TOWARDS CLEAN AIR IN Benefits, Pollution NEPAL Sources, and Solutions © 2025 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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Towards Clean Air in Nepal: Benefits, Pollution Sources, and Solutions. © World Bank.” Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e mail: pubrights@worldbank.org. WHERE’S MY BLUE SKY?: LIVE ART CHALLENGE IN NEPAL Creativity and advocacy for clean air came to life at the ‘Where’s My Blue Sky?’ Live Art Challenge. Twenty-six young local artists turned their canvases into compelling statements against air pollution, raising awareness and urgency in the fight for cleaner air in Nepal. The Challenge was implemented by Sattya Media Collective, with support from the World Bank. Artworks from the Challenge is featured throughout the report and is credited to the individual artists. Cover Art: Creationa Waiba, Finalist, Where’s My Blue Sky?’ Live Art Challenge. TOWARDS CLEAN AIR IN NEPAL: Benefits, Pollution Sources, and Solutions 4 TOWA R DS C LE A N AI R IN N E PAL: BE N E FITS, POLLU TION SO URC ES, A ND SO L UTIO NS Contents Acknowledgement 9 List of Acronyms 11 Executive Summary 15 A. The state and trends of air pollution in Nepal 15 B. The human and economic cost of air pollution 15 C. The main sources of air pollution in the Kathmandu Valley and the Terai 17 D. Identifying priority measures to address air pollution and meet the “35 by 35” target 18 E. Policy recommendations and solutions 19 F. The Government of Nepal is committed to improving air quality and has set ambitious targets, which the World Bank aims to support 24 Introduction 27 Background and context 27 Report methodology 28 Structure of the Report 29 CHAPTER 1: Nepal’s Air Quality 31 1.1 Patterns of air quality 31 1.2 Air quality monitoring 36 CHAPTER 2: Air Quality Governance in Nepal 41 2.1 Institutional framework and governance structure related to air quality 41 2.2 Existing air quality policies 44 2.2.1 Environmental law and regulation 44 2.2.2 Air quality standards 44 2.2.3 Environmental fiscal policies 46 2.3 Existing sector-specific policies and initiatives related to air quality management 48 2.3.1 Transport sector policies related to cleaner air 48 2.3.2 Industrial sector policies related to cleaner air 49 C ontents 5 2.3.3 Energy sector policies related to cleaner air 50 2.3.4 Other policies and initiatives related to cleaner air 51 2.4 Gaps in plans and policies related to cleaner air 53 CHAPTER 3: Benefits of Clean Air in Nepal 57 3.1 Health impacts of air pollution and the burden of disease 57 3.2 The cost of air pollution 60 3.3 Multiple development benefits of clean air action 61 Chapter 4: Key Sources of Air Pollution and Technological Solutions 65 4.1 Key sources – sectoral and geographic – of air pollution for the Kathmandu Valley and the Terai 65 4.2 Air pollution trends by 2035 72 4.3 Priority measures to reduce PM2.5 exposure by 2035 76 4.4 Other priority measures 80 4.5 Reaching 35 µg/m by 2035 3 82 CHAPTER 5: Creating the Enabling Foundations for Clean Air in Nepal 89 5.1 Data: Strengthen air quality monitoring and information 91 5.2 Rules: Strengthening air quality governance and enforcement 96 5.3 Economics: Using pricing and markets to create the economics of cleaner air 104 5.4 Incentives: Private sector adoption of clean technologies and practices 107 5.5 Infrastructure: Putting in place infrastructure that enables adoption of clean air technologies and practices 110 CONCLUSION 113 REFERENCES 115 ANNEX i Annex A: Detailed Assessment of Air Quality in Nepal ii Annex B: Air Quality Standards xvi Annex C: Literature on Health Impacts from Air Pollution and Air Q+ Health Analysis Methodology xx Annex D: The GAINS modeling tool xxiii 6 TOWA R DS C LE A N AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Figures Figure 0.1: Average annual air pollution concentrations in Nepal, 2021............................................................. 16 Figure 0.2: Population-weighted PM2.5 annal average exposure in Kathmandu Valley, 2021-2035.................. 17 Figure 0.3: Air pollution concentrations in Nepal and the other four countries sharing the Indo-Gangetic Plain and Himalayan Foothills (IGP-HF) airshed, 2021........................................................................................... 18 Figure 0.4: The five enabling foundations for clean air in Nepal......................................................................... 19 Figure 1.1: PM2.5 concentrations (µg/m3) in Nepal and other four countries sharing the Indo-Gangetic Plain and Himalayan Foothills (IGP-HF) region, 2021............................................................................................. 32 Figure 1.2: Annual average PM2.5 concentrations in the Kathmandu Valley and the Terai region, by monitored locations ............................................................................................................................................ 33 Figure 1.3: Annual average PM2.5 (µg/m3) concentration trends in the Kathmandu Valley (2017-2023)........... 35 Figure 1.4: Monthly trends of PM2.5 in the Kathmandu Valley (monthly average concentrations of the years with available data)......................................................................................................................................... 35 Figure 1.5: Monthly trends of PM2.5 in the Terai (monthly average concentrations of the years with available data)............................................................................................................................................................ 36 Figure 1.6: Map of reference-grade air quality monitoring stations in Nepal.................................................... 37 Figure 1.7: Total days of PM2.5 data availability in 2021 and 2023........................................................................ 38 Figure 2.1: Governance structure for air quality management in Nepal............................................................. 42 Figure 2.2: Timelines of EPA and EPR...................................................................................................................... 44 Figure 2.3: Standards related to air quality management.................................................................................... 44 Figure 2.4: Border (CIF) prices and taxes of vehicles (Lakh, NPR)........................................................................ 47 Figure 2.5: Policies and initiatives related to transport sector............................................................................. 48 Figure 2.6: Policies and initiatives related to industry sector............................................................................... 49 Figure 2.7: Policies and initiatives related to energy sector................................................................................. 50 Figure 2.8: Policies and initiatives related to climate and environment.............................................................. 51 Figure 3.1: Percentage of deaths from specific causes attributable to total air pollution in Nepal.................. 58 Figure 3.2: Potential gain in life expectancy in Nepal from permanently reducing PM2.5 from 2022 concentration to the WHO guideline (5 µg/m3)...................................................................................................... 59 Figure 4.1: Contributions of different source sectors to population-weighted annual-average PM2.5 concentrations in the Kathmandu and the Terai in 2021 (in µg/m3 and %).......................................................... 68 Figure 4.2: Spatial origin of PM2.5 in ambient air in the Kathmandu and the Terai in 2021 (in µg/m3 and %)........................................................................................................................................................ 69 Figure 4.3: Spatial and sectoral origin of PM2.5 in ambient air in the Kathmandu Valley, 2021......................... 70 Figure 4.4: Spatial and sectoral origin of PM2.5 in ambient air in the Terai region, 2021................................... 71 Figure 4.5: Baseline emissions in the Kathmandu Valley, 2021-2035, by sector................................................. 74 Figure 4.6: Baseline emissions in the Terai, 2021-2035, by sector....................................................................... 74 Figure 4.7: Population weighted PM2.5 exposure in the Kathmandu Valley, 2021-2035, by sector.................... 75 Figure 4.8: Origin of PM2.5 exposure in the Kathmandu Valley for the baseline projection in 2035.................. 76 Figure 4.9: Cost-effectiveness of additional measures to reduce ambient air pollution in the Kathmandu Valley in 2035........................................................................................................................................ 79 Figure 4.10: Cost-optimized policy scenario measures to reduce ambient air pollution in the Terai in 2035........................................................................................................................................................................ 79 Figure 4.11: Total emission control costs in the Kathmandu Valley for (a) unilateral action in the Kathmandu Valley, and (b) cooperation across the Indo-Gangetic Plain and Himalayan Foothills................... 84 Figure 4.12: Total emission control costs in the Terai for (a) unilateral action in the Terai, and (b) cooperation across the Indo-Gangetic Plain and Himalayan Foothills........................................................... 84 C ontents 7 Figure 0.4: The five enabling foundations for clean air in Nepal......................................................................... 89 Figure 5.2: Governance and institutional framework for assessing AQM systems............................................ 97 Figure A.1: Diurnal cycle of PM2.5 in Pulchowk, Kathmandu Valley, for each season......................................... iii Figure A.2: Monthly average PM2.5 for the Kathmandu, reconstructed for the period 1980 to 2021................. v Figure A.3: View of Kathmandu from Hattiban (1775m) on the southern valley rim, on 28 Feb. 2013 (L) and 2 March 2013 (R)................................................................................................................................................. vii Figure A.4: Annual average PM10 for the Kathmandu Valley and the Terai, for the period 2021 and 2023..... xiii Figure A.5: Percentage of PM2.5 data available across air quality monitoring stations in the Kathmandu Valley and the Terai (2016-2023).............................................................................................................................. xv Figure D.1: Information flow in the GAINS-IGP model analysis.........................................................................xxiv Figure D.2: Primary emissions of PM2.5 from the various source sectors in the Kathmandu Valley in 2021 (tons/cell)..................................................................................................................................................................xxvi Figure D.3: Total primary PM2.5 emissions in the Kathmandu Valley in 2021 (tons/cell).................................. xxvii Figure D.4: Density of primary PM2.5 emissions from the various sectors in Nepal, 2021 ............................. xxvii Figure D.5: Computed annual average concentrations of PM2.5 in the Kathmandu Valley (µg/m3), 2021.... xxviii Figure D.6: Computed annual average concentrations of PM2.5 in the Terai (µg/m3), 2021............................ xxix Figure D.7: Computed monthly average PM2.5concentrations for January and July 2021 in Kathmandu...... xxix Figure D.8: Locations of the monitoring stations with sufficient data coverage in the Kathmandu Valley.... xxx Figure D.9: Annual average concentrations of PM2.5 measured at monitoring stations in the Kathmandu Valley................................................................................................................................................... xxxi Figure D.10: Locations of the monitoring stations with sufficient data coverage in the Terai....................... xxxi Figure D.11: Annual average concentrations of PM2.5 measured at monitoring stations in the Terai...........xxxii Figure D.12: Validation of estimated annual mean PM2.5 concentrations at specific locations in the Kathmandu Valley against modelled PM2.5concentrations in the surrounding 1 km x 1 km grid cells..........xxxiii Figure D.13: Validation of estimated annual mean PM2.5 concentrations at specific locations in the Terai against modelled PM2.5 concentrations in the surrounding 1 km x1 km grid cells................................xxxiii Figure D.14: Contributions of the various emission source sectors to annual mean PM2.5 concentrations in the Kathmandu Valley in 2021 (µg/m3)............................................................................................................ xxxiv Figure D.15: Annual mean concentrations of primary and secondary PM2.5 in Kathmandu 2021 (µg/m3).... xxxv Figure D.16: The spatial origin of PM2.5 concentrations in the Terai East (upper panel) and the Terai West (lower panel) in 2021 (µg/m3)....................................................................................................................... xxxv Figure D.17: Contributions of the various emission source sectors to annual mean PM2.5 concentrations in the Terai in 2021 (µg/m3)................................................................................................................................... xxxvi Figure D.18: Spatial and sectoral origin of PM2.5 in ambient air in the Kathmandu Valley, 2021.................. xxxvii Figure D.19: Spatial and sectoral origin of PM2.5 in ambient air in the Terai region, 2021............................ xxxvii 8 TOWA R DS C LE A N AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Tables Table 0.1: Multi-sector foundations for AQM planning for Nepal........................................................................ 21 Table 1.1: Comparison of the WHO recommended AQG levels and NAAQS for various pollutants.................. 39 Table 2.1: Comparison of NAAQS for various pollutants....................................................................................... 45 Table 4.1: Main data sources employed for emission estimates for 2021........................................................... 67 Table 4.2: Measures assumed as “already implemented” within the baseline scenario through 2035 and therefore not included as additional options for the cost-effectiveness analysis (policy scenario)........... 73 Table 4.3: The shares of the various sectors in the total potential PM2.5 exposure reductions from local measures in the Kathmandu and the Terai in 2035................................................................................................ 78 Table 4.4: Effectiveness and challenges of dust control strategies...................................................................... 81 Table 4.5: The common set of measures assumed in the cooperative scenario for the other IGP-HF jurisdictions................................................................................................................................................................ 85 Table A.1: Information on air quality monitoring stations of Nepal..................................................................... xi Table B.1: Standard on emission and stack height for brick kilns........................................................................xvi Table B.2: Standard on emission and sampling method for cement plants........................................................xvi Table B.3: Standard on emission and sampling method for crusher plants.......................................................xvi Table B.4: Emission limits for new diesel generators (g/kWh).............................................................................xvii Table B.5: Emission Limits for in-use diesel generators (g/kWh).........................................................................xvii Table B.6: Standard on emission and sampling method for industrial boilers..................................................xvii Table B.7: Emission standards as per NVMES, 2000 ...........................................................................................xviii Table B.8: Emission standards for petrol vehicles, as per the revised NVMES of 2012 (MOFE, 2019) ............xviii Table B.9: Emission standards for diesel vehicles, as per the revised NVMES 2012 (MOFE, 2019)................... xix Table D.1: Key approach and data sources employed for the GAINS implementations for the Kathmandu Valley and the Terai............................................................................................................................xxiv Table D.2: Data sources for the implementations of the GAINS model for the Kathmandu Valley and the Terai.....................................................................................................................................................................xxv Boxes Box 5.1: Successful implementation of Continuous Emission Monitoring System (CEMS) in China................. 99 Box 5.2: International experience in responding to heavy air pollution episodes  .......................................... 102 Box 5.3: Indoor Air Pollution: Case studies of protective and preventive measures ....................................... 103 Box 5.4: Singapore’s Carbon Tax and Revenue Recycling Initiatives.................................................................. 105 Box 5.5: Is Nepal ready for an Emissions Trading System (ETS)?........................................................................ 106 Box A.1: Interplay between human activities and physical processes: The morning and evening pollution peaks in the Kathmandu Valley.................................................................................................................. x Acknowled ge m ent 9 Acknowledgement This report was drafted by Martin Philipp Heger (Senior Environmental Economist), Markus Amann (Senior Emissions Modeling Expert), Gary Kleiman (Senior Atmospheric Scientist), Govinda Timilsina (Senior Research Economist), Arti Shrestha (Environmental Researcher), Nina Tsydenova (Environmental Specialist), Wolfgang Schoepp (Senior Environmental Scientist), and Arnico Panday (Senior Environmental Expert). Technical Inputs were received from Sulochana Nepali (Environmental Analyst), Annu Rajbhandari (Senior Environmental Specialist), A.S. Harinath (Senior Environmental Specialist), and Aminul Islam (Geographer). Strategic guidance was received from Dina Umali-Deininger (Regional Director, Planet Vertical, South Asia), David Sislen (World Bank Division Country Director for Maldives, Nepal, and Sri Lanka), Ann Jeannette Glauber and Christophe Crepin (both Managers of the Environment Department in the South Asia Region), Preeti Arora (Operations Manager of the Maldives, Nepal, and Sri Lanka), Steve Danyo and Maha Ahmed (both Program Leaders, Planet Vertical, South Asia). The report carried out original pollution-policy analysis, and created a unique model for Nepal, called the Greenhouse Gas and Air Pollution Interactions and Synergies (GAINS) model for Nepal, or “GAINS-Nepal.” The model was developed by Markus Amann (Senior Emissions Modeling Expert) and Wolfgang Schoepp (Senior Environmental Scientist) jointly with experts from the International Institute for Applied Systems Analysis (IIASA) in close partnership with local experts, namely Dr. Kundan Lal Shrestha (Kathmandu University), Professor Rejina Maskey (Tribhuvan University), and Professor Shree Raj Shakya (Tribhuvan University). The report drew on detailed air quality monitoring data provided by a team from the World Bank’s Department of Environment. All potential errors in this report are the fault of the main authors, not the experts they partnered with. Experts from IIASA supporting the development of GAINS-Nepal include Pallav Purohit, Adriana Gomez-Sanabria, Gregor Kiesewetter, Zbigniew Klimont, and Fabian Wagner. The team deeply appreciates the contribution of the World Bank staff who peer reviewed the report: Arturo Ardila Gomez (Lead Transport Economist), Daniel Mira-Salama (Lead Environmental Specialist), Craig Meisner (Senior Environmental Specialist), and Ivan Jaques (Senior Energy Specialist). The team would like to thank Charles Warwick for editorial support. The team is grateful to Sarah Jene Hollis for the excellent graphic design of this report, including figures, maps, schematics, photos, and overall report layout. The support from Akash Shrestha (External Affairs Officer) and Avinashi Paudel (External Affairs Associate), in providing communications support including managing media relations and dissemination was greatly appreciated. We acknowledge financial support from the World Bank’s Resilient Asia Program, funded by the UK government’s Foreign Commonwealth Development Office and the Swiss Agency for Development and Cooperation. The UK funding is delivered through Climate Action for a Resilient Asia (CARA), the UK’s flagship regional programme to build climate resilience in South Asia, Southeast Asia and the Pacific islands. We also acknowledge valuable funding from the Korean Green Growth Trust Fund (KGGTF). 10 TOWA R DS C LE A N AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS The team is grateful for the comments received during the stakeholder consultations held on March 26, 2025, where preliminary findings were presented and feedback was collected. The participants included stakeholders from the Department of Environment (DoE), Ministry of Industry, Commerce and Supplies (MoICS), the Alternative Energy Promotion Center (AEPC), among several other government agencies, private sector, development partners, academia, and local governments. While developing this report, the team held several consultations with the Ministry of Forests and Environment, DoE, MoICS, Department of Transport Management, AEPC, Nepal Electricity Authority, National Disaster Risk Reduction and Management Authority, Lalitpur Metropolitan City, Kathmandu Metropolitan City, Chandragiri Municipality, Changunarayan Municipality, FHI 360, the International Center for Integrated Mountain Development (ICIMOD), and several development partners, and private sector stakeholders. List of Acronym s 11 List of Acronyms AEPC Alternative Energy Promotion Center ALRI Acute Lower Respiratory Infections AOD Aerosol Optical Depth AQI Air Quality Index AQM Air Quality Management As Arsenic BC Black Carbon CCMD Climate Change Management Division (of MOFE) Cd Cadmium CO Carbon Monoxide COPD Chronic Obstructive Pulmonary Disease DALY Disability Adjusted Life Years DoE Department of Environment (of MOFE) DoI Department of Industries (of MOICS) DoLI Department of Local Infrastructure (of MoUD) DOLOS Department of Labor and Occupational Safety (of MoLESS) DoS Department of State, USA DoTM Department of Transport Management (of MoPIT) DPC Development Policy Credit EIA Environmental Impact Assessment EPA Environment Protection Act EPI Environmental Performance Index EPR Environment Protection Rules ESMAP Energy Sector Management Assistance Program EV Electric Vehicles GAINS Greenhouse Gas and Air Pollution Interactions and Synergies GIZ Gesellschaft für Internationale Zusammenarbeit GoN Government of Nepal 12 TOWA R DS C LE A N AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS GRID Green Resilient and Inclusive Development GW Gigawatt HC Hydrocarbon HEI Health Effects Institute HKH Hindu-Kush Himalayas ICE Internal Combustion Engine ICIMOD International Centre for Integrated Mountain Development IEA Industrial Enterprises Act IEE Initial Environmental Examination IER Industrial Enterprises Regulations IGP-HF Indo-Gangetic Plain and Himalayan Foothills IHD Ischemic Heart Disease IIASA International Institute for Applied Systems Analysis INGOs International Non-Governmental Organizations KfW Kreditanstalt für Wiederaufbau KVAQMP Kathmandu Valley Air Quality Management Action Plan LDV EV Light-Duty Vehicles Electric Vehicle LDV ICE Light-Duty Vehicles Internal Combustion Engine LPG Liquified Petroleum Gas MERRA2 Modern-Era Retrospective analysis for Research and Applications, Version 2 MoALD Ministry of Agriculture and Livestock Development MoLESS Ministry of Labor, Employment and Social Security MoEST Ministry of Environment, Science and Technology MoEWRI Ministry of Energy, Water Resources, and Irrigation MoF Ministry of Finance MoFAGA Ministry of Federal Affairs and General Administration MOFE Ministry of Forest and Environment MoHA Ministry of Home Affairs MoICS Ministry of Industry, Commerce, and Supplies MOPE Ministry of Population and Environment MoPIT Ministry of Physical Infrastructure and Transportation MoUD Ministry of Urban Development MoWS Ministry of Water Supply MW Megawatt NAAQs National Ambient Air Quality Standards NCR National Capital Region L ist of Acronym s 13 NEEP Nepal Energy Efficiency Programme NGOs Non-Governmental Organizations NH3 Ammonia Ni Nickel NOC Nepal Oil Corporation NPR Nepali Rupee NVMES Nepal Vehicular Mass Emission Standard PM Particulate Matter Pb Lead RE Renewable Energy RETS Renewable Energy Test Station REEP-GREEN Renewable Energy and Energy Efficiency Programme - Green Recovery and Empowerment with Energy in Nepal SEA Strategic Environmental Assessment SOPs Standard Operating Procedures US EPA United States Environment Protection Agency VAT Value Added Tax VSBK Vertical Shaft Brick Kilns WHO World Health Organization WRF-Chem Weather Research and Forecasting model coupled with Chemistry Executive Summary The main objectives of this report are to identify the levels, patterns, and sources of air pollution in Nepal, assess its health and economic impacts, and propose solutions to improve air quality. The recommendations are based on a foundational diagnostic review of Nepal’s existing air quality management actions. The report aims to provide comprehensive insights and actionable policy options for the government, stakeholders, and the public to support urgent and effective interventions. A. The state and trends of air pollution in Nepal The Kathmandu Valley and the Terai are Nepal’s air pollution hotspots, with no significant improvement over the last decade. The key pollutant of concern for human health is Particulate Matter (PM) smaller than 2.5 microns (i.e. PM2.5), due to its ability to penetrate deeply into the lungs and other vital organs. Figure 0.1 shows that air pollution concentrations are highest in the country’s capital, Kathmandu, and the southern plains of the Terai, near India. Trends analysis carried out by this report shows that the air pollution level has remained largely unchanged over the last decade. The World Health Organization (WHO) has set targets to guide countries in mitigating air pollution and safeguarding public health. The WHO’s ultimate target for annual mean PM2.5 concentration is 5 µg/m³, with an initial interim goal of 35 µg/m³ to encourage incremental progress.1 These benchmarks emphasize the urgency and scale of effort required to address air pollution in regions like the Kathmandu Valley and the Terai, where current levels significantly exceed these safety limits. B. The human and economic cost of air pollution Air pollution is the number one risk factor for death and disability in Nepal, surpassing malnutrition (second) and tobacco (third). It reduces life expectancy by 3.4 years for the average Nepali and causes approximately 26,000 premature deaths annually. Air pollution heavily contributes to various diseases: 75 percent of chronic obstructive pulmonary disease cases, 46 percent of strokes, 44 percent of ischemic heart disease, 41 percent of lower respiratory infections, 38 percent of lung cancer, 30 percent of neonatal issues like low birth weight and preterm birth, and 20 percent of diabetes. 1 The unit µg/m³ stands for micrograms per cubic meter i.e., one millionth of a gram of pollutant in one cubic meter of air. 16 TOWA R DS C LE A N AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Figure 0.1: Average annual air pollution concentrations in Nepal, 2021 Source: GAINS-Nepal estimates produced for this report. The economic impacts of air pollution are substantial. It affects labor productivity due to increased health-related absences and impaired cognition. The negative impact on the tourism industry and the aviation sector is also significant. The economic cost of poor air quality is estimated to exceed six percent of Nepal’s Gross Domestic Product (GDP) each year. If no additional measures are taken, the impact of air pollution is projected to intensify significantly by 2035. Under the baseline scenario, average PM2.5 concentrations will reach 52 µg/m³ in the Kathmandu Valley and 42 µg/m³ in the Terai, far above the WHO interim target of 35 µg/m³. These levels would result in tens of thousands of additional premature deaths, particularly impacting children and the elderly, a further strain on healthcare system, and a growing drag on productivity and competitiveness. Without intervention, the economic burden is also expected to grow proportionally. This underscores the cost of inaction that results in irreversible damage to health and the economy. The economic impacts of air pollution are substantial. ...If no additional measures are taken, the impact of air pollution is projected to intensify significantly by 2035. Ex ecuti ve S u m m ary 17 C. The main sources of air pollution in the Kathmandu Valley and the Terai In the Kathmandu Valley, the main sectoral sources of air pollution are currently (i) industrial production, (ii) cooking, and (iii) mobility, and these will remain dominant over the next decade unless further action is taken (see Figure 0.2).2 Industrial fuel combustion – led by boiler usage – is expected to increase significantly. Forest fires dominate during the dry months (February to May) and constitute the fourth largest local source of annual average air pollution exposure, the most relevant metric for adverse impacts on public health. Transboundary air pollution significantly impacts air quality in both the Kathmandu Valley and (especially) the Terai region. Figure 0.2 indicates that about a quarter of the pollution in the Kathmandu Valley comes from outside the Valley (more than half of that from outside of the country). Despite being surrounded by hills, the Kathmandu Valley experiences pollution transport from regional sources, as wind patterns and atmospheric conditions carry pollutants into the area. In the Terai, transboundary pollution is even more dominant, largely driven by its geographic proximity to other countries in the Indo-Gangetic Plain Himalayan Foothills (IGP-HF) area (Figure 0.3). Two thirds of PM2.5 exposure in the Terai comes across the international borders, a region with high agriculture and industrial emissions (Figure 4.4). Figure 0.2: Population-weighted PM2.5 annal average exposure in Kathmandu Valley, 2021-2035, by sector 60 Municipal waste in KV Agriculture Forest fires in Nepal 50 Residential and commercial in KV Transportation in KV Industry in KV 40 From rest of Nepal From other countries Soil dust µg/m³ 30 20 10 0 2021 2035 Source: GAINS-Nepal estimates developed for this report. 2 Figure 0.2 is an aggregation of data contained within Figure 4.7 of the main report to highlight the contributions of sectors overall rather than specific sub-sectoral contributions detailed in Chapter 4. 18 TOWA R DS C LE A N AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Figure 0.3: Air pollution concentrations in Nepal and the other four countries sharing the Indo-Gangetic Plain and Himalayan Foothills (IGP-HF) airshed, 2021 Source: GAINS estimates produced for this report. D. Identifying priority measures to address air pollution and meet the “35 by 35” target In the Kathmandu Valley, the 35 µg/m³ target can be reached with just three measures: cleaner production technology, cleaner cooking, and cleaner Heavy-Duty Vehicles (HDVs). 1. Cleaner boilers (running on cleaner fuels such as electricity or pellets/briquettes with adequate filters) are the most critical technology to adopt by industries (predominantly small and medium enterprises). 2. Cleaner cookstoves, i.e., electric induction stoves or fan-assisted biomass stoves. Their adoption is greatly facilitated through almost universal electricity access in the Kathmandu Valley. 3. Inspection & Maintenance (I&M) of Heavy-Duty Vehicles (HDV), with enforced repair and/or scrapping programs for vehicles that do not comply and upgrading the Light-Duty Vehicles (LDVs) to a stricter vehicle emissions standard (Euro IV). Ex ecuti ve S u m m ary 19 These three priority measures are listed in rank-order of pollution abatement potential (by how many µg/m³ the air quality can be improved), assuming perfect efficiency and complete adoption of these technologies and practices. They are also among the most cost-effective measures to take. The cost per 1 µg/m³ of improvement ranges from USD 1 million to USD 5 million. For the Terai, the same three measures are crucial but insufficient to meet the 35 µg/m³ target; to achieve this target it is critical that neighbors also act. The report shows that the Terai can theoretically meet the target independently, but only at great expense. Even with perfect implementation of the three priority cost-effective measures, more expensive actions (costing USD hundreds of millions for a 1 µg/m³ improvement) would be necessary. Since most pollution comes from neighboring countries, it is advised that the Terai focus on local priority actions and collaborate with nearby regions on pollution control. It is therefore a priority for Nepal to engage in regional coordination efforts to strengthen the collaboration and implementation of common priority measures across the countries of the IGP-HF region. Participation in the annual Science Policy Finance Dialogue that the World Bank has been organizing since 2022, together with the International Centre for Integrated Mountain Development (ICIMOD), is critical. E. Policy recommendations and solutions For the Government of Nepal to support the three priority pollution abatement measures identified, requires promoting policies that build the five foundations of Air Quality Management (AQM). Figure 0.4. indicates these five enabling foundations. Moving the country to cleaner production, cooking, and vehicles, which are the priority sectors in terms of abatement potential, and reducing forest and agricultural fires, which are seasonal priorities, requires several levers to be pushed, including (1) enhancing air quality data, (2) strengthening rules (such as emissions or technology standards) and their enforcement, (3) aligning the economics for facilitating a clean transition (by taxing pollution, or exempting cleaner alternatives), (4) offering incentives to the private sector (nudging cleaner technology and practice adoption), and (5) establishing infrastructure that enables clean technology adoption (ensuring the supply of clean electricity or modern biomass). Figure 0.4: The five enabling foundations for clean air in Nepal DATA RULES ECONOMICS INCENTIVES INFRASTRUCTURE Enhancing air Strengthening Creating the For Private Sector: Putting in place quality monitoring governance and economics for Offering incentives public infrastructure and information, enforcement, clean technology to the private that enables enabling under- ensuring that the adoption, by sector for the clean technology standing of air right policies are using fiscal policy adoption of clean adoption. quality issues, put forward and including pricing technologies and planning abatement are enforced. and markets. practices.  