystem

services derived from these different sources, people and livelihood.

22

Figure 6: Climate Change Vulnerability Assessment and Risk Assessment Framework

Insert Header Field


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Assessing hazard: This excercise is aimed at characterizing the disaster patterns by means of relevant

metrics (e.g. temperature and precipitation) coming from trend analysis and investigating different scenarios.

Ascertaining the climate trend and climate change scenario: The trend in temperature and

precipitation was assessed in conjunction with future scenario investigation. The annual average rainfall and

temperature should be considered for trend analysis. As far as possible the climate change future scenario

should be investigated using AR5 RCP scenario of 2040-2060. Necessary corrections may be done by

interpolating data from different sources.

Climate Threshold: The threshold level of both temperature and precipitation that can lead to extreme

events can be arrived at by through literature review and data analysis. This exercise can give an indication of

potential occurrence of a disaster that may impact the ecosystem services and livelihood of people.

Table 2: Some indicators for hazard assessment in Nepal

Elements of risk Indicators Data source(s)

Hazard Climate trend from temperature and precipitation observed in historic datasets

Dept. of Hydrology and Meteorology (DHM), Measured Data

AR5, RCP climate scenario in watershed World Bank Climate Portal

Climate threshold for flood, landslide and drought

DHM Climate and Flood Forecasting Division Research Paper

No. of extreme rainfall and disaster event DHM- MoHA

No. of water induced hazards, storm, flood, landslide, GLOF, drought

DHM, ADB TA 7984, IWMI

Figure 7: The method of hazard assessment

Insert Header Field


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Assessment of vulnerability: Vulnerability assessment is aimed at evaluating the degree to which

ecosystem services and their users (system of concern) could be effected by climate change based on site-

specific information.

System of Concern: is a regularly interacting or interdependent group of items forming a unified whole.

Every system is delineated by its spatial and temporal boundaries, surrounded and influenced by its

environment, described by its structure and purpose and expressed in its functioning. For the purpose of this

study, the ecosystem services and their users were considered as system of concern. In Tamakoshi, ecosystem

services are primarily derived from water, forest and agriculture. So the focus of the assessment was the

provisioning services derived from these ecosystems and socioeconomic system of the considered region.

Sensitivity: Area under forest and its growth was the key indicator to assess sensitivity. As forest regulates and

prevents adverse physical impacts, the extent of its coverage can significantly affect the sensitivity. The forest

area from 2016 digital map was overlaid with NDVI to assess the forest density. People in the considered region

with low household income are more dependent on forest and forest related products. Therefore, proxy

indicators which indicate number of low income households were considered for analysis. Population

dependent on forest products were indirectly assessed using energy used and house type data from CBS 2011.

Another indicator was population settled in high slope which are more sensitive to adverse physical impacts.

The indicator was indirectly extracted from SRTM 30 m DEM and UNOCHA settlement map (based on CBS

data). The physical and socioeconomic data was analyzed together to arrive at the sensitivity index.

Adaptive Capacity: The key indicators that were used for assessing the adaptive capacity are road network,

housing type, age group, literacy rate, female population, irrigated land, economic status of household. The data

on area of land under irrigation was taken from 2016 DoI map. All the other indicators were extracted from CBS

2016.

Table 3: Some indicators for vulnerability assessment in Nepal

Elements of risk Indicators Source

Vulnerability Sensitivity Fire wood consumption CBS 2011

Household water use CBS 2011

Figure 8: Vulnerability assessment

Insert Header Field


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Population density (Agriculture dependent population- high vulnerability if pop density is high)

CBS 2011

House type (house built from local forest resources)

CBS 2011

Settlement distributed on slopes (landslide vulnerability)

CBS 2011

Settlement close to flood plain (flood vulnerability

CBS 2011

Income disparity CBS 2011

Topography SRTM DEM

Adaptive capacity

Road density DDC, DoLIDAR, DoI

Housing type CBS 2011

Availability of electricity CBS 2011

Age group with gender CBS 2011

Literacy rate CBS 2011

Economic activity CBS 2011

Exposure: Exposure assessment was aimed at identifying the elements at risk. In this step primarily land use

(agriculture area) and land cover (forest area) data sets were analyzed for the localization of people, ecosystem

resources, and social, economic and cultural assets that could be adversely affected. The area under agriculture

and forest area were extracted from DoI 2016 digital map.

Table 4: Some indicators for exposure assessment in Nepal


Exposure Forest area and quality (NDVI) FRA/DOI 2016

Water resources ((Specific discharge, river density)

DOI 2016/DHM

Area under agriculture (cultivated land) DADO, DOI 2016

Overall risk mapping: The final risk is assessed considering the risk as the combination of hazard, exposure

and vulnerability. In this methodology the physical environmental dimensions of risk was assessed by

considering its hazard, exposure and vulnerability components by means of an integrated approach.

Risk assessment combines the information about hazard scenario with the exposure and susceptibility of the

examined human-environment ecosystem, providing an evaluation of risks through the computation of a

relative (risk) score. Risk scores varies from 0 (i.e. no risk) to 1 (i.e. highest risk for the considered area). Under

Risk =Hazard X Vulnerability X Exposure

Where, Vulnerability = Sensitivity / Adaptive

Capacity

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this framework the probability scale of 0-1 was categorized in terms of “High probability”, “Medium

Probability” and “Low Probability”.

The overall risk is mapped in Q GIS. All the layers of indicators and sub indicators were analyzed and

normalized in the form of a 0-1 score and reclassified into High-Low-Medium. The data is available in different

formats – number, point, raster, vector, etc. For the ease of analysis and comparability all the data can be

converted into 5x5 km grid raster map. The analysis from different layers of maps generated would lead to

assessment of the extent of exposure and the extent of vulnerability to a particular hazard which eventually lead

to identification of the most suitable adaptation and mitigation measures.

2.2. Illustration of vulnerability assessment of Dholakha and Ramechapp districts

To begin with, the entire country was divided into a matrix of 9 grids using 3 mega basin influenced areas from

East to West and 3 physiographic regions from North to South. The grid so developed is shown in the figure given

below.

9 grids across 3 mega basin influenced areas from East to West and 3 physiographic regions

from North to South

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A) How the most vulnerable grid has been selected

The following steps were followed to identify the most vulnerable grid:

Figure 9: Steps for vulnerability assessment

Out of these 9 grids, the most vulnerable grid was selected using ecosystem services related; geo-physical and

biological and socioeconomic indicators. The 13 parameters chosen for the assessment of 9 grids were:

1. Forest area

2. Specific discharge

3. River density

4. Annual rainfall (total)

5. Rainfall extreme (24 hours)

6. Annual rainfall trend

7. Protected area coverage

8. Agriculture productivity

9. Population density

10. Population without access to safe water

11. No. of disaster events

12. Disaster related property losses

13. Per capita income

The point data for all the above 13 parameters were converted into raster format for analysis. The raster data

was normalized to a non-dimensional unit and rescaled to 0-1 score. A combined score and ranking was then

generated by assigning equal weightage to all the indicators.

First level of screening

• based on physiographic, landcover and climatic parameters

Second level screening

• Socio economic and disaster loss parameters added for further screening

Data conversion from vector to

raster

Raster data normalized to

non dimensiolal unit and rescaled

to 0-1 score

Weighing each parameter

equally as 1/13

Conbined score and ranking

Applying mountain fragileness

Total 13 parameters in

first and second level of

screening

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The final analysis was a combination of combined ranking method and elimination method. Elimination was

based on mountain fragileness. The three physiographic regions of Terai Siwalik (TS), Middle Mountain

(MM) and High Mountain (HM) were given weightage basis the area occupied by mountains. In the TS

region, approximately 40% of the area is occupied by mountains and 60% of the area is near plain. Similarly

in the MM & HM regions 80% of the area is occupied by mountains and 20% of the area is near plain.

Higher the area occupied by mountains, higher the fragility of that region and consequently more is the

vulnerability of the watersheds falling in that region. Therefore, mountain fragility is represented as an

inverse function of the stable watershed. So following were the weightages assigned to the three region:

TS = 1 – (% area occupied by mountain) = 1 – 0.4 = 0.6

MM = 1 – (% area occupied by mountain) = 1 – 0.8 = 0.2

HM = 1 – (% area occupied by mountain) = 1 – 0.8 = 0.2

The combined score was coupled with the fragility of the three physiographic regions - TS, MM and HM to

select the grid for further analysis. The grid Koshi Mid Mountain (KoMM) with lowest final score was

considered for identification of the most vulnerable watershed.

Table 5: Output Table

Region-Grid

Combined Score

(a)

Vulnerability without

mountain fragility

Weightage of the region

(b)

Final score

(a x b)

Vulnerability with

mountain fragility

KTS 0.454315 High 0.6 0.86 Low

KoTS 0.484384 High 0.6 0.92 Low

NTS 0.524853 High 0.6 1 Low

KoMM 0.563565 Medium 0.2 0.35 High

NMM 0.587921 Medium 0.2 0.37 High

KMM 0.616821 Medium 0.2 0.39 High

KHM 0.666269 Low 0.2 0.42 Medium

NHM 0.671514 Low 0.2 0.42 Medium

KoHM 0.696783 Low 0.2 0.44 Medium

The grid KoMM-Koshi mid mountain with lowest final score is considered for further analysis for identification

of the most vulnerable watershed.