action, and under- standing what works. (Section 5.1) (Section 5.2) (Section 5.3) (Section 5.4) (Section 5.5) 20 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Data It is necessary to improve the operations of the existing 30 monitoring stations in Nepal to ensure that all stations report data continuously throughout the year. Enhancing the current monitoring stations to track additional air pollutants and expanding the network are important steps for the medium-term. Improving communication with the public about air pollution levels through user-friendly websites, smartphone applications, and health-related advisories is also essential. This report has provided a first-order air pollution source profile, but it is important for Nepal to continue refining and updating this source data through ongoing source apportionment campaigns and strengthening emissions inventories. Rules Nepal is enhancing its institutional framework for air quality management by defining the roles and respon- sibilities of federal, provincial, and local governments. The country is also adopting stricter standards for industrial and vehicular emissions. Completing this regulatory reform process is necessary. Additionally, stricter enforcement of the regulations, such as improved inspection programs for vehicles and industries, is essential. Economics Establishing a supportive economic framework to accelerate the adoption of cleaner technologies and practices is essential. Nepal has implemented several price-based policy measures, including a pollution tax introduced in 2008 and a green tax in 2024. To enhance the impact and credibility, the revenue from these environmental taxes should be redirected toward incentivizing clean sectoral transitions. This includes supporting priority actions such as cleaner industrial production technologies, subsidized electric cooking solutions, and investments in electric vehicle (EV) infrastructure. A tax recycling model would enable Nepal to align fiscal and environmental objectives more clearly. Similarly, overlapping environmental levies should be consolidated where possible, reinforcing transparency and building sustained public support for air quality action. Incentives Providing incentives for the adoption of cleaner technology is important, especially for small and medium enterprises in major industries contributing to air pollution. The use of boilers, furnaces, and kilns (listed in order of importance) for heat generation is significant for cleaner air. Similarly, implementing end-of-pipe technologies, such as filters (scrubbers, electrostatic precipitators, baghouse, cyclones, etc.), is necessary. Offering technical and financial support to firms can encourage the adoption of cleaner technologies. Infrastructure Establishing adequate infrastructure is crucial for adopting cleaner technologies like electric cookstoves, EVs, or industrial production technology powered by electricity or modern biomass. In Nepal, important aspects include electricity provision (generation and distribution of hydroelectricity), the availability of electric charging stations, and the planning and construction of roads to reduce air pollution. Ex ecuti ve S u m m ary 21 Using this framework, the Government of Nepal is well-poised to take immediate action in some sectors, while near-term preparatory studies may be needed to enable effective implementation in others. Table 0.1 illustrates the multi-sectoral foundation to advance AQM over the next few years and suggests a suite of key measures to take. Table 0.1: Multi-sector foundations for AQM planning for Nepal AQM Foundation Industry Transportation Residential Energy Agriculture Forests Data Establish pilot Develop a Expand national • Conduct sat- Develop early stack emissions national digital household energy ellite-based warning systems testing protocols for vehicle database use surveys focused monitoring of using forest dryness priority industries. integrating on cooking energy agricultural burning and fire risk indices. registration, patterns and across the Terai. Collect industrial inspection, and pollution exposure. • Map spatial Deploy remote emissions data for emissions test patterns of sensing for a representative results. Track adoption agricultural real-time forest fire sample of key and usage rates residue availability detection. industrial sectors. Use remote sensing of electric and for cleaner fuel for emissions improved biomass production. Map high-risk zones Use remote sensing (activity) monitoring stoves. • Track seasonal for preventive for stack emissions on key corridors. variations in residue fire management detection. Use geospatial burning practices. interventions. Establish data mapping to identify (DoE, MoICS) integration between high-pollution-risk (MoALD, and MoFE/ Map spatial inspection centers residential clusters. DoE) patterns of biomass and enforcement residue availability agencies. (AEPC) for cleaner fuel production. (DoTM, DoE) (MOFE, NDRRMA). Rules Introduce stricter Enforce Euro Support RETS Assign local Strengthen industrial emissions VI equivalent to become a government roles in coordination standards. standards for all national testing enforcing seasonal between forestry combustion vehicle and certification burning bans departments, Introduce biomass categories. hub and and strengthen fire services, co-firing mandates formalize national enforcement. and disaster for industries using Mandate dust performance management coal (e.g. brick control and road standards for clean Institutionalize agencies. kilns). cleaning as part cookstoves. a crop residue of all public works management Formalize rapid Enhance the contracts. Strengthen local system through response protocols enforcement of governments’ public-private for peri-urban industrial emission Strengthen vehicle role in monitoring partnerships. forest fire standards, including inspection centers and promoting management. strengthening and certify private household energy (MoALD, MoFE/DoE, stack testing and inspection stations programs. and Municipalities) (MoFE, NDRRMA, inspection. under strict federal Municipalities) standards. (MoICS, NBSM, AEPC, Delegate regulatory MoEWRI) enforcement (DoTM/MoPIT) authority to provincial governments with clear accountability frameworks. (DoE, and Provinces) 22 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS AQM Foundation Industry Transportation Residential Energy Agriculture Forests Economics Scale up the Green Scale up the Green Scale up the Green Offer tax benefits Offer tax benefits Tax (on fossil fuels) Tax (on fossil fuels) Tax (on fossil fuels) for mechanized for forest-derived and use revenues agricultural biomass pellet for clean technology Continue to offer Offer tax solutions to and briquette transitions, and substantial import exemptions agricultural waste production. environmental duty reductions for electric and burning, such protection. for EVs and electric efficient biomass as “happy/super Provide incentives two-wheelers. cookstoves. seeders” and for sustainable Offer tax benefits alternative residue harvesting of forest for early adopters Establish scrappage Introduce electricity management residue for energy of verified cleaner incentives tariff structures that equipment. production. production for outdated, incentivize off-peak technologies high-emissions cooking with Support market (MoFE, MoF) (including cleaner vehicles. induction stoves. creation for boilers and agricultural furnaces). (MoF, MoPIT, DoTM) Provide rural energy residues. subsidies tied to Reduce import cleaner household Realign fertilizer duties for clean fuel energy adoption. subsidies toward and technology. optimized, (MoF, NEA, AEPC) low-emission Offer accelerated fertilizer terminal application. depreciation of existing (MoALD, MoF) old polluting technology. (MoF) Incentives Provide financial Implement a Introduce cash Subsidize purchase Provide grants incentives (such scrappage program rebates for of happy/super for communi- as grants and for heavy-duty households seeders and rice ty-based forest concessional diesel vehicles. purchasing certified straw balers. fire management lending) for clean cookstoves. initiatives. industries shifting Penalize fraudulent Support farmer to electric or emissions Offer microfi- cooperatives in Incentivize private modern biomass certifications and nance-backed offering residue sector investment boilers. impose penalties. loan programs collection services. in fire management for household technologies. Provide technical Offer tax credits clean energy Provide incentives assistance for for companies technologies. for low-emissions Offer incentives energy audits and investing in EV fertilizer for early detection cleaner production fleets. Support domestic technologies. and reporting of roadmaps. manufacture of wildfires. (MoPIT, DoTM, certified clean (MoALD) Establish awards for MoLJPA, MoF) stoves. (MoFE) clean technology pioneers. (AEPC, MoICS) (MoICS, MoF) Ex ecuti ve S um m ary 23 AQM Foundation Industry Transportation Residential Energy Agriculture Forests Infrastructure Ensure dedicated, Install fast-charging Expand distribution Establish regional Establish reliable electric EV stations along grid improvements crop residue community fire feeder lines to highways and urban in peri-urban and collection and watch towers major industrial centers. rural areas for processing centers with radio parks. cooking electrifica- in the Terai. communication. Upgrade residential tion. Modernize stack electrical capacity Build decentralized Set up decentralized designs to facilitate for overnight Upgrade residential composting water storage for routine inspection charging. electrical capacity hubs linked forest firefighting and data collection. for cooking electri- to agricultural purposes. Pilot urban fication cooperatives. Create centralized low-emission zones Procure and clean industrial with supporting EV Conduct a Pilot mobile operate helicopters zones with shared infrastructure. stocktaking of biomass pelletizers equipped for early clean energy access. households without in high-yield areas. fire spotting and (NEA, Municipalities) clean electricity suppression. (MoICS, NEA, IDM) access. (MoALD, Municipalities, AEPC) (MoFE, MoHA, Deploy mini-grids NDRRMA) where main grid extension is not feasible. (NEA, CBS, AEPC) Note: This table summarizes the key measures, discussed in the main text of the report and lists the key institutions for implementation (institutions are listed in brackets and in italics). On a day with high air pollution levels, a pedestrian crosses the street. Source: Anuj Adhikary/World Bank. 24 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS By implementing the recommendations outlined in this report, Nepal can achieve significant improvements in air quality, leading to better health outcomes, economic benefits, and a more sustainable environment. F. The Government of Nepal is committed to improving air quality and has set ambitious targets, which the World Bank aims to support The goal: achieving 35 µg/m³ of annual average pollution concentrations by the year 2035. The Government of Nepal has recognized the urgency of addressing air pollution and has incorporated air quality improvement measures into its Sixteenth Five-Year Plan. In alignment with regional efforts to combat air pollution, Nepal has endorsed the “35 by 35” aspirational goal as part of the Indo-Gangetic Plain and Himalayan Foothills (IGP-HF) Science Policy Finance Dialogue process, as have all the other countries—Bangladesh, Bhutan, India, and Pakistan. This goal aims to achieve annual average PM2.5 concentration of 35 µg/m³ by the year 2035, which also coincides with the WHO interim target 1 for PM2.5. In parallel, Nepal is actively working on integrating this target into its new and updated ambient air pollution standards, demonstrating a strong commitment to improving air quality and protecting public health. The World Bank’s strategic engagement with Nepal, prioritizes the reduction of air pollution, among other important goals, such as job creation and economic growth. The 2025 Country Partnership Framework (CPF) for Nepal prioritizes air pollution reduction and supports the government’s interim goal to reduce air pollution in line with the 35 µg/m³ goal, in line with Nepal, IGP-HF countries, WHO, and the World Bank’s own global Corporate Scorecard Indicators. The World Bank plans to support these targets through a series of projects, which aim to improve air quality, by focusing in phases on the three priority measures identified: adoption of cleaner boilers, cookstoves, and vehicle technology. Meeting 35 µg/m³ is only a first step in the movement towards clean air. For instance, after China began to successfully combat air pollution about a decade ago, Beijing’s annual average concentrations of PM2.5 have declined from more than 80 µg/m³  to around 31 µg/m³  in 2024. Similarly, Mexico City achieved a steady decline from about 60 µg/m³ to below 40 µg/m³ over a ten-year period (1993-2003), and Ulaanbaatar reduced PM2.5 levels from over 130 µg/m³ to approximately 60 µg/m³ between 2011 and 2019. While these cities have made significant progress, they continue working to promote cleaner energy and transportation and to tighten industrial regulations, to move closer to the World Health Organization guideline value for PM2.5 set at 5 µg/m³. Addressing air pollution will have significant co-benefits for Nepal. Measures that improve air quality can yield development synergies in other sectors, such as energy security through reduced reliance on imported fossil fuels, and industrial cost savings through improved energy efficiency. Cleaner transport systems can reduce congestion and fuel costs while improving urban livability. These benefits strongly align with Nepal’s Sustainable Development Goals (SDGs) commitments and Nationally Determined Contribution (NDC) targets 3. However, maximizing these co-benefits also requires anticipating potential tradeoffs. For instance, transitions in polluting industries may result in localized job losses unless complemented by green job creation. Understanding and managing these tradeoffs will be critical to ensuring a just and sustainable clean air transition. 3 The SDGs are a global agenda of 17 goals set by the United Nations (UN) to achieve social, economic, and environmental sustainability by 2030. The NDCs are country-specific climate action plans under the Paris Agreement that outline targets to reduce emissions and adapt to the impacts of climate change. Ex ecuti ve S um m ary 25 This is a personification of air, which is under severe distress. The air is being engulfed by emissions and is struggling to breathe. Source: Unique Maharjan, 16, 1st Runner-up, ‘Where’s My Blue Sky?’ Live Art Challenge. Addressing air pollution is core to the recent World Bank CPF, for the period FY2025 – FY2031, for Nepal. The CPF for Nepal (World Bank, 2025) identifies two central challenges to Nepal’s development pathway: (a) lack of sustainable, inclusive, and job-creating growth; and (b) Nepal’s extreme exposure to natural disasters, including those caused by and exacerbated by climate change, and includes reducing the number of people exposed to hazardous air pollution. Addressing air pollution in Nepal requires both multi-sectoral actions and multi-jurisdictional (including by other countries) action. By implementing the recommendations outlined in this report, Nepal can achieve significant improvements in air quality, leading to better health outcomes, economic benefits, and a more sustainable environment. Introduction Background and context Hazardous air pollution poses significant health and economic challenges for Nepal. Air pollution raises public health concerns in Nepal, particularly in the country’s two geographic hotspots: the Kathmandu Valley and the Terai (southern plain areas bordering India). In these two areas, the annual average PM2.5 (i.e. particulate matter of less than 2.5 micrometers in diameter, which is the most critical air pollutant) concentrations reach 37 and 39 µg/m3, respectively. This exposure is between seven to eight times higher than the World Health Organization (WHO) guideline value of 5 µg/m3. These levels of air pollution shorten the average life expectancy of Nepal’s residents by more than three years, and lead to almost 26,000 premature deaths each year (World Bank, 2019). Beyond health impacts, poor air quality leads to reduced labor productivity and negatively impacts tourism (lower visibility of the Himalayas and cancelled flights) (Kathayat et al. 2023). Overall, poor air quality is estimated to cost the equivalent of more than six percent of Nepal’s Gross Domestic Product (GDP) each year (World Bank, 2019). Cleaning Nepal’s skies is a government priority. Nepal’s Sixteenth Five-Year Plan, adopted in 2024, acknowledges the health and environmental impact of air pollution and emphasizes the need for adopting stricter standards and implementing air pollution control measures. Recognizing the consequences of poor air quality, Nepal is currently strengthening its air quality targets and associated policy and regulatory framework, including updating its National Ambient Air Quality Standards (NAAQS) to a level consistent with WHO guidance. Black carbon (BC), which is a sub-set of PM2.5, is a significant Short-Lived Climate Pollutant (SLCP) and is leading to accelerated glacial melting. SLCPs such as BC have a significant impact on climate change because their effects are more immediate and pronounced over shorter timescales than long-lived greenhouse gases such as carbon dioxide. BC accelerates glacial melting considerably causing rates about twice as fast owing to BC deposition on white snowy surfaces (World Bank, 2021). According to the Global Climate Risk Index, Nepal was already the 12th most affected country particularly due to its steep terrain and heavy monsoons, putting the country at risk of floods including Glacial Lake Outburst Floods (GLOFs), landslides, and droughts. BC significantly increases the risks of these hazards. 28 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS In this painting, a hurt bird asks, “Where’s my blue sky?” The red color represents the suffering of all living beings amidst the pervasive dust and grime. To bring this vision to life, the artist used an impasto technique, incorporating materials like tissue paper, rags, and grass from the ground. This approach not only adds depth and dimension to the piece, but also underscores the importance of reuse. Source: Ranjit Kunwar, 21, Winner, ‘Where’s My Blue Sky?’ Live Art Challenge. Air pollution is a transboundary problem, creating Report methodology a regional emergency. The Indo-Gangetic Plain and Himalayan Foothills (IGP-HF) airshed4 in South The report utilizes a comprehensive set of data, Asia includes parts of Bangladesh, Bhutan, India, including air quality data from the national air Nepal, and Pakistan. It is the global air pollution quality monitoring network, emission inventory, hotspot with almost one billion people exposed to the administrative energy statistics, technology highest worldwide annual average concentrations of effectiveness and costing inventory, and employs PM2.5. Multiple jurisdictions across the five countries advanced atmospheric, economic, and effectiveness contribute and are exposed to emissions that circulate modeling. It also includes an in-depth review of within the larger IGP-HF airshed jurisdiction. For this air quality institutions and policies, along with gap reason, it is critical that these countries across this analysis. The modeling framework used to analyze region take action to address air pollution. the movement of pollution, its sources, and the impact of pollution abatement measures is the Air pollution is a multisectoral issue in Nepal. The Greenhouse Gas and Air Pollution Interactions and primary sources of air pollution emerging from Nepal Synergies (GAINS) integrated assessment model. include industrial emissions, vehicular emissions, and This model incorporates new emissions inventory household air pollution (from cooking and heating information collected for the report and uses a with solid fuels). In addition to these three main chemical transportation model to provide insights sources, forest fires are a seasonal issue in Nepal, on spatial dispersion. Local air quality experts from particularly in the dry months from February to May. Tribhuvan University, Kathmandu University, and Addressing these sources requires coordinated policy the International Centre for Integrated Mountain actions and regional collaboration. Research (ICIMOD) quality controlled the model findings presented. Stakeholder consultations are scheduled for February, April, and May 2025 with key government stakeholders from various Ministries, 4 An airshed is a geographic area where air pollutants are including environment, transport, energy, health, confined and circulate due to topography and weather conditions, impacting air quality within its boundaries. and education. I ntroduction 29 Structure of the Report The report is organized into five chapters, each addressing distinct aspects of air quality management in Nepal. The chapters encompass an overview of air quality issues, a comprehensive analysis of pollution sources, an assessment of health and environmental impacts, and proposed solutions. Specifically: Chapter 1 Reviews the patterns and trends of air pollution. Chapter 2 Reviews Nepal’s air quality management governance structure and institutions. Chapter 3 Examines the health, economic, and human development benefits of reducing air pollution. Chapter 4 Examines the key sources of air pollution, current and future, identifies abatement measures, and evaluates their effectiveness and efficiency. Chapter 5 Identifies the enabling foundations to help address air pollution in Nepal, including for adopting the priority measures identified in chapter 4. The chapter discusses opportunities for strengthening air quality information systems, awareness raising, governance and enforcement, pricing and market policies, incentives to engage the private sector, and infrastructure development. CHAPTER 1: Nepal’s Air Quality Chapter 1 reviews the patterns and trends of air pollution in Nepal. Section 1.1 synthesizes the existing knowledge on the spatial and temporal variation of air quality in Nepal (a more detailed discussion is presented in Annex A), with focus on the most polluted regions, namely the Kathmandu Valley and the Terai. Section 1.2 describes the current state and recent developments of Nepal’s Air Quality Monitoring network. 1.1 Patterns of air quality Nepal’s two hotspots for air pollution are the Kathmandu Valley and the Terai. Nepal’s capital city is located in the Kathmandu Valley and the Terai (or more precisely the Terai plains), stretch along the northern edge of the IGP-HF airshed (Figure 1.1). Kathmandu, with its unique topography surrounded by mountain ridges, restricts the movement of air. Many mountain valleys and the Terai experience temperature inversions that trap air pollutants near the ground. Nepal, and particularly the Terai, is highly affected by other countries in the IGP-HF region when pollutants are transported within the same airshed that is shared by parts of Bangladesh, Bhutan, India, Nepal, and Pakistan (Lüthi et al., 2015). Kathmandu is also affected by other countries, but to a lesser degree. See chapter 4 for a detailed discussion of air pollution sources (both geographic and sectoral). Kathmandu’s air pollution often reaches ‘unhealthy’ or ‘very unhealthy’ levels. Source: Sabrina Dangol/World Bank. 32 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Figure 1.1: PM2.5 concentrations (µg/m3) in Nepal and other four countries sharing the Indo-Gangetic Plain and Himalayan Foothills (IGP-HF) region, 2021 LEGEND Country Border Terai Region Border Source: GAINS-Nepal estimates produced for this report. This report focuses on the pollutant responsible for in a host of severe health problems, including the greatest burden of disease, namely particulate cardiovascular diseases, stroke, and respiratory matter of 2.5 micrometers in diameter or less, disorders. Additionally, PM2.5 is highly correlated with known as PM2.5, is the most critical air pollutant other priority pollutants like Nitrous Oxide (NOx) and due to its severe health impacts. These minute Sulphur Dioxide (SO2), owing to their common origin particles, about 30 times smaller than the thickness from vehicle exhaust, industrial processes, and the of a human hair, penetrate deeply the respiratory combustion of fossil fuels in general. These pollutants system reaching the lung alveoli and the bloodstream.5 coexist in emissions and moreover, interact with one While larger particles are normally filtered out in the another chemically in the atmosphere: NOx and SO₂ nose and throat, PM2.5 can bypass these filters and can undergo chemical transformation into secondary cause inflammation, oxidative stress, and systemic PM2.5 particles, further worsening air pollution levels. damage (Krittanawong et al., 2023). This can result None of the monitoring stations across the 5 Bumrungrad International Hospital. 2024. The Health Risks Kathmandu Valley and the Terai report PM2.5 of PM2.5. Accessed through https://www.bumrungrad.com/ en/health-blog/january-2024/the-health-risks-of-pm-2-5. concentrations that are within the World Health C HA PTER 1: N epal’s Air Q uality 33 Figure 1.2: Annual average PM2.5 concentrations in the Kathmandu Valley and the Terai region, by monitored locations WHO guideline 100 80 60 40 20 0 ti pu a r ak g hi a ra ur ka nj PU ra k a TU ga ar ar tt ut an pa ad gu ha Ra kp am um ta da ap m nk na si D ng al ok ak na Si im ai D Jh tn ha t ep ra Bh ,P ha Bh Ja Bh Ra D Bi N BS D G Source: World Bank based on DoE’s annual reports on Status of Air Quality in Nepal, 2021 and 2023. Note: For stations where the latest PM2.5 data was not reported, 2021 data is included to ensure broader representation. By 2023, DoE has reported data from a total of sixteen stations within the Kathmandu Valley and the Terai, stations which had minimal gaps. It is important to note that the annual averages across these monitoring stations shown in this graph have been calculated based on partial data coverage, as shown in Figure 1.7, which could affect reliability of the reported values. Organization (WHO) guidance level, which is 5 2 (25 µg/m³), and 3 (35 µg/m³). All sixteen stations, µg/m³.6 Figure 1.2, which draws on the government’s which were reported by the Department of Environment air quality monitoring network, shows that in the (DoE) in its annual publications on Status of Air Kathmandu Valley readings exceed 40 µg/m³ and Quality in Nepal 2021 and 2023, exceeded WHO’s most stations in the Terai are even higher. Not only standard for PM2.5 of 5 µg/m³ for annual average are the current pollution concentrations higher concentrations. Stations in the Kathmandu Valley than the WHO guideline value, but they are also recorded high concentrations due to elevated levels of higher than WHO interim target values 1 (15 µg/m³), urban emissions from vehicles, construction activities, and the valley’s bowl-shaped topography that traps 6 This guidance level is a quantitative target to help gov- pollutants. More information on the location of these ernments minimize health risk through exposure to air stations and a comparison of their PM10 levels is pollution. The WHO global air quality guidelines state that this long-term target is “defined as the lowest exposure provided in Section A.5. level of an air pollutant above which the GDG is confident that there is an increase in adverse health effects.” It is Air pollution in the Kathmandu Valley is important to note that this does not mean that below 5µg/ m³ is “safe.” What exact level of exposure is risk free is not concentrated in the city center and the eastern determined. The WHO guidelines document writes: “This part. The ventilation in Kathmandu is constrained approach avoids consideration about what level of expo- sure should be considered safe, given that the available by the surrounding mountain ridges, which trap evidence cannot currently identify levels of exposure that are risk free for any of the pollutant–outcome pairs consid- localized air pollution, restrict airflow and allow ered in this document.” pollution to accumulate within the valley. The city 34 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS center and the eastern parts of the valley report the pollution levels have remained well above the the highest level of pollution due to dense urban WHO Interim Target 3 (15 µg/m³) and even surpassed activities and proximity to industrial areas and being a more lenient Interim Target 1 (35 µg/m³) at some a pathway for air pollutants to enter or leave the stations in certain years. For the Terai, the same annual valley. Annual PM2.5 in central Kathmandu and in trends analysis was not possible, given patchy data. Bhaktapur city is found to be somewhat higher For the Kathmandu Valley, statistical interpolation was than other suburban areas such as Bhaisepati and needed to arrive at the trends analysis displayed in Kirtipur.7 Among Kathmandu Valley stations, the Figure 1.3.8 To establish accurate long-term air quality lowest PM2.5 levels were recorded at Pulchowk which trends that enable evidence-based policymaking, it can be attributed to its location on the rooftop of is crucial to improve data monitoring across all 30 a campus building that reduces direct exposure to stations in Nepal. Details on how this can be achieved ground-level pollution sources and allows for better is further discussed in Section 5.1. dispersion of pollutants. In contrast, Khumaltar and Shankhapark recorded the highest levels at 46 µg/m³ Air pollution in the Kathmandu Valley exhibits and 50 µg/m³, respectively. Both stations reflect a seasonal pattern, with higher levels in winter urban emissions, with Shankhapark experiencing and lower levels in summer. Figure 1.4 shows particularly high pollution due to its proximity to that in the winter and spring months (dry season) the ring road. Corroborating evidence shows that Kathmandu experiences the worst air quality while the concentration of other air pollutants (such as summer monsoons9 are associated with cleaner air. nitrogen dioxide) is higher near roads, industrial, During the winter months, cooler temperatures and and built-up areas in central Kathmandu compared the valley’s bowl-shape traps the pollutants close to rural and suburban areas (Gurung et al. 2017b). to the ground, deteriorating the air quality. The summer monsoon season is conversely marked by In the Terai, air pollution levels were slightly a very noticeable improvement in air quality as rain higher than the Kathmandu Valley. In many Terai washes the pollutants out of the atmosphere.10 Heavy stations, the PM₂.₅ levels reached levels 12-15 times rainfall can temporarily improve air quality, reducing higher than the WHO guideline value, likely driven atmospheric lifetime of PM2.5. During the dry season, by industrial activities, agricultural residue burning, Kathmandu’s air quality is worsened by emissions and cross-border pollution. Biratnagar, the largest from brick kilns across the IGP-HF and forest fires city in the eastern Terai, had an annual mean PM2.5 (Kuikel et al., 2024). Heavy rainfalls are continuously concentration of 61 µg/m³ in 2021. More information concentrated over three summer months, followed on the sources of this pollution is provided in Chapter 4. by dry and dusty conditions with low air quality for the remainder of the year (Hamal et al., 2021). In the Kathmandu Valley, the air quality over the last seven years, for which there was data, Air pollution peaks in the morning and evening has remained stable. The trend analysis of PM2.5 because of human activities and natural processes. concentrations across three monitoring stations Air pollution levels generally follow a diurnal cycle, Bhaisipati, Pulchowk, and Ratnapark suggests that meaning they peak during the morning and evening air pollution levels in the Kathmandu Valley have remained relatively stable over the past decade, 8 The annual averages were calculated for stations with with no significant improvements or deterioration at least 70 percent data coverage across all seasons, but (Figure 1.3). While minor fluctuations were observed, many did not meet this threshold. For those with limited data, interpolation was applied to estimate missing the annual averages have consistently exceeded the values and improve trend analysis. The process involved WHO’s air quality guideline of 5 µg/m³. In most cases, calculating daily average PM2.5 concentrations, deriving station-specific ratios from overlapping data, and using these ratios to estimate missing values. 9 Mid-June to late-September; all stations had unhealthy air 7 The annual mean PM₂.₅ concentration at Ratnapark in cen- throughout January. tral Kathmandu was 39.2 µg/m³ and at Bhaktapur, on the east side of the valley, was 49 µg/m³. Both stations record- 10 PM₁₀ measurements around the Kathmandu Valley from ed higher PM₂.₅ levels than at other suburban sites in the 2002 to 2007 showed levels dropping by two-thirds to southern and southwestern parts of the valley (Bhaisepati three-quarters on the day after a heavy rainfall (Aryal et 38.9 µg/m³ and Kirtipur 37 µg/m³ (DoE, 2024). al., 2008). C HA PTER 1: N epal’ s Air Quality 35 because of high emission rates. Pollution drops in information on the dynamics of air pollution in the the middle of the day as winds ventilate the valley Kathmandu Valley is presented in Annex A. but then increases at night when the cool air traps While air pollution is a problem throughout the pollutants near the surface. These effects are Nepal, it is by far the highest in the Terai during further magnified by topographical factors such as the dry season. Like the pattern in Figure 1.4, the the enclosed geography of the valley. More detailed Terai has the most polluted individual days in winter Figure 1.3: Annual average PM2.5 (µg/m3) concentration trends in the Kathmandu Valley (2017-2023) 50 Bhaisipati Pulchowk 40 PM2.5 (ug/m3) Ratnapark 30 Interpolated 20 10 0 2017 2018 2019 2020 2021 2022 2023 Source: World Bank analysis based on data from the Nepal national monitoring network. Figure 1.4: Monthly trends of PM2.5 in the Kathmandu Valley (monthly average concentrations of the years with available data) 100 80 µg/m³ 60 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec US-Embassy Durbar square Dhulikhel Pulchowk Ratnapark Bhaisipati Bhaktapur Shankhapark Khumaltar Kirtipur CDES4 Ktm-Cms PKR-03 Daxinkali Teku PKR-04 LTP-03 Thankot2 BKT-06 CDES-26 HET-01 Budan Museum Source: World Bank analysis based on the data from DoE’s national air quality monitoring stations and a network of low-cost sensors installed by the Central Department of Environmental Science at Tribhuvan University (TU-CDES) in collaboration with Duke University. 36 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Figure 1.5: Monthly trends of PM2.5 in the Terai (monthly average concentrations of the years with available data) 120 100 80 µg/m³ 60 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Bhimdatta Dhangadhi Nepalganj Dang Simara Jhumka Damak Source: World Bank analysis based on data from the Nepal national monitoring network. and spring months (with monthly averages near of 200-300 µg/m³. Unlike the Kathmandu Valley, the 100 µg/m³), coinciding with the timing of forest Terai does not have clean air sweeping in at night fires and/or crop residue burning (Figure 1.5). The due to pollutants from neighboring IGP-HF states. flat and low-lying plains of the Terai house more than half of Nepal’s population (CBS, 2023) and are consistently polluted throughout the dry season. 1.2 Air quality monitoring The high concentration of industrial zones and the high population density contribute to air pollution Nepal’s Air Quality Monitoring network has in the Terai (see chapter 4 for a detailed pollution expanded in recent years. In 2002, six stations source analysis). High pollution levels in the Terai, were established to collect daily PM₁₀ samples at compared to the Kathmandu Valley, are associated urban, suburban, and roadside locations. Since with specific meteorological conditions and local 2016, the DoE has gradually expanded the network sources. to a total of 30 monitoring stations across Nepal, including seven in the Kathmandu Valley. Each of the The Terai air pollution follows a specific diurnal DoE’s 30 air quality monitoring stations is equipped pattern with high pollution levels in the morning with a GRIMM11 Electronic Dust Monitor (EDM) 180 and evening. All monitoring stations indicate having that measures PM1, PM2.5, PM10, Total Suspended the cleanest air of the day in the early afternoon, Particles (TSP), and a Lufft Smart Weather Sensor that followed by a rapid increase in PM2.5 levels in the measures several meteorological parameters. Four evening (DoE, 2024). Many stations demonstrated stations (Ratnapark, Dhulikhel, Chitwan, and Lumbini) winter and spring morning and evening PM2..5 maxima 11 GRIMM refers to GRIMM Aerosol Technik GmbH, a German manufacturer of air quality and aerosol monitoring equip- ment. C HA PTER 1: N epal’s Air Q uality 37 Figure 1.6: Map of reference-grade air quality monitoring stations in Nepal also measure CO, NOₓ, SO2, ozone, as well as black element of the nationwide network. This network is carbon, which is also measured at Chitwan. One shown in Figure 1.6. Alongside the federal nationwide ozone analyzer is also installed at Pulchowk station. network, a short-lived citizen-driven initiative named The data are collected every minute, via the stations’ “Drishti” added another layer to AQ monitoring in data loggers, and transmitted to a central server at 2016; the group established a network of 18 low-cost the National Information Technology Centre (NITC). air quality sensors around the Kathmandu Valley. The dataset is made available for download in Comma- Through active social media engagement, Drishti Separated Values (CSV) format through the official was effective in raising public awareness about air pollution monitoring website.12 Two additional stations quality until 2019. are managed by the US Department of State (DoS) at Phora Durbar and U.S. Embassy in Chakrapath The current air quality (AQ) monitoring network that measure hourly PM2.5 with a MetOne E-BAM requires further strengthening to ensure and ozone with an instrument from Teledyne API. data quality. The DoE network lacks official These data are made publicly accessible through the documentation on data cleaning techniques and US Environment Protection Authority (EPA) AirNow detailed record-keeping (Kim Oanh et al., 2024). website.13 Similarly, a high-altitude black carbon station While the DoE’s annual report outlines some quality on Yala Glacier set up by ICIMOD forms the 30th control rules, such as filtering out outliers,14 there is room for improvement, particularly in presenting 12 MOFE. Air Quality Monitoring. Accessed through: http:// 14 DoE‘s annual report on Status of Air Quality in Nepal-2021 www.pollution.gov.np/. outlines quality control rules for filtering out outliers 13 EPA. AirNow. Accessed through: https://www.airnow. (PM₂.₅≥ 1500 µg/m³; PM₁₀≥ 3000 µg/m³; TSP≥ 5000 µg/m³) gov/?city=Kathmandu&country=NPL. before data display. 38 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Figure 1.7: Total days of PM2.5 data availability in 2021 and 2023 Bhaisipati-2023 317 Bhaktapur-2021 239 Kathmandu Valley Khumaltaar-2023 355 Kirtipur-2023 254 Pulchowk-2023 179 Ratnapark-2023 325 Shankhapark-2023 283 Bhimdatta-2023 203 Biratnagar-2021 269 Damak-2021 236 Dang-2021 272 Terai Dhangadhi-2021 210 Janakpur-2021 340 Jhumka-2021 102 Nepalgunj-2021 95 Simara-2021 148 Source: DoE’s annual report on Status of Air Quality in Nepal, 2021 and 2023. complete seasonal coverage and analyzing the causes stations that would provide reliable and continuous of pollution events. The network faces significant data air quality information across the country (ICIMOD, gaps, with partial data coverage at most stations (see 2016). With more than half of their eventual target Figure 1.7). By 2021, 28 monitoring stations had been number of stations in place, the data gaps and poor established, but data was reported for only 17. By performance of the existing network severely limit the 2024, 30 stations existed, but data was reported for Department’s ability to assess baseline concentrations only 10 (DoE, 2024). Persistent gaps in data coverage15 across the country for all seasons. highlight the need for detailed reporting on data interruptions, learning from past challenges, proactive The lack of stack emissions monitoring limits the equipment maintenance, and better management DoE’s ability to enforce compliance with industrial practices to improve data reliability. standards. Currently, DoE does not have the capacity to carry out stack monitoring. Monitoring systems The lack of reliable and accessible AQ monitoring that track emissions from industrial units provide data limits the DoE’s ability to manage air quality a basis for enforcing robust industrial emissions in the country. The DoE has long-term plans to regulations. A pilot running stack emissions expand their monitoring network to a total of 56 monitoring would be a useful first start. As a next step, a Continuous Emissions Monitoring System 15 Figure 1.7 shows that four stations recorded PM2.5 data for (CEMS) can be considered. See box 5.1 describing fewer than 183 days, indicating these stations have data availability for less than half a year. Nepalgunj (95 days) the CEMS experience in China. However, adopting has the lowest number of days with available PM2.5, fol- such capacity requires significant finance as well lowed by Jhumka (102 days), Simara (148 days) in the Terai region, and Pulchowk (179 days) in the Kathmandu Valley. as human resource capacity for the operation and C HA PTER 1: N epal’ s Air Quality 39 maintenance of sophisticated systems that may Table 1.1 reveals that the NAAQs only specifies 24-hour require significant training and skills development. averages and lacks annual average limits for both PM2.5 and PM10. This omission underscores a critical Advancements in AI-powered satellite monitoring gap in Nepal’s air quality standards, specifically for are increasingly capable of detecting and regulating activities that lead to exceedances, and for quantifying industrial emissions. AI-driven analysis evaluating long-term exposure to particulate matter, of high-resolution satellite data can identify emission which have adverse consequences for human health. plumes, detect large-scale events like fires and flaring, and improve transparency by providing independent, large-scale monitoring. However, limitations such as lower spatial resolution, atmospheric interference, and the need for regulatory-grade precision prevent satellite-based methods from fully replacing CEMS. It is important for Nepal to set an annual average PM2.5 ambient air quality standard. The WHO’s Air Quality Guideline (AQG) has established a global benchmark that provides a basis for countries to assess the baseline level of ambient air pollution. The key air pollutants for which threshold limits are developed under AQG are PM2.5, PM10, SO2, NO2, CO, and O₃ along with heavy metals such as lead, arsenic, and cadmium (WHO AQG, 2021). AQG also recommends interim targets for pollutants to help encourage a shift from higher to lower pollutant concentrations.16 In Nepal, the air quality levels are assessed based on the nationally set limits as outlined by NAAQS. Table 1.1 compares the WHO’s target for pollutants Clean air is achievable if we embrace renewable energy; otherwise, our blue sky may vanish forever. Source: Mukti with Nepal’s nationally set standards. Chalise, 20, Finalist, Where’s My Blue Sky?’ Live Art Challenge. Table 1.1: Comparison of the WHO recommended AQG levels and NAAQS for various pollutants. Parameters WHO ( µ g/m 3 ) NAAQS ( µ g/m 3 ) 24-hour average Annual average 24-hour average Annual average TSP - - 230 - PM10 45 15 120 - PM2.5 15 5 40 - SO2 40 - 70 50 NO2 25 10 80 40 Lead - - - 0.5 Benzene - - - 5 Note: CO and O₃ have not been included in the table as their standards have been provided for a different averaging period. 16 Interim targets set annual average thresholds at 5 µg/m³ for PM₂.₅ and 15 µg/m³ for PM₁₀, and 24-hour averages at 15 µg/m³ for PM₂.₅ and 45 µg/m³ for PM₁₀. CHAPTER 2: Air Quality Governance in Nepal This chapter provides a review of Nepal’s air quality management governance structure. Section 2.1 gives an overview of the institutional framework and governance structure. Section 2.2 describes the current legal framework, standards related to air quality management, and environmental fiscal policies targeted at improving air quality. Section 2.3 describes past policies and initiatives aimed at specific sectors that affect air quality, while section 2.4 describes the results of some of these regulatory initiatives. 2.1 Institutional framework and governance structure related to air quality Figure 2.1 shows Nepal’s governance structure that involves legislative, executive, and judicial branches, along with various ministries, departments, and local bodies, working together to control air pollution through policies and regulations. The Federal Parliament is responsible for law-making related to pollution control, with several committees addressing this multi-sectoral issue. The judiciary helps to ensure adherence to air quality standards and pollution control measures, while the executive implements budgets, enforces policies, and coordinates the ministries and departments involved. The existing governance mechanism for managing air quality is characterized by ambiguity due to several factors: lack of clear roles and responsibilities, multi-sectoral involvement, absence of a dedicated parliamentary committee, insufficient legal and regulatory frameworks, judicial and executive challenges for compliance, and gaps in monitoring and enforcement. Therefore, the current governance mechanism for AQM in Nepal needs to be strengthened by establishing a clear institutional structure with well-defined roles and responsibilities, enhancing capacity, ensuring robust coordination among key stakeholder agencies and levels of government, and developing systems for regular monitoring and enforcement. At the federal level, nine ministries, directly or indirectly, contribute to air pollution management in the country. Among them, the Ministry of Forest and Environment (MoFE) and its Environment and Biodiversity division is responsible for formulating policies and strategies related to pollution control, environmental standards, and biodiversity conservation. Under MoFE, the Department of Environment (DoE)17 plays a crucial role in air quality 17 The Environmental Monitoring and Assessment Unit oversees the air quality monitoring network and conducts environmental impact assessments; the Pollution Control and Regulatory Unit enforces pollution standards, conducts environmental inspections, and issues pollution control certificates to industries that comply with emission standards; the Environmental Study and Statistics Unit collects environmental data and prepares annual reports on environmental trends and monitoring results to support evidence-based policy- making. 42 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Figure 2.1: Governance structure for air quality management in Nepal Federal Government Legislative Judiciary Executive Parliament & Parliamentary Office of the Prime Minister and Council of Ministers Committees Environment Protection and Climate Change Management National Council Federal Ministries & Departments Central Government Agencies • MOFE • MOPIT • NPC ◦ DoE ◦ DoTM, DoR • AEPC • MOHP • MOIC • KVDA ◦ DoHS ◦ DoI Provincial Government Office of the Chief Minister and Council of Ministers Environment Protection and Climate Change Management Council 7 Provincial Ministries • Ministry of Industry, Tourism, Forest and Environment Local Government 753 Local Levels • Private Sector • Academia • Media • NGOs/ Civil Societies • Metropolises • Sub-metropolises • Municipalities • VDCs management by drafting and enforcing air quality Industry, Commerce, and Supplies (MoICS) oversees standards, managing air quality monitoring stations, the control of industrial pollution; the Department of sharing air pollution data from various platform, Labor and Occupational Safety (DOLOS) oversees the and preparing periodic reports on air pollution for inspection of equipment for worker safety; the Ministry decision making. The MoFE issues pollution control of Health and Population (MoHP) oversees different certificates to industries complying with emission health issues caused by deteriorated air; and finally, the standards. Apart from MOFE, other line ministries Ministry of Physical Infrastructure and Transportation have their own specific roles within the management (MoPIT) manages vehicular air pollution. Additionally, of different sources of air pollution: the Ministry of other ministries directly or indirectly contribute to C HA PTER 2: A ir Q ualit y Governance in Nepal 43 the air pollution management in Nepal, such as the federal environmental strategies. The provincial Ministry of Energy, Water Resources, and Irrigation Environment Ministries are charged with overall (MoEWRI), the Ministry of Urban Development responsibility of planning, enacting, and reviewing (MoUD), the Ministry of Agriculture and Livestock air pollution standards and policies under their Development (MoALD), the Ministry of Federal Affairs jurisdiction; however, provinces lack the capacity and General Administration (MoFAGA), and the Ministry to effectively carry out these mandates. of Finance (MoF).18 The Nepal Planning Commission (NPC) is the central advisory body that formulates At the local level, municipalities along with their national visions, periodic plans, policies, budgeting, respective wards, are accountable for air pollution annual government programs and monitoring and control by engaging communities in efforts to evaluation systems. The NPC also provides recom- achieve and maintain clean air standards. The mendations, insights, and guidance to the sectoral Local Governance Operation Act, 2017 delineates the ministries, departments, and local bodies, supports rights, duties, and responsibilities of urban and rural the plan and program development, and monitors municipalities, empowering them to enact local laws the implementation of programs. A National Council and regulations for the conservation of environmental on Environment Protection and Climate Change protected areas, environmental pollution and Management, chaired by Prime Minister, has also hazard control, and solid waste management. A been established to provide high level guidance on few municipalities have attempted to reduce solid the subject. This council, however, hasn’t been very waste. With a total of 753 local governments across active, despite being required to meet once a year. the seven provinces, these entities handle service delivery and execute development activities. Local At the provincial level, the Chief Minister (CM) stakeholders, including private sectors, communities, is the head of the government and chairs the NGOs, International Non-Governmental Organizations Environment Protection and Climate Change (INGOs), civil societies, academia, and media, also Management Council that operates within the actively contribute to air quality management in policy framework of the federal government. Nepal. Each of the seven provinces of Nepal has established ministries that address environmental management, However, gaps and challenges remain in the with portfolios including forests, tourism, or institutional arrangement and regulatory reforms industry19. These ministries are responsible for policy are needed to clarify mandates and advance Nepali implementation and sustainable management of federalism for Air Quality Management (AQM). This resources at the provincial level, in alignment with involves identifying mandates for policy formulation, monitoring, and enforcement across federal, provincial, 18 The Ministry of Energy, Water Resources, and Irrigation and municipal levels, and among various ministries (MoEWRI) promotes clean energy alternatives such as hydropower to reduce reliance on fossil fuel and thereby and agencies. Strengthening the Department of reducing emission of air pollutants. The Ministry of Urban Development (MoUD) oversees urban planning, waste Environment (DOE), Department of Industry (DOI), management, and construction practices to reduce dust Department of Local Infrastructure (DOLI) and and emissions. The Ministry of Agriculture and Livestock Development (MoALD) addresses agricultural emissions Department of Transport Management (DOTM) is from the burning of crop residue and methane produced crucial, including financing, training programs for by livestock. The Ministry of Federal Affairs and General Administration (MoFAGA) facilitates liaison and coordi- enforcement officers, and the procurement of testing nation among federal, provincial and local levels. The and inspection equipment. These efforts should be Ministry of Finance (MoF) provides fiscal incentives and budgetary allocations to support clean energy technolo- integrated into a program of regulatory reform with gies and air quality initiatives. a clear implementation strategy, defined institutional 19 In Koshi province, the Ministry of Tourism, Forests, and Environment oversees environmental management; in responsibilities, and time-bound targets. The program Madhesh, Karnali, and Sudurpashchim provinces, it is should be developed collaboratively with relevant managed by the Ministry of Industry, Tourism, and Forest; in Bagmati and Lumbini provinces, the Ministry of Forest ministries and agencies, identifying necessary policy, and Environment is responsible; and in Gandaki province, institutional, and regulatory interventions, including it falls under the Ministry of Tourism, Industry, Commerce, and Supplies. guidelines, standards, and licensing protocols. 44 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS 2.2 Existing air quality policies and Initial Environmental Examination (IEE). The amended EPA has several provisions relevant to air Article 30 (1) of the Nepali Constitution provides to quality, including the issuance of pollution control every individual the fundamental right to a clean certificates to industries reducing emissions, the and healthy environment. establishment of laboratories, and the establishment of an environmental protection fund. 2.2.1 Environmental law and regulation Figure 2.2 shows the timeline of key developments In addition to the EPA and EPR, numerous policies in environmental regulations of Nepal. The from various sectors address air quality and clean Government of Nepal (GoN) enforces the Environment air management in Nepal. This is further discussed Protection Act, 2019 (EPA) and Environment in section 2.3. Protection Rules, 2020 (EPR) to control and minimize environmental pollution, thereby protecting public 2.2.2 Air quality standards health. While the first EPA was enacted in 1996, its Figure 2.3 illustrates a timeline of standards related enforcement began a year later in 1997, followed to air quality management, as introduced by the by the promulgation of EPR. With these rules, GoN. It shows how standards have been gradually Nepal made Environmental Impact Assessment introduced and revised to address emissions from (EIA) mandatory. In 2019, the EPA was amended sources, including vehicles and industries. The and introduced two additional categories: Baseline timeline represents the country’s attempts to tackle or Brief Environmental Study (BES) and Strategic air pollution through various standards. Environmental Assessment (SEA), alongside EIA Figure 2.2: Timelines of EPA and EPR 1997 2019 2020 • Environment Protection Act, EPA National Environment Environment • Environment Protection Protection Act, EPA Protection Rules, EPR Regulations, EPR (revised) (revised) Figure 2.3: Standards related to air quality management 2000 2003 2008 Nepal Vehicle Mass First National Ambient Standards on Chimney Emission Standard, Air Quality Standard, Height and Emission for NVMES Euro-I NAAQS Brick Kiln Industry 2012 2009 • Revision of Nepal Vehicle Mass Emission Standard National Indoor Air • Revision of NAAQS Quality Standard and • Standard for PM emissions for Cement and Crusher Plants Implementation Guideline • Standard on Chimney Height and Emission of Industrial Boiler • Standard for emission from In-Use and Imported Diesel Generators C HA PTER 2: A ir Q ualit y Gov ernance in Nepal 45 Standards for ambient air quality control devices to restrict emission from boilers, The National Ambient Air Quality Standard (NAAQS) thereby keeping air quality in check. Additionally, was first established in 2003 by the Ministry of emission limits were also introduced for in-use and Population and Environment (MOPE) and later imported diesel generators, used most frequently in revised in 2012. A comparison of the former and industries as an alternate power source due to the revised versions of NAAQS is given in Table 2.1. The unstable supply of electricity in the country. Detailed revised NAAQS in 2012 introduced a standard for PM₂.₅ information on emission limits is provided in Annex B. and implemented stricter standards for benzene, Standards for the mobility sector which were absent in the NAAQS-2003. In 2000, the Nepal Vehicular Mass Emission Standards for the industry sector Standards (NVMES) were introduced, aligning with To control industrial air pollution, Nepal has the European Emission Standard I (Euro-I)20. These introduced several standards in key sectors for standards aimed to control harmful pollutants like key technologies such as brick kilns, cement carbon monoxide and hydrocarbons emitted from and crusher plants, industrial boilers, and diesel vehicles. By 2012, the NVMES was revised to adopt generators. In 2008, chimney height and emission stricter Euro-III standards, reflecting advancements in standards were introduced for brick industries, one of vehicle emission control. This revision also prohibited the highest emitting sectors for air pollution. These the import of vehicles that did not meet the Euro-III standards regulate chimney heights to improve the criteria, with an exception for heavy equipment dispersion of pollutants and reduce concentration at vehicles. These updates were significant in ensuring the ground level. In 2012, emission standards were cleaner vehicle technology and reducing emissions, as introduced for cement and crusher plants, considered many registered vehicles in Nepal were still operating to be a major source of dust and fine particulate under older emission standards. In 2020, the Nepal matter. In the same year, standards were introduced Oil Corporation (NOC), a sole importer and distributor to limit emissions from industrial boilers prevalent of petroleum fuels, started importing Euro-4 standard across manufacturing sectors for generating steam to petrol and diesel, which when complemented with produce energy. Coal, diesel, or other fossil fuel-fired Euro-VI standard vehicles can significantly reduce boilers emit enormous amounts of pollutants (Khan et SOX and NOx emissions. Detailed information on the al., 2022). The emission standards of 2012 mandated guidelines of emission limits for vehicles is provided the use of specific chimney heights and emission in Annex B. Table 2.1: Comparison of NAAQS for various pollutants Parameters NAAQS 2003 ( µ g/m 3 ) NAAQS 2012 ( µ g/m 3 ) 24-hour average Annual average 24-hour average Annual average TSP 230 - 230 - PM10 120 - 120 - PM2.5 - - 40 - SO2 70 50 70 50 NO2 80 40 80 40 Lead - 0.5 - 0.5 Benzene - 20 - 5 Note: CO and O₃ have not been included in the table as their standards have been provided for a different averaging period 20 Roman numerals (Euro I, II, etc.) are used for vehicle emission standards, while Arabic numerals (Euro 1, 2, etc.) are used for fuel qual- ity standards, 46 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS 2.2.3 Environmental fiscal policies rate of infrastructure tax is NPR 10/liter. From July Nepal has experience with introducing environ- 2015 to March 2023, the government collected NPR mental fiscal policies, especially targeted at 194.5 billion from the infrastructure tax on petroleum reducing emissions. These policies include additional products (Republica, 2024). or incremental taxation on polluting fuels and The GoN has introduced a Green Tax to incentivize technologies, and subsidies to cleaner fuels and emissions reductions and generate public revenue. technologies. Most of the environmental fiscal policies The Green Tax, introduced through the Finance Act have been introduced upstream, or at the border 2024, is imposed on all imported petroleum and coal (through custom centers) for multiple reasons. First, products. The Green Tax rates are, however, small— almost all fossil fuels (except a small portion of coal) NPR 0.5 per kg on coal and coal products and NPR 1 are imported in Nepal. Since fossil fuels are the main per liter on petroleum products (in addition to the sources of local air pollution and CO₂ emissions, pollution tax discussed above). The government has taxing them at the border has a lower administrative already started collecting the Green Tax starting July cost. Second, upstream taxing covers all consumers 15, 2024. The funds are flowing into the consolidated (final and intermediate) and helps reduce emissions budget of the country and have not been earmarked throughout the economy through pricing as well for environmental use. as substitution effects.21 Increased fuel prices due to taxation also incentivize consumers to improve The government also imposes conventional taxes their energy efficiency. Examples of environmental (e.g., import duty, excise tax, VAT) besides the fiscal policies recently introduced in Nepal include specific taxes discussed above. While petroleum the pollution tax (an environmental tax on petrol), products receive subsidies in many countries, Nepal which was introduced on July 1, 2017, the Green does not have subsidies on fossil fuels except a Tax (a tax on fossil fuels more broadly), which was cross-subsidy (not a budget transfer from the introduced on July 1, 2024, and reduction of import government) on Liquified Petroleum Gas (LPG). duties of electric vehicles (EVs), which was introduced According to the Department of Customs, the total on July 1, 2022. tax on gasoline was 58 percent of its border price in 2022/23 fiscal year. Similarly, diesel is also taxed at 40 A pollution tax, imposed on petroleum products percent of its border price. Nepal’s higher petroleum (gasoline and diesel), was the first environmental taxes act as a deterrent, keeping fuel use in check fiscal policy introduced in Nepal aiming to reduce and in turn, reducing emissions. If these taxes are emissions. As per the Finance Act 2064 BS (2008 reduced, fuel consumption will increase, adding to AD), the GoN introduced an additional tax at the pollution and environmental degradation. For instance, border point (i.e., customs) on the import of petrol subsidies and low taxes have underpriced fossil fuels (i.e., gasoline) and diesel. Initially, this pollution tax in China22, making these fuels affordable for industries rate was NPR 0.5 per liter of petrol and diesel. This and therefore leading to increased emissions. This has since increased threefold and is now NPR 1.5 per has imposed a significant health burden, with China liter. Although the government has been collecting experiencing some of the highest mortality per ton this tax for more than 15 years and collected billions of SO₂ emission (IMF, 2023). Removing subsidies and of rupees, it has not been utilized for environmental adding corrective taxes to fossil fuel prices could purposes. For example, the government collected NPR achieve a 43 percent reduction in CO2 emissions 3.08 billion as pollution tax in the fiscal year 2022/23 globally, preventing 1.6 million premature deaths alone (Nepal Oil Corporation, 2023). In addition to due to air pollution by 2030 (IMG Blog, 2023). the pollution tax, the government also imposed an infrastructure tax on petrol since 2015. The current 21 Pricing effect refers to reduction of emissions through demand response of increased price, and substitution effect refers to substitution of taxed fossil fuels with 22 China is the largest subsidizer of fossil fuels globally, with cleaner fuels in response to the increased prices due to a contribution of 2.2 trillion to global fossil fuel subsidies the environmental taxation. in 2022. C HA PTER 2: A ir Q ualit y Governance in N epal 47 Reduced duty on EVs is the main subsidy policy due to much smaller taxes and duties or due to cuts for cleaner transportation in Nepal. The GoN has in taxes and duties as compared to ICE vehicles. cut duties and excise tax on EVs to promote the substitution of fossil fuels with hydroelectricity and The taxation policies in Nepal provide a price reduce local air pollutants as well as CO₂ emissions advantage to EVs over Internal Combustion Engine from the transport sector. Figure 2.4 presents average (ICE) vehicles, promoting their affordability and prices of various vehicles in Nepal with a breakdown adoption. The duties and taxes (including 13 percent of border prices and taxes. Currently, EVs receive cuts VAT) on ICE vehicles as the percentage of border (CIF – on their import duties and excise tax compared to Cost, Insurance, Freight) price, are much higher their Internal Combustion Engine (ICE) counterparts. compared to EVs (see Figure 2.4). For example, the For example, 1000 CC ICE light-duty vehicles costs, on taxes on Light-Duty Vehicles (LDV) ICE, on average, is average, NPR 30.6 Lakh. Of this total, costs, import 247 percent of its CIF price, whereas the corresponding duties and taxes (including 13 percent VAT) account value for an equivalent EV is only 30 percent. If the for NPR 21.8 Lakh (or 71.2 percent). On the other same rates of duties and taxes of LDV ICE vehicles hand, equivalent size EVs (≤ 50 kW) cost NPR 24.1 are applied to LDV EVs, the latter would cost NPR Lakh, of which duties and taxes account for only 64.3 Lakh, or almost three times as expensive as it 23 percent. The EV of this category is 21 percent is presently. The LDV EV thus receives, on average, cheaper compared to the equivalent ICE vehicles NPR 40 Lakh implicit subsidies on its duty and taxes. Figure 2.4: Border (CIF) prices and taxes of vehicles (Lakh, NPR) 45.0 80.0% 40.0 70.0% 35.0 60.0% 30.0 50.0% 25.0 40.0% 20.0 30.0% 15.0 20.0% 10.0 5.0 10.0% 0.0 0.0% ICE EV ICE EV ICE EV ICE EV ICE EV ICE EV 2W LDV I LDV II Microbus Minibus Minibus CIF Tax Tax as % of total costs Source: Unpublished report prepared by the World Bank for the High-Level Tax System Reform Advisory Committee (May 2024). Notes: Taxes include duties, excise and VAT. EV and ICE refer to electric vehicles and internal combustion vehicles, respectively. 2W refers to two-wheel- er vehicle and LDV refers to light-duty vehicles. 2W ICE and LDV I (ICE) have an engine capacity less than or equal to 1000 cc; LDV II (ICE) has an engine capacity between 1000 and 1500cc. LDV I (EV) has an engine capacity less than or equal to 50kW, whereas LDV II (EV) has an engine capacity between 50 and 100 kW. Microbus has 11 to 14 seats; minibus has 15 to 25 seats and bus has more than 25 seats. On purchasing price basis, a taxi falls under LDV I. 48 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS 2.3 Existing sector-specific Management Act, 1993, which provided legal backing for the emission testing of vehicles. This was expanded policies and initiatives related further in 1996 to include testing vehicle emissions to air quality management in 3- and 4-wheelers in the Kathmandu Valley to ascertain that the levels of emission were within This section outlines several policies and initiatives permissible limits. Similarly, the Vehicles and Transport relating to sectors that significantly contribute to Management Rules of 1997 required that the vehicle air pollution. should always meet the prescribed emission standards. These were the initial steps taken by the government 2.3.1 Transport sector policies for controlling vehicular emissions and were under related to cleaner air the purview of the Pollution Control Division of the Figure 2.5 provides a chronological overview of Department of Transport Management. policies and initiatives taken by the GoN related to the transport sector, representing efforts toward In 1999, the GoN introduced a ban of diesel-fueled regulating air pollution through technological three-wheelers, called Vikram tempos, within the upgrades and policy measures. The foundation Kathmandu Valley (BBC, 1999). This decision marked of transport-based pollution control in the country a significant step towards reducing visible vehicular was established by the Motor Vehicles and Transport emissions as it targeted one of the most polluting Figure 2.5: Policies and initiatives related to transport sector 1993 1996 1997 1999 Motor Vehicles and Vehicle Emission Testing Vehicle and Transport • Ban on diesel-operated Transport Management in Kathmandu Valley Management Rules, 3-wheelers in Act, 2049 (3- and 4-wheelers) 2054 Kathmandu Valley 2014 2012 2001 Environment Friendly Euro-III National Transport Vehicle and Transport Policy Standard Fuels Policy, 2058 2017 2018 2020 • Vehicle-free zone at core areas of • National Action Plan Adoption of tourist-hub Thamel for Electric Mobility Euro IV fuels • Ban of public vehicles older than • Ban of public vehicles older than 20 years in Kathmandu Valley 20 years in the country • Import of Euro IV fuel C HA PTER 2: A ir Q ualit y Governance in N epal 49 forms of public transport.23 The focus on cleaner the DoTM in coordination with traffic police. This vehicles continued with the National Transport Policy decision was extended to a nationwide ban in 2018, of 2001, which promoted pollution-free vehicles and with a vision to phase out older polluting vehicles mandated regular emission testing. Similarly, the from the road. Environment-Friendly Vehicle and Transport Policy, To accelerate the implementation of Nepal’s introduced in 2014, targeted a 20 percent share of Nationally Determined Contributions (NDC), the EVs in Nepal’s transport by the year 2020, providing National Action Plan for Electric Mobility was subsidies on EVs and non-motorized transportation. introduced in 2018. The action plan outlines strategic Other localized initiatives have been taken to steps to be taken for increasing the adoption of EVs, combat urban congestion and pollution; some with an emphasis on infrastructural development, have proved successful. For example, the 2017 such as charging stations, policy development, and implementation of vehicle-free zones in Thamel, a financial support. Some of the key goals include significant tourist destination in Nepal, significantly reducing air pollution and reliance on fossil fuels reduced particulate matter in that area. This initiative by strengthening the adoption of electric mobility. was undertaken by the joint effort of local level authorities such as the Kathmandu Municipality, 2.3.2 Industrial sector policies Metropolitan Police Division, and Thamel Development related to cleaner air Council. Even though the vehicle-free zone rule could Figure 2.6 provides a chronological overview of not be sustained after the pandemic, this initiative the policies and initiatives related to the industry highlights the significance of scaling up local-level sector in Nepal, emphasizing their role in managing interventions to achieve long-term success. In the industrial air emissions. In 2003, the brick sector same year 2017, a ban of vehicles older than 20 years saw the banning of the extremely polluting moving within the Kathmandu Valley was implemented by chimney bull’s trench kilns (MCBTKs). While most of Figure 2.6: Policies and initiatives related to industry sector 2003 2011 2016 Nationwide ban on Industrial Policy Special Economic MCBKTs Zones Act 2021 2011 2017 Industrial Enterprises Industrial Enterprises Transition from Regulations Act FCBKTs to ZZKs 23 The ten-seater Vikram tempos were one of the most used and affordable public transports, although each vehicle was accompanied by a very visible plume of black smoke. 50 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS the kilns in the Kathmandu Valley were replaced by stricter compliance requirements for industries fixed chimney bull’s trench kilns within the year24, to adopt pollution control measures. Firstly, the and by zig-zag kilns after 2015, dozens of MCBKTs Act allows industries investing in pollution control remained in hidden rural locations even a decade after measures to claim expense deductions up to 50 their ban, and even in 2024 a handful of them can still percent of their adjusted taxable income. The Act be spotted in Google Earth imagery. Meanwhile the also reduces customs duty on pollution prevention spread of zig-zag kilns in areas outside of Kathmandu equipment imports. The Industrial Policy 2011 also is happening in clusters, with some Terai districts supports these tax deductions for investments in such as Sunsari, converting almost entirely, while pollution control systems. The Industrial Enterprises other districts are still largely dominated by fixed Regulations (IER) of 2021 further clarify how industries chimney bull’s trench kilns. should manage environmental protection and pollution prevention. Secondly, the Act allows issuing penalties The enactment of the Special Economic zone (SEZs) in the form of fines and suspension of operating Act in 2016 has been a significant policy toward license, for non-compliance with environmental pursuing more balanced industrial growth with standards. minimal environmental degradation. The SEZs were established to promote manufacturing and 2.3.3 Energy sector policies export-oriented industries, through fiscal incentives related to cleaner air such as tax exemptions, reduced customs duty, Figure 2.7 provides a timeline of policies and and concession of land. More importantly, the initiatives related to Nepal’s energy sector Act requires that industries in the SEZs adhere to with implications for air pollution reduction. national-level emission standards and implement The Hydropower Development Policy 2001 aims to suitable eco-friendly technologies to control emissions. generate low-cost and clean hydroelectricity, focusing To further address industrial pollution, the on rural electrification through the development of Industrial Enterprise Act (IEA) of 2020 enacted small and micro-hydropower projects. The policy Figure 2.7: Policies and initiatives related to energy sector 2001 2006 2013 Hydropower Development Rural Energy Nepal Energy Policy Policy Strategy 2018 2017 2016 National Energy Biomass Energy Renewable Energy Efficiency Strategy Strategy Subsidy Policy 24 There were also some failed donor-driven pilots to introduce vertical shaft brick kilns. C HA PTER 2: A ir Q ualit y Governance in N epal 51 mandates environmental impact assessments to 2.3.4 Other policies and initiatives ensure that the hydropower projects comply with related to cleaner air environmental protection standards. Figure 2.8 provides a timeline of policies and The GoN aims to increase access to clean sources initiatives related to the climate and environment of energy in rural areas. The Rural Energy Policy of sector, as introduced by the government. The 2006, followed by initiatives such as the Renewable National Environmental Policy and Action Plan (NEPAP), Energy Subsidy Policy in 2016 and Biomass Energy introduced in 1993, implemented some fundamental Strategy in 2017, have encouraged the adoption steps against air pollution: the enforcement of vehicle of clean and sustainable energy technologies in emission standards, integrating environmental impact rural areas. The efforts included subsidizing biogas assessments, and involving local bodies in urban technologies, improved cookstoves, biofuels, and and industrial planning. These early steps laid the biomass gasification—all indicative of reduced basis for addressing air quality issues. dependence on traditional biomass and fossil In 2010, the Forest Fire Management Strategy fuel. Likewise, the Nepal Energy Strategy 2013 has was implemented in Nepal, which aimed at highlighted the need to transition toward modern reducing air pollution resulting from wildfires. fuels, including hydropower and to reduce indoor The strategy aims at conserving biodiversity and air pollution by using improved cookstoves. These reducing carbon emission from forest fire through policies summarize Nepal’s strategic leap toward policy and institutional strengthening, community renewable and clean energy solutions for better mobilization, relevant stakeholder engagement, air quality. development of early warning systems, and transboundary collaboration. Figure 2.8: Policies and initiatives related to climate and environment 1993 2010 2011 2016 National Environmental Forest Fire Management Climate Change First Nationally Policy and Action Plan Strategy Policy Determined Contributions, NDC 2020 2016 • Second Nationally Determined Contribution • National Environment Policy • National Environment Protection Regulation • National Climate Change Policy • Kathmandu Valley Air Quality Management • Climate Change Strategy and Action Plan Action Plan, KVAQMP • A ban of opening burning in Kathmandu Valley 2021 Nepal’s Long Term Strategy for Net-Zero Emission 52 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS In 2011, Nepal introduced the Climate Change The Kathmandu Valley Air Quality Management Policy, aiming to tackle climate change and its Action Plan (KVAQMP) was first developed in 2017 implications through environmental conservation and approved by the council of ministers in 2020. and sustainable development. With the transition to a The plan identified vehicular emissions, industrial federal system, the need for a new policy had emerged. activities, and construction dust as major sources Accordingly, in 2019, the National Climate Change of air pollution in the valley where levels of PM Policy was formulated, envisioning the integration frequently exceeded national and WHO standards of climate change issues into government plans and The KVAQMP delineates roles and responsibilities to policies at all levels. This policy extends to sectors such several ministries, departments, and local levels for the as agriculture, forestry, tourism, transport, disaster, implementation of activities to manage air pollution and water resources, each outlined with specific in the valley.25 As the activities are time-bound, plans and programs. However, air pollution received with clear deadlines, measurable indicators, and limited attention in this policy document, aside from responsible agencies, the Action Plan is seemingly section 8.11 which highlighted the development of a powerful policy tool to ensure the cross-sectoral technologies aimed at reducing black carbon and coordination required to achieve clean and healthy greenhouse gas emissions. air in the Kathmandu Valley; however, the lack of accountability for failure to achieve the specified The first Nationally Determined Contributions targets has left the plan falling short of its desired (NDC) of 2016 and the Second NDC of 2020 set outcome. Additionally, the plan lacks a clearly defined ambitious goals for transition towards clean coordination mechanism among stakeholders, leading energy and reducing dependence on fossil fuel. to challenges in effective implementation. The First NDC presented targets for renewable energy expansion: achieving 80 percent electrification from The National Environment Policy of 2019 aims renewable sources by 2050, reducing dependence for the protection of the environment through on fossil fuel by 50 percent, and increasing EVs by pollution control, solid waste management, and at least 20 percent no later than the year 2020. The the enhancement of green spaces. While there Second NDC expanded these targets to 15,000 MW isn’t a distinct section solely focused on air quality clean energy generation capacity and 90 percent management, Section 8.1 broadly outlines actions EV sales by 2030. related to air, water, and noise pollution control. Some of the measures include establishment of concentration-based and load-based standards to regulate air pollution, issuance of certificates to industries utilizing clean technologies, promotion of eco-friendly cooking stoves, and promotion of clean energy vehicles. 25 The KVAQMP delineates the roles to 10 ministries including the Ministry of Forests and Environment (MoFE), Ministry of Physical Infra- structure and Transport (MoPIT), Ministry of Finance (MoF), Ministry of Industry, Commerce and Supplies (MoICS), Ministry of Energy, Water Resources and Irrigation (MoEWRI), Ministry of Health and Population (MoHP), Ministry of Water Supply (MoWS), Ministry of Education, Science and Technology (MoEST), Ministry of Federal Affairs and General Administration (MoFAGA), and Ministry of Home Affairs (MoHA). The departments include the Department of Environment, Department of Transport Management, Department of Roads, Department of Industry, Department of Water Supply and Sewerage Management, Metropolitan Traffic Police Division, Nepal Electricity Authority, and Nepal Bureau of Standards and Metrology. Local levels include Kathmandu Metropolitan City (KMC), Lalitpur Metropolitan City (LMC), and other municipalities within the valley. Supporting agencies comprise the National Planning Commission (NPC), Office of the Prime Minister and Council of Ministers, Kathmandu Valley Development Authority, High Powered Committee for Integrated Development of the Bagmati Civilization, and Alternative Energy Promotion Center (AEPC). Additionally, other stakehold- ers include NGOs, private sector entities, community-based organizations (e.g., Tole Development Committees), universities, and research institutions. C HA PTER 2: A ir Q ualit y Governance in N epal 53 The Supreme Court of Nepal prohibited open 2.4 Gaps in plans and policies burning in 2019, followed by a notice from the Kathmandu Metropolitan City (KMC) in 2022 to related to cleaner air stop burning solid waste (The Himalayan Times, In this section, gaps in the existing policy framework 2022). Open burning significantly contributes to poor are diagnosed; however, recommendations on filling air quality in the Kathmandu Valley, particularly the policy gaps with respect to Nepal’s AQM framework during the winter season. Approximately three are presented in chapter 5. percent of the daily generated solid waste in the valley, equivalent to 20 tons per day, is reportedly NAAQS burnt in open spaces26. It is estimated that open burning of solid waste in Nepal leads to a 30 percent The revised NAAQS mandates 24-hour average increase in PM2.5, causing around 300,000 premature threshold levels for pollutants including PM2.5, PM₁₀, deaths from chronic obstructive pulmonary diseases and TSP, but lacks annual average thresholds for these (Saikawa et al., 2020). pollutants. Both annual and 24-hour standards are crucial for assessing air quality. For instance, the WHO recommends annual average PM2.5 concentration below 5 µg/m³ and 24-hour average below 15 µg/m³. While the 24-hour standards help to understand short-term pollution peaks, annual standards are essential in addressing long-term exposure to A woman and child, both wearing masks, navigate a dusty road in Nepal, a common sight highlighting the daily challenges posed by the air quality in many parts of the country. Source: Sabrina Dangol/World Bank. 26 CEN. Policy Brief on Air Pollution & Health in Kathmandu Valley- Solid Waste. Accessed through: https://www.cen.org.np/uploads/doc/uhi- policy-brief-swm-final-62b145f1ce03f.pdf. 54 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS The inclusion of annual standards for PM 2.5 and PM 10 in NAAQs is crucial as it provides a benchmark to assess impacts related to prolonged exposure to these pollutants, facilitating effective air quality management strategies and regulations. pollutants and tracking progress in air quality over effectiveness. If a vehicle fails the emission test, time. Therefore, the inclusion of annual standards owners often rely on local repair shops to make for PM2.5 and PM10 in NAAQs is crucial as it provides essential adjustments for proper functionality of the a benchmark to assess impacts related to prolonged vehicle’s emission control device. However, these exposure to these pollutants, facilitating effective repair shops frequently lack the technical expertise air quality management strategies and regulations. and resources required for such changes and resort to providing minimal alterations solely to facilitate Nepal Vehicular Mass Emission Standards (NVMES) test clearance. The availability of authorized repair centers would have simplified the process of making While this standard exists to date, vehicle inspections accurate adjustments to minimize vehicle emission, have major gaps. First, they are not mandatory for ensuring compliance and facilitating more effective motorcycles (which are the most common vehicle monitoring. type) or for heavy-duty diesel vehicles (which are the biggest emitters). The standards apply only to In 2022, the DoE issued a notice to fine vehicles three- and four-wheel passenger and light-duty failing pollution tests, leading to random checks in vehicles. Second, the inspections/measurements the valley where a significant number of vehicles are still based on Euro-II standards, while Euro-III failed emissions tests. However, these initiatives have and higher standard vehicles are being imported. been irregular and inconsistent, making them an Third, as identified in the earlier sections, the inefficient approach to monitor and ensure compliance. instruments used to measure emissions are often Additionally, a comprehensive guiding document wrongly calibrated. Fourth, the system is allegedly is lacking that provides details on emission testing fraught with corruption, with an open black-market instruments, their maintenance, testing methods, and for “green” stickers (Nepali Times, 2019). emission standards thereby raising concerns about National Environment Policy the accuracy and reliability of the entire process. In addition, the manual record-keeping of issued green Despite covering various sources of air pollution, stickers in yearly logbooks, without a mandated digital from household fuel use to transportation, the recording procedure, poses challenges in assessing policy lacks clear implementation strategies. The program effectiveness and opens avenues for fraud provisions appear as individual statements rather and corruption (Faiz et al., 2006; Shrestha, 2013). than comprehensive strategies ready for execution. The absence of specified timelines for achieving Ban on diesel-fueled three wheelers these goals contributes to the ambiguity of these Alongside the ban on “Vikram tempos” (diesel-fueled, policies. Moreover, the policy does not establish a three-wheeled public transport vehicles) in 1999, the clear coordination mechanism among the three tiers government introduced incentives that seemingly of the government, potentially hampering effective contradicted this environmental initiative. This policy implementation. included a 99 percent subsidy on customs taxes Vehicle emission testing and an exemption from the Value Added Tax (VAT) for imported 15-seater diesel-powered microbuses Since the introduction of the system, there have (Sushila Maharjan, 2002). The implementation of these been growing concerns about policy enforcement mixed measures overlooked the opportunity to fully C HA PTER 2: A ir Q ualit y Gov ernance in Nepal 55 support the adoption of cleaner alternatives, such caught on the roads, but this is inadequate in regions as “Safa tempos” (three-wheeled, battery-powered with sparse inspections. A more effective strategy EVs that are used for public transportation). This could involve leveraging the DoTM’s registration data ultimately limited the growth of the EV market in to compile a list of old vehicles and facilitating their Nepal in the early 2000s. The electric trolleybus system removal by the Traffic Police Division during routine connecting Kathmandu and Bhaktapur, launched monitoring. in 1975 as a cleaner public transport alternative, also met with the same fate and was officially shut In February 2024, the Gandaki Province introduced down in 2009 due to persistent maintenance issues, the Provincial Vehicle and Transport Regulations 2080, financial constraints, and operational inefficiencies, extending the policy to include the scrapping of private among other reasons. vehicles over 25 years old (Provincial Gazette, 2024). However, at the national level, this ban remains limited Ban on public vehicles older than 20 years to leased transport vehicles. The GoN initiated phasing out of aging vehicles by Other implementation challenges include a lack of introducing a ban on public vehicles over 20 years dedicated scrapping or dismantling facilities. The old, starting enforcement in the Kathmandu Valley Nepal Road Safety Action Plan (NRSAP) 2021–2030 on March 1, 2017 (Nepal Gazette, 2017), and then highlights the absence of a structured vehicle nationwide on March 15, 2018 (Das et al., 2024). The scrapping mechanism and inadequate Vehicle nationwide ban was reinforced by the Supreme Court Fitness Testing Centers (VFTCs) as significant gaps in 2024 to scrap all leased (public and commercial) to achieving the intended outcomes of such policies diesel and petrol vehicles older than 20 years and (MoPIT, 2021). The NRSAP emphasizes the urgent EVs older than 30 years. Despite these efforts, the need for comprehensive infrastructure to support enforcement has been inconsistent as many of the old vehicle scrapping. It calls for establishing Vehicle models remained on the roads, especially in rural areas Fitness Testing Centers in all provinces to ensure with limited monitoring. A key issue is the absence of regular inspections and proper decommissioning an effective strategy as the government’s approach processes. relies on dismantling older vehicles only if they are A painter imagines a future with cleaner air. Source: Jenish Maharjan, Finalist, Where’s My Blue Sky?’ Live Art Challenge CHAPTER 3: Benefits of Clean Air in Nepal This chapter examines the health, economic, and human development benefits of reducing air pollution in Nepal. Section 3.1 describes the overall health burden of air pollution. Section 3.2 reviews Nepal-specific health studies, focusing on local evidence with respect to the effects of air pollution. Section 3.3 discusses newly emerging evidence on other health impacts, such as childhood stunted growth, preterm birth, and neurological effects. Section 3.4 covers the economic costs associated with air pollution. Section 3.5 outlines numerous development benefits of clean air action, such as improved energy and water security, tourism, aviation safety, and creation of jobs in green energy sectors. 3.1 Health impacts of air pollution and the burden of disease Air pollution is the number 1 risk factor for death and disability in Nepal, ahead of malnutrition (number 2) and tobacco (number 3).27 Air pollution is a persistent environmental challenge in Nepal, with significant implications for public health and development. Elevated levels of particulate matter and other pollutants in the air have been associated with a range of health issues and diseases that contribute to the global burden of disease. Key diseases and health conditions associated with air pollution include respiratory diseases (chronic obstructive pulmonary disease (COPD)—asthma, bronchitis, etc.), and cardiovascular diseases (increased risk of heart attacks, stroke, hypertension, lung cancer, acute lower respiratory infections (ALRI), etc.). Air pollution can also weaken the immune system, making individuals more susceptible to respiratory infections like pneumonia, particularly in children and the elderly. Exposure to particulate matter and other pollutants contributes to inflammation and blood clotting, and diabetes. Studies have suggested increased risk of developing diabetes and exacerbating existing diabetes-related complications, low birth weight and preterm birth or babies with low birth weight. The seven disease categories with well-established relationships are routinely included in Global Burden of Disease calculations. Figure 3.1 shows the percentage of deaths in Nepal attributable to air 27 https://www.healthdata.org/research-analysis/health-by-location/profiles/nepal 58 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Figure 3.1: Percentage of deaths from specific causes attributable to total air pollution in Nepal Neonatal outcomes Ischemic heart disease LRI 30% 44% 41% COPD Lung cancer Diabetes Ischemic stroke 75% 38% 20% 46% Data Source: Global Burden of Disease Study 2021 (HEI, 2024). pollution, for various health conditions28. Air pollution’s from ambient exposure and more than 14,000 from health impact is more severe in Nepal due to higher household exposure) (World Bank, 2019). Reducing exposure to pollutants. Compared to global averages, a air pollution levels is crucial for addressing these significantly higher percentage of cases for conditions health impacts and improving public health outcomes like COPD (75 percent vs. 40 percent) are linked to worldwide. The Energy Policy Institute (EPIC) of the air pollution.29 University of Chicago Air Quality Life Index (AQLI) estimates that exposure to particulate pollution The overall burden due to air pollution on Nepal’s takes 3.4 years off the life of the average Nepalese public health is large. Figure 3.1 shows seven resident. If Nepal were to reduce particulate pollution diseases associated with air pollution in the Global to meet the WHO guideline, residents in the mid and Burden of Disease study for 2021. Air pollution in eastern Terai region—where nearly 40 percent of Nepal was estimated to have led to over 48,500 Nepal’s population resides—would gain 4.8 years premature deaths and the loss of more than 1.4 of life expectancy. In the capital city of Kathmandu, million disability adjusted life years (DALY).30 These residents would gain 2.6 years of life expectancy estimates are somewhat larger, but in line with earlier (EPIC, 2024, Figure 3.2). World Bank estimates from 2015, which found 26,000 premature deaths from PM2.5 alone (nearly 12,000 28 These estimates reflect Total Air Pollution, which includes PM₂.₅ from both ambient and household sources. Other pollutants like NO₂, SO₂, and O₃ are excluded, except for COPD, where ozone exposure is considered. Neonatal deaths are attributed only to PM₂.₅, household air pollution, or both combined. Neonatal outcomes include complications from low birth weight, preterm birth, and lower respiratory infections. 29 Globally, 40 percent of COPD, 30 percent of lower respiratory infections (LRI), 26 percent of strokes, and 20 percent of diabetes, isch- emic heart disease, neonatal deaths and lung cancer are associated with air pollution. In Nepal, air pollution related death is much higher, attributable to conditions like COPD (75 percent), stroke (46 percent), and ischemic heart disease (44 percent), LRI (41 percent), lung cancer (38 percent), neonatal outcomes (30 percent), and diabetes (20 percent). 30 Health Effects Institute. 2020. State of Global Air 2020. Data source: Global Burden of Disease Study 2019. Institute for Health Metrics and Evaluation (IHME), 2020. These estimates are based on the Global Burden of Diseases estimates which associate air pollution with 7 key risk factors including: ischemic heart disease, lung cancer, chronic obstructive pulmonary disease (COPD), lower-respiratory infections (e.g., pneumonia), stroke, type 2 diabetes, and, more recently, adverse birth outcomes. C HA PTER 3 : B enefits of C lean A ir in N epal 59 Figure 3.2: Potential gain in life expectancy in Nepal from permanently reducing PM2.5 from 2022 concentration to the WHO guideline (5 µg/m3) Potential gain in life expectancy (Years) 1 to <2 2 to <3 3 to <4 4 to <5 5 to <6 Data Source: EPIC Air Quality Life Index, 2022. Both indoor and outdoor sources of air pollution year.32 The impact of HAP is far-reaching outside have a significant burden on public health. While homes, as nearly 66 percent of PM2.5 emissions from outdoor air pollution is dominated by emissions cookstoves directly passes to the outside environment, from vehicles, industries, waste burning, and dust contributing to ambient air pollution (Adhikari et resuspension, household air pollution (HAP) is al., 2020)exact quantification of the contribution of attributed to using traditional fuels of biomass. biomass cookstove emissions to outdoor air is still By 2021, 54 percent of population of Nepal relied lacking. In order to address this gap, we designed on solid fuels such as fuelwood and animal dung a field study to estimate the emission factors of for domestic heating and cooking (Census, 2021). PM2.5 (particulate matter of less than 2.5 µ diameter. The incomplete combustion of fuels on inefficient While preventive actions like switching to LPG, electric stoves within poorly ventilated houses of rural areas cooking, and biogas contribute to eliminating causes, produces extremely hazardous levels of indoor air protection measures like purifiers, better ventilation, pollution, risking women and children developing and masks can provide immediate relief from exposure a wide array of health ailments like allergies of skin to indoor pollution (Refer to Box 5.3). Detailed evidence and eyes, asthma, cough, respiratory, cardiovascular of the negative health impacts of air pollution on diseases31 and leading to around 8,700 deaths every health in Nepal are included in Annex C. 31 A study estimated that 34.6 percent of childhood pneu- monia cases, 42.5 percent of acute respiratory infections/ 32 Energy Sector Management Assistance Program (ESMAP). pneumonia, and 54.8 percent of chronic obstructive pul- 2017. Nepal: Fostering Healthy Households through Improved monary disease/asthma cases in Nepal could be attributed Stoves. Accessed through: https://www.esmap.org/ to HAP (Shrestha, 2022). node/57862. 60 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS This painting highlights the fragility of our environment, symbolized by a shattering blue sky. It portrays the confluence of current environmental challenges – how smog, dust, and air pollution have become pervasive in our daily lives. Source: Richene Singh, Finalist, ‘Where’s My Blue Sky?’ Live Art Challenge. Additional research on impacts of air pollution The health and economic impact statistics discussed on public health in Nepal is needed. The national above underestimate the true burden of disease statistics cited above generally rely on global associated with air pollution since they leave out databases and research conducted outside of Nepal. important disease categories for which the epide- Extrapolation of health impacts from studies performed miological evidence is still being established by in other regions provides useful information but has the global public health community. Other impacts limitations (Gurung et al., 2013). For example, while the include preterm births and low birth weight, childhood Kathmandu Valley has substantially higher pollution stunting and potential neurological effects, including levels, the pollution mix may differ and there may be Parkinson’s, Alzheimer’s, and cognitive impairment variations in the physical and chemical characteris- with learning outcomes. These studies are included tics of fuels and in the abatement technologies and in Annex C. practices. Driving habits and congestion patterns and other elements of lifestyle and culture may vary, and health responses may differ due to baseline health, 3.2 The cost of air pollution nutrition, health care systems. More local research is needed to overcome the gaps in lack of exposure Pollution constrains Nepal’s development through data, and the absence or poor quality of health records its human and economic costs. Mortality, morbidity, (e.g. absence of International Classification of Disease and reduced cognition have financial costs on (ICD) codes in hospital records). households along with wider economic costs, including C HA PTER 3 : B enefits of C lean A ir in N epal 61 Pollution constrains Nepal’s development through its human and economic costs... Reducing the burden of environmental degradation further improves conditions for growth by encouraging foreign investment, tourist inflows, recreation opportunities, and quality of life. loss of income and time, expenditure on medical businesses, leading to greater investment and job services, costs of suffering, and reduced intellectual creation. Areas with lower pollution and more natural capacity and productivity. Pollution degrades human beauty attract people and economic activities (Kahn capital—the sum of people’s productive capacity—an et al., 2019). High-quality living conditions also boost important economic concern given that human capital access to enterprise finance and venture capital tends is fundamental for accelerating economic growth to concentrate in healthier, more attractive cities. and lifting productivity (World Bank 2019). Reducing In contrast, poor air quality undermines long-term the burden of environmental degradation further economic potential by impairing early childhood improves conditions for growth by encouraging foreign development. For example, a 1 µg/m³ increase in PM2.5 investment, tourist inflows, recreation opportunities, exposure raises stunting by 0.5 percent in children and quality of life (World Bank, 2019). under five, which in turn reduces future productivity and national GDP (Heft-Neal et al. 2022; Galasso PM2.5 is the greatest contributor to Nepal’s economic and Wagstaff 2019). Cleaner air therefore not only burden due to pollution, with a total forgone output promotes public health but also lays the foundation cost in 2015 of USD 130 million per year, and a total for sustained economic growth. welfare loss of USD 1.36 billion in 2015. These costs—as estimated by the World Bank for Nepal’s most recent Country Environmental Assessment—represent around 0.6 and 6.4 percent of annual economic activity (GDP 3.3 Multiple development equivalent), respectively.33 More recent estimates, benefits of clean air action following similar methodologies, but utilizing updated values and methods, find a welfare loss for Nepal of The adverse economic effects of air pollution USD 1.4 billion in 2019 due to ambient air pollution extend beyond the productivity losses and welfare alone. When ambient and household air pollution costs associated with public health. In addition, are combined, a cost of more than USD 3.1 billion on a seasonal basis, air pollution also reduces the is estimated, equivalent to more than 10 percent of quality of life for millions of people. Air pollution Nepal’s GDP (World Bank, 2021). affects many aspects of the country’s economy, from agriculture (Nakarmi et al., 2020), to visibility, aviation, Clean air improves productivity and city competi- and tourism (Kathayat et al., 2023). Air pollution in tiveness by attracting labor, boosting tourism, and Nepal is also tied closely to climate change—not just fostering economic innovation. Cities with better through the co-emission of greenhouse gases by many air quality are more appealing to skilled workers and of the same sources, but also more directly through the contribution of black carbon to the melting of 33 The economic (monetary) value of the total attributable burden is estimated in terms of (1) forgone labor output, the Himalayan Cryosphere, and through the impact and (2) lost welfare. The forgone labor output value is an of airborne particles on the microphysics of cloud estimate of the cost of premature mortality, calculated as the present value of forgone lifetime earnings, and welfare and fog droplets, thereby altering the spatial and is calculated by multiplying the estimated number of pre- temporal patterns of precipitation and fog (Mani, mature deaths with the value of statistical life, a measure of “an aggregate of individuals’ willingness to pay (WTP) 2022; Panday, 2022; Saikawa et al., 2019; Yasunari for marginal reductions in their mortality risks. (Narain and Sall 2016). et al., 2010). 62 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Improving air quality in Nepal offers a multitude Enhancing air quality also makes Nepal more of co-benefits that extend beyond health attractive to tourists. The country’s tourism improvements. For example, cleaner air significantly industry heavily relies on clear views of its natural reduces aviation risks, enhances the attractiveness beauty, including the Himalayas. Poor air quality of the country for tourists, and reduces glacial obscures these views, leading to disappointment melting (which, if unchecked, may lead to flooding, among visitors and negatively impacting tourism among other water insecurity issues). Measures that revenue. For example, air pollution in the Kathmandu promote cleaner technologies and fuels, which lead Valley has been estimated to lead to annual tourism to cleaner air, also have development co-benefits revenue losses of approximately USD 10 million (Shah such as stimulating domestic demand for electricity & Nagpal, 1997). By improving air quality, Nepal can and creating job opportunities. offer better visibility and a more pleasant experience for tourists, thereby boosting the tourism sector One of the key benefits of improving air quality and its contribution to the economy. is the reduction of aviation risks. Poor visibility caused by haze and fog, often exacerbated by high Reducing air pollution mitigates the accelerated levels of PM2.5, leads to flight delays and cancellations, melting of glaciers caused by anthropogenic black impacting both safety and timeliness. For instance, carbon (BC), thereby contributing to water and studies at Bhairahawa airport (BWA) have shown energy security. Recent evidence suggests that a strong correlation between PM2.5 concentration deposits of anthropogenic BC are responsible for and poor visibility. Haze accounts for the highest more than 50 percent of the accelerating glacier percentage of delays and its annual occurrence is and snow melt (World Bank, 2022). A reduction in increasing (Kathayat et al., 2023). By implementing glacial melt improves water and energy security by measures to reduce air pollution, Nepal can ensure preserving the freshwater stored in glaciers, especially safer and more reliable air travel, which is crucial in the Hindu Kush Himalaya (HKH) mountains, for both domestic and international flights. which boast nearly 55,000 glaciers. These glaciers, A man connects a charging cable to an electric bus in Nepal, highlighting the country’s move towards greener transportation. Source: Narendra Shrestha/World Bank. C HA PTER 3 : B enefits of C lean A ir in N epal 63 Improving air quality in Nepal offers a multitude of co-benefits that extend beyond health improvements...reduced aviation risks, enhanced tourism, stimulated domestic demand for electricity, and new job opportunities to name a few. holding an estimated 163 cubic kilometers of ice, for EVs could rise significantly under sustainable supply critical water resources to three major South development scenarios (Karn et al., 2025). This shift Asian rivers: the Indus, Ganges, and Brahmaputra, towards cleaner energy sources can enhance energy supporting 750 million people. By slowing glacier security and reduce the environmental impact of melt, immediate disaster risks like flash floods and traditional fuel use. landslides are mitigated and a stable water flow is ensured for agriculture, human consumption, and Creating job opportunities is another important hydropower generation. Cleaner air plays a pivotal co-benefit of improving air quality. The transition role in maintaining water reserves in dams, bolstering to clean energy and technologies requires new skills both water and energy security for the region. and creates employment in various sectors. Globally, the renewable energy sector has employed millions Another significant benefit of improving air of workers, and similar trends can be expected in quality is the stimulation of domestic demand Nepal (ILO, 2023). As the country adopts cleaner for electricity. Nepal generates surplus hydroelectric technologies, it can generate numerous green jobs, power during the rainy season, leading to periods contributing to sustainable and inclusive economic when electricity supply exceeds domestic demand. growth. For example, projects that utilize decentralized Expanding electricity use in manufacturing, transport, renewable energy sources like rooftop solar involve and cooking would absorb this surplus, boosting localized installations, creating more jobs in local economic productivity, and reducing import communities (World Bank & ESMAP, 2023). dependence on fossil fuels, in addition to lowering emissions. For instance, by 2030, electricity demand Chapter 4: Key Sources of Air Pollution and Technological Solutions This chapter examines the key sources of air pollution in Nepal, current and future, and evaluates abatement measures. Section 4.1 identifies the sector/source contributions to PM2.5 in the Kathmandu Valley and the Terai. Section 4.2 projects air quality trends to 2035 under a baseline scenario, showing significant increases in PM2.5 exposure without further interventions. Section 4.3 identifies cost-effective measures to reduce PM2.5 exposure. Section 4.4 discusses the potential to achieve the WHO interim air quality targets (35 µg/m³) by 2035 through coordinated local and regional actions. 4.1 Key sources – sectoral and geographic – of air pollution for the Kathmandu Valley and the Terai The existing knowledge on sources of air pollution in Nepal is incomplete and in need of supplementa- tion. Source apportionment studies are crucial for identifying different sources and their relative contributions to air pollution. Such studies enable policymakers to develop targeted emission reduction strategies based on localized and scientifically robust data. In Nepal, the studies conducted so far have largely been short-term, site-specific, and limited to the Kathmandu Valley34, making it difficult to extrapolate the findings to rest of the country which vary significantly in geography and socio-economic conditions. Additionally, these studies have been conducted at different times using varying methodologies, leading to inconsistencies in reported pollution sources and their relative contributions. The lack of a comprehensive, credible and ongoing nationwide source apportionment network limits our ability to fully understand the sources of air pollution in Nepal and their impacts. A detailed analysis of what has been missing in terms of knowledge of sources is presented in Annex A. This report developed a Nepal-specific model and data infrastructure to understand the current trends in air quality and to assess the impacts of various abatement measures in the country. This report improves existing knowledge through (a) consideration of a complete set of source categories, (b) coverage 34 A study by Islam et al. (2019) found that anthropogenic combustion sources, including garbage burning, biomass burning, and fossil fuel combustion, were the largest contributors to PM2.5 in the Kathmandu Valley. Another study revealed that resuspended dust plays a significant role in elevating PM2.5 and PM₁₀ levels, particularly during the dry winter months (Islam et al., 2021). These findings high- light multiple sources of PM2.5 pollution but remain limited in scope and geographic coverage. Artwork: Buddha Bahadur Gautam, ‘Where’s My Blue Sky?’ Live Art Challenge. 66 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS The GAINS-Nepal model distinguishes about 400 emission source categories. of an entire year (as opposed to selected months), methodology, detailed results and comparisons with (c) considerations of secondary particles (formed observations are presented in Annex D. through chemical reactions), and (d) geographical dispersion of particles. The GAINS-Nepal model distinguishes about 400 emission source categories, for which it estimates The new analysis carried out for this purpose the annual quantities, locations and timing of employs a world-wide applied and extensively precursor emissions that generate secondary PM2.5 validated scientific methodology—the GAINS in ambient air. Local activity rates (i.e., the quantities (Greenhouse Gas-Air Pollution Interactions and of emission-generating activities) are compiled from Synergies) model, adapted to the Nepal context relevant local statistics (see Table 4.1) or, if unavailable, (the “GAINS-Nepal model”). It combines an inter- estimated based on experience from other countries/ nationally recognized and widely applied scientific states with comparable conditions. Emission factors tool for air quality management planning with are primarily derived from local measurements that recent governmental energy and industrial statistics, are deemed representative of the specific sources in household surveys and road traffic data for Nepal the region, and local emission inventories to the extent with emission characteristics that have emerged from they are available. The plausibility and robustness of analyses for comparable conditions in other regions local data is validated with international literature. of the Indo-Gangetic Plain and Himalayan Foothills In total, the analysis considers about 1,100 proven region and other parts of South Asia. The resulting emission control options for which the emission emission estimates were fed into an atmospheric removal efficiencies are derived from world-wide dispersion model (chemical transport model) and literature considering the local conditions in Nepal the computed PM2.5 concentrations are validated and other regions in South Asia with similar char- with observed PM2.5 concentrations in ambient air acteristics. from monitors. Annual mean concentrations of PM2.5 in ambient air GAINS-Nepal was developed by a strong partnership are computed at a 1 km x 1 km spatial resolution between global and local experts. International for the Kathmandu Valley and 10 km x 10 km for experts from the International Institute for Applied the Terai. This calculation combines results from Systems Analysis (IIASA) and the Iowa State University, three atmospheric chemistry and transport models who originally developed and continue to refine for (i) local primary PM2.5 emissions, (ii) the long-range the GAINS model, collaborated with local experts transport characteristics of primary PM2.5 emissions in emission inventories, energy modeling and air from all South Asia into the Kathmandu Valley, and quality monitoring/atmospheric chemistry to develop (iii) the formation and transport of secondary PM2.5 the GAINS-Nepal model. This partnership included emitted throughout South Asia. These models are researchers from the Centre for Energy Studies (CES) operated with hourly time steps36 for the full year, at the Institute of Engineering (IoE), the Central employing the meteorological conditions of 2018, Department of Environmental Science of Tribhuvan considering for all emission sources the characteristic University, and the Department of Chemical Science seasonal and diurnal time patterns, and distinguishing and Engineering of Kathmandu University.35 The GAINS three emission heights. 35 The GAINS-Nepal model was developed in collaboration with local experts, including Dr. Kundan Lal Shrestha (Department of Chemical Science and Engineering, Kathmandu University), Dr. Rejina Maskey Byanju (Central Department of Environmental Science, Tribhuvan University), and Dr. Shree Raj Shakya (Institute of Engineering, Tribhuvan University). 36 Meaning that the models run with one-hour temporal resolutions, so that each hour has a unique estimate of the concentration of air pollution at each grid cell. Chapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 67 Newly imported electric vehicles signify a transition towards cleaner modes of transport. Source: Narendra Shrestha/World Bank. Table 4.1: Main data sources employed for emission estimates for 202137 Types of data employed in the emission estimates • Nepal sectoral energy balances, by province • Household energy use surveys, by district • Municipal waste statistics • Population data, 1 km x 1 km • Locations and production volumes of brick kilns, cement plants • Road network maps, traffic density data, fleet registration statistics • Land use data for crop land • GAINS-South Asia emission factors, adjusted to Nepal conditions Specific data sources • Energy Consumption and Supply Situation in Federal System of Nepal (Bagmati Province)38 • Energy Consumption and Supply Situation in Federal System of Nepal (reports for Province 1 (Koshi), Province 2 (Koshi) & Bagmati, incl. Annex)39 • Census data40 • Energy by province41 • Land use data for crop land42 37 Data for the 2020 baseline year have been corrected to represent actual emission levels and fuel consumption from 2021, which was not impacted as significantly by COVID lockdowns. 38 Water and Energy Commission Secretariat (WECS), Government of Nepal. 2022. Energy Consumption and Supply Situation in Federal System of Nepal (Bagmati Province). Accessed through https://wecs.gov.np/source/Bagmati%20Province.pdf. Accessed in November 2024. 39 Water and Energy Commission Secretariat (WECS), Government of Nepal. 2022. Energy Consumption and Supply Situation in Federal System of Nepal (Province 1 and 2). Accessed through https://wecs.gov.np/source/Final%20Report_%20Province%202.pdf. Accessed in November 2024. 40 National Statistics Office. National Population and Housing Census 2021. Accessed through https://censusnepal.cbs.gov.np/results/ downloads/provincial/3?. Accessed in November 2024. 41 National Energy Information System. Bagmati Pradesh Energy Consumption By Fuel Types (2019). Accessed through https://neis.gov. np/report/province/province-3?. Accessed in November 2024. 42 Regional Database System. ICIMOD. Accessed through https://rds.icimod.org/Home/Data?any=land+cover+of+koshi+basin&Catego- ry=datasets. Accessed in November 2024. 68 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Although public attention and legislative air quality management, industrial activities, and agriculture). action often focus on episodic concentration peaks Despite pertinent differences in geographic locations, at pollution hot spots (such as around the crop topographic conditions and the types and densities burning season around November), worldwide of economic activities between the Kathmandu Valley epidemiological evidence indicates long-term and the Terai, critical commonalities characterize the exposure to PM2.5 as the most powerful predictor nature of the pollution problem in these two regions for adverse health impacts (WHO, 2021)43. With a of Nepal (Figure 4.1). Residential energy use and focus on public health, hourly results are aggregated road transport are major contributors in both urban to annual mean concentrations as the most relevant (Kathmandu Valley) and rural (Terai) environments. metric associated with public health impacts. Also, Industrial sources, especially process heat boilers to facilitate air quality management at the airshed with fuel wood, can make substantial contributions level, ambient concentrations occurring in the target in areas where they exist. In rural areas, agricultural regions (i.e., the Kathmandu Valley and the Terai) activities such as crop burning, and livestock farming are aggregated to a population exposure metric, are also relevant. computed as a sum of the products of grid average PM2.5 concentrations and population in the grid cell. Significant share of PM2.5 in ambient air originate from sources outside the local jurisdictions, often In both the Kathmandu Valley and the Terai in other countries. This is a direct consequence PM2.5 concentrations originate from a multitude of the long residence time of small particles in the of emission sources spanning a wide range of atmosphere and the resulting long-range transport economic sectors (inter alia, road transport, solid of pollution. At any given site, the exact quantity fuel combustion in households, municipal waste depends on the geographic location, topographic Figure 4.1: Contributions of different source sectors to population-weighted annual-average PM2.5 concentrations in the Kathmandu and the Terai in 2021 (in µg/m3 and %) Transport 10.1, 6.5, Waste management 27% 16% Livestock, fertilizer Crop burning, 2.3, forest fires 9.6, 6% Soil dust 25% KATHMANDU 12.6, TERAI Industry and power 7.1, 31% 6.7, Residential 1.2, 19% 3.3, 3% 17% 9.1, 9% 23% 4.0, 11% 2.4, 6% 2.4, 6% 0.3, 1% Source: GAINS-Nepal, developed for this report. 43 As per the WHO’s Global Air Quality Guidelines, long-term exposure to PM2.5 is associated with increased mortality due to cardiovas- cular diseases, respiratory diseases, and lung cancer. This report emphasizes that even low levels of long-term exposure can result in adverse health impacts, indicating that risk increases progressively with exposure. Health burden related to short-term exposure to higher concentrations corresponds to a very small fraction of the total air pollution-related burden. C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 69 and meteorological conditions and the types and PM2.5 in ambient air comprises many different densities of economic activities within the region chemical substances, with different physical and and in the surrounding airshed. chemical properties. Some are directly emitted, and others are formed chemically from several The sources of PM2.5 pollution in Nepal vary gases into “secondary” particles downwind of their significantly by geography. Figure 4.2 shows that emission location. Directly emitted ‘primary PM2.5’ even in the Kathmandu Valley, a region with high includes, inter alia, black carbon, organic carbon and economic activity that is distant from the plains areas crustal material. All these emissions are diluted in the of the IGP-HF region,44 only 63 percent of PM2.5 in atmosphere over several hundreds of kilometers, with ambient air emerges from emissions within the valley, concentrations declining over distance. Secondary 17 percent are caused by emissions in other parts of PM2.5 is formed from nitrogen oxides (NOx), sulfur Nepal, and 14 percent imported from other countries dioxide (SO2) and volatile organic compounds (VOCs) (the remainder consists of soil dust from natural emitted from a range of fuel combustion sources. In sources). In the Terai, a region with relatively low particular, ammonia (NH3), emitted by agricultural population density located in the plains area, close to sources such as fertilizer and livestock manure, the Indian border, the inflow of PM2.5 pollution from combines with NOx (nitric oxide and nitric dioxide) other IGP-HF countries with high emissions accounts and SO2 to form ammonium nitrate and ammonium for about 68 percent of total PM2.5 in ambient air. sulfate PM2.5 particles. As the formation of secondary Only 24 percent is caused by emissions from the particles takes some time, their impact increases Terai itself, and eight percent can be traced to other with distance from the location where emissions sources in Nepal. take place, before declining over larger distances. Figure 4.2: Spatial origin of PM2.5 in ambient air in the Kathmandu and the Terai in 2021 (in µg/m3 and %) 2.4, 7% 0.3, 1% Natural sources Natural sources 9.1, 24% 23.2, 63% Terai 5.0, 14% Kathmandu Other countries KATHMANDU TERAI 2.9, 8% Other Nepal 6.1, 17% Other Nepal 26.3, 68% Other countries Source: GAINS-Nepal, developed for this report. 44 Kathmandu is about 90-100km away (by measure of a straight line) from the closest border point Raxaul-Birgunj. 70 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS The different transport characteristics of the In contrast, PM2.5 from other IGP-HF countries various PM2.5 components emitted at different that reaches Kathmandu (left most bar in Figure places have an important impact on the relative 4.3 or 14 percent of total PM2.5 in Kathmandu) contributions of the various emission sources to consists of up to three quarters of secondary PM2.5. PM2.5 in ambient air at any given location. The 30 percent of these emerge from NH3 emissions geo-physical approach of the GAINS-Nepal model of livestock farming and fertilizer use, 27 percent enables the apportionment of PM2.5 in ambient air from SO2 and NOx emissions of power plants and to the various sources of precursor emissions (i) in industry, and 20 percent from NOx emissions of the target regions of the Kathmandu and the Terai, road transport. Note that these sources are very (ii) in other regions in Nepal, and (iii) in the other different from those of primary PM2.5 (e.g., solid fuel countries in the Indo-Gangetic Plain and Himalayan use in the residential sector and industrial boilers, Foothills region. diesel vehicles, industrial processes), and will not be affected by policies that are only focused on direct In the Kathmandu Valley more than three quarters emissions of PM2.5. of the local contribution to PM2.5 in ambient air (bar labeled “Kathmandu” in Figure 4.3) consists In the Terai, higher agricultural emissions lead to of primary PM2.5. 