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B) How the most vulnerable watershed has been selected:

The major watersheds identified within the KoMM are Indrawati, Bhotekoshi, Tamakoshi, Likhu, Dudh Koshi,

Arun and Tamor

Watersheds in KoMM

Same steps as for the selection of the most vulnerable grid were

followed for screening of the identified watersheds in KoMM.

Seven critical parameters were chosen for vulnerability analysis

of the watersheds within KoMM. The data against each

parameter were then normalized to a non dimensiolal unit and

rescaled to 0-1 score. Equal weightage was assigned to all the 7

parameters and a combined score was obtained. Table below

shows the combined ranking of the watersheds based on the

assessment:

Based on the assessment, the three lowest scored i.e., the most vulnerable watersheds were ranked as follows:

1. Tamakoshi

2. Bhotekoshi and

3. Indrawati

1) Agriculture Productivity 2) Extreme Rainfall 3) Specific Discharge 4) Forest Cover 5) Population density 6) Disaster Events 7) Watershed area

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Watershed vulnerability score and map:

In terms of vulnerability score, Tamakoshi and Bhotekoshi are close. However, it is observed that amongst these

three:

The impacts of mountain hazards (flood and landslide), particularly landslides, are most severe in Tamakoshi.

Number of people affected by landslide in Tamakoshi has been twice that of Bhotekoshi

Besides, Tamakoshi rivers are source of water for some major hydro-power projects in the country. In Tamakoshi the settlements are more evenly distributed.

Consequently, Tamakoshi has been chosen as the most vulnerable watershed.

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2.3. Illustration of spatial analysis of Dholakha and Ramechapp districts

The VA methodology delineated in the section 4.2 was used to carry out the spatial analysis. The analysis was

carried at the VDC level by assessing the Hazard, Exposure and Vulnerability using ecosystem based, climatic

and socio-economic indicators. The point data for all the indicators were converted into raster format for

analysis. The raster data was normalized to a non-dimensional unit and rescaled to a 0-1 score. The analysis

was done at a VDC scale for each of the indicators. The scoring methodology used for spatial analysis of each of

the indicators and its data source is presented in the below table. The resultant maps against each of the

indicator is provided in the annexure.

Table 6: List of indicators, data source and scoring methodology

S. No. Indicator /Sub-

indicator

Data Source Map Reference Scoring Methodology

1 Literacy rate CBS 2011 Annexure – Figure 8 Score = Literacy rate/100

2 Road density Road map google Annexure – Figure 9 Arc GIS tool, Kernel density

3 Economically

active population

CBS data 2001, Annexure – Figure 10 Score = (Economically active

population)/(total population)

4 Adaptive

Capacity

Calculated Annexure – Figure 11 Final Adaptive Capacity =

Average of (1,2,3)

5 House Density Dept. of Survey,

1995

Annexure – Figure 12 Score = (Number of

houses)/(VDC area)

6 No of Houses at

slope >150

Dept. of Survey,

1995 and SRTM

90 m DEM

Annexure – Figure 13 Score = (No of Houses at slope

>150/(Total Houses)

7 Gender ratio CBS 2011 Annexure – Figure 14 Score = Male/female

population

8 Sensitivity Calculated Annexure – Figure 15 Final Sensitivity = Average

of (5,6,7)

9 Vulnerability Calculated Annexure – Figure 16 Vulnerability = Sensitivity

(8) /Adaptive Capacity (4)

10 Agriculture

exposure

DoI land cover

2016

Annexure – Figure 17 Score = (Total cultivated land

area in VDC)/(area of VDC)

11 Forest exposure DoI land cover

2016

Annexure – Figure 18 Score = (Total forest land area

in VDC)/(area of VDC)

12 Stream Density SRTM generated

river network

Annexure – Figure 19 Arc GIS tool. Kernel density

13 Exposure Calculated Annexure – Figure 20 Exposure = Average of

(10,11,12)

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S. No. Indicator /Sub-

indicator

Data Source Map Reference Scoring Methodology

14 Drought Hazard District

Development

Rating, 2011

Annexure – Figure 21 Adopted from District

Development Rating,

15 Flood Hazard VDC boundary,

Dept. of Survey,

1995 and river

network

Annexure – Figure 22 Scoring of VDCs based on the

presence of major, medium and

small rivers

16 Landslide Google map 2017 Annexure – Figure 23 Number of landslides in VDCs

from satellite image in 2017

17 Drought Risk Calculated Annexure – Figure 24 Drought Risk = Drought

hazard x Exposure x

Vulnerability

18 Landslide Risk Calculated Annexure – Figure 25 Landslide Risk = Landslide

hazard x Exposure x

Vulnerability

19 Flood Risk Calculated Annexure – Figure 26 Flood Risk = Flood hazard

x Exposure x Vulnerability

The Tamakoshi basin was divided into upper and lower region for the sake of analysis. So, region wise major

findings of the spatial analysis are explained below

Upper Tamakoshi region:

Population in the upper Tamakoshi region has a high level of exposure to forest related ecosystem

services

Landslide is a major hazard in the upper Tamakoshi region

As compared m to lower Tamakoshi region, upper Tamakoshi region has more number of VDCs with high

risk of landslide.

Lower Tamakoshi region:

Drought is a major hazard in almost all the VDCs of the lower Tamakoshi region.

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As compared to upper Tamakoshi region, lower Tamakoshi region has more number of VDCs with high

risk of drought.

2.4. Validation of findings through field visits

Field visits were carried out to validate the findings of spatial analysis. The observations made during field visits

corroborated with the findings of the field visits. The main findings of the field visits can be categorized into three

key issues:

Figure 10: Key findings of the field visits

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Dependency on forest ecosystem in upper Tamakoshi region - The local people in the upper Tamakoshi area are highly dependent on forest related ecosystem services like - fire wo od from forest and grassland for grazing livestock. The key dependency of the locals are on the firewood for cooking/ heating purposes. Grazing land is another key ecosystem service as there are large numbers of livestock (goat, buffalo and cow) in the area that depend on grassland. The major changes in the forest ecosystem as observed by local people include incidents of forest fire, landslide and construction of roadways and HT transmission line of hydropower project. Also, the grassland area has been decreasing and as a result livestock population has been decreasing. Since livestock is the main source of income for people in some of the areas, there has been a decline in the family income.

Landslide hazard in upper Tamakoshi region – An increasing trend has been observed in the occurrence of landslide and flood related disasters in the upper Tamakoshi region. The FGD results identify landslide as the major cause of losses in terms of human mortality, death of livestock and property damages in the area. The reasons of landslides could be attributed to several factors such as – 1) High rain intensity on the fragile geolog ical structure, 2) Farming at more than 30o slope, 3) Unscientific land use, 4) Road works, 5) Earthquake etc. Due to landslide in the upstream region, debris flows with river water therefore river water is polluted and is not suitable for drinking purpose.

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Drought hazard in lower Tamakoshi region – Drought was observed to be a major hazard in the lower Tamakoshi region. Erratic and irregular rains have led to increase in drought conditions in the area. Majority of the VDCs in this region are drought prone. It was noted that the farm irrigation systems such as rain fed or traditional channel/kulo are decreasing that could be due to the decline in availability of water reserves or increase in soil erosion. It is directly impacting the livelihood of people of the entire region. The spring sources are also slowly drying up and people are drawing directly water from Tamakoshi using pumps. People in drought-hit areas of lower Tamakoshi region have been severely affected due to exorbitant power tariff as they are using electrical pumps to draw water from the rivers. All electricity based water lifting projects are witnessing increasing trend in operational cost. People are even paying to get water in the hills.

2.5. Identification of potential adaptation & mitigation measures based on spatial analysis and field visits findings

There exists a host of technologies and practices that addresses mitigation and/or adaption issues. However, not all are suitable for all regions and all communities. Therefore, selecting the right technology and practices holds the key to the sustainable development of an area. The technology selection is guided by a number of factors:

Emerging technological pathways: This is guided by the R&D that a nation has invested in to find solutions to climate change impacts on development; and also on the propensity of the State to transfer similar technologies from other external sources.

Feasibility of technology: This depends on the nature of impacts, spatial/ geographical characteristics of the vulnerable area, cost of the technology, etc.

Existing technology/ practices: It is not always necessary to create/ adopt new technologies. Existing technologies/ practices can also be employed to increase resilience. This is particularly true for adaptation, where long existing indigenous knowledge have often proved to be extremely effective. The challenge is to identify these practices and revive/ remodel them to address the present issue.

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Economic viability of technology and best practices: The successful deployment of any technology/ practice depends on its economic viability. Investors would hesitate to adopt the same if adequate returns – visible or invisible, are not forthcoming during the tenure of the project.