40 percent of this primary PM2.5 is a larger share of secondary PM2.5 (45 percent of related to emissions from road transport, one third the total local contribution) than in Kathmandu to solid fuel combustion in the residential sector, and (Figure 4.4). About 45 percent of locally generated about 20 percent to industrial boilers. The main local secondary PM2.5 are linked to agricultural activities, sources of secondary PM2.5 (25 percent of the total 24 percent to road transport, and about 20 percent local contribution) are SO2 emissions in industrial to industrial activities (one quarter to brick kilns). boilers (36 percent), NOx emissions from road transport In contrast, about two thirds of the local primary (25 percent), which react in the atmosphere with PM2.5is caused by the residential sector. However, ammonia from livestock farming. local sources account for only 24 percent of total Figure 4.3: Spatial and sectoral origin of PM2.5 in ambient air in the Kathmandu Valley, 2021 Crop burning 40 Livestock Fertilizer 35 Solid waste burning 30 Road dust Light duty vehicles 25 Heavy duty vehicles µg/m³ Commercial boilers 20 Cookstoves 15 Brick kilns Industrial boilers 10 Diesel generators All sources 5 Forest fires 0 Soil dust Other countries Rest of Nepal Kathmandu Total Source: GAINS-Nepal estimates developed for this report. Note: Commercial boilers include emissions from space heating and hot water usage by commercial establishments. C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 71 Figure 4.4: Spatial and sectoral origin of PM2.5 in ambient air in the Terai region, 2021 40 Crop burning Livestock 35 Fertilizer 30 Solid waste burning Road dust 25 Light duty vehicles µg/m³ Heavy duty vehicles 20 Commercial boilers Cookstoves 15 Brick kilns 10 Industrial sources* Power generation 5 Forest fires Soil dust 0 Other countries Rest of Nepal Terai Total Source: GAINS-Nepal estimate developed for this report. * Industrial sources other than brick kilns PM2.5 in the Terai, while 68 percent is imported from other sources. The Global Burden of Disease Report other countries. Due to its location directly adjacent estimated that about 33,000 cases of premature to areas with high emission densities in India, about deaths occur annually from indoor exposure and half of the PM2.5 from transboundary sources consists 12,700 cases per year in ambient air exposure from of primary PM2.5 (60 percent from the residential this source in Nepal.45 sector), while power plants and industry, agriculture, and road transport all contribute to secondary PM2.5in While solid fuel consumption has only been almost equal shares. partially addressed in some of the earlier Nepalese emission inventories, the recent energy statistics Both in the Terai and Kathmandu, the combustion and household surveys together with robust of wood, charcoal, and dung in households to satisfy evidence about typical emission characteristics energy demands such as cooking, heating, and of traditional cookstoves indicate contributions lighting constitutes a significant source of pop- of 25 - 40 percent to total PM2.5 exposure in the ulation-weighted PM2.5. This source of air pollution Kathmandu Valley and the Terai, respectively. is especially important because it contributes both Such a range is in line with recent global research. household air pollution—exposure in and around the For instance, the Global Burden of Disease Report home, mostly affecting women and children involved estimates that the combustion of solid biofuels in with cooking and domestic chores—as well as ambient households contributes more than one-third to pop- air pollution after it disperses into the air of the ulation-weighted annual average PM2.5 exposure in neighborhood and combines with emissions from Nepal. The recent World Bank report Striving for Clean 45 State of Global Air. Health Impact- Burden on Your Health. 72 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Air46 shows similar results for cities across South Asia, waste management, agricultural activities). This has with residential biomass combustion contributing a been combined with advanced fine-scale atmospheric significant fraction of overall pollution in all cities. dispersion modeling of primary and secondary PM2.5 Residential air pollution contributes to a range of that extends over the full year. diseases, with more than three-quarters of premature deaths associated with PM2.5 related to heart attack, Forest fires have also caught public attention as a stroke or respiratory infections (pneumonia). key source causing spring episodes of extremely high PM2.5 pollution in the Kathmandu Valley. In addition, small- and medium-sized industrial Based on satellite imagery, this report confirms the boilers are found to be another important dominance of forest fires for PM2.5 concentrations source of PM2.5 concentrations and exposure in March/April. While these pollution peaks are in the Kathmandu Valley. While this source was accurately picked up by the model (see Annex D), not addressed in earlier emission inventories, the when considered over the full year, their contribution recent provincial and district energy statistics47 report to annual mean concentrations in the Kathmandu substantial quantities of fuel wood and other biomass Valley is estimated at about seven percent. In the for heat generation in the “food and tobacco” industrial Terai, the open burning of agriculture residue—within sector (e.g., bakeries, breweries, rice parboiling). and outside the country—leads to high pollution Combining these statistics with the typical emission events in the fall, which, however, accounts for only characteristics of such biomass boilers and their six percent of annual exposure. low stack heights, the calculation results in a popu- lation-weighted annual mean PM2.5 exposure in the Kathmandu Valley of about five µg/m³, accounting 4.2 Air pollution trends by 2035 for about 15 percent of total PM2.5. The envisaged tripling of GDP in Nepal in 2035 Although brick kilns have been identified in earlier relative to 2020 will have substantial impacts studies as key contributors to air pollution in Nepal, on future air quality. A baseline scenario explores this report estimates their relative contributions to how the anticipated socio-economic growth and population-weighted annual mean concentrations progressing implementation of the current pollution of PM2.5 at less than three percent in both regions. control legislation is likely to affect future air quality. This estimate emerges from a comprehensive The analysis adopts the socio-economic projections emission inventory specifically compiled for this outlined in the reports on the ‘Energy Consumption study, employing the latest available statistics on and Supply Situation’ of the Government’s Water the locations, production volumes, time patterns, and Energy Commission Secretariat for Provinces 1 fuel consumption and technological features of the (Koshi), Province 2 (Madhesh), and Bagmati.48 Economic individual brick kilns in the Kathmandu Valley and the output is forecast to increase by seven percent per Terai. Focusing on 2020/2021, this inventory captures year in the Kathmandu Valley, meaning that GDP will changes in technologies, locations and brick production almost triple in 2035 relative to 2020. This implies a volumes that have occurred since the earlier studies. near doubling of fuel use in industrial boilers and Notably, relying on the latest governmental statistics, furnaces. For the Terai, slightly lower economic the emission inventory also covers all other known growth is envisaged (6.3 percent per year), leading emission sources in the region, including sources that to a 2.5-fold higher GDP in 2035. The population is have often been omitted in earlier studies (e.g., solid assumed to grow by about 15 percent. fuel consumption in households, industrial boilers, 46 World Bank. 2022. “Striving for Clean Air: Air Pollution and Public Health in South Asia”, World Bank, Washington, DC. License: Creative Commons Attribution CC BY 3.0 IGO. 47 Water and Energy Commission Secretariat of the Government of Nepal, Kathmandu. Annex 1 to Energy Consumption and Supply Situation in Federal System of Nepal, Provinces 1 and 2 (2021), Bagmati Province (2022) 48 Energy Consumption and Supply Situation in Federal System of Nepal, Water and Energy Commission Secretariat of the Government of Nepal, Kathmandu. Provinces 1 and 2 (2021), Bagmati Province (2022). C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 73 Without further policies, emissions—and consequently air pollution—are projected to increase by 2035, but more slowly than recent trends. In the modeling, this baseline includes only emission Without further policies, emissions—and controls that were already under implementation consequently air pollution—are projected to in 2023, and few additional measures programmed increase by 2035, but more slowly than recent for implementation by 2035 (Table 4.2), based on trends. With the above assumptions, the baseline information provided by the local expert team (see indicates that Kathmandu emission increases for Section 2.3). Measures that may have been intended most PM2.5 precursors of 30 to 70 percent in the but have not, as yet, been implemented remain as urbanizing Kathmandu Valley, and somewhat lower available “options” for the GAINS model to select growth rates in the more rural Terai region (Figure as “further implementable actions”, whereas the 4.5, Figure 4.6). Steeper increases are expected for measures listed in Table 4.2 are already in place SO2 due to the expanded coal use in the energy or will come into place by 2035 and are not to be baseline. Importantly, the assumed energy policies considered as a “future” option. combined with implementation of current emission control regulations will clearly decouple emission growth from the expected 2.5 to a 3-fold increase in GDP. Table 4.2: Measures assumed as “already implemented” within the baseline scenario through 2035 and therefore not included as additional options for the cost-effectiveness analysis (policy scenario) Mobile sources Heavy-duty trucks and buses, diesel: • All heavy-duty vehicles complying with Euro-I controls in 2035 Light-duty vehicles (cars and vans): • All vehicles complying with Euro-2 controls in 2035 • Continued slow phase-in of electric vehicles Two- and three-wheelers: • 57 percent of vehicles with four-stroke engines and 13 percent of two-stroke vehicles complying with Euro-1 emission standards Agricultural machinery: No controls Construction machinery: No controls Stationary sources Diesel generators: • 100 percent low sulfur diesel oil with 0.045 percent S content Households: • Switch to improved biomass cookstoves (2 percent by 2030) • No major interventions to reduce solid fuel combustion in households (in 2020, 4 percent of households in Kathmandu and 54 percent of households in the Terai used solid biomass for cooking) Industry: • Particulate matter controls (cyclones) for industrial processes • 95 percent of kilns in the Kathmandu Valley and 30 percent in the Terai operated as zig-zag kilns, the other kilns as fixed chimney bull-trench kilns (FCBTK) and movable chimney bull-trench kilns (MCBTK) 74 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Figure 4.5: Baseline emissions in the Kathmandu Valley, 2021-2035, by sector 12 Crop burning Livestock and fertilizer 10 Solid waste burning Road dust Mobile machinery 8 Other road vehicles Heavy duty vehicles Tons 6 Commercial boilers Cookstoves 4 Industrial boilers Brick kilns Diesel generators 2 0 2021 2035 2021 2035 2021 2035 2021 2035 PM2.5 NOx SO2 NH3 Source: GAINS-Nepal estimates developed for this report. Figure 4.6: Baseline emissions in the Terai, 2021-2035, by sector 140 Crop burning Livestock and fertilizer 120 Solid waste burning Road dust 100 Mobile machinery Other road vehicles 80 Heavy duty vehicles Tons Commercial boilers 60 Cookstoves Industrial boilers 40 Brick kilns 20 0 2021 2035 2021 2035 2021 2035 2021 2035 PM2.5 NOx SO2 NH3 Source: GAINS-Nepal estimates developed for this report. C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 75 Based on present trends and even with the other countries (Figure 4.8). In the Terai, pollution application of current emission control measures, exposure is expected to increase from 39 µg/m³ to exposure to PM2.5 will continue to increase 42 µg/m³ in 2035. These calculations assume for through 2035. Population-weighted PM2.5 exposure India the baseline emission projections for 2030 that in Kathmandu increases in the baseline from 37 were developed by the recent World Bank studies µg/m³ in 2021 to 51 µg/m³ in 2035 (Figure 4.7). In for the Clean Air Plans for Uttar Pradesh and Bihar. terms of geographic origin, most of the pollution will Considering the policies that are already in place in come from Kathmandu, but significant amounts of these Indian States, these projections anticipate a pollution come from elsewhere in the country and stabilization of emissions after 2030. Figure 4.7: Population weighted PM2.5 exposure in the Kathmandu Valley, 2021-2035, by sector 60 Crop burning Livestock Fertilizer 50 Solid waste burning Road dust 40 Light duty vehicles Heavy duty vehicles Commercial boilers µg/m³ 30 Cookstoves Brick kilns 20 Industrial boilers Diesel generators From rest of Nepal 10 From other countries Forest fires 0 Soil dust 2021 2035 Source: GAINS-Nepal estimates developed for this report. Based on present trends and even with the application of current emission control measures, exposure to PM 2.5 will continue to increase through 2035. 76 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Figure 4.8: Origin of PM2.5 exposure in the Kathmandu Valley for the baseline projection in 2035 60 Livestock Fertilizer Solid waste burning 50 Road dust Light duty vehicles 40 Heavy duty vehicles Commercial boilers Cookstoves µg/m³ 30 Brick kilns Industrial boilers 20 Diesel generators All sources Forest fires 10 Soil dust 0 Other countries Rest of Nepal Kathmandu Total Source: GAINS-Nepal estimates developed for this report. 4.3 Priority measures to In total, local measures have been identified that could reduce in 2035 PM2.5 population exposure reduce PM2.5 exposure by 2035 in the Kathmandu Valley and the Terai by about 27 µg/m³ and seven µg/m³, respectively. The This section identifies the priority measures by exposure reduction potentials in the various source assessing the pollution abatement potential and sectors and specific examples of possible emission the cost-effectiveness of nearly 1,100 measures reduction interventions are presented in Table 4.3 (primarily technologies). As discussed, between (the contributions from these sources in the 2035 2021 and 2035, annual average population-weighted baseline case are shown in the red boxes in Figure exposure to PM2.5 concentrations in Nepal is projected 4.8). If combined with commensurate measures in to grow by up to one third in 2035, far exceeding the other IGP regions that reduce the pollution inflow WHO interim target 1 of 35 µg/m3. This projection into Nepal, such measures would enable achieving assumes that certain measures have already been the 35 µg/m³ target in the Kathmandu Valley and implemented (as of 2023) as discussed in Table 4.2, the Terai (see Section 4.5). but that the further implementation of measures is not likely without additional investment. For Three measures are the most impactful (in terms the analysis, about 1,100 measures for reducing of reducing population exposure): cleaner boilers, emissions in the Kathmandu Valley and the Terai cleaner cooking, and cleaner transportation. In from each polluting sector were drawn from the the Kathmandu Valley, these measures combined comprehensive GAINS database of nearly 2,000 would reduce air pollution exposure by 81 percent, technologies and interventions that have been and in the Terai by 53 percent, assuming that the shown to reduce emissions both of PM2.5 and of measures were implemented fully and effectively the precursors that form secondary particulates (without leakage). In the Kathmandu Valley the chemically in the atmosphere (e.g., SO2, NOx and following are the top four measures: (1) fully switching ammonia – see Chapter 1). to either electric or pellet boilers with filters would Chapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 77 Three measures are the most impactful (in terms of reducing population exposure): cleaner boilers, cleaner cooking, and cleaner transportation. bring a reduction of more than 30 percent; (2) For Kathmandu, the most cost-effective measures Cleaner cooking, especially with electric/induction (shown at the lower right of the chart) include cooking, would yield 20 percent; (3) switching to pollution controls for industrial biomass boilers, cleaner vehicles, would bring another 18 percent; enforced inspection and maintenance regimes for and (4) introducing bag filters or similar air pollution vehicles, Euro-4 emission standards for light-duty control measures in industries would yield another vehicles, improved urban waste management, the 12 percent. The remaining measures, if implemented replacement of traditional biomass cookstoves perfectly, have impacts in the single digits. Notably, by fan-assisted stoves, and particle filters for other source sectors contribute a significant share to diesel heavy duty vehicles. Full implementation exposure in Kathmandu and/or Terai on a seasonal of these measures could reduce PM2.5 exposure in or episodic basis (e.g. forest fires and open burning Kathmandu by almost 20 µg/m³, to about 32 µg/m³. of agriculture residue) and measures where further Other measures could deliver further improvements, assessment is required (e.g. road and construction although at higher costs. In total, measures in the dust). Potential near-term action for these sectors Kathmandu Valley could reduce PM2.5 concentrations is described in the next section. to about 25 µg/m³ in 2035, while the remainder will be caused by the inflow of pollution from outside The measures were ranked to identify how to Kathmandu (Figure 4.9). reduce PM2.5 levels in the Kathmandu Valley and the Terai at least cost. The GAINS-Nepal model In the Terai, the available local measures was run in an “optimization mode” to identify the will deliver much smaller reductions in PM2.5 cost-effective sequence of measures that can be exposure, due to the lower emission density and taken in the Kathmandu/Terai to achieve increasingly the overwhelming influence of pollution inflow stringent targets on PM2.5 exposure. The results are from outside, especially from other regions in the presented in the form of a ‘marginal cost curve’ in IGP-HF. Most of the measures that emerge as most Figure 4.9 and Figure 4.10. With resulting PM2.5 cost-effective in the Kathmandu Valley (e.g., enforced exposure (including contributions from all sources vehicle inspection programs49, low-emissions industrial including the inflow from other areas in Nepal and biomass boilers, fan-assisted cookstoves) apply in from other countries in the IGP) shown on the x-axis, the Terai as well, although some have significantly the curve starts with baseline exposure at the lower smaller reduction potential. In addition, banning right corner. For each category of measures, the the open burning of agriculture residue as well as PM2.5 exposure reduction potentials are indicated emission controls at cement plants are important in by the horizontal segments (to the left) and their the Terai (Figure 4.10). In total, measures within Terai marginal costs by their position on the vertical axis. have the potential to reduce exposure in 2035 by about five µg/m³, while emissions in outside areas will account for about 29 µg/m³ out of the total baseline exposure of about 42 µg/m³. 49 The GAINS (Greenhouse Gas and Air Pollution Interactions and Synergies) model, which has been used in air quality assessments for Nepal, primarily focuses on the “Improve” dimension of the ASI framework. Rather than emphasizing “Avoid” (reducing travel demand) or “Shift” (moving to public or non-motorized transport), GAINS prioritizes technological improvements—such as cleaner ve- hicle fuels, emissions control technologies, and electrification—as the key measures for reducing air pollution. This focus is pragmatic because in Nepal and similar countries, economic growth, urbanization, and infrastructure limitations make large-scale shifts in travel behavior unlikely in the short term. In contrast, “Improve” offers the most immediate and scalable benefits, leveraging existing policy momentum around electric mobility and cleaner energy sources. By targeting vehicle and fuel improvements, emissions reductions can be achieved without fundamentally altering mobility patterns, making the approach both politically and logistically feasible. 78 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Table 4.3: The shares of the various sectors in the total potential PM2.5 exposure reductions from local measures in the Kathmandu and the Terai in 2035. Sector Key measures Share of total reduction potential Kathmandu Terai Biomass for process Switch to electric boilers or pellets boilers (with particle filters) 31% 8% heat (industrial applications) Clean cooking Elimination of traditional biomass cookstoves through access to 20% 29% clean cooking fuels (electric induction stoves, LPG), replacement of remaining cookstoves by fan-assisted cookstoves. Enhanced emission Euro-IV standards for light-duty vehicles, Euro-VI with diesel particle 18% 13% standards for vehicles filters for heavy-duty vehicles, electric two-wheelers Industrial processes Emission controls for SO2 Nox and PM2.5. Technologies include Flue 12% 3% Gas Desulfurization (FGD) for SO2, Selective Catalytic Reduction (SCR) or NOx, and Electrostatic Precipitations (ESP), Baghouse filters, or cyclone separators or PM. Boilers in the Replacement programs for traditional biomass-fired boilers, switch 6% 5% commercial sector to pellets Diesel generators Enhanced reliability of grid electricity supply, Euro-VI emission 4% 0% standards and low-sulfur fuel (0.015 percent S content) for remaining generators. Enforced inspection Mandatory regular inspection and maintenance, enforced repair of 2% 7% and maintenance of broken vehicles, retirement of most polluting vehicles road vehicles Industrial coal boilers End-of-pipe controls for SO2 NOx and PM2.5 emissions 2% 2% Urban waste Collection and separation of paper, plastic, textile and wood 2% 0% management waste, recycling of paper, plastic, textile and wood waste, ban of decentralized open burning of municipal waste, managed (compacted and covered) landfills, collection and reuse of methane Cement plants Filters for SO2 NOx and PM2.5 emissions 0% 17% Manure management For industrial farms low-emissions manure storage and manure 1% 2% application Efficient fertilizer use Avoiding overfertilization, efficient use of urea fertilizer 0% 4% Crop residue burning Ban on open burning of agriculture residue, energetic re-use of 0% 6% crop residue Brick kilns Replacement of traditional brick with zig-zag or VSBK kilns, 0% 1% enforced operation Road dust Regular road cleaning 0% 2% Total potential 27 µg/m3 7 µg/m3 (absolute) C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 79 Figure 4.9: Cost-effectiveness of additional measures to reduce ambient air pollution in the Kathmandu Valley in 2035 60 Cement plants 50 Industrial processes Manure management US-$ million per µg/m³ 40 Commercial boilers Industrial coal boilers 30 Heavy-duty vehicles, diesel particle filters Clean cooking Diesel generators 20 Urban waste management Light-duty vehicles, Euro-4 10 I&M light duty vehicles Industrial biomass boilers I&M heavy duty vehicles 0 20 25 30 35 40 45 50 55 Population-weighted exposure in KV (µg/m³) Baseline 2035 Source: GAINS-Nepal, developed for this report (See Technical Annex D.7 for further details). Figure 4.10: Cost-optimized policy scenario measures to reduce ambient air pollution in the Terai in 2035 250 Improved cooking 200 Heavy-duty vehicles, diesel particle filters Manure management US-$ million per µg/m³ Commercial boilers 150 Light-duty vehicles, Euro-4 Efficient area fertilizer use Cement plants 100 Industrial processes Construction and road dust Non-road mobile machinery Clean cooking 50 Industrial coal boilers Industrial biomass boilers Crop residue burning I&M heavy duty vehicles 0 Baseline 2035 31 33 35 37 39 41 43 45 Population-weighted exposure in Terai (µg/m³) Source: GAINS-Nepal, developed for this report (See Technical Annex D.7 for further details). 80 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Adopting the priority measures identified in this to quickly identify and then extinguish forest fires section requires a suite of policy measures, in the before they spread. Additional fire-fighting equipment five areas of data, rules, economics, incentives, at the federal level (e.g., helicopters) is also imperative and information, as elaborated in chapter 5. For for those fires that spread beyond local capacity. enterprises to adopt cleaner production technologies at scale, and for households to embrace cleaner Over the medium-term, turning forest residue cooking technologies, or for any of the other priority from Tarai forests into pellets to burn in brick kilns interventions, coordinated action is needed across not only reduces the intensity of forest fires but all five dimensions: also displaces coal imports for use in brick kilns. Preventing and extinguishing forest fires not only 1. Data on the impacts of these sectors and tech- reduces some of the worst air pollution episodes in nologies on emissions and exposure is needed Nepal but also protects the country’s biodiversity for planning and enforcement purposes. and carbon stock. Here it will be important to further clarify how to engage Community Forest Users Group 2. Rules are needed, especially in the form of emis- (CFUGs) and small medium enterprises (SMEs) in sions performance standards, which mandate the pelletization industry. Training rural fire fighting certain maximum levels of emissions. Functioning teams and manufacturing trainees would create enforcement mechanisms that ensure compli- jobs and enable production of cleaner fuels like ance with the rules are critical. pellets by supporting forest-based SMEs. Aligning and harmonizing forest and agriculture policies to 3. Economic policies are needed as the relative reduce burning and provide financial incentives for price difference between a fossil-fuel based or a productive uses of biomass wastes is aligned with the cleaner energy-based technology is determined existing World Bank Forests for Prosperity Project. by the prices of the different sources of fuel/ energy, which in turn are affected by taxes, tax Crop residue burning in the Terai exemptions, and other fiscal policies. The burning of crop residues, a common agricultural 4. Incentives are important for nudging enterprises practice to clear fields quickly for the next planting to adopt cleaner production technologies, and season, emits high levels of PM2.5. Crop residue households to adopt cleaner cooking technologies. burning is widespread, but it is mostly practiced in the Terai in the rice-wheat crop cycle, where large 5. Infrastructure is critical for facilitating the adop- quantities of residues need to be cleared quickly. tion of cleaner technologies, especially for elec- Burning is often the lowest-cost option for farmers tricity generation and distribution. to dispose of crop residues, which would otherwise involve additional investments in terms of energy and money. Reducing crop residue burning will require 4.4 Other priority measures scale up of sustainable residue management practices by: (i) implementing policies and regulations aimed Forest Fires at banning the practice, (ii) rewarding sustainable Kathmandu had the dubious distinction of being the practices through payment for ecosystem services (for world’s most polluted city on several days each spring, e.g. conservation agriculture practices), (iii) promoting largely due to seasonal rural forest fires causing markets for, and alternative uses of residues (such widespread smoke and haze. To address the growing as mulching, incorporating them into soil, or using number and increasing size of forest fires devastating them for feed), (iv) changing the rice-wheat crop Nepal’s community and government managed forests, cycle, and (v) supporting farmers with adequate it is critical in the near-term that NDRRMA establish technologies and public awareness campaigns. advanced fire detection and early-warning systems in It is essential that options identified are political collaboration with MOFE. Enhanced coordination and feasible and the challenges of reforming policies training with local governments and communities will (especially price support and input subsidies) are also be important to build on enhanced surveillance understood so that proposed technical solutions C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 81 Road dust is a major contributor to air pollution in Kathmandu, accounting for 8-12 percent of total PM 2.5 pollution. are implementable; thus, it is crucial that farmers waste collectors is needed to ensure compliance be involved in the design and implementation of and sustainability. these solutions. To combat road dust pollution, it is essential to Reducing road and construction dust expand mechanical and wet sweeping programs Road dust, composed of resuspended particulate in high-pollution cities, enforce strict penalties for matter (PM), tire and brake wear particles, soil, road dust suppression violations at construction and debris, is a major contributor to air pollution sites, and pilot “low-dust zones” in major urban in Kathmandu, accounting for 8-12 percent of total areas. Additional efforts should focus on upgrading PM2.5 pollution and up to 25 percent of PM10, especially road infrastructure by paving high-dust areas and in the dry season pre-monsoon. Construction & maintaining road quality. Developing an air quality Demolition (C&D) waste is a critical source of pollution monitoring network for real-time road dust tracking at construction sites or where it is improperly disposed and improving traffic flow to reduce road wear and tear of, releasing particulate matter through dust and are also crucial. Additionally, introducing a targeted debris. The transportation of such waste further financing mechanism to support municipalities in aggravates air pollution by increasing road dust road paving projects, prioritizing high-dust corridors, stirred up by vehicles and urban activity. Current and expanding mechanized sweeping schedules in regulations on waste management exist but suffer smaller cities (e.g., the Terai). Eventually, adopting from weak enforcement, particularly in peri-urban sustainable urban planning to reduce dust-prone and informal settlements. A lack of regulation road networks, encouraging electric vehicle (EV) on road construction leads to lengthy periods of adoption to lower tire and brake wear emissions, and construction where dusty conditions persist. Scaling investing in advanced dust suppression technologies, up investments in mechanized street sweeping, landfill such as smart dust barriers can be considered. With modernization, and alternative waste treatment targeted policies, a 50-60 percent reduction in road solutions like composting and waste-to-energy (WTE) dust PM10 and up to 40 percent reduction in PM2.5 is crucial. Effective coordination between municipal emissions is achievable. Table 4.4 summarizes these governments, private waste companies, and informal key interventions. Table 4.4: Effectiveness and challenges of dust control strategies Mitigation Strategy Effectiveness Challenges Street Cleaning (mechanical Reduces PM10 by ~90% on paved Not done regularly in smaller cities. sweeping, wet sweeping) roads Water Spraying on Roads 7-10% PM10 reduction Short-lived effect, high water usage. Paving Roads (including permeable Long-term PM reduction High costs, limited funding for full pavers) implementation. Construction Dust Control (barriers, Can cut PM2.5 by up to 50% at active Weak enforcement on private covers, wet suppression) sites construction sites. Note: This information is based on the forthcoming Solutions Note on Waste prepared by the World Bank team. 82 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Achieving clean air progress requires careful magnitude reflects the seriousness of ambition among preparation and sequencing. In the near term, the the IGP-HF governments as achieving this target industrial sector in Nepal is ripe for the adoption of would require tremendous effort by all jurisdictions in clean technology because the data is clear, industrial the region. Second, 35 µg/m3 refers to international standards are being reformed, policy incentives have air quality standards for PM2.5 such as the Interim been identified that can provide the right signal for Target 1 of the World Health Organization (WHO, nudging enterprises, and infrastructure solutions are 2021), outlining a gradual path towards reaping the available. Other sectors require more preparation with substantial benefits of clean air to public health, respect to the development of a roadmap to achieve wellbeing, and development. progress across each of these dimensions before finance at scale is recommended. Chapter 5 provides Achieving “35 by 35” will require regional an assessment of these elements across additional collaboration. Focusing on population-weighted sectors; however, more planning and stakeholder exposure, with 37 and 39 µg/m³ this target was slightly engagement is needed before other sectors are ready exceeded in the Kathmandu Valley and the Terai in for implementation of the recommended solutions. 2021. However, following the envisaged economic Such important planning, evidence-gathering, and development and with the current pollution control stakeholder engagement work could be carried out regulations, the baseline suggests for 2035 significant as next steps toward strengthening Nepal’s AQM higher exposure in the Kathmandu Valley (52 µg/m³) institutional and governance framework for each and in the Terai (42 µg/m³). At the same time, the relevant sector. above analyses reveal considerable opportunities for air quality improvements through locally applied emission controls. Full implementation of the identified 4.5 Reaching 35 µg/m3 measures in Kathmandu could reduce PM2.5 exposure to about 25µg/m³. In the Terai, local action could by 2035 counterbalance the envisaged growth but would not be sufficient to reduce exposure to 35 µg/m³ Nepal has recognized the paramount importance without significant collaboration through the IGP-HF of working together with the 12 jurisdictions regional program. across the five countries of the Indo-Gangetic Plain and Himalayan Foothills (IGP-HF) region on However, full implementation of all locally available air pollution challenges. The International Centre for emission controls involves significant costs for Integrated Mountain Development (ICIMOD) and the the economy. For instance, achieving the 35 µg/m³ World Bank have jointly hosted government represen- target through local measures unilaterally implies tatives, finance institutions and other development annual costs of about USD 6 million in the Kathmandu partners at two Science Policy Dialogues and are Valley and USD 500 million in the Terai (the red lines actively planning a third Science Policy Finance in Figure 4.11 and Figure 4.12). These estimates refer Dialogue in 2025. These convenings emphasize to additional resource costs for emission controls the crucial role of multi-country collaboration on that occur to Nepal’s economy, incremental to the common methodologies for monitoring, air quality baseline costs of current (brown) technology. Costs and policy assessment and potentially harmonized include additional annualized investments, capital air quality targets. The Thimphu Outcome of June charges and operating costs, and additional costs—or 2024 charts the way for development of a regional savings—of fuel costs. However, they do not include cooperation mechanism for AQM planning and transfer payments such as taxes and subsidies. arrived at a common understanding that parties will consider an aspirational goal of < 35 µg/m3 for Coordination on control measures across the annual average PM2.5 concentrations by 2035 (“35 IGP-HF, and especially with the neighboring Indian by 35”) for long-term Air Quality planning. The 35 States of Uttar Pradesh and Bihar, could help µg/m3 target for annual average concentrations is Nepal achieve the 35 µg/m3 target in its most significant. First, because an aspirational target of this polluted regions at drastically lower costs. In the C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 83 Kathmandu Valley in 2035, coordinated approaches air quality management with other regions in the in which a common set of basic measures (Table IGP-HF, as a minimum through implementation of 4.5) would be implemented across the entire IGP-HF the measures that occur as most cost-effective in region would reduce the inflow of pollution into the the Terai. In the Kathmandu Valley, where pollution valley by about 2.8 µg/m³. This will avoid the necessity sources in other parts of the IGP-HF have less impact to take the most expensive measures locally and due to the topographic and meteorological conditions, thereby reduce annual costs for local measures in annual pollution abatement costs shrink from USD Kathmandu to less than USD 4 million, i.e., by about 6 million to USD 4 million. one third (Figure 4.11). In the Terai, cooperation on implementing a common set of basic measures Different agents could pay for these additional across the entire IGP will reduce the inflow by about costs of cleaner air: households, motorists, private 5.3 µg/m³, i.e., from 41.6 µg/m³ to 36.3 µg/m³. The sector in industries, or the state. The three priority remaining gap to the 35 µg/m³ target can then be measures identified, in terms of cleaner cooking, achieved through local measures at annual costs manufacturing, and mobility, can be taken and of about USD 5 million, only a small fraction of the financed by different agents. For instance, cleaner USD 500 million of the unilateral strategy. cookstoves could be financed by the households using them, or by the state who could provide them, For the Kathmandu Valley, reaching the 35 µg/m3 or a mixture thereof (the various cleaner cookstoves interim target is much cheaper than for the Terai. projects in Nepal had different ways of distributing The report estimates that it would cost about USD 6 these costs). For cleaner industries, the private million per year for the Kathmandu Valley to arrive at sector could be mandated to adopt, for example, the 35 by 35 target through local action. For the Terai, cleaner boilers, furnaces, or kilns, and/or enterprises annual costs amount to about USD 500 million if the could receive financial incentives that make these target was to be met by unilateral local action only. additional investments profitable for them. Finally, There are differences in costs because the Kathmandu motorists, whether private or commercial, could Valley has 4-5 times fewer residents, but also because receive incentives to switch to cleaner vehicles (such the Terai would need to support heavy duty vehicle as with the reduction of import duties on EVs) or be replacement and cleaning cement production, which mandated (e.g. through vehicle emission standards are much more expensive interventions. It is also important to note that these costs are best case or fuel standards) or nudged (e.g. through higher scenarios, assuming perfect efficiency and complete fossil fuel taxes). adoption success, and should therefore be seen as The common set of basic measures that has been the lower case estimates. proposed for cooperative airshed management in For the Terai especially, it is critical that other the IGP-HF comprises most of the measures that jurisdictions in the airshed act. For example, if emerge as cost-effective for the Kathmandu Valley similar pollution controls are taken in other parts of and the Terai. It also contains additional measures the IGP-HF (mainly India), abatement costs for the that are relevant in other IGP regions, but not in Nepal Terai drop precipitously to USD 5 million per year (e.g., electric cremation, fireworks). Conversely, due (from USD 500 million). However, the envisaged air to the large fuel wood consumption in process heat quality improvements will then only be achieved boilers in the Kathmandu Valley compared to other if commensurate action is indeed taken in the IGP regions, emission controls for this source category neighboring areas. Thus, it will be critical for Nepal emerge as an essential element of a cost-effective to promote and actively participate in cooperative air quality management strategy in Nepal. 84 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Figure 4.11: Total emission control costs in the Kathmandu Valley for (a) unilateral action in the Kathmandu Valley, and (b) cooperation across the Indo-Gangetic Plain and Himalayan Foothills 40 35 30 US-$ million per year 25 20 15 10 5 0 15 20 25 30 35 40 45 50 55 Population-weighted exposure in Kathmandu (µg/m³) Kathmandu Valley unilateral With common measures throughout the IGP-HF Source: GAINS-Nepal, developed for this report. Figure 4.12: Total emission control costs in the Terai for (a) unilateral action in the Terai, and (b) cooperation across the Indo-Gangetic Plain and Himalayan Foothills 600 500 US-$ million per year 400 300 200 100 0 25 27 29 31 33 35 37 39 41 43 45 Population-weighted exposure in Terai (µg/m³) Terai unilateral With common measures throughout the IGP-HF Source: GAINS-Nepal, developed for this report. Chapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 85 Table 4.5: The common set of measures assumed in the cooperative scenario for the other IGP-HF jurisdictions Mobile sources • Effective inspection and maintenance for heavy-duty and light-duty road vehicles • Street paving and washing Power generation • Large stationary generators: Diesel particle filters according to EU Stage 3B controls for non-road diesel engines50 Households • Universal access to clean household fuels for cooking (LPG/electricity) to replace biomass fuels (fuelwood, dung) • Residential kerosene lamps: Switch to LPG or LEDs • Filters for restaurant kitchens • Electric cremation • Ban of fireworks • PM controls at heating boilers • New/improved heating stoves burning solid fuels in households Industry • Brick production: Zig-zag kilns (55 percent of production capacity) and vertical shaft brick kilns (VBSK) with basic dust control (40 percent of production capacity) • Electrostatic precipitators (2 or 3 fields) at large industrial sources • Basic NOx controls for industrial boilers • Electrostatic precipitators (1 field) at industrial furnaces • High-efficiency de-dusters (3-fields) in aluminum production • Flue gas desulfurization of large industrial boilers and furnaces • Basic SO₂ controls (-50 percent) at cement, aluminum, steel plants and refineries Agriculture • Efficient urea fertilizer use • Stop open burning of agricultural residue 50 European Union. Emission Standards for Nonroad Engines. Accessed through: https://dieselnet.com/standards/eu/nonroad.php#s3 86 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Black smoke emerging from a firewood boiler used by a food and beverage enterprise in Tokha Municipality, Kathmandu Valley. Source: Sulochana Nepali/World Bank. The cost-effective measures outlined in the report filters for diesel heavy-duty vehicles to cut vehicular align closely with the priorities in the Air Quality emissions and implement enforced inspection and Management Action Plan for the Kathmandu Valley maintenance regimes to phase out old polluting of 2020, introduced by the Ministry of Forests and vehicles. To curb industrial emissions, the Action Environment (MOFE). The Action Plan was built upon Plan highlights the importance of compliance the already framed Air Quality Management Action with emission standards, the promotion of clean Plan for the Kathmandu Valley of 2017. The revised technologies in industrial facilities, and relocation of plan identifies various strategic areas of transport, brick kilns. These activities agree with the emphasis of industries, waste management, indoor air pollution, this report where end-of-pipe controls for industrial and proposes sector-wise interventions to reduce air boilers and shifting to electric or pellet-based systems pollution in the valley. To reduce emissions from the are identified as the most cost-effective measures transport sector, the Action Plan prioritizes upgrading to minimize pollution from industries. To reduce vehicle and engine technologies and phasing out old household emissions, the Action Plan emphasizes the high-emitting vehicles from roads. These approaches promotion of improved cookstoves, complementing are in line with this report’s recommendations to this report’s recommendation to replace traditional implement cost-effective measures such as application biomass cookstoves with fan-assisted stoves or electric of Euro-IV standards to light-duty vehicles and particle induction stoves. C hapter 4: Ke y S ources of A ir P ollution and T echnolo g ical S olutions 87 Achieving the WHO target for PM 2.5 (5 µ g/m 3) and interim targets 1 and 2 (35 µ g/m 3 and 25 µ g/m 3), would result in substantial health benefits, reducing the burden of disease across all categories for both Kathmandu and Terai. There are co-benefits where these measures also tool, an assessment of the benefits of achieving the contribute to other policy priorities—but these WHO interim targets 1 and 2 has been performed benefits are not included in this analysis. The relative to the projected 2035 concentrations of 51 GAINS analysis considers measures that could deliver and 42 µg/m³ in the Kathmandu Valley and the Terai, other air quality improvements than simply reducing respectively (see details in Annex C). exposure to PM2.5 in ambient air. However, the analysis does not take these co-benefits into account, nor Achieving the WHO target for PM2.5 (5 µg/m³) and does it consider simultaneous co-benefits on other interim targets 1 and 2 (35 µg/m³ and 25 µg/m³), policy priorities, for example on greenhouse gas would result in substantial health benefits, reducing emissions, improvements in soil fertility, etc. However, the burden of disease across all categories for cost savings that emerge from PM2.5 control measures both Kathmandu and Terai. For both locations, are fully considered; for example, biogas energy achieving WHO Target 1 (35 µg/m³) would reduce the from improved solid waste management, reduced burden by about 15-20 percent across diseases like fertilizer consumption, sale of recycled materials etc. COPD, ischemic heart disease (IHD), ALRI, and lung cancer. Reaching WHO Target 2 (25 µg/m³) would A detailed analysis of the burden of disease further decrease the burden by 30-40 percent, while attributable to ambient PM2.5 exposure was achieving the optimum level (5 µg/m³) could result conducted for both Kathmandu and Terai in 2021 in a nearly 90 percent reduction in burden for most and 2035. Using the World Health Organization’s AirQ+ diseases. CHAPTER 5: Creating the Enabling Foundations for Clean Air in Nepal This chapter identifies a broad set of recommendations for putting in place the enabling foundations to help address air pollution in Nepal, including for adopting the priority measures identified in chapter 4. Chapter 5 has carefully assessed the effectiveness of pollution abatement measures (technologies and practices) and identified the priority measures to take. The adoption of the identified priority (cleaner) technologies across the sectors—whether those are cleaner boilers, cookstoves, vehicles, or any other technology—is a function of a strong enabling foundation being in place. The core elements of a clean air enabling foundation are data, rules, economics, incentives, and infrastructure (Figure 5.1). Data collection and monitoring enhance understanding and planning; rules enforce robust policies; economics shape fiscal strategies for clean technology; incentives encourage private sector adoption; and infrastructure supports the practical deployment of solutions. Figure 0.4: The five enabling foundations for clean air in Nepal DATA RULES ECONOMICS INCENTIVES INFRASTRUCTURE Enhancing air Strengthening Creating the For Private Putting in quality monitoring governance and economics for Sector: Offering place public and information, enforcement, clean technology incentives to infrastructure enabling ensuring that the adoption, by the private that enables under- standing right policies are using fiscal policy sector for the clean technology of air quality put forward and including pricing adoption of clean adoption. issues, planning are enforced. and markets. technologies and (Section 5.5) abatement action, (Section 5.2) (Section 5.3) practices.  and under- (Section 5.4) standing what works. (Section 5.1) Artwork: Anjali Neupane, ‘Where’s My Blue Sky?’ Live Art Challenge. 90 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS This chapter can build the foundations of a Nepal This national plan must extend beyond the existing Air Quality Management Plan (NAQMP). The Kathmandu Valley Air Quality Management Action furnishing of an NAQMP is crucial, as it would provide Plan (2022), addressing other pollution hotspots the guidance needed for how to work on the five key such as the Terai. Unlike the Kathmandu Action Plan, dimensions of data, rules, economics, incentives, which lacks detailed implementation strategies, a and infrastructure in the multiple sectors required to NAQMP should offer specific, actionable steps to bring about air quality improvements. The leadership turn aspirations into reality, ensuring effective and of MOFE and its DoE in this process is critical, and sustained pollution abatement across Nepal. As part so is the engagement of line Ministries, which cover of the NAQMP, sectoral road maps would provide the many sectors from which air pollution emerges. guidance for how to reduce emissions in key sectors High-level executive commitment is essential, given such as industry, cleaner cooking and transport. the multisectoral nature of air quality challenges. C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 91 5.1 Data: Strengthen air quality monitoring and information Enhancements to the air quality monitoring network are required to provide reliable data from many locations around the country. As described in chapter 1, the current monitoring network is hampered by patchy data due to the age and condition of monitoring equipment and human resource constraints—especially far from the capital—lack of consistent protocols for data collection and perennial challenges providing ongoing consulting support for network operations and maintenance. Identifying solutions here—as with other sectors (illustrated in Section 5.2)—should follow a similar formula to establish: • Mandates – It is important to clarify the air quality monitoring roles and responsibilities among federal, provincial and local level. While all three have the mandate to regulate and enforce AQ NAAQS, questions remain such as what is the proper role for each with respect to baseline compliance monitoring? In many countries the federal government issues regulatory minimum requirements for AQ monitoring (e.g., proce- dures, QA requirements and number of sites and frequency of monitoring) but it is incumbent on provinces to carry out monitoring subject to the federal regulations. Hard questions need to be explored in terms of the appropriate level of government, institutional arrangements and resource allocation for compliance monitoring, especially far from the capital, where it may make sense to either establish federal DoE offices in distant provinces or to capacitate provincial authorities. • Mechanisms – This includes consideration of tradeoffs between the hiring and training of permanent AQ monitoring staff versus the use of consulting support as is current practice.  If a consulting model is pursued, the Government of Nepal (GoN) may need to identify and support the appropriate level of gov- ernment to modify existing procurement mechanisms for hiring firms to provide continuous operation, maintenance and management (supply of spare parts and attending to repairs) for monitoring stations, even across fiscal years, which currently results in annual data gaps when past year contracts lapse. Standard Operating Procedures (SOPs) with rigorous quality assurance and data validation protocols are essential elements of any AQ monitoring program. The government should be supported in analyzing and reporting the data routinely not only through publicly accessible formats such as smartphone apps, but also through annual government reports. • Means – A funding mechanism for implementation options will require aligning allocation of resources with monitoring responsibility (i.e., ensuring that the right agency (with the mandate) has resources, staff- ing, equipment and capacity to carry out the job). Training programs can be established in collaboration with local research institutions and other IGP-HF partners to ensure that consistent protocols are being used for quality assurance and data validation across the region. Pending adequate staff availability to fully utilize existing equipment, there is further need for additional measurement parameters at existing stations, such as black carbon (BC), Sulfur Dioxide (SO₂), Nitrogen Oxide (NO) and Ozone (O3) as well as deployment and operation of manual samplers for source apportionment analysis. 92 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS • Accountability – Establishing clear data quality provincial officials to establish a source apportionment objectives (DQOs) for AQ monitoring data that network (5 pairs of new manual samplers co-located include accuracy and completeness require- at existing sites; potentially 2-3 within the Kathmandu ments, will ensure that only appropriate data Valley, and 2-3 in nearby provinces (i.e., within driving are published on a regular schedule and relied range), while ensuring adequate site security and on for government decision making. However, staffing/resources for sample collection. Meanwhile, establishing DQOs is necessary, but not suf- federal-level filter preparation, weighing and storage ficient. DQO regulations should include both facility can be established at a DoE laboratory facility, incentives to achieve these requirements and allowing for the creation of an archive of samples consequences (i.e., mandatory corrective actions) for subsequent analysis. A plan then needs to be for agencies that fail to meet DQOs. prepared for analyzing these stored filter papers at an appropriate frequency. Data collection solutions are needed across the sectors that impact air pollution to enable ongoing Support is needed for enhanced planning capacity policy assessment. While available information and for policy assessment and scenario planning. A data has been collected and used for the preliminary proper role for federal DoE officials—in partnership assessments presented in chapter 4 of this report, with local academic institutions familiar with AQM ongoing inventory and modeling is a core responsibility assessment methods—is to develop action plans and of the federal DoE to maintain the technical foundation determine the appropriate stringency for sector-spe- for policy assessment. Contributing sources to air cific emissions standards, including for industries pollution evolve and change, and thus the DoE needs (such as bricks, metal, etc.), transportation emissions, the capacity to maintain an updated understanding residential energy use and identify regulatory options of source structure as a basis for continually refining for control of forest fires. Importantly, this planning policy approaches to regulate those sources. For capacity will be most effective if mainstreamed across example, routine collection of emission inventory ministries so that the relevant emitting sectors data requires vehicle data through a digital vehicle (e.g., energy, transportation, agriculture, urban registration portal and the industrial facility permitting development) are also able to assess the air quality database are discussed in Section 5.2. However, similar implications of their medium- and long-term plans approaches will also be needed from power plants, in collaboration with the DoE/MOFE. However, this commercial entities, and other sources that should be capacity must be based on solid analytics requiring routinely reported to MOFE so that the DoE and the the emission inventories and source apportionment Climate Change Management Division (CCMD) have studies described above. A periodic update of such the data to establish and track relevant emissions inventories is required to inform policy formulation. in a comprehensive emission inventory. Localized epidemiological studies are essential Detailed source apportionment studies are needed to understand and effectively address the health to provide quantitative details about the source impacts of air pollution in Nepal. The focus should sectors and the regions responsible for the air be on establishing localized exposure-response pollution in Nepal. Source apportionment is a relationship i.e., determining how exposure to technique to mathematically work backward from pollution results in certain health impacts, specific to fine particle chemical observations to deduce the main the country’s unique pollution mix and socio-economic sources giving rise to pollution. It requires, however, conditions. Similarly, improving health data collection detailed analysis of the composition of PM2.5 over at hospitals and establishing centralized national many samples. Given that this capacity takes many health database are crucial steps to ensure reliable years to establish, initial steps toward routine source information is available for advancing health studies apportionment can begin with the deployment of on air pollution in Nepal. By integrating air quality several pairs of manual samplers to prepare, collect, data with reliable hospital data, researchers can gain weigh, and archive filter samples for future source valuable insight into how prolonged exposure to apportionment analysis. The DoE could work with pollution causes chronic health impacts such as C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 93 respiratory and pulmonary diseases. A critical step and across levels of government within Nepal, but to achieve this goal is stronger collaboration between also across the airshed, which entails coordination the Ministry of Forest and Environment (MOFE) and with governments at the IGP-HF level.  By forging the Ministry of Health and Population (MoHP) to partnerships with other IGP-HF countries—through establish a structured program that can directly future Science Policy and Finance Dialogues and other examine the linkages between air pollution and convenings—and using consistent, science-based public health outcomes. Nepal’s Health Information methods to explore policy options and regulatory Management System (HIMS), which currently approaches for common airshed sectoral sources, collects health data from hospitals is focused on the DoE must remain engaged in regional AQM communicable diseases, child and maternal health, coordination. and general healthcare services. The national HIMS could be expanded to include environmental health Raising awareness based on high quality air indicators and air pollution related morbidity, enabling quality data is critical. In other countries of the policymakers to quantify the true health burden of Indo Gangetic Plains and Himalayan Foothills, such pollution and advocate for stronger evidence-based as India, Bangladesh and Pakistan, the recognition air quality regulations. Additionally, strengthening of air pollution as a critical problem has significantly the partnership of health research institutions advanced over the years, driven by growing scientific such as the Nepal Health Research Council (NHRC) evidence, media coverage, and public advocacy. This with the MoHP could further drive evidence-based acknowledgment has led to policy actions, large-scale interventions to mitigate the rising health burden awareness campaigns, and community involvement. of air pollution in Nepal. In contrast, while Nepal faces serious air pollution issues, awareness and recognition of the problem Nepal’s scope for AQM planning is appropriately remain limited (compared to these other countries), shifting from the municipal scale to airshed scale, hindering the urgency and scope of action needed to which requires national/regional cooperation address it effectively. A couple of steps for Nepal to on data and information sharing. Given that improve awareness of the air pollution issue include: more than one-third of Kathmandu’s and more than three-quarters of the Terai’s air pollution 1. Public Awareness Campaigns: Implement- comes from outside the immediate vicinity, AQM ing widespread public awareness campaigns planning must be conducted at the airshed level. to inform the public about the health impacts The IGP-HF airshed shares a common flow of air of air pollution, open burning of garbage and that can be (near)-uniformly polluted or stagnant. the importance of air quality management. This For AQM systems, the definition of airsheds for a will help generate public demand for clean air. region or country is fundamental since it sets the domain over which to plan coherent interventions, 2. Community Engagement: Engaging local com- execute projects and programs, gather data, monitor munities through workshops and seminars to progress, and evaluate the impact of AQM policies foster a better understanding of air quality is- and programs. This means that the assessment of sues, enabling easy access of air quality data policies considers both the pollution generated to the communities, supporting programs for within a specific geographic unit and any transfers local air monitoring by communities, building of pollution into or outside its boundaries. Solving awareness on taking adaptive actions during the regional problems in the context of local action requires periods of air pollution spikes and encouraging regional coordination, analysis and assessment and community-driven solutions for local air quality ultimately can require regional harmonization of management. standards and policies.  Continuing engagement and support for the IGP-HF process is an essential 3. Media Involvement: Utilizing various media element of national AQM planning.  As the chief air platforms, including social media, television, resource management agency for Nepal, the DoE and radio, to disseminate information on air must work collaboratively with other ministries quality trends in the country/relevant cities, raise 94 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS awareness about air quality and its effects and and usage rates of electric and improved biomass potential mitigation and adaptation actions that stoves is vital for assessing the effectiveness of each stakeholder can implement to address the interventions aimed at reducing household air issue of air pollution. pollution. By monitoring the uptake of these cleaner cooking technologies, policymakers can identify 4. School Programs: Integrating air quality edu- barriers to adoption and develop targeted strategies cation into school curriculums to educate the to promote their use. This will help ensure that younger generation about the importance of households transition to cleaner cooking methods, clean air and how they can contribute to im- reducing indoor and outdoor air pollution. proving air quality. Use geospatial mapping to identify high-pollu- 5. Campaigns for Clean Technologies: Beyond tion-risk residential clusters. Utilizing geospatial information on environmental benefits of clean mapping to identify high-pollution-risk residential technologies, awareness efforts should also fo- clusters can help target interventions where they cus on raising financial literacy i.e., educating are needed most. By mapping areas with high levels individuals and firms about the costs, benefits, of pollution exposure, policymakers can prioritize financing options, and long-term savings asso- resources and actions to address the specific needs ciated with adopting these technologies. of these communities. This approach will enhance the effectiveness of air quality management efforts There are many sectoral data/information needs; and improve public health outcomes. the priorities are: Conduct satellite-based monitoring of agricultural Develop a national digital vehicle database burning across the Terai. Satellite-based monitoring integrating registration, inspection, and emissions of agricultural burning across the Terai region is test results. To enhance the effectiveness of air essential for understanding the extent and impact of quality management in the transportation sector, it is this practice on air quality. By tracking the location, crucial to develop a national digital vehicle database. frequency, and intensity of agricultural burning, This database should integrate vehicle registration, policymakers can develop targeted interventions inspection, and emissions test results, providing to reduce emissions from this source. This will help a comprehensive overview of the vehicle fleet’s mitigate the impact of agricultural burning on air compliance with emissions standards. Such a system quality and public health. will facilitate better monitoring and enforcement of regulations, ensuring that vehicles on the road meet Map spatial patterns of agricultural residue the required emissions standards and contribute to availability for cleaner fuel production. Mapping improved air quality. the spatial patterns of agricultural residue availability is crucial for promoting the use of cleaner fuels. By Use remote sensing for emissions monitoring on key identifying areas with high availability of agricultural corridors. Implementing remote sensing technology residues, policymakers can support the development for emissions monitoring on key transportation of cleaner fuel production facilities and encourage corridors can significantly enhance the ability to the use of these fuels. This will help reduce reliance detect activity and address high-emission vehicles. on traditional biomass and fossil fuels, contributing Remote sensing allows for real-time monitoring of to improved air quality. vehicle emissions, identifying non-compliant vehicles and enabling targeted enforcement actions. This Track seasonal variations in residue burning technology can help reduce emissions from the practices. Tracking seasonal variations in residue transportation sector, contributing to cleaner air burning practices is important for understanding and improved public health. the temporal dynamics of this pollution source. By monitoring when and where residue burning occurs, Track adoption and usage rates of electric and policymakers can develop targeted interventions to improved biomass stoves. Tracking the adoption reduce emissions during peak burning periods. This C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 95 A forest fire burns in the Hattiban Forest, in the outskirts of Kathmandu. Fires like this can blanket the nearby urban area with acrid smog. Source: AP Tolang / iStock. will help mitigate the impact of residue burning on forest fires. By monitoring forest areas in real-time, air quality and public health. authorities can quickly identify and address fires before they spread, reducing their impact on air Develop early warning systems using forest quality and public health. This technology will help dryness and fire risk indices. Developing early improve the effectiveness of forest fire management warning systems using forest dryness and fire risk efforts. indices is essential for preventing and managing forest fires. By monitoring these indices, authorities Map high-risk zones for preventive fire management can predict and respond to fire risks more effectively, interventions: Mapping high-risk zones for reducing the occurrence and impact of forest fires on preventive fire management interventions is air quality. This proactive approach will help protect crucial for targeting resources and actions where public health and the environment. they are needed most. By identifying areas with a high risk of forest fires, authorities can prioritize Deploy remote sensing for real-time forest fire preventive measures, such as controlled burns and detection: Deploying remote sensing technology vegetation management, to reduce the likelihood for real-time forest fire detection can significantly of fires. This approach will help protect air quality enhance the ability to detect and respond to and public health. 96 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS 5.2 Rules: Strengthening air quality governance and enforcement Proposed policies and action plans to address air pollution need the power of law and regulation to achieve their goals. While the recommendations identified in government ‘action plans’ set the stage for a more effective AQM and establish potential institutional arrangements for effective AQM monitoring and enforcement, this potential will only be achieved if the recommendations are enshrined in law giving relevant agencies the appropriate mandate via the EPA, and those agencies subsequently develop regulations and guidance to carry out the mechanisms identified. This sets the legal and regulatory framework for effective AQM. Ambient standards could be strengthened, and an annual average fine particle standard added. The revised NAAQS mandates 24-hour average threshold levels for pollutants including PM2.5 that are more than twice the WHO guideline value. 24-hour average PM₁₀ standards are similarly far higher than WHO guidelines. More concerning, however, is that Nepal currently lacks annual average thresholds for these pollutants. Both annual and 24-hour standards are crucial for assessing air quality. For instance, the WHO recommends annual an average PM2.5 concentration below 5 µg/m³ and 24-hour average below 15 µg/m3. However, without inclusion of annual average levels for PM2.5 and PM₁₀ NAAQS, Nepal misses an opportunity for compliance with indicators that are indicative of the largest burden of disease, chronic, long-term exposure to PM2.5. High-level support can put in place institutional arrangements that support effective AQM governance. World Bank analytics in multiple global regions have shown that the most effective AQM programs have (i) basic legislative and regulatory frameworks,  (ii) national high-level champions (who ensure staffing and budget for basic functions as well as push line ministries to cooperate), (iii) decision-making based on high quality evidence, including data, analyses and knowledge, (iv) horizontal and vertical coordination of programs (i.e., federal, provincial and local alignment and coordination across ministries), and (v) accountability and transparency via the production and tracking of publicly-available information (See Figure 5.2). This framework provides a solid basis for restructuring Nepal’s existing AQM framework. However, experience shows that it will require support beyond MOFE, including sectoral line ministries responsible for key pollution sources to ensure that recommendations take root across government.  Defining a long-term AQM agenda and providing the necessary budget for it needs to be championed or endorsed by high-level officials, like the prime minister, within and across layers of government. This is particularly the case if the agenda’s objectives and targets require multi-sectoral actions. At the sectoral level, Nepali federalism presents a unique challenge to clarify AQM mandates and advance action. Given that the constitution guarantees that each level of government can establish their own Environment Protection Act and that all levels of government have a mandate for enforcing and delivering clean air, a series of technical-level dialogues—sanctioned at a high-level—are needed across all ministries and agencies to define effective implementation arrangements. C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 97 Figure 5.2: Governance and institutional framework for assessing AQM systems LEGAL & COMMITTED NESTED HORIZONTAL & ACCOUNTABILITY REGULATORY EXECUTIVE PLANNING VERTICAL & FRAMEWORK COORDINATION TRANSPARENCY Legal framework Strategic vision Planning Political leadership Transparency: Data process generation and Roles and Funding allocation Membership to disclosure responsibilieties Independent match Incentives expert advice and Audit, monitoring, Enforcement Functional reach Government’s evidence-based and evaluation Mechanisms and powers to capacity match Citizen’s Transboundary participation mandate and Independent int. commitments funding Legal recourse Source: World Bank, 2024b. Air Quality Management in EU Member States: Governance and Institutional Arrangements: International Experience and Implications, Europe and Central Asia Region, Washington DC. For each of the areas discussed below, the GoN can • Mandates - The registration of new industries is develop a blueprint for action including legislative handled by the Department of Industry (DoI) or principles and regulatory reforms with corresponding industry departments or offices from provinces. budget (including revenue generation and resource However, the industrial standards are set by the requirements) and accountability recommenda- Ministry of Forest and Environment, which also tions.  Specific dialogues can follow a similar format to reviews and approves EIAs and has the authority set clear goals, timebound targets and enforceable/ through the DoE to inspect the industrial facili- accountable outcomes targeting key AQM functions, ties and verify that self-monitoring reports are including AQ monitoring (already described in Section in place and to ensure compliance with those 5.1), industrial enforcement, vehicle inspection industrial standards. Projects that are under enforcement, clean cooking technology testing and provincial jurisdiction follow a different process sales and forest fires management. with provincial authorities providing oversight. EIAs tend to utilize a self-monitoring process Enhancing regulations and enforcement for utilizing external consultants, making it very industrial facilities will require careful consideration difficult for effective oversight to understand of existing mandates, staffing and equipping if industries are following requirements or not. appropriate agencies. Theoretically, existing industrial Updated legislation should provide clear roles standards and requirements under the Industrial and responsibilities among federal, provincial Enterprises Act for development of new industrial and local level allocating the mandate to reg- facilities requires compliance with standards and ulate and enforce specific categories of indus- ensures that development will adhere to approved tries in specific geographic locations (including conditions and levels, preventing it from making provinces, municipalities of various sizes and a “significant contribution to control of pollution.” industrial zones).   However, the lack of inspectional human resources, equipment and procedures to ensure follow-through • Mechanisms – Section 20 of the EPA requires on plans or to conduct routine inspections prevents industries making a significant contribution the GoN from effectively controlling emissions from to receive a pollution control certificate (PCC). the sector. However, the process of issuing PCC stopped in 98 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS 2002 due to unclear regulations between the DoI • Accountability – To establish accountability and the Ministry of Environment, Science, and for these programs, it is the responsibility of Technology and now is a completely voluntary the federal DoE or DoI to train inspectors on process with only clean industries tending to procedures and to insist on rigorously follow- apply. A comprehensive system of permitting ing regulatory procedures for collecting data needs to be established that includes all indus- and performing inspections. However, it is also trial sources that emit specified pollutants above the responsibility of the inspection programs specific thresholds. Operating permits can be tied (whether at the federal, provincial or local level) to emission charges that would provide funding to follow regulations or guidance in carrying for environmental permitting and inspections/ out these duties. Failure to conduct inspections audit staff. This can be complemented with rou- per requirements should automatically trigger tine reporting (e.g. emissions or activity data) to corrective actions, loss of funding, and ultimate- support AQ emission inventory work (see below), ly imposition of a federal inspection program as well as a system of routine inspections using until corrective actions are demonstrated. This specified methodology and set fines for various provides the incentive for proper enforcement specific violations (right now fines are extremely and compliance.  For regulated industries, a subjective and only for ‘actions in contravention non-negotiable system of fines for failure to of the act’). The use of routine inspections would comply with standards, including daily fines and also call for a means of accrediting or certifying ultimately sealing of industrial units after an both public and private sector inspectors in the established grace period elapses. approved test methods. Industrial standards could be stricter and better • Means – A means of accomplishing the activi- enforced. To enhance environmental compliance and ties above would ensure that a clearly identified ensure accurate monitoring of industrial emissions, it agency (with the established mandate, at the is imperative to update regulations to mandate routine federal, provincial or municipal level) has re- stack testing. Taking a sample of pollutants from a sources (both human resources—in terms of stack or vent is usually the most direct, and often authorization to hire staff—as well as financial the only, way of determining if a source’s emissions resources – in terms of having adequate budget comply with regulations or with the limits set in a to pay staff, procure stack testing equipment, permit. Emission, or “stack”, testing should be required inspection vehicles and pay for training of staff) whenever a new piece of equipment is installed, or and capacity to carry out the mechanisms de- when a new or revised permit is issued, and certain scribed. The DoE should prepare a roadmap facilities should be required to routinely perform for strengthening the enforcement of the reg- emission testing every two or three years. Due to ulator(s) (including e.g., DoI, DoE, and DOLOS the difficulty of the procedures and expense of the at the federal and provincial level) that defines equipment, stack tests would normally be performed clear and escalating penalties, streamlines legal by a professional consultant who specializes in this procedures, and defines mandates across all type of work and is hired by the facility doing the test. levels of government and/or the private sector. The DoE, DoI or other government (e.g., provincial or The DoE should also strengthen the enforcement municipal) entities should serve in the role of auditor, capacity of its staff, including with training pro- ensuring that test procedures and equipment meet grams for emissions inspectors/auditors and specifications detailed in testing regulations. Industrial technical professionals, and the procurement standards that outline current emissions limits should of monitoring and inspection equipment at the be strengthened and amended to include written appropriate level of government and within the guidelines regarding the stack test requirements, private sector. procedures and data handling conventions. Such inspections will not only ensure compliance but also promote transparency and accountability in industrial operations, ultimately contributing to improved air C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 99 quality and environmental protection. For industries third-party certification. Independent certification with significantly higher emissions (such as Cement bodies can provide unbiased assessments, ensuring Plants), the feasibility of establishing Continuous that industries comply with environmental standards. Emission Monitoring Systems (CEMS) connected This approach will enhance transparency, build public to the DoE’s central office may also be explored trust, and improve the overall effectiveness of air (See Box 5.1). As discussed in Chapter 1, the use quality management. of these more sophisticated industrial monitoring systems may require significant training and skills Delegate regulatory enforcement authority to development but should wait until capacity and provincial governments with clear accountability expertise to conduct baseline ambient air quality frameworks. This delegation can improve the efficiency monitoring is demonstrated per section 5.1. and effectiveness of air quality management. Clear accountability frameworks should be established to Mandate third-party certification for industry ensure that provincial authorities are held responsible inspections and emissions reporting. To ensure for enforcing regulations and achieving air quality the accuracy and reliability of industry inspections targets. This decentralized approach will enable and emissions reporting, it is essential to mandate more localized and responsive enforcement actions. Box 5.1: Successful implementation of Continuous Emission Monitoring System (CEMS) in China Continuous Emission Monitoring Systems (CEMS) are automatic systems installed in highly polluting industries to measure emitted air pollutants in real-time. These systems facilitate governments to effectively monitor and enforce air pollution standards and control policies. In China, CEMS was pilot tested in various industrial facilities starting 1990s and by 2015, the government mandated large scale deployment of CEMs in coal-fired power plants. Under the 13th Five-Year Plan (2016-2020), the Ministry of Ecology and Environment (MEE) mandated real-time emission reporting for high-polluting industries including cement plants and steel industries. Industrial firms were required to install CEMS on their facilities, such as exhaust chimneys or stacks, to continuously monitor emissions of PM, SO2, and NOx. The collected hourly data is transmitted from the CEMS at industrial facilities to a central monitoring station for analysis and assessing compliance with specific emission standards for pollutants. Industrial firms are also required to upload the collected CEMS data to public online platforms which serve as repositories for environmental data and provide transparency to the public regarding industrial emissions. Besides strengthening monitoring and enforcement mechanisms, CEMS are crucial for developing emission inventories, refining air quality models, and assessing the effectiveness of pollution control measures. For instance, the air quality in the Yangtze River Delta region was simulated using the Community Multiscale Air Quality (CMAQ) model that utilized emission inventories with and without CEMS data from coal-fired power plants. The findings indicated that incorporating CEMS data reduced biases between simulated and observed pollutant concentrations, leading to more accurate reflections of actual pollution sources (Y. Zhang et al., 2021). This suggests that the integration of CEMs data significantly improved the accuracy of emission inventories in China. Similarly, CEMS data can be used to assess the effectiveness of emission reduction policies. CEMS measurements have been compared with satellite observations to report that SO2 emission reduced by 13.9 percent after the implementation of stricter air pollution standards in 2014.a This alignment between CEMs and satellite data underscores the reliability of CEMS in tracking emission trends. a MIT Energy Initiative. 