Willingness to adopt technologies: There are often psychological, physical, financial and other barriers that deter target communities from accepting a new technology/ practice. Therefore, to increase the adoption rate for a new system it is often important to undertake detailed stakeholder consultations at all levels, spatial analysis, field visits, focus group discussions, etc.

Prioritization of technologies on the basis of Environment & Social Safeguards/ Gender assessment: The objective of sustainable development is to maximize social, environmental and economic gains. Also, it is well established that the success of any development strategy – sustainable or otherwise, crucially hinges on its acceptance and adoption by the female members of a community – a most vulnerable group. Therefore, among the available technology/ practice set, the right choice must optimize socio-economic and environmental benefits. This can be ensured by carrying out environmental, social and gender assessment studies before the adopting a new technology/ practice.

2.6. Illustration of the process of identification of potential adaptation & mitigation for Dholakha and Ramechapp

The adaptation and mitigation measures were identified to address three most critical issues, as discussed in

the previous section 2.4 – 1) Dependency on forest ecosystem in the upper Tamakoshi region, 2) Hazard of

landslide and 3) Drought in upper and lower Tamakoshi region respectively. Using the findings from field

visits coupled with the spatial analysis, following potential interventions were identified.

Figure 11: Potential adaptation and mitigation interventions

Measure 1 –Sustainable

Water Management

Measure 2 -Sustainable

Forest Management

(SFM)

Measure 3 –Other

interventions

Energy management

Spring source management

Farming of less water intensive

fruits

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2.7. Measure 1 - Sustainable Water Management practices in Ramechapp

The lower Tamakoshi region has been suffering from water shortage due to decrease in rainfall. The FGDs

conducted in this region have confirmed that the situation is worsening as the springs and other natural sources

of water are drying up. Consequently, the local community – mostly the poor and marginalized groups, face

acute water stress, particularly during the dry seasons, as these natural systems are the only available potable

water source in the region. To cope with the stress, the community then has to either decrease their water

consumption or has to invest time and effort to ferry water from distant sources. Irrigation linked water

conservation can be an effective adaptation strategy in such a situation.

1. Largescale rooftop rainwater harvesting

Rain Water Harvesting (RWH) can be used for two primary purpose:

Storage for future use

Groundwater recharge

RWH involves collecting water that falls on roof of a house during rain storms and conveying it via drain or

collector to a nearby covered storage unit or cistern. The roof should be made of an impervious material

and the drainage pipe can be made of an aluminum, PVC, wood, plastic or any other local material

including bamboo. The size and surface of the catchment area greatly impacts the rainwater yield. More

impermeable the roofing material is higher is the quantity collected. A clean and smooth surface is vital to

avoid any contamination of the water.

The advantage with rainwater harvesting system is that it is decentralised and independent of topography

and geology of the region. Water is delivered directly to the household which reduces the burden of carrying

the water, especially for women and children. A sanitation and a rainwater harvesting project are similar in

terms of their on-site implementation. In both rainwater harvesting and sanitation, once the system is in

place, the ownership lies with household for its operation and maintenance.

Figure 12: Logic framework for selecting Sustainable Water Management for Ramechapp

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Household systems generally catch rain from the rooftops of homes and store it in tanks adjacent to the

homes. Water is drawn from the tanks by means of taps at the base of the tanks. In some cases rainwater

may be reticulated within a house using a pump/pressure system. Alternatively the tank may be partly

buried and a hand pump used to withdraw water. If no suitable catchment surface is available, a separate

catchment surface can be built adjacent to, or directly over, the water storage tank. Rainwater harvesting

systems can serve households or communities of various sizes. At an individual household level, it is a small

intervention but it can be very easily scaled up by involving more and more households. For e.g., if it can be

adopted by even 25% of the households in the drought prone Ramechhap district then total number of

rainwater harvesting system to be installed will exceed 10000.

2. Gravity surface water irrigation

This kind of irrigation scheme ensures water is available for irrigation during the period of no rain by using

water from the perennial sources. This basically uses gravity led surface water for irrigation. Water is

conveyed from the rivers and is distributed across individual fields through a system of permanent and

temporary diversions, using gravity as the driving force. The diversion is created by raising an obstruction

on the river stream and diverting water through the artificial channel. Such a system primarily requires two

major constructions – head works (obstruction) across the river and water distribution network. The river

discharge, if exceeding the capacity of the distribution network, can be stored by creating a reservoir or a

storage system. This stored water can then be used as per requirement in a dry season for irrigation.

3. River lifting through solar pumps

This type of irrigation system can be deployed where topography of land does not allow construction of

network of diversions with gravity flow irrigation schemes. Water is lifted from the river with the help of

water pump-motor sets and delivered to field through pipe line network. Wherever feasible, solar pumps

will be used for lifting of river water. The focus, however, remains on addressing the issue of water scarcity

for irrigation. So, if required, diesel or electric pumps will also be used. The detail of this intervention is

explained under the energy management measure.

4. Embankment

Embankment is nothing but a wall of earth or stone raised above the immediately surrounding land. It can

be a good structural measure to safeguard from flood. At the same time, this can help in recharging the

ground water. The water collected can then be used for irrigation.

2.8. Measure 2 - Sustainable Forest Management practices in Dholakha

Detailed scientific analyses carried out during the course of this exercise have found that the upper Tamakoshi

region is suffering from severe degradation of forests and grassland. This is one of the major reasons for

landslides and drought in this area. Additionally degradation of forests is causing economic hardship for the

population in this area – majority of which is dependent on forests for their livelihood, energy needs, etc.

Rearing of livestock is an important economic activity in this area. Traditionally, the communities have

depended on forests and grassland for fodder for animals. As forests and grassland degrade, the communities

are facing scarcity of food for the livestock. The FGDs have revealed that due to this problem, the number of

livestock is decreasing over the years. Thus, there is an adverse economic impact.

The discussions held with various stakeholders suggest that the problem has escalated and unless actions are

initiated, encroachment in and degradation of forests will reduce the forest and bio-diversity wealth of this area.

Also, due to these problems, the productivity of forests is rapidly decreasing. Dependence on forests, however,

does not decrease as there is not much scope for diversification of livelihoods for the people in this region.

Degradation of forests is likely to increase the run-off along the slopes increasing the probability landslides and,

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in some cases, floods. Therefore, quick planned actions are required for not only protecting forests but also

turning forests into sources of revenue – from agro-forestry, timber logging and step-cultivation, together with

tourism. Needless to say, forests are also the source of carbon sequestration that aids to mitigation of Green

House Gases (GHG).

SFM can be a strategy to achieve the goals of increasing coping capacity of the population residing in the upper

Tamakoshi region through leveraging benefits of eco-system services of forests. Further, the promotion of

sustainable forest management practices in the region has potential to generate a host of climate benefits

including other developmental benefits.

SFM has dual advantage of safeguarding against forest degradation and deforestation while providing direct

social & environmental benefits. On the social front, it provides ecosystem services by contributing to

livelihoods and sources of revenue of the locals. On the environmental front, it acts as a carbon sink and

contributes to biodiversity, water and soil conservation. Forests provide defensive mechanism during extreme

weather events by preventing topsoil run-off and protecting people, animals and physical infrastructure.

Majority of the people living in the upper Tamakoshi region depend on fuelwood, charcoal and various other

forms of renewable wood-based energy for cooking and heating. Firewood is often the only domestically

available and affordable source of energy. Some of the potential interventions to increase the sustainability of

firewood production from forest include establishing dedicated woodlots for energy production; effective use of

wood wastes; and improving forest management. Wood production can also be increased by providing

incentives for management of degraded forests; adoption of agroforestry; and reforestation of fallow or

degraded land. Other measures include improvement of tree harvesting techniques, better planning and

monitoring, and selection of appropriate species. It is critical to incorporate local stakeholders, their knowledge,

interests and cultural values in the forest management plan to ensure successful implementation of SFM.

Figure 13: Logic framework for selecting Sustainable Forest Management for Dholakha

http://www.fao.org/sustainable-forest-management/toolbox/modules/forest-management-planning/basic-knowledge/en/

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2.9. Illustration 3 – Other interventions

Figure 14: Logic framework

A. Spring source management at Ramechapp

FGDs conducted in the project area showed that water from spring source is the major source of water for

drinking and household purposes. Majority of the local population (up to 92% in one of the VDCs) is dependent

on this key ecosystem service. Through the discussions it was found that the spring sources near the settlements

are drying so the local population, especially women, now have to travel longer distance to fetch water from the

next nearest spring source. It is therefore vital to revive and maintain drying springs through spring source

management.

Spring source management is a feasible adaptation intervention particularly in drought prone areas. The basic

aim is to reduce the surface runoff of rainwater and allow more water to percolate down to recharge

underground aquifers thereby ensuring increased discharge from springs. Some of the potential activities to

increase spring discharge include developing springs-sheds, restoring lakes to function as recharge medium,

terracing sloping lands and improving water storage infrastructure. The process involves mapping of resources,

preparing village spring atlas, identification of recharge areas of various springs and streams based on local

geohydrology and finally laying of contour trenches and preparing for rainwater harvesting of various springs

and lakes.