2019. Tracking emissions in China. Accessed through: https://energy.mit.edu/news/tracking-emissions-in-chi- na/. 10 0 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Establish penalties for tampering with monitoring of compliance by conducting random checks to equipment or submitting false data: To maintain reduce non-compliance and collect fines. the integrity of air quality monitoring data, it is crucial to establish penalties for tampering • Mechanisms – An expansion of the existing in- with monitoring equipment or submitting data spection and maintenance program is needed that is not representative of normal operating to ensure that all emitting vehicles (including conditions. Strict penalties will deter individuals two-wheelers) are included. Establishing such a and organizations from interfering with monitoring system will require routine fee and fine collec- devices, ensuring that accurate and reliable data tion (or potentially funding through dedicated is collected for decision-making and regulatory vehicle fuel taxes) but can enable expansion enforcement. and establishment of the provincial DOE or the DoTM offices primarily to train and regulate pri- Strengthening vehicular emissions inspection and vate sector vehicle inspection stations (via local testing is important. As part of their environmental garages and petrol stations). An expanded pro- protection mandate, the DoE sets the standards for gram should ensure that inspection schedules vehicular emissions. However, the Pollution Control are adhered to (e.g., via random traffic stops Division of the Department of Transport Management with sticker checks) and establish a system of (DoTM) under the Ministry of Physical Infrastructure fines for various specific violations and system and Transport (MoPIT) is responsible for overseeing of accrediting private sector garages/inspectors. vehicular pollution control. Since 1996, the DoTM has implemented an annual green sticker program and • Means – To ensure effective AQM as well as to established emission testing procedures for vehicles eliminate corruption via hand sales of green in the Kathmandu Valley. It also conducts emission stickers, it is also crucial for all relevant agen- testing for three- and four-wheelers, even though cies to have access to a digital data sharing/ most vehicles in the valley are two-wheelers,which green sticker program thereby highlighting the are not tested. need for a centralized data-sharing government portal. Ensuring that the right agency (with the mandate) has resources, staffing, tailpipe testing • Mandates – While the mandate to set standards equipment, vehicles or other equipment and are clearly within MOFE and the DoE, the EPA’s capacity to carry out the job. Chapter 3, Section 15 gives the DoE the authority to assess compliance with standards from var- • Accountability – Criminal penalties should be ious pollution sources, including vehicles, and imposed for illegal issuance of green stickers, Section 35, Clause 2 provides the authority for but fines for operating a vehicle with an expired respective agencies to act on non-compliance sticker can also contribute to financing the en- including for the DoTM to collect revenues from hanced program. A hold on federal grants can emission testing and collect fines for non-com- ensure that provinces and municipalities hold pliance. Nevertheless, the current practice shows up their mandates under federal regulations. a duplication in duties between the DoE and the DoTM, especially in managing pollution Strengthened Nepal Vehicular Mass Emission from vehicular emissions, as well as gaps for Standards (Euro-VI) with strict enforcement specific technology classes like two-wheelers. will reduce emissions from the transportation Additionally, the implementation of the green sector. Government action between 2000 and 2012 sticker program in major metropolis other than was significant and importing the Euro-6 standard the Kathmandu Valley would require defining petrol and diesel since 2020 sets the stage for further and strengthening the roles of the provincial progress. However, Euro-VI standards—equivalent ministry and their respective environment and to Bharat Standard VI (BS VI) emission norms—for transport divisions. There may also be a need heavy-duty vehicles and passenger vehicles are for municipal officials to step up enforcement needed to yield the air quality benefits that build on the foundation of these prior actions. Regulatory C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 10 1 action should be complemented with enhanced Strengthening local governments’ role in enforcement, including enhanced vehicle testing monitoring household energy programs. This through accreditation for vehicle testing centers and will improve the implementation and effectiveness repair shops, increased random checks and fines of these initiatives. Local authorities can provide for failure to comply and digital record keeping valuable insights and support for promoting clean system for vehicle registrations and green sticker energy technologies, ensuring that programs are compliance. There is an urgent need for comprehensive tailored to the specific needs of their communities. infrastructure to support vehicle scrapping, including the establishment of Vehicle Fitness Testing Centers Institutionalize a crop residue management system in all provinces to ensure regular inspections and through public-private partnerships: This system proper decommissioning processes. Standards also will help address the issue of agricultural burning. need to be consistent across all types of vehicles, By involving both public and private sectors, the including heavy-duty vehicles, buses and two- three- government can develop sustainable solutions for wheelers. managing crop residues, reducing emissions, and promoting cleaner agricultural practices. Certify private inspection stations under strict federal standards. Stricter standards can expand Assign local government roles in enforcing seasonal the capacity for vehicle inspections and improve burning bans: Assigning local governments this compliance with emissions regulations. By ensuring responsibility will enhance the effectiveness of that private stations meet high standards, the these regulations. Local authorities are better government can enhance the effectiveness of vehicle positioned to monitor and enforce bans, ensuring inspection programs and reduce emissions from the that agricultural burning is minimized, and air quality transportation sector. is improved. Mandate dust control and road cleaning as part of Strengthen coordination between forestry all public works contracts. To reduce dust emissions departments, fire services, and disaster from construction and roadworks, it is important management agencies. This is crucial for effective to mandate dust control and road cleaning as part forest fire management. By improving communication of all public works contracts. Implementing these and collaboration, these agencies can respond more measures will minimize the release of particulate quickly and effectively to forest fires, reducing their matter into the air, improving air quality and reducing impact on air quality and public health. health risks. Formalize rapid response protocols for peri-urban Support RETS to become the national testing and forest fire management. These response protocols certification hub and introduce comprehensive will ensure that fires are detected and addressed clean cooking standards. Improving clean cooking quickly, minimizing their impact on air quality. These options in Nepal will reduce household air pollution, protocols should include clear roles and responsibil- which is one of the major contributors to PM2.5 ities for all involved agencies, as well as guidelines emissions and creates a high health risk from for coordination and communication. traditional smoke exposure. Presently, the safety and Establish fire prevention units at local level. This will efficiency of clean cooking technologies are evaluated enhance the capacity to prevent and manage forest by the Renewable Energy Test Station (RETS) against fires. These units can conduct regular patrols, engage interim standards for biomass cookstoves (Nepal with local communities, and implement preventive Interim Benchmark for Solid Biomass Cookstoves, measures to reduce the risk of fires and their impact NIBC). However, comprehensive national standards on air quality. for electric stoves and biomass pellets are still lacking. These national standards, consistent with “Graded Response” programs are effective for international protocols, will also be necessary for managing episodes with acutely high air pollution wide-scale adoption of clean cooking technologies levels. Targeted short-term measures may be in Nepal. 10 2 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS needed to reduce emissions—and thus population compliance. In addition, because most episodes of exposure—to air pollution by imposing restrictions acute air quality in Nepal are a result of emissions on activities that bring about immediate short-term from domestic forest fires, large-scale open burning results even while they may be unsustainable over of crop- residue in Nepal, or large-scale crop residue the long run. Managing acute air pollution episodes burning in nearby countries, special attention needs requires a robust monitoring network (see recom- to be paid to (a) ways to reduce forest fires and mendations above to credibly inform when air quality crop residue burning in Nepal, (b) opportunities for thresholds are exceeded) along with a pre-agreed temporary reduction of emissions from other domestic publicly disseminated and accepted plan that details sources during bad episodes and (c) strengthening which restrictions will be imposed when air quality of regional coordination and cooperation to reduce exceeds certain thresholds, who will enforce those emissions beyond Nepal’s borders.  restrictions, and the penalties associated with non- Box 5.2: International experience in responding to heavy air pollution episodes  Many cities have established a system in which pre-agreed measures are triggered when air pollution reaches harmful levels. Unlike ad hoc emergency decisions, these systems activate specific actions when air pollution crosses certain thresholds. New Delhi:   The Graded Response Action Plan (GRAP) was introduced by the Ministry of Environment, Forest and Climate Change (MoEF&CC) in 2017 and is implemented in the National Capital Region (NCR) of India, which includes Delhi and its surrounding cities. GRAP outlines a set of predefined measures and actions to be taken at four stages of air quality deterioration, based on the Air Quality Index (AQI). In the event of Stage I, ‘Poor’ air quality conditions, the contingency plan includes measures such as road sweeping, traffic management, preventing garbage burning, monitoring thermal power plants, dust control in construction, ban on firecrackers, and public awareness campaigns through media. Similarly, Stage II, ‘Very Poor’ air quality conditions, prompt actions such as halting diesel generators, increasing parking fees, and enhancing public transportation with additional buses. During Stage III, ‘Severe’ air quality conditions, GRAP mandates shutting industries such as brick kilns and stone crushers, maximizing natural gas-based power generation, and promoting off-peak travel with differential rates in public transport, as well as intensifying road cleaning in high dust areas. In Stage IV- ‘Severe+’ air quality conditions, measures include restricting truck entry, suspending construction, implementing an odd-even scheme for vehicles, and empowering a Task Force for additional actions.  Beijing:   The Beijing “Heavy Air Pollution Contingency Plan” outlines a three-tier alert system (yellow, orange, and red) based on forecasted daily mean air quality index levels. The plan involves educating the public and organizing medical services based on the severity of forecasted air pollution. Each alert level triggers specific emission reduction measures. A yellow alert involves street cleaning, dust control on construction sites, increased public transport use, and emphasize providing health protection guidance. An orange alert introduces extra rounds of street cleaning, reduced outdoor activities like barbecues, and a ban on transport vehicles carrying construction waste. A red alert imposes more stringent measures, including production restrictions, increased electricity transmission from other cities to reduce local power generation load, and enforcement of odd-even rules that allows the vehicles to operate on alternate days. The contingency plan is integrated into the city’s health emergency system, overseen by the Municipal Heavy Air Pollution Emergency Headquarters and a dedicated Health Emergency Response Branch.  C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 10 3 Managing acute air pollution episodes requires a robust monitoring network along with a pre-agreed publicly disseminated and accepted plan. Box 5.3: Indoor Air Pollution: Case studies of protective and preventive measures South Korea has implemented a series of emergency measures to combat high levels of PM2.5 originating from domestic emissions. In 2018, the government mandated the installation of air purifiers in all classrooms nationwide, equipping schools and public daycare centers with government-funded filtration systems and air quality monitoring devices that automatically adjust purification levels based on pollution levels.a Studies show that the installation of one and two air purifiers reduced the average PM2.5 levels of classrooms by 67 percent and 81 percent, respectively (Han et al., 2022). Similarly, Singapore deployed air purifiers in all primary and secondary schools and established protocols to suspend classes when the 24-hour Pollutant Standard Index (PSI) exceeded 300.b Additionally, real-time air quality alerts were issued to advise schools to cancel outdoor activities and elderly care centers to keep residents indoors during severe pollution episodes. During the 2019 Southeast Asian haze crisis, the Malaysian government distributed around half a million face masks to residents in heavily affected areas and temporarily closed schools to minimize children’s exposure to hazardous air quality.c In Bangladesh, 350 households received free air purifiers, but their usage was inconsistent suggesting that alongside financial support, awareness campaigns and behavioral change incentives are needed to scale up their adoption (Chowdhury, 2024). While protective measures such as use of air purifiers and masks help reduce short-term health risks, they do not address the root causes of indoor pollution, such as reliance on polluting fuels. In India, the Pradhan Mantri Ujjwala Yojana (PMUY) has provided 80 million free LPG connections to low-income households, reducing reliance on biomass fuels and indoor smoke exposure.d Likewise, China’s Coal-to-Gas and Coal-to-Electricity program have rapidly replaced coal stoves with cleaner energy alternatives, significantly lowering indoor pollution in rural areas (J. Zhang et al., 2022). In summary, a comprehensive approach is needed to tackle indoor pollution- combining immediate protective measures with long-term solutions that transition households away from highly polluting fuels. a Ministry of Education. 2018. Announcement of countermeasures against high concentrations of fine dust in schools. Accessed through: https://english.moe.go.kr/boardCnts/view.do?boardID=265&boardSeq=74120&lev=0&m=03&opType=&page=11&s=english&search- Type=S&statusYN=C. b National Environment Agency (NEA). 2019. Singapore Government Agencies Implement Measures to Mitigate Impact of Haze. Accessed through: https://www.todayonline.com/singapore/moe-deploy-25000-air-purifiers-primary-secondary-schools. c Reuters. 2019. Malaysia sends half a million face masks to haze-hit state, shuts schools. Accessed through: https://www.reuters.com/ article/world/malaysia-sends-half-a-million-face-masks-to-haze-hit-state-shuts-schools-idUSKCN1VV0C2/. d Ministry of Petroleum and Natural Gas. India. 2016. Pradhan Mantri Ujjwala Yojana 2.0. Accessed through: https://pmuy.gov.in/about. html. 10 4 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS 5.3 Economics: Using pricing and markets to create the economics of cleaner air To accelerate the adoption of clean technologies in Nepal, a strategic combination of macro-fiscal and pricing policies is essential. These policies must align with Nepal’s development priorities, ensuring economic growth while addressing environmental concerns such as air pollution and climate change. The proposed recommendations in this section build on the stocktaking of existing environmental fiscal policies in section 2.2.3 of this report and the gaps identified there. Recently taken initiatives by the GoN to reduce import duties for electric vehicles (EVs) and electric stoves have shown how fiscal policy accelerates the adoption of clean technology. In July 2022, the Nepal government issued significant reductions in import duties for EVs. Import duties were reduced to as low as 10 percent from as high as 80 percent, depending on the types and capacities of the EVs. As a result, the share for newly registered electric two-wheelers increased from below one percent in 2021 to seven percent in 2024, electric three-wheelers surged from 15 percent to 88 percent, while four-wheeled EVs jumped from four percent to 81 percent during the same period. This growth reflects the market’s responsiveness to the incentive provided. The government also promoted clean cooking adoption by reducing import costs for electric cookstoves. The import duty on electric cookstoves was reduced from 30 percent to 15 percent, in addition to offering VAT exemptions on select models. To further promote renewable energy and clean technologies, the government introduced the Green Tax in July 2024, under GRID DPC-2 whereby NPR 1 per liter for diesel/gasoline and NPR 0.5 per kg of coal was introduced. Overall, fiscal and pricing policies under the GRID-DPC series together illustrate the importance of a conducive economic environment for the adoption of clean technologies. The government could consider a reformulation of the existing environmental fiscal policies to strengthen emission reduction and to benefit the low-income households. The following recommendations might help to accomplish this objective: 1. Streamlining different environmental taxes, into one improved Green Tax. A number of separate taxes are imposed on petroleum, particularly gasoline and diesel in Nepal. These include the pollution tax, the infrastructure levy, and the road maintenance fees. The government could consider integrating these taxes into the revised Green Tax. It would streamline the environmental tax system in Nepal and reduce administrative costs. 2. The Green Tax could be applied to fossil fuels based on their emissions/pollution content. The existing Green Tax has two limitations. First, its rate on coal and coal products (NPR 0.5/kg) is smaller compared to petroleum products (NPR 1/liter), but coal has much higher emissions and pollution intensity. Second, the current Green Tax is also applied to petroleum products that are used for non-energy purposes (e.g., lubrication) and do not produce emissions, which could easily be adjusted. Adjustments to alleviate these C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 10 5 two limitations could strengthen the Green Tax’s 4. The Green Tax revenue could be used to fi- effectiveness to reduce emissions of local air nance emissions reduction initiatives such as pollutants as well as CO2. promoting cleaner technologies and enhanc- ing energy efficiency. Currently the GoN uses 3. Increasing the Green Tax rates. Integrating the Green Tax and the pollution tax revenue as existing environmental taxes and infrastruc- general revenue in the consolidated budget of ture levies into single Green Taxes based on the government. Existing studies suggest that the polluter-pay principle would raise the rates allocating these funds towards environmental and broaden the base. However, it might seem objectives, including emission reduction initiatives like merely renaming the existing taxes despite and subsidizing cleaner technologies, would be the increased coverage. Moreover, the current a better strategy to amplify the benefits of the Green Tax rate is one of the lowest in the world, tax. For instance, in Japan, the revenue generated amounting to less than USD2 per ton of CO2. from carbon tax introduced in 2012 is allocated The rate may gradually increase to assist its to climate change mitigation measures, such as effectiveness to promote the green transition promoting renewable energy and energy-efficient of the economy. Studies suggest that Nepal will technologies. These investments are expected benefit from green taxation because it helps to reduce both energy costs and emissions over substitute imported fossil fuels with domestic time (Arimura & Matsumoto, 2020). In Singa- hydropower (Timilsina et al., 2024a). pore, the carbon tax revenue is reinvested into Box 5.4: Singapore’s Carbon Tax and Revenue Recycling Initiatives In 2019, Singapore emerged as the first country in Southeast Asia to implement a policy aimed at charging carbon tax. The tax system was established to discourage heavy greenhouses gas (GHG) emitters from discharging pollutants into the environment. The tax rate was set at USD 5 per tonne of CO2 equivalent (tCO2e) from 2019 to 2023, providing transitional period for enterprises to adjust. The government has announced its plan to increase the tax rate to USD 25 per tonne by 2024 and 2025, targeting USD 50 per tonne to USD 80 per tonne by 2030.a The revenue generated from carbon tax is reinvested into programs that help enterprises transition to cleaner technologies and improve energy efficiency. For instance, the Energy Efficiency Fund (E2F) and the Resource Efficiency Grant for Energy (REG(E)) programs which assist industries financially to adopt cleaner and energy efficient technologies are funded through revenue from carbon tax.b As of 2024, the E2F offers up to 70 percent co-funding to firms investing in energy efficient technologies and the REG(E) provides up to 50 percent co-funding to manufacturing firms investing in emission reduction measures that lead to carbon abatement of at least 250 tonnes per annum.c Funds have also been earmarked under the Research, Innovation and Enterprise 2025 plan for the development of sustainable urban solutions, as well as emerging low-carbon technologies. Singapore’s implementation of the carbon tax exemplifies how environmental tax, coupled with revenue recycling, could work as an effective tool to decrease pollution as well as promote sustainable industrial development. a Based on information provided by the National Climate Change Secretariat (NCCS), Singapore on Carbon Tax. Accessed through: https://www.nccs.gov.sg/singapores-climate-action/mitigation-efforts/carbontax/. b Ministry of Sustainability and the Environment. 2021. Written Reply to Parliamentary Question on Carbon Tax. Accessed through: https://www.mse.gov.sg/latest-news/written-reply-to-parliamentary-question-on-carbon-tax-by-ms-grace-fu--minister-for-sustainabil- ity-and-the-environment. c Based on information provided by the Singapore Economic Development Board (EDB) on Resource Efficiency Grant for Emissions (REG(E). Accessed through: https://www.edb.gov.sg/content/dam/edb-en/how-we-help/incentive-and-schemes/Information%20-%20 Resource%20Efficiency%20Grant%20for%20Emissions.pdf. 10 6 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS co-funding programs that help industries adopt households could be implemented prior to in- cleaner technologies (see Box 5.4). A similar tax troducing the taxes. This proactive approach recycling strategy can be developed in Nepal to ensures that vulnerable populations are not boost the environmental and social benefits. In adversely affected during the transition. Effec- Nepal’s brick industry, tax revenues from envi- tive compensation can take the form of direct ronmental fiscal policies could be channeled cash transfers or rebates that can help offset into adopting cleaner technologies or alternative increased costs of energy and goods, ensuring fuels, thereby reducing coal consumption and that the transition toward sustainability does associated emissions (Timilsina et al., 2024b). not exacerbate existing inequalities. Addition- ally, revenues can be recycled into programs 5. The government could design a revenue like educational grants, health insurance, and scheme that prioritizes low-income house- social security contributions, which improve ac- holds to rectify its potential regressive im- cess to essential services and uplift low-income pacts on vulnerable population. Levying taxes communities over the long term. For instance, often disproportionately impacts low-income using green tax revenues to provide affordable households, as they spend a higher share of public transportation options can create long- their income on essentials like energy. To ad- term benefits for vulnerable populations while dress this, compensation mechanisms for poor simultaneously addressing environmental goals. Box 5.5: Is Nepal ready for an Emissions Trading System (ETS)? The ETS in Gujarat represents a pioneering effort in India to control industrial air pollution through market-based mechanisms. Introduced as a pilot program, the ETS targets particulate matter emissions among 317 high-polluting plants in a major industrial city within the state. This system establishes an airshed-level cap on total emissions and allows participating firms to trade emission permits, thereby providing flexibility and economic incentives for reducing pollution. A critical component of the ETS is the robust monitoring system installed in the participating firms, which ensures accurate measurement and reporting of emissions. Evaluated through a randomized control trial, the pilot ETS in Gujarat has demonstrated 20-30 percent reductions in emissions at a lower cost compared to other approaches (Greenstone et al., 2023). However, the ETS cannot be transferred to other IGP HF jurisdictions including Nepal in the short or medium term, primarily due to differences in industrial structure, measurement capacity, regulatory and institutional capacity, market size and diversity, and cost and complexity. Nepal’s industrial facilities are mainly micro, small, and medium enterprises (MSMEs), whereas Gujarat’s scheme focuses on large industries. The monitoring and evaluation system for an effective ETS should be robust and requires a well-functioning Continuous Emissions Monitoring System (CEMS). Nepal’s existing capacity is insufficient to start a CEMS. Gujarat’s ETS benefits from many participating industries, fostering a robust market for emissions trading permits with competitive pricing and liquidity. In contrast, Nepal’s smaller industrial base would likely result in low market liquidity and price instability, potentially leading to system failure. Furthermore, setting up an ETS involves high administrative and operational costs, adding to the complexity and financial burden for regions with limited resources and capacity. C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 107 5.4 Incentives: Private sector adoption of clean technologies and practices Government-provided incentives are critical for galvanizing the private sector to adopt cleaner technologies. The private sector often needs a ‘nudge’ to shift to cleaner technologies, as has been shown the world over (World Bank, 2023). While incentives can take many forms, the GoN should specifically consider how tax incentives (such as tax breaks), technology subsidies, concessional terms on lending, and risk guarantees, among others, can incentivize firms to adopt cleaner technologies. Experience in other countries has shown that these programs can help to overcome fear of the unknown among first movers and encourage behavior change in sectors where dirtier technologies are prevalent (IEA, 2024). Voucher programs, which enable the government to target subsidies, have also been effective in encouraging individuals to adopt new technologies that may be unfamiliar or not in common use (e.g., clean cooking options) (Spiesberger & Schönbeck, 2019; Shankar et al., 2020). Creating the right incentives for firms, farms, and households to adopt cleaner technologies should be explored with care, as there are also drawbacks associated with subsidies (including financial strain on public resources, market distortion, misallocation, and transaction costs) but is necessary to nudge these actors toward novel technologies needed to clean the air. Nepal has successfully introduced incentives for the adoption of cleaner production technology. Industrial energy efficiency and cleaner production have been a focus since the 1980s and several Development Partners have supported initiatives. In 1994, the World Bank implemented a program in collaboration with the GoN to establish an Office of Energy Efficiency Service (OEES) that focused on energy audits and energy-saving options in industrial boilers, industrial equipment, and hotel lighting (World Bank, 2008). In 1998, the Danish International Development Agency (DANIDA) started the Environment Sector Programme Support (ESPS) to support cleaner production in industries of Nepal, mostly from Hetauda and Balaju Industrial Districts. By 2005, the ESPS interventions were carried out in 322 industries whereby loans and grants were provided to industries adopting cleaner production (PACE Nepal, 2011). The program also conducted energy audits and extended technical assistance to industries to implement energy efficient practices (DANIDA, 2017). By drawing upon the results from ESPS, a German development agency—Gesellschaft für Internationale Zusammenarbeit (GIZ)—implemented the Nepal Energy Efficiency Programme (NEEP) in 2010 to further advance industrial energy efficiency efforts in Nepal. The implementation of NEEP led to the establishment of an Energy Efficiency Centre (EEC) which facilitated energy audits, offered training to energy auditors, collaborated with local banks to encourage investment in energy efficient practices, and overall provided energy efficiency services to large industries as well as small scale enterprises.51 From 2016-2021, a German Development bank- Kreditanstalt für Wiederaufbau (KfW) funded Energy Efficiency Financing Program in Nepal to support industries like steel, cement, and hospitality to adopt efficient and cleaner technologies (Adephi, 2021). In partnership with Rastriya 51 NEEP. Promotion and Realization of Energy Efficiency. Accessed through http://energyefficiency.gov.np/resource.php. 10 8 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Banijya Bank Limited (RBBL), a state-owned commercial as tax exemptions, reduced import duties, or tax bank, this program offered grants covering up to rebates help alleviate the financial strain by reducing 39 percent of the investment (capped at NPR 10 the cost of purchasing these technologies and making million) for adopting energy-efficient technologies them more affordable. (USAID, 2021). Another program managed by RBBL is the GIZ’s Renewable Energy and Energy Efficiency To accelerate the transition toward cleaner Programme-Green Recovery and Empowerment with industrial technologies in Nepal, the government Energy in Nepal (REEEP-GREEN), aimed at promoting should introduce accelerated terminal depreciation broader adoption of energy efficient practices from for firms retiring polluting equipment such 2021-2024.52 Through this program, industries and as inefficient boilers and furnaces. Terminal enterprises with high energy saving potential received depreciation allows businesses to claim a tax deduction grants to implement energy-saving measures identified for the unrecovered value of an asset when it is through certified energy audits (EU Nepal, 2023). scrapped or replaced—effectively compensating for Similarly, AEPC leads the Nepal Renewable Energy early retirement losses. By offering an enhanced Programme (2019–2025) that supports the scaling depreciation rate (e.g., 100 percent of the remaining up the use of renewable energy technologies such book value) for certified polluting assets that are as mini-grid, solar, and biogas. replaced with verified clean technologies, this policy would reduce the financial burden of switching and Private sector firms require financial incentives incentivize faster turnover of high-emitting capital to adopt cleaner technologies. For Nepal, such a stock. This measure would be particularly impactful in financing mechanism may include: (a) grants for a pollution-intensive sectors like brick manufacturing, part of the technology costs; (b) loans at favorable cement, textiles, and food processing, where firms terms (e.g. rates and tenors); and/or (c) offering often hesitate to invest in cleaner technologies due partial risk guarantees through the Deposit and Credit to sunk costs in legacy equipment. Guarantee Fund (DCGF) to Financial Intermediaries for the financing of cleaner technologies/fuels. The Alongside financial incentives, effective enforce- GoN will have to explore which sort of mechanism ment and awareness within the industry are needed would draw the demand of potential clean technology to stimulate the uptake of cleaner production adopters to undertake the desired on-lending and technologies. Nepal has introduced incentives for reduce emissions. This can demonstrate the viability the adoption of clean and energy efficient solutions of and reduce the perceived risk of financing/installing through the Industrial Enterprises Act (IEA) 2020 and cleaner technologies, demonstrate the demand Industrial Enterprises Regulation (IER) 2021. The IEA for scaling up clean technology interventions, and 2020 and IER 2021 provide provisions for tax reduction establish a financing model for future technology/ and customs duty exemption to industries adopting fuel switches and clean air interventions with private eco-friendly technologies. Industries investing in sector involvement. Financial incentives should be pollution abatement technologies, such as energy complemented by raising awareness campaigns and efficient machinery and emission control equipment, strong enforcement of emission standards. are eligible for tax deduction of up to 50 percent of their taxable income for expenditures incurred to Reducing taxes on clean technology lowers costs install these control systems. The import duties are by allowing businesses to deduct a portion of their further reduced or waived, encouraging the industries investment from their tax liabilities, improving to adopt cleaner solutions. Despite these provisions by the return on investment and reducing perceived the government, their implementation and industry risks. Adopting or switching to cleaner technologies awareness remain uncertain. Therefore, in addition requires capital investment, often posing a financial to such incentives, a strong mechanism is required burden to industries and enterprises. Incentives such to ensure not only effective implementation but also monitoring and promotion of these incentives to maximize their benefits and encourage widespread 52 MoEWRI. REEP-GREEN. Accessed through: https://reeep. gov.np/page/about-us?utm. adoption of clean production practices. C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 10 9 Incentives are needed to encourage behavior residue management practices, thereby reducing change in adopting new cooking methods. agricultural burning, improving air quality, and Transitioning to modern, efficient technologies such promoting cleaner agricultural practices. Supporting as electric stoves, biogas systems, and improved farmer cooperatives in offering residue collection biomass cookstoves reduces pollution and public services will facilitate sustainable management of health burden. In Nepal, various efforts have been crop residues, further reducing agricultural burning made to disseminate improved cookstoves and biogas and enhancing air quality. Additionally, providing systems; however, due to their high up-front costs incentives for low-emissions fertilizer technologies and lack of financing mechanisms, the adoption of will encourage the use of environmentally friendly such technologies has been limited. Subsidies, tax fertilizers, which will help reduce emissions from exemptions, and collaboration with microfinance agricultural activities, improve air quality, and support institutions will be crucial in making these technologies sustainable farming practices. more affordable. Other feasible approaches to ensure affordability include bulk procurement of Provide incentives for community-based forest the clean cooking stoves to reduce the capital costs fire management initiatives. Providing grants and results-based financing, where payments are will support local efforts to prevent and manage disbursed only after verifiable results are achieved, forest fires. This financial assistance will enhance the like successful delivery, installation, and use of clean capacity of communities to address forest fire risks, cooking stoves. improving air quality and public health. Offering incentives for the early detection and reporting of To promote sustainable agricultural practices and wildfires will encourage individuals and organizations reduce emissions, various financial incentives to take proactive measures and will improve the and support programs are essential. Subsidizing effectiveness of forest fire management efforts, the purchase of happy seeders and rice straw reducing their impact on air quality. balers will encourage farmers to adopt sustainable A fleet of electric buses charge at the Sajha Yatayat depot in Kathmandu. Source: Narendra Shrestha/World Bank. 110 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS 5.5 Infrastructure: Putting in place infrastructure that enables adoption of clean air technologies and practices Public infrastructure such as a reliable electricity grid and good roads plays a crucial role in enabling the adoption of clean technologies across multiple sectors. In Nepal, improving electricity infrastructure is particularly important, as electricity supports the clean transitions in sectors contributing the most to pollution, such as manufacturing, cooking, and mobility (see section 4.1). Strengthened electricity infrastructure means increased reliability in the generation, transmission, and distribution system, all of which are essential to displace fossil fuels and reduce air pollution. Provided there is a stable and uninterrupted power supply, industrial facilities reliant on traditional fuel systems can conveniently switch to electric alternatives, which drastically reduce emissions. Similarly, to reduce household emissions, electric/induction stoves, rice cookers, and other household appliances are ideal solutions to biomass-based cooking that leads to indoor air pollution. However, the large-scale adoption of e-cooking solutions depends on improving electricity reliability across both urban and rural areas. One of the key constraints in transitioning to cleaner technologies is the reliability of electricity supply. More than 75 percent of firms in Nepal experience regular outages (typically 13 outages per month) (World Bank, 2023b). Approximately 10 percent of boilers are located within Industrial Districts (IDs), which benefit from dedicated feeder lines, ensuring consistent electricity reliability. For enterprises situated outside of IDs, backup solutions are necessary such as the installation of a dedicated feeder line for larger enterprises, solar panels for smaller boilers, and/or use of the original (pre-existing) fuel-based technologies. To ensure electricity reliability, it is important to strengthen electricity infrastructure through investments in storage, modernization, and stabilization of electrical grid, including integration of renewable energy. Large-scale Battery Energy Storage Systems (BESS) are a feasible and scalable solution, already being implemented globally53 to stabilize grids, store excess energy from renewable sources, and release it during peak demand hours. Furthermore, cross-border transmission line development with neighboring countries like India can play a crucial role in strengthening supply security. This interconnected grid system reduces dependence on a single energy source, mitigates risks of power shortages, and ensures a more stable and reliable electricity supply, particularly during peak demand or emergencies. Ensuring dedicated, reliable electric feeder lines to major industrial parks will support the adoption of electric production technologies. This infrastructure investment will provide industries with a stable and sufficient power supply, promoting cleaner production methods. Beyond electricity infrastructure, improvement of public transport, non-motorized transport, and land use planning are critical strategies to enhance mobility while reducing emissions. There is an absence of organized mass transit system in Nepal, with no Bus Rapid Transit (BRT) or Light Rail Transit (LRT). In the Kathmandu Valley, around three percent of 1.75 million registered vehicles fall under the category of public transport, accounting for 28 percent of all trips made using public transportation.54 While there are plans for modernizing public transport with the adoption of electric buses and smart transport management systems55, broader policy 53 In South Asia, India is scaling up BESS to manage energy fluctuations through government-backed investments and private sector participation. For instance, Kadapa Ultra Mega Solar Park is a large-scale initiative integrating solar energy with BESS, featuring a planned capacity of 1000 MW, of which 250 MW is currently operational. 