B. Energy Management at Dholakha and Ramechapp

In the upper and lower Tamakoshi region, the unavailability of proper infrastructures and reliable sources of

electrical energy has created many problems related to quality of life. The locals, having settlements far from

the water sources and at much higher altitudes, have to walk for long hours to fetch water to perform household

chores. People in the project area are also highly dependent on carbon intensive fossil fuels for domestic energy

requirements like lightning and agro-processing needs. Renewable energy technologies like solar, wind,

micro/mini hydro, etc. can not only help in overcoming these challenges but can also contribute in reducing

GHG emissions. Usage of renewable energy sources can reduce dependency on traditional sources like diesel

mills, kerosene lamps.

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Solar PV pumping system - The issue of availability of water at higher altitudes far from the water sources

can be overcome by installing two water tanks: one situated near the water source to collect water from the

running source (like rivers) and the other near the village situated at a higher altitude with required head. With

the help of a high efficiency solar DC or AC pump water can be lifted from lower tank to the upper. The water

collected at upper tank can then be circulated through normal pipelines as per requirement. Solar energy is

available in abundance at many of these remote sites. So, an array of solar photovoltaic modules can be

installed at these sites to pump water from the lower regions.

Wind energy technology – According to the Alternative Energy Promotion Centre, Nepal, there are

predominantly two types of modern wind power technology that are currently being used in Nepal – a) Vertical-

axis wind turbines (VAWT), and b) Horizontal-axis wind turbines (HAWT). In a VAWT, the shaft is mounted on

a vertical axis, perpendicular to the ground. VAWTs are always aligned with the wind, unlike their horizontal-

axis counterparts, so there's no adjustment necessary when the wind direction changes; but a VAWT can't start

moving all by itself. It needs a boost from its electrical system to get started. Instead of a tower, it typically uses

guy wires for support, so the rotor elevation is lower. Lower elevation means slower wind due to ground

interference, so VAWTs are generally less efficient than HAWTs. On the upside, all equipment is at ground level

for easy installation and servicing; but that means a larger footprint for the turbine, which is a big negative in

farming areas. VAWTs may be used for small-scale turbines and for pumping water in rural areas, but all

commercially produced, utility-scale wind turbines are horizontal-axis wind turbines (HAWTs).

Mini/Micro hydro technology – Mini hydro is the hydro-power system that generates electric power from

100 kW to 1MW capacity and serves nearby households through a mini-grid. Micro hydro consist of

hydroelectric generating units with capacities ranging above 10 to 100 kW. Micro-hydro has the potential to be

a major source of energy for rural areas. Micro-hydro provides a more practical and cost effective alternative to

the national grid.

C. Farming of less water intensive fruits at Dholakha and Ramechapp

The parts of Tamakoshi basin where water availability is an issue can shift to less water intensive fruits which

are also commercially lucrative. For e.g. Kiwi can be considered in Dolakha district. Kiwi fruit cultivation can

help prevent soil erosion and is a sustainable land management practice. This high value crop introduces

biodiversity and improves livelihoods by providing a source of cash income. This fruit is cultivable from the

elevation of 1000 to 2500 meters from the sea level. Loamy soil is best preferred soil for kiwi plantation.

Orchards are easy to establish and farmers can readily learn what is needed for kiwi cultivation - awareness and

training programmes can help farmers quickly learn what is needed for kiwi cultivation. This is a good

alternative for sloping land management. This can also reduce downstream flooding. The approximate annual

income from kiwi production is USD 11,765/ha/year. The technology provides on-farm employment

opportunities for both men and women. As per DoAD, kiwi farming in Dolakha can start generating profit from

the 5th year onwards and over a 10 year cycle can generate a benefit to cost ratio of 3.7. In Ramechhap the

benefit to cost ratio over a 10 year cycle for kiwi farming is 3.65. Another fruit with similar benefits and which

can provide good returns is pomegranate. This is more suited for Ramechhap. Farming of this fruit in

Ramechapp can start generating profit from the 5th year onwards and over a 10 year cycle can generate a benefit

to cost ratio of 3.1.

2.10. Prioritization of the identified measures

Let us learn about the

approach adopted for

prioritizing the

identified measures

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The identified measures were prioritized on the basis of following parameters:

E&S and Gender assessment: E&S and gender related issues were assessed for each of the measures to

identify any adverse impacts because of these measures. Relevant environmental issues like water

contamination, usage of renewable energy, biodiversity, etc. and social issues like child labor, impact on

community, cultural heritage, etc. were assessed for all the proposed interventions. Gender related issues

were assessed to map vulnerability of women and marginalized groups to these interventions. Based on the

assessment, it was found that Irrigation and SFM have no major adverse impacts and with appropriate

safeguards in place minor adverse impacts can be easily mitigated.

Scalability: The measures were assessed on their scalability and their reach to stakeholders. Irrigation and

SFM will have widespread benefits and are easily scalable. Whereas measure like spring source

management for water conservation is location specific. Moreover, the underlining climate driver of

drought can be more comprehensively addressed with irrigation linked measures which also has benefits

like water conservation.

Climate drivers: The number of climate drivers behind an intervention was a key factor for prioritization.

Irrigation and SFM were found to have multiple climate drivers like drought, landslides, flood,

temperature, rainfall, etc. Hence these two interventions were prioritized over measure like “Energy

Management” which is primarily a mitigation measure with less number of climate drivers. Energy

management would also need significant policy support and therefore may not be a feasible option for

implementation in the short term.

Sustainability: Whether a particular intervention can be a long term solution or not was also one of the

criteria for prioritization. Measure like “farming of less water intensive fruits” require extensive market

assessment, both local and global, as the success of this intervention is market linked. In absence of suitable

market forces, this measure may not be viable.

2.11. Illustration of prioritization of identified measures through E&S and Gender assessment

E&S and gender assessment was carried out for all the identified measures. The assessment was used to map

the vulnerability of women and marginalized groups and prioritize the identified options. The prioritization was

also corroborated with the findings of the field assessment.

Figure 15: Approach to prioritization of interventions on the basis of E&S and Gender assessment

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Measure 1 – Sustainable Water Management

E&S assessment The key issues to be considered from an E&S perspective are as follows:

Water contamination:

o Irrigation canal itself might not be a source of pollution. However, two scenarios can be expected – a) if

the river carries large concentration of silt or chemicals, then these pollutants can get transported

through irrigation and contaminate the fields; and b) the chemicals used in the fields might leach and

get washed to the irrigation canal and contaminating the rivers.

o The rainwater harvesting consists of collecting rainwater through roof, terrace, etc. The sanitary

condition of the roof, terraces, etc., therefore, is an important factor that determines utility of water. It

is recommended that the water should only be used for irrigation and household purposes (other than

drinking).

Water conservation - Rainwater harvesting has been considered a viable solution for conservation of

water in Nepal. Nepal receives large amount of water in short period of monsoon, and remains relatively

drier in other seasons, hence, the rainwater harvesting provides an ample opportunity to collect water.

Storage of water, however, poses a constraint. How much can be stored at the household level and for how

long, are two challenges that have to be addressed for success of the rainwater harvesting.

Usage of renewable energy - Use of solar energy for pumps is an excellent example of usage of

renewable energy. This will avoid pressure to the national grid electricity, which is currently a scarce

resource. However, life of the battery, to be used in the solar panels, and its safe disposal will have to be

planned to mitigate any adverse impact on the environment. If feasible, direct use of solar energy without

battery charge can also be considered.

Child labour - Child labor might be employed for construction of the schemes because of (a) easy

availability of workforce, (b) relatively cheaper, and (c) controlling children to maximize effectiveness is

relatively easier. So, safeguards need to be provided to prevent child labour.

Cultural perspective:

o Water conservation and reuse are practiced is Nepal, particularly, the area where water is scarce.

Rainwater has been collected in utensils, and sometimes in ponds for later use. However, this has not

done in a systematic manner. Therefore, the rainwater harvesting can be successful in Nepali society.

o The construction of irrigation scheme might disturb existing heritage sites. It is important to (a) avoid

such disturbance by altering the location of the project component, (b) repair and maintain those

structure if damaged, (c) relocate and/or compensate if avoidance and repair is not viable.

Labour working condition - Construction of the irrigation schemes requires large number of workers of

different skill levels. Their employment will require compliance with national labor laws.

Impact on the community:

o Surface irrigations require diversion of water from the river/stream towards the fields. This will cause

reduction in water discharge downstream from the diversion site. The river morphology, water quality

and organisms in that stretch of river might suffer from the diversion. Furthermore, Nepal has some

migratory fishes such as Asala and Sahar. Population of these fishes might reduce due to obstruction

by the diversion structure and reduce water quantity as well as deteriorating water quality.

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o Construction of irrigation components such as diversion weir, canal etc. requires acquisition of land on

permanent or temporary basis. This means existing land use pattern will change. There are existing

practices on compensating forest, agriculture, and private lands, which will have to be followed.

o Site clearance to start the construction, might result in removal of vegetation and cause disturbance to

the habitat.

o Construction of irrigation canals on the steep slope with weak geology has to be carefully planned. The

exposure of water in weak slope results in instigation of slope failure.

Gender assessment The following gender related issues can be considered for addressing the vulnerability of women

During Focus Group Discussion with local people and district level officials in the study area, the need

assessment of water resource management from the perspective of gender were carried out and

majority of them responded the urgent need of irrigation measures interventions

Rainwater harvesting will be carried out at the household level. Most of the times, household chores

are undertaken by women in a family. There is a possibility that operation and maintenance of

rainwater harvesting work can come under women's responsibility, thus, women's workload can be

increased with introduction of rainwater harvesting. However, this might not be significant increment

in workload.

Women are extensively utilized as agricultural labour in Nepal. Women, sometimes, have to complete

household work and join their male counterparts in fields as well. Watering the field has always been a

challenge in Nepali hills and mountains. The major rivers lie relatively in lower elevation than the

cultivated land. Operation of irrigation system, therefore, can reduce the drudgery work of fetching

water for irrigation, and/or rely of rainfall for cultivation. Solar pump system for lifting the river water

can further reduce women’s workload.

Improved access to water supply may release women from water-collection chores and might allow

women to invest more time in income-generating activities, such as agricultural production. If women

are farming their own plots and have access to irrigation technologies, then the productivity of female-

managed plots may increase, and income from the increase in productivity may also grow. They can

invest their income particularly for girls’ education. It will reduce the workload of women and

contribute to drudgery reduction. Hygiene and sanitation practices may also improve due to greater

water availability and lead to important health benefits.

During the functional stage of mitigation/adaptation measures, Water User Groups (WUG) of women

and marginalized groups can be formed to regulate the water resource management which can have

positive impact to fulfill their strategic needs providing access in decision making.

Measure 2 – Sustainable Forest Management

Environmental & Social assessment

The key issues to be considered from an E & S perspective are as follows:

Biodiversity conservation - The forest management can ensure conversation of biodiversity of forests.

Improvement of habitat can provide promote population of vegetation and wildlife.

Child labour - Child labor might be employed in forestry activities, such as plantation, maintenance of the

forests, etc. because of (a) easy availability of workforce, (b) relatively cheaper, and (c) controlling children

to maximize effectiveness is relatively easier. So, safeguards need to be provided to prevent child labour.

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Impact on the community:

o Forestry activities have tendency of promoting trees on the first hand, and further preferring species

that have better market value and/or easier to maintain. This tendency might result in pruning out of

vegetation other than tree, and tree species that have lower market value. Species richness of managed

forests might fall down. Hence sustainable forestry practices must prioritize diversity of a forest by

protecting native species of overall vegetation. It is vital to conserve biodiversity for the delivery of

environmental services that a forest provides, such as water, oxygen, aesthetics etc.

o Monoculture plantation might also be preferred for afforestation work, which shall also be avoided to

ensure biodiversity on one hand, whereas on the other hand to ensure the forest resistance to vectors of

diseases, and other calamities. Some tree species that are preferred in Nepal for plantation such as pine.

Pine trees have good timber value however it has tendency of modifying its environment. The needles

of pine create acidic soil in the area preventing other vegetation to grow.

o Community based forest management is a popular concept in Nepal such as community forestry,

leasehold forestry, etc. This concept has been successful in improving overall forest condition as well as

improving the accessibility of locals to forest resources in a sustainable manner. However, there have

been instances that culturally and economically disadvantaged groups within the communities are

discriminated from taking benefits of the forestry activities. The forestry management has to ensure

equitable participation in management and benefit sharing.

Gender assessment

The following gender related issues can be considered for addressing the vulnerability of women

During Focus Group Discussion with local people and district level stakeholder in the study districts, the

need assessment of forest resource management from the perspective of gender was carried out and

majority of them responded with the urgent need of intervention of sustainable forest resource

management to maintain ecological services and reduction of women’s drudgery.

Women are primary users of forests and harvesting products such as fodder, fuelwood, medicines and

foods. Women are usually also the primary care-givers - they use the products harvested from forests to

feed, shelter and heal their families and to earn income that they mostly spend on their families.

Through sustainable forest resource management, women can fulfill their practical needs such as

saving of time for fuel-wood collection, productive needs such as increased time for child care, leisure

and income generation and use of earned income and strategic needs such as women’s involvement in

decision making process at household and community level.

Women can be organized into user groups and involved in decision making to empower them. The

income generated through selling of wood and timber can be invested for the welfare of the women

members.

Measure 3 – Other interventions

E&S assessment

The key issues to be considered from an E&S perspective are as follows:

Child labour - Child labor might be employed for potential activities under spring source management like

developing springs-sheds, restoring lakes, terracing sloping because of (a) easy availability of workforce, (b)

relatively cheaper, and (c) controlling children to maximize effectiveness is relatively easier. So, safeguards

need to be provided to prevent child labour.

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Gender assessment

The following gender related issues can be considered for addressing the vulnerability of women

Through spring source management, access to water supply will be increased which reduce the time of

women for water fetching. This will allow women to invest more time in income-generating activities,

such as high value crops production. They can invest their income in productive sectors. It will reduce the

workload of women and contribute to drudgery reduction. Hygiene and sanitation practices may also

improve due to greater water availability and lead to important health benefits in maternal and child

health.

Energy interventions can have significant gender benefits particularly reducing the time of women

collecting fuel wood and processing cereals. It will also help to increase the education status of girls.

Equally, it will contribute to better health status of women. There is potentially scope for increasing

women’s employment in income generating activities by better energy management.

Farming of less water intensive fruits can have positive impacts on earning of women. It can be quite cost

effective as it can be even grown in the abandoned land. Through income generation, women can enhance

their social prestige and be more influential in the decision making at household and community level.

The income generated through fruit farming can be invested for better education and health. This

ultimately will increase the productive capacity of women.

Based on the E&S and gender assessment, Sustainable Water Management and Sustainable Forest

Management were finally shortlisted and considered for Cost Benefit Analysis (CBA), that is discussed in the

subsequent section.

2.12. Cost Benefit Analysis – General Methodology

In relation to the economic analysis of projects (or, for that matter, any new project), there exists two distinct

approaches to cost-benefit analysis – the financial cost benefit analysis and the economic cost benefit analysis.

In the case of financial CBA (FCBA), the profitability (or return) from the project is of interest. On the other

hand, in the case of economic CBA (ECBA), all externalities, positive and negative, in relation to the economy,

society and environment are considered as benefits and costs respectively. Though both the financial and

economic analyses necessarily analyzes “profit” from an investment, there is a distinction between “financial

profit” and “economic profit”. While the financial profit accrues to the project operating entity, the economic

profit is essentially the contribution of the project to the economy as a whole (ADB 2017), (The World Bank

2010), (ADB 1997).

For the projects which are planned with the objective to increase welfare – e.g. adaptation benefits, ECBA is

considered to be more robust and desired method (ADB 2017). ECBA captures costs and benefits accruing to

the different stakeholders of the project (over the life-time of the project) and, thus, justifies the efficacy of the

investment from the social, economic and the environmental point of view. With the goals of sustainable

Weighing the cost

vs the

benefits….the final

step for project

selection

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development becoming the desired outcomes of plans and policies, various development funding institutions

like UNDP, The World Bank, the Asian Development Bank, etc. stress on carrying out a comprehensive ECBA

as a decision criteria for undertaking an investment which are planned by the government.

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

to view any such project in isolation. The economic cost benefit analysis (ECBA) views the project in relation to

the entire economy (local, regional and global) and internalizes all the visible and invisible costs and benefits in

the calculation. This is a more robust tool for better resource allocation when competing projects are present.

Further, most development funding agencies (The World Bank, Asian Development Bank, Japan International

Cooperation Agency, etc.) while appraising a project for investment, puts a lot of stress on this analysis.

A project aimed at water shed management or agriculture, for example, can give rise to a series of costs and

benefits to the surrounding geographical space. A few examples of such benefits and costs are presented in the

table below. A cost benefit analysis without considering such “external” costs and benefits, and relying solely on

the internal (specific) costs and benefits (like the ones considered in the FCBA) tends to provide an incomplete

picture of the project as a whole, particularly from the welfare point of view. More important, such external

costs (and benefits) are not a one-time affair but continue to accrue over the life of the project. Therefore, a

properly done ECBA points to how a project (such as a project for increasing adaptive capacity of beneficiaries)

affects the surrounding population over its lifetime.

Given the global goal of mitigating environmental degradation and follow an alternative pathway for

development (which is carbon neutral and climate friendly), it is important to understand how the design and

plan of adaptation project reduces GHG emissions. Such reduction has an overwhelming effect on the climate

change – the harshest reality facing the mankind today (ADB 2017). The benefits of such GHG reductions are to

be considered while calculating net benefits for the ECBA of a new urban space which is green and carbon

neutral. The money value of reduction in emissions may be derived from the framework of Clean Development

Mechanism (CDM) and/or prices for carbon credits in different exchanges – Chicago Climate Exchange,

European Climate Exchange, etc.

Table 7: Example of External Costs and Benefits: Adaptation Project

Issue Economic benefits Economic costs

Incremental Livelihood Creates incremental income for the beneficiaries – productivity gains, conservation of resources

Loss of existing occupation due (e.g. loss of land, etc.)

Incremental accessibility to services from infrastructure developed

Beneficiaries can access the infrastructure (physical and social)

Issues concerning development induced displacement

Incremental opportunity to economic activities

Economic agents can engage in trade and commerce

Out-migration, if any, due to loss of opportunities

Incremental abatement of emission/pollution

Incremental value of the carbon sinks created through the project

Any direct/indirect emissions

Incremental bio-diversity Incremental value of eco-system services

Losses, if any arising due to loss of bio-diversity

The benefits and costs related to the ECBA are, at times, invisible and pertain to measures for adaptation and

mitigation and are most commonly, non-traded goods and services – for example, biodiversity preservation,

benefits of pollution free environment, social effects from improved infrastructure, etc. In such situations, the

method of Willingness to Pay (WTP) may sometimes be deployed to impute a monetary value to such goods and

services. ECBA is widely prevalent method in assessing the economic viability of investment projects,

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particularly, development projects and are mandatory exercises for proposals made to the development funding

institutions like UNDP, ADB, The World Bank, etc.

The following table lists steps in carrying out the ECBA. For details, one may please refer to (ADB 2017), (OECD

2007), (The World Bank 1998), (ADB 1997).

Table 8: Economic Cost Benefit Analysis: Key Steps

Step Description Key Activities

1 Defining the objective of the project This is the first step in the economic analysis. Clearly defined objective(s) is essential to reduce the number of alternatives considered, and to select the tools of analysis and the performance indicators of success.

Objectives of a project could be narrow to broad.

2 Deciding on the least cost design without compromising on the overall objective

Examination of alternatives solutions is necessary. The alternative (technically feasible solutions) could be alternative technical specifications policy/institutional reforms (different tax regimes), geographical locations or differences in scale of the project envisaged.

The exercise helps planners and policy makers to come up with a port-folio of alternatives, with associated costs and benefits, so that the most optimal solution is chosen for implementation.

3 Identification of Beneficiaries Normally, not everyone benefits from the outcomes of a project and some sections of the society may lose. Moreover, groups that benefit from a project are not necessarily those that incur the costs of the project. Identifying those who will gain, those who will pay, and those who will lose gives an insight into the incentives that various stakeholders have to be guaranteed so that the project is implemented as designed.

4 Assessment of fiscal impacts How and to what extent will the costs of the project be recovered from its beneficiaries?

What changes in public expenditures and revenues will be attributable to the project?

What will be the net fiscal effect for the central government and for local governments?

Will the cost recovery arrangements affect the quantities demanded of the services provided by the project?

Are these effects being properly taken into account in designing the project?

5 Assessing the Financial Sustainability Is adequate finance available for the project and maintenance of the same throughout its life?

What is the cost of capital? Are their opportunities to minimize the cost of capital?

What are the other costs (other than the cost of capital) for arranging finance for the project through its lifetime?

6 Distribution of Costs and Benefits among stakeholders

The exercise involves looking at the project from the view-point of the different stakeholders – government, private entities, society at large, etc. and then distributing the costs and benefits among these various stakeholder groups.

A sub national consultation workshop can be conducted to get suggestions from the district and

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Step Description Key Activities

village level institutional officers on the appraised cost and benefits for more precise analysis

Typically, the externalities are distributed between the stakeholders all through the life of the project. Valuation of external costs and benefits is an important issue and there exists different approaches to valuation (The World Bank, 1998).

The exercise also helps to ascertain the incentives to be designed and interventions required so that the project reaches the social optimum.

7 Is the project worthwhile? Once the aforesaid activities are completed the “economic benefits” from the project are compared with the economic costs. ADB (1997) refers to a measure called EIRR (Economic Internal Rate of Return). A project is considered worthwhile when the economic benefits are far greater than economic costs.

Alternately, a Cost-Benefit-Ratio (CBR) may be calculated and compared to a benchmark

8 Sensitivity Analysis and Risk Mitigation Strategy Altering scenarios and observing the impacts on the net economic benefits.

The analysis also points to the sources of risk and thereby helps in formulating appropriate risk mitigation mechanisms

Source: (ADB 2017), (OECD 2007), (The World Bank 1998), (ADB 1997)

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

technical specifications, socio-economic and environmental impacts of all the stake holders. For a projects

aiming at reducing climate-risks, the analysis must be the FIRST STEP for planning and designing. Decisions

(with respect to components, features and technologies) taken on the basis of a robust economic analysis

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

ensures sustainability of the project over a long time horizon.

2.13. Climate Change relevance of a project

When projects are intented to be financed through pooling of finances from dedicated climate funds (e.g. GCF,

Adaptation Fund, etc.), it is extremely important to highlight the CC relevance of a project. Action of Climate

Today (ACT) has developed a framework to find out this relevance. The methodology stems out of CBA. In this

sub-section, a brief description of the method is presented.

A project, while having development benefits, may also have benefits in the form of adaptation and/or mitigation

(Allan, et al. 2016). Conceptually,

Total Benefits = Economic growth (EG%)+Social development (SO%)+Environmental benefits (EV%)+

Adaptation benefits (AD%)+Mitigation benefits (MI%)

Climate relevance (CC%) = AD% + MI%

CC% = (B-A)/B, where B = CBR with climate benefits and A = CBR without climate benefits

Hence, a properly conducted CBA can also lead to ascertaining the climate relevance of the projects.

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2.14. Illustration of measure wise CBAs – with and without climate benefits

Illustration of CBA of Sustainable Forest Management at Dholakha

Sustainable Forest Management (SFM) can be an effective strategy to realize the goals of increasing coping

capacity and resilience of the population residing in the selected areas of the Tamakoshi Watershed, in the face

of climate change. SFM also aims at leveraging maximum benefits arising due to the potential eco-system

services of forests.

This chapter discusses the Cost-Benefit-Analysis of SFM, as a climate intervention and also explores the climate

relevance of the intervention.

Environmental Problems & Impacts: Detailed scientific analyses carried out during the course of this

exercise have found that the upper Tamakoshi region is suffering from severe degradation of forests and

grassland. This is one of the major reasons for landslides and drought in this area. The FGDs carried out in this

area also confirm this finding.

It has been found that there are several factors contribute to landslides in this area. The following are the major

reasons:

• Degradation of forests and grasslands

• Presence of barren lands

• Erratic rainfall, floods and GLOF

SFM: A Possible Strategy

In the literature, there has been a lot of evidence that sustainable forest management practices in Nepal can

generate adequate economic, social and environmental returns. Sustainable forest management (SFM)

leverages many benefits of ecosystem services for the local and national economy (Kanel & Niraula, 2017),

(GoN, 2015), (Acharya, 2002).

Figure 16: Outcomes of SFM

Reduce degradation & deforestation

Improve carbon sequestration

Improve resilience of wildlife

Empower local communities

Improve adaptability of forestry eco-systems

and dependent communities

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In view of the above, as a policy action, it is recommended that actions be initiated for:

Securing forests

Stopping encroachment and degradation

Promote SFM to realize mitigation benefits and increase adaptive gains for the population

Such actions needs to be started immediately.

Further given the issue of climate change, the climate relevance of the intervention has been analysed following

(Allan, Resch, Alvarez, & Nicholson, 2016). Mitigation and adaptation benefits have been calculated and two

Benefit-to-Cost Ratios (BCR) have been arrived at – (a) one without Climate Change (CC); (b) another with CC

abatement measure. The two BCRs have been compared to analyse the CC relevance of the intervention, termed

as CC%.

Table 9: Benefits and their relative importance

S.

No.

Type of

Benefit

Relative

importance

from the

point of view

of adaptation

Climate/Anthropogenic

Drivers impacting benefit

Explanation

1 Logging of

industrial

timber

High Drought; Forest Fire; Human

Encroachment; landslides

Traditionally, the rural population

at Dolakha have supplemented

their earnings from agriculture and

livestock with revenues from the

sale of industrial timber. With

climate change (leading to damage

of forest areas, degradation of the

quality of forests) and

anthropogenic activities

(encroachment, illegal felling of

trees), this additional and

important source of revenue is

expected to be extinct. This is

expected cause tremendous

hardship among the poor rural

population. On the other hand SFM

helps to restore and augment this

additional source of earnings.

Hence, from the point of

adaptation, this benefit has been

categorized as “High”.

2 Fuel wood

cultivation

High Drought; Forest Fire; Human

Encroachment; landslides

There is a high correlation between

access to energy and development

of social capital. In South Asia

universal energy access is still a

challenge. About 20% of the rural

population in Nepal depends on

fuel wood, biomass, etc. for meeting

their energy needs for lighting,

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S.

No.

Type of

Benefit

Relative

importance

from the

point of view

of adaptation



Explanation

cooking. It has also been found that

for the rural population who have

access to electricity, the quality of

supply is erratic and unreliable.

Poor people at Dolakha continue to

depend on forests for fuel wood,

dried leaves, etc. Degradation of

forests would aggravate their woes

as this relatively inexpensive source

of energy will dry up and additional

expenditure needs to be incurred in

order to procure, transport fuel

wood from other places. Hence,

sustainability of availability of fuel

wood has been categorized as

“High” from the point of view of

adaptation.

3 Agro-

forestry

High Erratic rainfall; landslides;

Rising temperature

In Dolakha, at some places agro-

forestry has been promoted on a

pilot basis. Cardamoms, turmeric,

fodder, multi-purpose trees and

crop species are being planted as a

part of community based forestry

programmes launched by FAO and

IFAD. Scaling up such programmes

is extremely essential as agro-

forestry provides increased income

opportunities, together with

binding the soil and preventing

landslides and erosion. The

benefits from the agro-forestry,

being incremental in nature, have

been classified as High

4 Step

Cultivation

Medium Erratic rainfall; landslides;

Rising temperature

Winter rice, winter wheat, maize

are some of the crops which may be

cultivated in this mode. This

additional source of income for the

poor rural communities and

marginal farmers. SFM provides an

opportunity to the community to

earn an additional income from

these sources and hence, offset

some of the losses that may be

accrue in the case of principal

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S.

No.

Type of

Benefit

Relative

importance

from the

point of view

of adaptation



Explanation

economic activities, in the face of

climate change. Given the limited

potential of this incremental

income, the benefit from step

cultivation has been classified as

“Medium”.

5 Livestock

rearing

High Rising temperature; erratic

rainfall; degradation of

grasslands; forest fire

The community of Dolkha depends

heavily on the income from

livestock. Due to climate change

and anthropogenic activities,

grasslands are being encroached

upon, proportion of barren lands

are increasing. As a result, severe

food shortage for livestock has

been reported. Consequently, not

dependence on livestock is

reducing but also the villagers have

to incur extra expenses to maintain

livestock. Hence the adaptation

gains have been considered to be

“High”

6 Avoided loss

due to

damage of

Properties

High Landslides, Erratic Rainfall;

Degradation of Forests

In Dolakha, the incidences of

landslides are increasing – causing

both loss to life and property.

Considering the magnitude of the

loss, the gains are classified as

“High”.

7 Ground

water

recharge

Low Drought, Erratic Rainfall Dolakha is a drought-prone area.

Further most of the population are

dependent on agriculture. In the

event of less than adequate ground

water recharge, the area will

continue to reel under water

shortage and escalated costs of

water harvesting. However, since

there are parallel programmes for

water conservation, the

incremental gains have been

considered as low.

Results and Discussions

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Using a discount rate of 10% p.a., the present values of net benefits have been calculated for 5 (short term), 10

(medium term) and 35 (long term) years. The results have been furnished in table

Table 10: Summary Results – Sustainable Forest Management

S. No. Particulars NPV 5 Years NPV 10 Years NPV 35 Years

1 Net Benefits without CC NPR

Million

(499.82) 13.75 814.96

2 Net Benefits with CC NPR

Million

(378.88) 277.81 1,301.83

3 Total Cost of the Project NPR

Million

961.99 999.54 1,055.37

4 Benefits without CC NPR

Million

462.16 1,013.29 1,870.33

5 Benefits with CC NPR

Million

583.10 1,277.35 2,357.21

6 BCR (without CC) Ratio 0.48 1.01 1.77

7 BCR (with CC) Ratio 0.61 1.28 2.23

8 CC% [(7-6)/7] 21% 21% 21%

The following observations are important to note:

The intervention is financially viable in the medium run and long run. Since forests take time to

develop, all benefits do not accrue in the short term.

Considering CC related benefits – mitigation and adaptation, the intervention becomes financially

viable in the medium term

The climate relevance of the intervention is approximately 21% - out of the total net benefits from the

intervention, 79% accrues from development benefit and the remaining 21% is attributable to climate

benefits.

Out of the 21% attributable to climate benefits, 20.97% accrues from adaptation while the remaining

marginal value is on account of mitigation.

Therefore, this is not just an ordinary development project but promotes the harnessing of ecosystem services

and leverages climate benefits.

Illustration of CBA of Sustainable Water Management at Ramechapp:

Ramechhap district have been suffering from drought like situation due to decrease in rainfall. The FGDs

conducted in this region, particularly hilly/mountainous areas, have confirmed that the situation is worsening

as the springs and other natural sources of water are drying up. Consequently, the local community – mostly

the poor and marginalised groups, face acute water stress, particularly during the dry seasons, as these natural

systems are the only available potable water source in the region. To cope with the stress, the community then

has to either decrease their water consumption or has to invest time and effort to ferry water from distant

sources. Sustainable Water Management can be an effective adaptation strategy in such a situation and our

approach to Sustainable Water Management comprises of 4 elements i.e.

Rain water harvesting

Gravity surface water irrigation

River lifting through solar pumps

Embankment

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Figure 17: Sustainable Water Management strategy for Ramechapp

Table 11: Benefits and their relative importance

S. No.

Type of Benefit Relative importance from the point of view of adaptation

Climate/Anthropogenic Drivers impacting benefit

Explanation

1

Avoided loss due to reduction in productivity of Paddy

High Drought, land-use change

Agriculture‐forest based livelihoods are dominant in the Basin (ICIMOD). Hence, from the point of adaptation, this benefit has been categorized as “High”.

2

Avoided loss due to reduction in productivity of Wheat


3

Avoided Loss due to reduction in productivity of Maize


4

Avoided Loss due to reduction in productivity of Millet


5

Avoided Loss due to reduction in productivity of Potato


6

Avoided Loss due to reduction in productivity of Mustard


Sustainable Water Management

Rooftop Rainwater

Harvesting

Gravity surface water

irrigation

River lifting through

solar pumps

Embankment

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Results and Conclusion:

Using a discount rate of 10% p.a., the present values of net benefits have been calculated for 5 (short term), 10

(medium term) and 30 (long term) years. The results have been furnished in the table below.

Table 12: Summary Results for CBA of Gravity Surface Water Irrigation

S.No Particulars NPV 5 Years NPV 10 Years NPV 30 Years


Million (1,583.57) 605.65 3,621.23


Million (815.30) 2,113.65 6,143.66


Million 4,201.65 4,561.90 5,051.90


Million 2,618.08 5,167.56 8,673.14


Million 3,386.35 6,675.55 11,195.56


7 BCR (with CC) Ratio 0.81 1.46 2.33

8 CC% [(7-6)/7] 23% 23% 23%

The following observations are important to note:

The intervention is financially viable in the medium term (i.e. >10 years) mainly due to the returns

from agricultural produce

The climate relevance of the intervention is approximately 23% - out of the total net benefits from the

intervention and the remaining 77% accrues from the development benefits.

With a conservative estimate of benefits accruing from the 3rd year of the intervention, it becomes

economically viable in both the scenarios i.e. with & without considering climate change benefits.

Considering anticipated climate change, it is found that intervention promotes adaptation and is

moderately climate relevant with a CC percentage of 23% during the life of the intervention. It may also

be noted that mitigation benefits have not been considered here. When such benefits are considered,

the climate relevance is expected to increase further.

2.15. Findings of the sub-national consultation

A sub national consultation workshop was conducted each in the districts of Ramechhap and Dolakha on 7th

and 8th July respectively. The attendance sheet and the feedback form is appended in the annexure. The

objective of these workshops was to get suggestions from the district and village level institutional officers on

the appraised cost and benefits of the two interventions – Irrigation and Sustainable Forest Management. The

suggested inputs and subsequent modification in the existing assessment is presented in the below table:

Table 13: Outcome of the sub-national consultation workshop

Intervention Suggested Input Outcome

Irrigation Implement rooftop rainwater

harvesting measure in the villages

It is recommended that rooftop

rainwater harvesting should be

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Intervention Suggested Input Outcome

where the average annual rainfall

exceeds 1000 mm.

implemented in the areas where

rainfall is more than 1000 mm

Values for some of the costs

associated with the solar water

pumping were discussed during

consultation.

As there has been no largescale

river lifting through solar pump

projects being implemented in the

area, the costs associated with it

hasn’t been standardized and it’s

also difficult to substantiate.

Hence, we are sticking to the

original calculation as the values

used have been taken from

authentic sources.

Expressed concerns regarding

practicality of gravity based

surface water irrigation in the

drought prone areas of

Ramechhap

It is recommended that a pilot

project should still be

implemented and then the

feasibility can be evaluated to

assess the scalability of the

measure

Sustainable Forest

Management

Modifications were suggested in

values (Numbers/Ha) of

following items:

Artificial regeneration

Bamboo plantation

Mixed plantation of trees

Regeneration of perennial

herbs

Cost-benefit calculations were

accordingly modified. Final

results as per original and revised

calculations is presented below as

separate tables. However, no

material change in the final

results were observed.

Following non-wood species were

suggested that can be considered

to generate revenue and

additional benefits:

Taxusspps

Swertia Chirayita

Daphne Bholua

Asparagus Recemosa

Valerina Jatamansi

Cardamom

Broom Grass

The costs (associated with

plantation of non-wood species)

considered for original

calculations were very

conservative in nature. Moreover,

costs associated with each of the

suggested species is not readily

available. Hence, there is no

change in the CBA calculations

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Table 14: Original CBA - Summary Results – Sustainable Forest Management



Million

(499.82) 13.75 814.96


Million

(378.88) 277.81 1,301.83


Million

961.99 999.54 1,055.37


Million

462.16 1,013.29 1,870.33


Million

583.10 1,277.35 2,357.21


7 BCR (with CC) Ratio 0.61 1.28 2.23

8 CC% [(7-6)/7] 21% 21% 21%

9 Benefits with CC (excluding

adaptation)

NPR

Million

463.33 1,015.74 1,874.70

10 BCR (excluding adaptation) Ratio 0.48 1.02 1.78

11 CC% (Excluding adaptation) % 0.3% 0.2% 0.2%

Table 15: Revised CBA - Summary Results – SFM (incorporating the inputs of sub-national level consultation)



Million

(512.98) (0.22) 799.77


Million

(392.04) 263.84 1,286.65


Million

975.14 1,013.51 1,070.56


Million

462.16 1,013.29 1,870.33


Million

583.10 1,277.35 2,357.21


7 BCR (with CC) Ratio 0.60 1.26 2.20

8 CC% [(7-6)/7] 21% 21% 21%

9 Benefits with CC (excluding

adaptation)

NPR

Million

463.33 1,015.74 1,874.70

10 BCR (excluding adaptation) Ratio 0.48 1.00 1.75

11 CC% (Excluding

adaptation)

% 0.3% 0.2% 0.2%

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2.16. Requirements of reforms and institutional mechanisms

The cost benefit analysis is the first step after the portfolio of the feasible options and strategies has been

identified. Further, for ensuring the inter-generational continuity of projects, it is necessary to design an

economic plan that incorporate policy instruments that uses both market based tools and command-and-

control principles. This may require a detailed analysis and review of existing policies so as to initiate, if

necessary, policy reforms and institutional overhauling. In light of the above, there are numerous questions that

may arise during analysis. Some of the questions are given below – these questions are indicative but not

exhaustive.

Table 16: Problems and issues for consideration

S. No. Key question Sub- question 1 Is the project a

revenue project or non-revenue project?

If revenue project:

What should be the structure of fees and taxes?

Wat will be the rates of fees and taxes?

What is the mechanism of revenue collection?

Is there a need for a specific institution for collecting revenue? etc.

If non-revenue project:

What mechanisms would attract non-government finance?

Can there be subsidies to cover O&M expenses?

Which ministries/ departments will provide subsidies? 2 How will the CAPEX

be financed? Is there need for co-financing?

Who are the co-financing partners?

Will private sector be interested in financing CAPEX?

What will be the mechanism for lending finances from different sources?

3 How will the O&M expenses be financed?

Should this be left to the government or financed by beneficiaries?

Is there a need for co-financing?

How to motivate beneficiaries to finance O&M expenses? 4 Are changes required

in national/ sub-national budgets?

How should the changes be mainstreamed?

Are all ministries/ departments willing to carry out changes?

5 Is the mechanism for delivery of benefits adequate and robust?

Are changes required in the supply chain to ensure continuity of projects?

How to ensure last mile connectivity? Source: Based on (Ghosh & Ghosh, 2016), (The World Bank, 2005), (The World Bank, 2011)

Deciding on strategies to overcome barriers to financing: In view of the above questions, to ensure the

adoption and continuity of projects, it is therefore necessary to plan for strategies to remove possible barriers to

financing of projects. These strategies/ policies ought to work at national, sub-national and local levels. Some

such strategies are:

Exploring different sources of finance: There exist bilateral, multi-lateral and private institutions who

finance climate projects. However, each institution has their own requirements and rationale for financing

projects. Therefore the project, at the design stage, must imbibe the requirements so as to facilitate co-

financing.

Adopting a multi-sector approach: Climate change project benefits are spread across various sectors and

governance levels. Therefore there must be inbuilt mechanisms to involve, integrate and coordinate

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ministries/ departments to work together so as to maximize the gains from the project at all levels –

national, sub-national and local.

Developing an effective and efficient value chain: The strategies have to be devised involving all

stakeholders so that an effective and efficient value chain can be created that will ensure the adaptability

and continuity of the projects in the future.

Initiating institutional reforms: There may be need to create new entities and/ or aboliosh old entities in

order to carry forward climate projects. Therefore institutional reforms – at national, sub-national and local

levels, are an integral part of the system.

Initiate fiscal reforms: Tax/ subsidy reforms maybe needed to attract public and private actors to

participate actively in climate projects (The World Bank, 2005).

Mainstreaming climate considerations at all levels of governance: Unaware of climate impacts on

development objectives, traditional governance has often concentrated on development priorities only. In

the backdrop of climate change it is necessary to factor in climate considerations in development strategies

at all levels of governance, to generate more robust development results.

Fostering an investment grade policy regime: The returns from climate related projects are slow and accrue

over a long term. They are also sensitive to policy volatility. Therefore, there is a need for government to

adopt an investment grade policy regime (Hamilton, 2009) that would ensure climate projects to be

sufficiently attractive to bilateral, multi-lateral development financing institutions and private investors.

The dimensions of the policy depend on the sector in which the project is undertaken.

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3. Preparing the investment plan

3.1. Sections of investment proposal

GCF funding proposal development process is based on their extant guidelines. It requires the project

proponent to address the following points in their funding proposal.

Table 17: Sections of a GCF funding proposal


A Project/ programme summary Project/ programme title

Basic information like executive summary, contact point, project focus (adaptation/ mitigation/ cross cutting) project size & lifespan

B Financing cost/ information Description of financial elements of the Project / Programme - project financing information like co-finance, loans, GCF financing etc.

C Detailed project/ programme description Political/ institutional information

Policy & institutional set-up

Objectives w.r.t baselines

Impact on climate change

Barriers address by the project/ programme

Project/ programme management structure

D Rationale for GCF involvement Value added by GCF involvement

Exit strategy

E Expected performance against investment criteria

Impact potential - Potential of the project/programme to contribute to the achievement of the Fund’s objectives and result areas

Paradigm Shift Potential - degree to which the proposed activity can catalyze impact beyond a one-off project/programme investment

Potential for knowledge and learning

Environmental, social and economic co-benefits, including gender-sensitive development impact

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Country Ownership - beneficiary country (ies) ownership of, and capacity to implement, a funded project or programme

F Appraisal summary Economic and Financial Analysis

Technical evaluation

Environmental, Social Assessment, including Gender Considerations

Financial management and procurement

G Risk assessment and management Risk Assessment Summary

Risk Factors and Mitigation Measures

H Results monitoring and reporting Paradigm Shift Objectives and Impacts at the Fund level

Outcomes, Outputs, Activities and Inputs at Project/Programme level

Arrangements for Monitoring, Reporting and Evaluation

I Annexes Supporting Documents for Funding Proposal, such as Feasibility Study, Environmental and Social Impact Assessment & Management Plan, Gender Analysis and Action Plan, Timetable of project/programme implementation, Economic analysis etc.

3.2. Linkages with background work covered in section 2

The discussions in the preceding section show that an investment proposal prepared for GCF must incorporate

the Theory of Change and should justify the rationale for GCF involvement in the project. Since, the objective of

GCF is to address climate considerations, the proposal must highlight the gains in terms of environment, while

also highlighting the gains accruing to the economy and the society. In many cases, these three types of gains

are interrelated. Further, the investment proposal is required to highlight economic returns so that the

investment is justified.

Taking the example of Dolakha and Ramechaap, this training manual has shown the necessary steps required

for carrying out vulnerability assessment, selection of options and cost benefit analysis of options to fortify the

rationale, climate impact abatement potential and attractiveness of the investment. Therefore, preparing a

proposal for GCF is an intensive process and must be supported through a detailed technical and economic

analysis. The analysis requires to be strengthened by the theory of change which requires specifying existing

problems, intended outputs, expected outcomes and assessing the attractiveness of economic returns. The

analysis must also highlight to what extent the mitigation and adaptation objectives are fulfilled by the project.

This has been adequately described taking the case of Dolakha and Ramechaap. Needless to mention, a quality

proposal can only be prepared when all stakeholders have been consulted, detailed technical analysis have been

performed and, environmental, social and economic gains have been considered.

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