54 National Policy Forum. 2024. Why does Kathmandu’s public transport need a complete revamp? A perspective from Mass Rapid Transit promoting efficient urban mobility. Accessed through: https://www.nationalpolicyforum.com/posts/why-does-kathmandus-public-trans- port-need-a-complete-revamp-a-perspective-from-mass-rapid-transit-promoting-efficient-urban-mobility/. 55 Initiatives include deployment and operation of electric public buses in the Kathmandu valley by Sanjha Yatayat, expansion of electric public microbuses and minibuses through collaborations with organizations like GIZ and ADB, and widespread adoption of electric rickshaws in cities of the Terai. Additionally, the Sustainable Urban E-Mobility Project aims to integrate smart transport management systems in Kathmandu and Pokhara. C HA PTER 5: C reatin g the E nablin g Foundations for Clean A ir in Nepal 111 support, financing, and integration with urban planning are concentrated across main highways to facilitate are needed. To complement improvement of public long-distance travel between major cities. A national transport, infrastructure for non-motorized transport plan for EV infrastructure is crucial to systematically such as cycling lanes and pedestrian friendly road build a network of charging stations, with a focus on networks must be prioritized. Additionally, integration underserved areas. Additionally, standards should be of transport infrastructure with land use planning introduced to ensure that the stations are safe to use through higher Floor Area Ratios (FAR), mixed use and compatible with all vehicle types. To strengthen zoning, and transit-oriented development (TOD)56 access to charging facilities, the private sector can can promote densification around transit points, collaborate with the government to install solar or with easy access to public transport and reduced hybrid charging stations at key locations such as urban sprawl (World Bank, 2024a). These long-term malls, hotels, and office complexes. The charging structural interventions, alongside electrification and stations can explore creative business models, such as clean energy adoption, are necessary to achieve subscription plans, to attract more users. While two- emission reduction and improve air quality in Nepal. and three-wheelers can be charged from residential charging, the rapid adoption of EVs will put extra load In the context of Nepal and similar countries, on the local electricity network. In such a scenario, the “Improve” dimension of the Avoid-Shift-Im- substantial investment will be required to improve the prove (ASI) paradigm is the most relevant for condition of the local distribution network, upgrading reducing air pollution. With growing urbanization transformers, and thereby ensuring stability in the and increasing reliance on motorized transport, a electricity supply to meet household requirements wholesale shift to public transit or non-motorized and additional charging of vehicles. modes is unlikely in the short term. Similarly, avoiding trips altogether is constrained by economic and in- Public infrastructure has been a key factor in frastructural realities. However, improving vehicle promoting clean technologies in South Asia. technology—such as transitioning from diesel and For example, in India, the FAME scheme of the petrol to electric or cleaner fuel vehicles—is a more government has supported the development of feasible and impactful strategy. Nepal has already charging stations through subsidies combined with committed to increasing EV adoption, supported by public investment for the promotion of EVs. During hydropower-based electricity, fiscal incentives, and Phase-I, the government sanctioned 520 charging an expanding charging network. Strengthening fuel stations while in FAME’s Phase-II, 2,877 EV charging quality standards, enforcing emissions regulations, stations were sanctioned. and modernizing public and freight transport fleets with cleaner alternatives will yield significant air quality Additionally, the government of Bangladesh has benefits. While “Shift” strategies, such as improved public implemented several policies to enhance public transport, can complement these efforts, “Improve” infrastructure for clean technology adoption. remains the most pragmatic and scalable solution for Bangladesh has adopted ambitious goals of achieving reducing transport-related air pollution. 15 percent of total electricity generation from renewable sources by 203057, and the construction In the transport sector, the “Improve” strategy of solar parks has been a significant step toward this presently incorporates an increasing emphasis on goal. In Pakistan, the Alternative Energy Development the adoption of EVs, which relies on the availability Board (AEDB) has been actively involved in promoting of proper public charging infrastructure. Nepal has renewable energy projects and has facilitated the over 400 charging stations, of which 62 are installed by installation of wind and solar energy projects, which the Nepal Electricity Authority (NEA), a governmental are crucial for reducing reliance on fossil fuels. body, while the remaining 300+ are privately owned and operated (ICT Frame, 2024). The charging stations 56 FAR is the ratio of a building’s total floor area to its land size where a higher FAR allows for tall and compact buildings; mixed-use zon- ing allows residential, commercial, and recreational spaces to coexist in the same area; and TOD focuses on creating dense, walkable neighborhoods around public transport hubs to reduce car dependency and improve accessibility. 57 Ministry of Power, Energy, and Mineral Resources. Bangladesh. 2023. Integrated Energy and Power Master Plan (IEPMP). 112 TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS CONCLUSION Air pollution is a major health and economic crisis in Nepal. The average PM2.5 concentration in the Kathmandu Valley and the Terai is seven to eight times higher than WHO guidelines, causing over 25,000 premature deaths annually and reducing average life expectancy by more than three years. If no additional action is taken, PM2.5 levels are projected to rise even further by 2035, leading to tens of thousands of additional premature deaths and deepening economic losses, currently estimated at over six percent of GDP annually. Therefore, investing in clean air is essential for ensuring a healthier and more sustainable environment for future generations. To address this crisis, Nepal has set an ambitious goal of achieving 35 µg/m3, similar to its neighboring countries with which it shares the Indo-Gangetic Plains and Himalayan Foothills (IGP-HF) region. While challenging, reaching this target is possible, as shown by examples from other cities such as Mexico City, Beijing, and Ulaanbaatar. These nations have achieved improvements in air quality through strict regulations, effective enforcement, environmental fiscal policies, investments in clean technology, and public-private partnerships. Their experiences demonstrate that with a combination of political will, public engagement, and technical innovation, progress is achievable. Three high-impact pollution abatement measures have been identified: 1. Cleaner industrial boilers with effective post-combustion technologies (baghouse, wet scrubbers, or elec- trostatic precipitators) 2. Electric or fan-assisted improved cookstoves for cleaner household energy 3. Inspection and maintenance programs for heavy-duty and light-duty vehicles, with scrappage and Euro-4 upgrades Achieving the 35 µg/m³ target requires coordinated action across all three sectors, supported by five enabling foundations: robust data systems, effective governance, supportive economic policies, targeted incentives, and adequate infrastructure. Several priority actions, also outlined in Table 0.1, include the following: • Scaling up the Green Tax and linking revenues to clean technology incentives • Establishing real-time emissions monitoring (CEMS) for major industries • Subsidizing household clean energy adoption • Installing fast-charging EV infrastructure • Strengthening enforcement for seasonal crop burning bans Artwork: Aarya Bajracharya, ‘Where’s My Blue Sky?’ Live Art Challenge. 114 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Air pollution does not respect borders. Addressing air pollution requires collaboration across different levels of government- local, national, and regional. Air pollution does not respect borders. Addressing A whole-of-government approach is crucial in driving air pollution requires collaboration across different the necessary changes. Various government bodies levels of government- local, national, and regional. must collaborate to offer incentives, establish Coordinated policies and regulations, along with regulations, enforce these regulations, and implement shared resources and data, will enable a more effective economic policies that promote clean technologies and response to air quality challenges. Cross-border practices. Subsidies, tax exemptions, and favorable cooperation with neighboring countries can further financing mechanisms can make clean energy solutions strengthen these efforts by addressing transboundary more accessible and affordable. 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REF ER E NCES 121 12 2 TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS ANNEX Towards Clean Air in Nepal: Benefits, Pollution Sources, and Solutions ii TOWA R DS C LE A N AI R IN N E PAL: BE N E FITS, POLLU TION SO URC ES, A ND SO L UTIO NS Annex A: Detailed Assessment of Air Quality in Nepal Knowledge about Nepal’s air pollution problem has increased significantly over the past two decades and there is now sufficient data to understand the broad picture. Although, as early as the 1980s the Kathmandu Valley’s air pollution problem was part of public discourse (Kanak Dixit, 1987) and one study reported a handful of measurement datapoints (Davidson et al., 1986), it was not until the early 2000s that multi-month data sets were collected while several doctoral studies laid out elaborate hypotheses about how physical factors and human activities together affected air quality in the Kathmandu Valley (Aryal et al., 2008, 2009; Kitada & Regmi, 2003; Panday et al., 2009; Panday & Prinn, 2009; R. P. Regmi et al., 2003). The 2010’s saw the International Centre for Integrated Mountain Development (ICIMOD) A.1 Spatial and temporal hosting several international field campaigns on patterns of air quality in the air pollution in Nepal as well as collaborating with the Government of Nepal’s (GoN) Department of Kathmandu Valley Environment (DoE) to establish an air pollution Pollutant levels follow a diurnal cycle, dropping monitoring network around the country. This rapidly at midday when vertical mixing allows network has grown to 27 stations (Doe, 2024), and winds from the western passes to reach the surface is complemented by two stations in Kathmandu run (Figure A.1). Pollution is lowest in the afternoons by the US State Department (Becker et al., 2021). due to ventilation by these winds. However, after Research and monitoring over the past decade have sunset, cold air pooling at the valley bottom restricts revealed that Nepal’s air pollution problem is not ventilation, causing pollution to accumulate. Overnight, confined to the Kathmandu Valley, affects most of down-slope winds bring cleaner air, lifting the polluted the country’s population, and is particularly severe cold pool until early morning, when it mixes back in the Terai (Rupakheti et al., 2017). down, adding to rush-hour emissions. Pollutant levels follow a diurnal cycle, dropping rapidly at midday when vertical mixing allows winds from the western passes to reach the surface. A nne x A : D etailed Assessment of Air Q uality in N epal iii Places in the valley bottom have a distinct pattern at the Institute of Engineering in 2020 (Regmi et al., with a morning and an evening peak in air pollution. 2023). The morning and evening peaks remain clearly This diurnal cycle has been observed on precipita- visible in each valley-bottom station when hourly tion-free days in multiple locations and across a data is averaged together for an entire year (DoE, variety of pollutants. Measurements in October 1995 2024). These peaks are explained in Figure A.1 below. found condensation nuclei in Kathmandu to have a The one pollutant with a very different diurnal cycle morning peak from around 6 am to after 9 am, and at the bottom of the Kathmandu Valley (Putero et again from around 8 pm to around 10 pm (Hindman al., 2018) is ozone, which has a day-time maximum & Upadhyay, 2002). Continuous measurements of and very low values at night (Bhardwaj et al., 2018a; carbon monoxide (CO) and PM₁₀ in Bouddha, northeast Panday & Prinn, 2009; Singh Mahata et al., 2018). of Kathmandu city, from September 2004 to June 2005 found distinct repeating patterns of morning Beyond the Kathmandu Valley’s flat valley bottom and evening peaks on all clear days (Panday & Prinn, the daily air pollution patterns are quite different. 2009). The same pattern was later observed in CO In simultaneous sampling in Spring 2005 at Pullahari concentrations at other locations around the valley Monastery on a little hill and at Bhimdhunga pass on (Mahata, Rupakheti, et al., 2017) as well as in black the western edge of the valley (both ~150-200 meters carbon concentration at Paknajol, in central Kathmandu above the valley bottom), CO was found to gradually (Putero et al., 2018). A more recent study of PM2.5 increase after midnight, while the valley bottom had measurements at the two US Embassy stations its night-time low (Panday & Prinn, 2009). Nagarkot (Becker et al., 2021) found the same basic pattern, (700 meters above the valley floor, on the eastern but with consistently higher morning peaks than rim), experiences day-time peaks in CO (Panday et al., evening peaks. The same pattern also occurred in 2009) and consistently high ozone levels throughout PM2.5 measurements using a Purple Air low-cost sensor the night (Mahata, Rupakheti, et al., 2017). Figure A.1: Diurnal cycle of PM2.5 in Pulchowk, Kathmandu Valley, for each season Source: Regmi et al., 2023. iv TOWA R DS C LE A N AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Occasionally the seasonal patterns are affected inter-annual fluctuations of 5-10 µg/m³ (Kim Oanh by other factors, such as in Spring 2021. More days et al., 2024). in the last week of March and first week of April that year were classified as “very unhealthy” compared Decade-scale air quality trends in the Kathmandu to in January (Doe, 2024). Those days coincided with Valley are unclear due to limited surface-data the occurrence of unusually high numbers of forest availability and inconsistent findings. Mahapatra fires and wildfires upwind of Kathmandu (Kuikel et et al. (2019) observed a 35 percent increase in AOD al., 2024). over the Kathmandu Valley from 2000 to 2015. While AOD has one of the longest consistent datasets, Ozone and aerosol optical depth have different because it is a measure of pollution levels over the seasonal patterns from particulate matter. Ozone entire atmospheric column rather than at the surface, has peak values in Spring, unlike in many mid-latitude it predominantly reflects regional rather than local places where its peak values occur in summer. This influences. Two studies that have attempted to makes sense, given the need for sunlight in the reconstruct PM2.5 levels for the Kathmandu Valley production of ozone, but the frequent cloud cover using global datasets and models show conflicting during the summer monsoon (Bhardwaj et al., results: Becker et al. (2021) observed a steady increase 2018a; Singh Mahata et al., 2018). A 2012-2013 study in PM₂.₅ levels at a rate of 2 µg/m3 from 2003 to 2019, measuring ozone at multiple locations around the with the most pronounced increases occurring during Kathmandu Valley found WHO’s 8-hour standard of winter and post-monsoon periods. Meanwhile, Bhatta 50 ppb exceeded 132 times in a year in Paknajol, in & Yang (2023) showed fluctuating PM2.5 levels1, with the city center, and 102 times in the Bode, downwind a gradual increase from 46 mg/m³ to 56 mg/m³ in of Kathmandu. It exceeded 159 times at the hilltop 2005 followed by a gradual decrease to 52.5 mg/m³ station in Nagarkot, at 2000 meters altitude, indicating by 2017 (Figure A.2). However, these reconstructions polluted regional air (Mahata, Rupakheti, et al., 2017). lack details on changing human activities within the Most of these exceedances occurred in the Spring, valley, so any results prior to 2017 need to be taken but there were also a few between September and with a grain of salt. December. Meanwhile, aerosol optical depth (AOD), a measure of the total particulate matter in a column In summary, particulate matter and carbon of air above a location, is affected by regional air monoxide show consistent patterns in the masses. AOD scales quite closely with visibility, Kathmandu Valley on daily and seasonal time but it may not be a good proxy for ground-level air scales. They are higher in the city center and the quality: Becker et al, 2021, pointed out the contrast eastern valley than elsewhere. They have morning between ground level PM2.5, which peaks in winter, and evening peaks. (See Box A.1). Peak and trough and AOD over the Kathmandu Valley, which peaks values are higher in the winter and lowest during the in the pre-monsoon. summer monsoon. Long-term trends are not clear. There are very few analyses of multi-year air pollution trends in Nepal. Measurements of daily A.2 Spatial and temporal average PM₁₀ measurement in Bhaktapur (in the brick kiln region in the eastern Valley) showed a patterns of air quality outside wintertime decrease after 2003, when the most the Kathmandu Valley polluting moving chimney bull’s trench brick kilns were banned (Aryal et al., 2008). A plot of annual There are fewer peer-reviewed studies of air average PM2.5 measurements at four DoE stations pollution from the entire rest of Nepal than from and two US embassy stations over six years found the Kathmandu Valley. Our current understanding is limited by the availability of past research results. 1 In this study the Kathmandu Valley’s monthly average PM₂.₅ concentration was reconstructed from 1980 to 2021 by first using machine learning to correct MERRA2 global meteorological reanalyses using US Embassy measurements of PM₂.₅ from March 2017 onwards. A nne x A : D etailed Assessment of Air Q uality in N epal v Figure A.2: Monthly average PM2.5 for the Kathmandu, reconstructed for the period 1980 to 2021 Source: Bhatta & Yang, 2023. Only two places, Lumbini in the west-central Terai, showed smaller diurnal variations in CO compared and Nepal Climate Observatory – Pyramid station, to stations within the valley. Interestingly, each near Mt. Everest Basecamp, have hosted research day’s CO levels in Chanban closely corresponded that has resulted in more than a dozen journal to that day’s low values observed in the Kathmandu publications each. Their results, plus a few studies Valley (Singh Mahata et al., 2017); this suggests that, from elsewhere in Nepal, along with data from recent while the Kathmandu Valley’s pollution peaks may Department of Environment monitoring stations in be determined by local emissions, the levels of its 2021, provide an understanding of the air quality afternoon low values were largely influenced by the situation outside of the Kathmandu Valley in Nepal. quality of the regional background air. Dhankuta and Gandaki Boarding School (GBS) had the least gaps in The column of air above the Terai also has a far their air quality records and reported annual mean higher aerosol optical depth than elsewhere in PM₂.₅ concentrations of 37.7 µg/m³ and 58.64 µg/m³ in Nepal. The high AOD levels observed from the ground 2021 (DoE, 2024). Dhankuta’s diurnal cycle resembled in Lumbini (Rupakheti et al., 2018a, 2020) and by that of the Kathmandu Valley stations with an early satellite over the entire Terai region (Kim Oanh et al., morning and post-sunset peak, while GBS showed 2024). It is also reflected in the worsening visibility an unusual late morning2 and evening peaks (DoE, data collected at airports in the Terai (Kathayat et al., 2024). Both stations showed tall single-day peaks 2023). AOD over the Terai is affected by the regional during March-April, coinciding with forest fire activity. pollution haze that sits over the IGP during the dry Meanwhile a 2020 study with portable samplers found season; higher altitude locations such as Kathmandu lower winter-time PM₂.₅ levels in Pokhara3 compared have a thinner layer of haze over them, leading to to Pulchowk in the Kathmandu Valley in 2020 (Regmi lower AOD (Mahapatra et al., 2019). et al., 2022). Once Covid lockdowns started in March Few studies and less air quality data exist for hilly 2020, PM₂.₅ levels dropped at both sites, but Pokhara areas of Nepal outside of the Kathmandu Valley. consistently had cleaner air than Kathmandu. Several Carbon monoxide (CO) measurements in Chanban, studies of AOD over Pokhara using ground-based Makwanpur, southwest of the Kathmandu Valley, AERONET observations found AOD peaking in the 2 Between 9 am and noon. 3 The annual mean PM₂.₅ recorded in Pokhara was 61.1 µg/m³ compared to 99.7 µg/m³ in Pulchowk. vi TOWA R DS C LE A N AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Spring4 (Ramachandran & Rupakheti, 2020, 2021; J. section first discusses the relevant physical processes, Regmi et al., 2020; Xu et al., 2014), with exceptionally followed by the human activities and emissions. high levels in 2016, attributed to increased forest fires (Ramachandran & Rupakheti, 2021). The concentration of most of Nepal’s rains during the summer monsoon period has a strong impact on Despite high mountain areas’ reputation for air quality. The impact is two-fold. First, rain washes pristine blue skies, there are times when pollution out particles from the atmosphere, reducing their plumes reach high altitude locations. At the DoE’s atmospheric lifetime, the distance they can travel Rara Lake station, 3,120 meters above sea level, the from the source, and the concentrations to which annual mean PM₂.₅ concentration is 16.8 µg/m³, but they can accumulate. Lower particulate pollution unhealthy air quality was observed on numerous levels have consistently been observed during the days in March and April 2021, exceeding the NAAQs monsoon season in Nepal across all studies. Second, on 32 out of 294 days (DoE, 2024). At the Yala Glacier by having most of the year’s rainfall concentrated black carbon observatory (4,900 meters), set up by during a three-month period, that leaves the rest ICIMOD and the GoN, surprisingly high peaks of of the year much very dry and dusty. Rainfall during black carbon were observed in April 2017, driven the winter and spring, when brick kilns are operating by up-valley winds carrying air from regions with across vast regions of South Asia and when more forest fires (Rai et al., 2019). Black carbon, usually a open fires take place, has decreased significantly and minor constituent of PM₂.₅, contributes to the melting may decrease further with climate change (Hamal of Himalayan glaciers both by darkening surfaces et al., 2021). and by warming the air on contact with glaciers (Gertler et al., 2016; Panday, 2022; Rai et al., 2019). In recent years the Terai has experienced increases Elsewhere too, pollutants have also been observed in winter fog that appear to be connected to air arriving in the afternoons at high mountain sites, pollution. Visibility data from airports around the including at Lukla and Hotel Everest View (Hindman Terai going back to 1980 show an increase both in & Upadhyay, 2002). PM₁₀ levels exceeding 80 µg/m³ the number of foggy days and in the frequency of were recorded at the Nepal Climate Observatory – dense fog (Kathayat et al., 2023; Shrestha et al., 2023). Pyramid (NCO-P) near Mt Everest Base Camp during While fog can be a purely natural phenomena, when Spring afternoons (Decesari et al., 2010). The NCO-P sharp temperature gradients can lead to natural also had ozone maxima in the Spring and minima condensation of water vapor into droplets that obscure in July (Cristofanelli et al., 2010a). Records from an visibility, air pollution particles can significantly affect ice core on the north side of Mt. Everest since 1995 how condensation occurs resulting in a pollution/ show significant increases in black carbon (Ming et water mixture and droplets of different sizes than al., 2008a), suggesting a rise in air pollution reaching would occur naturally. Just like in other parts of high altitudes in the Himalaya. the IGP, fog patterns in the Terai have changed starting in the late 1990s. The worsening visibility data collected at airports in the Terai (Kathayat et al., 2023) is consistent with observations of regional A.3 Physical processes that pollution haze (pollution-impacted fog) at all levels affect air pollution in Nepal of the atmosphere sitting over the IGP during the dry season (Rupakheti et al., 2018a, 2020; Kim Oanh Air pollution concentrations in any given location et al., 2024). are a result of two very different types of processes: The quantity of emissions taking place–from both During the dry season, air pollution levels in Nepal anthropogenic and natural sources–and the physical are affected by weather patterns, resulting in and chemical processes that transport, transform day-to-day variations. Kathmandu on two otherwise or remove pollutants from the atmosphere. This identical days, with identical local emissions, might 4 Mean levels exceeded 60 ppb in Spring. Anne x A : D etailed Assess ment of Air Q uality in N epal vii Figure A.3: View of Kathmandu from Hattiban (1775m) on the southern valley rim, on 28 Feb. 2013 (L) and 2 March 2013 (R) Photos: Arnico Panday. have clear skies on one day and very hazy conditions A.4 Impacts of human activities on the other (See Figure A.3). Episodes of transport of high pollution loads from the IGP across Nepal’s width on air quality in Nepal and across the high Himalaya to the Tibetan Plateau While physical processes transport around have been found to depend on synoptic weather and affect the accumulation and ventilation conditions, with the passing of southwesterly flows of pollutants, reducing air pollution requires over central and northern India leading to transport addressing the anthropogenic emissions sources pollutants to the high Himalaya (Lüthi et al., 2015). and the activities responsible for them. The Ozone levels over Nepal are determined by different anthropogenic sources of air pollution are discussed processes compared to particulate matter. Ozone in chapter 4. is photochemically produced in the atmosphere, and The sources contributing to particulate air pollution thus its control requires both a detailed understanding in Nepal vary seasonally (Kim et al., 2021; Saikawa of the transport and chemistry, as well as of the et al., 2019). Their relative contributions depend on sources of a diverse set of precursors (Sillman et al., the time and place. The concentration of PM₂.₅ at 1990). Due to its need for sunlight, ozone levels in any given location is the sum of contributions from Nepal peak in the pre-monsoon spring instead of in local sources and from far-away sources transported the summer as is more common at mid-latitudes. At over. Some of these sources are year-round and high altitudes there is another source of ground-level some are seasonal. The biggest year-round sources in ozone: stratospheric intrusions raised ozone levels Nepal are cooking with biofuels, vehicles (particularly on 14.1 percent of observed days at Nepal Climate diesel-powered ones), and, in some parts of the Observatory-Pyramid, (Cristofanelli et al., 2010b). country, industries. Brick kilns are big sources in some parts of the country (primarily in the Tarai and near the Kathmandu Valley) between December and May, while agricultural residue burning and forest fires occur at specific times in the Autumn and the Spring. In addition, garbage burning is a big source that tends to occur more in the dry season than in the monsoon. viii TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Secondary particles are formed through chemical high pollution episodes in Chitwan may be caused reactions in the atmosphere. They typically require both by nearby and far-away fire burning (Mehra et gaseous emissions of ammonia from agriculture al., 2018). During the post-monsoon period, Lumbini (fertilizer or manure) plus either sulfur dioxide or is affected by biomass burning from western India nitrogen oxides gases to form ammonium sulfate or and eastern Pakistan (Wan et al., 2017), while during ammonium nitrate particles. Gas-to-particle conversion the pre-monsoon period, it experiences significant in the formation of new, secondary particles has been influence from air masses originating in the western observed in detail a number of places in the Indian IGP (Rupakheti et al., 2018b). While local emissions Himalaya (Mönkkönen et al., 2005; Ram et al., 2008; playing a role in diurnal pollution peaks, their levels Venzac et al., 2008) but has not been studied in detail are affected by the time-varying background regional in Nepal. Regional GAINS model runs, however, do air pollution originating from far-away sources onto show substantial contributions to PM₂.₅ load over which they are added. Evidence for increased regional Kathmandu by secondary particles originating from background pollution can be found in ice cores from gases emitted elsewhere in Nepal and in other nearby high mountain areas high (Kaspari et al., 2011; Ming countries (World Bank, 2023). et al., 2008b), while recent real-time stations at the height of glaciers provide insights into the processes The concentration of a pollutant measured at a bringing the BC to those altitudes. For instance, at particular location is influenced by a few processes NCO-P station near Mr. Everest, clean background operating on different scales. It is influenced by conditions were observed 55 percent of the time, a variety of sources located at different distances but there were episodes when PM levels 50 times from the site, with air flow between the source and the background concentration (Marinoni et al., 2010) the measurement site varying in time. Small sources and included dust from the Middle East. repeated across a landscape, such as cooking with biofuel in the IGP, influence the air quality and climate The use of models to study air pollution in Nepal is of entire regions (Praveen et al., 2012). Weekday limited by the quality of the input data, but this is versus weekend differences have been observed in improving. There have been some attempts to improve many places including Kathmandu (Pudasainee et al., both the activity data, and the emissions factor that 2010). As we have seen earlier, seasonal variations describes the amount of each pollutant emitted per in polluting human activities, such as brick kilns and unit of activity. The Nepal Ambient Monitoring and agricultural residue burning, also play a major role Source Testing Experiment (NAMaSTE) conducted in determining the levels of air pollution at any given in 2015 and 2018, sponsored by the US National time and place. Sometimes impacts of events in Science Foundation and ICIMOD, aimed to improve one place can be observed across a broad region: emission data by measuring pollutants from various Agricultural fires in northwestern India have been sources not well represented in global databases found to lead to simultaneous increases in ozone and (Goetz et al., 2018; Islam et al., 2019; Jayarathne et CO in both Nainital and in Bode in the Kathmandu al., 2018; Stockwell et al., 2016). It found significant Valley (Bhardwaj et al., 2018b). discrepancies between older emission factors and actual emissions, particularly from vehicles and brick A major cause for concern in Nepal is trans-boundary kilns in the Kathmandu Valley. It found that the older transport of pollutants that adds onto the pollution HTAP_v2.2 emissions inventory underestimated levels due to locally emitted pollutants. Regional emission of particulates by vehicles in Kathmandu pollution originating from sources outside Nepal Valley by more than a factor of one hundred (Zhong contribute an additional 20-25 percent of particulate et al., 2019). matter in the Kathmandu Valley (Mahapatra et al., 2019), and as much as two-thirds of CO in Lumbini Field based source apportionment studies give us (Rupakheti et al., 2016). Biomass burning in the insights into the relative contributions of different northwestern IGP region has been identified as a sources of pollution, particularly in the Kathmandu major source of ozone and CO in Nepal (Bhardwaj et Valley. One study found the major sources of PM₁₀ to al., 2018a). Model back trajectories have found that be motor vehicles (31 percent), soil dust (26 percent), Anne x A : D etailed Assessment of A ir Q uality in Nepal ix biomass/garbage burning (23 percent) and brick cuts have ended. In certain districts of the Nepali kilns (15 percent); the major sources of BC to be brick Tarai, the switch from hand harvesting to machine kilns (40 percent), motor vehicles (37 percent), and harvesting of rice and wheat, followed by the burning biomass/garbage burning (22 percent) (B. M. Kim et of taller stubble that is left behind, has become a al., 2015a).Non-methane volatile organic compounds major source of pollution. Meanwhile, changes in (NMVOCs) were traced to industries (32 percent), firewood consumption, combined with drier spring traffic (16.8 percent), residential biomass burning weather is contributing to more severe forest fires (10.9 percent), brick kilns (10.4 percent), and biogenic (Hamal et al., 2021; Kuikel et al., 2024). Meanwhile, sources (10.0 percent) (Sarkar et al., 2017). More than over the past year, the Nepali automobile market has 37 percent of toxic NMVOCs such as benzene were seen a rapid increase in the sale of electric passenger found to be from brick kilns. Another study at the cars and vans. same site found the main sources particulate bound mercury to be brick kilns, diesel engines and biomass Lockdown measures implemented during COVID-19 burning (Guo et al., 2017). Furthermore, brick kilns, in Nepal temporarily resulted in substantial diesel engines, and biomass burning were found to reduction in emissions, thereby impacting air be major sources of particulate-bound mercury (Guo quality. Several studies have looked at the impacts et al., 2017). Anthropogenic combustion sources, of Covid on air quality in Nepal, when the country including garbage burning (18 percent), biomass imposed a strict lockdown from 24 March 2020 to burning (17 percent), and fossil fuel combustion 11 June 2020, followed by several phases of partial (18 percent) have been identified as the largest openings and shorter lockdowns (Bhandari et al., 2023). contributors to PM2.5 pollution in Nepal (Islam et al., The first lockdown coincided very closely with India’s 2019). A field campaign5 conducted in 2018 revealed lockdown, leading to a rare reduction in industrial that resuspended dust contributes significantly to and transport emissions both within and upwind of PM2.5 and PM₁₀ levels in central Kathmandu during Nepal, and the largest fraction of pre-monsoon days winter (Islam et al., 2021). within WHO and NAAQS limits on record (Bhandari et al., 2023). The city of Nepalganj saw PM2.5 levels Several changes in human activities affect drop by more than 80 percent (Baral & Thapa, 2021). emissions in Nepal, ranging from changes in The Kathmandu Valley saw a 38.1 percent decrease industrial operations to transportation preferences in PM₂.₅ and 38 percent decrease in aerosol optical and agricultural practices. The start of operations depth while the country overall saw a 27.7 percent of brick kilns in the Kathmandu Valley on January 3rd, decrease in AOD when compared to multi-year mean 2013, shows a clear jump in air pollution (Kim et al., values (Dhital et al., 2022). At the US monitoring 2015b). Major changes in emissions from the brick station at Phora Durbar, PM2.5 was found to be 46.7 sector occurred when Nepal banned moving chimney percent lower during the first lockdown compared bull’s trench kilns in 2003, and again starting in 2015 to the average over the same period in the previous when many kilns started converting to zig-zag. The three years (Edwards et al., 2021). Kathmandu Valley’s largest pollution point source, the state-owned Himal Cement Factory shut down in Oftentimes pollution levels in Nepal are a result of a 2002; its former location in Chobhar is now a dry port. complex interplay between when and where human During several pre-Covid years all of Kathmandu’s activities take place, and the physical processes streets were dug up for new water pipes, resulting resulting from the mountainous topography. Box in extreme dust emissions that disappeared again A.1 illustrates one such example. after the streets were re-paved. Until 2017 Nepal experienced severe power shortages, leading to the operation of diesel gensets with an installed capacity of over 600 MW. Those are mostly idle since power 5 The study found that in wintertime in central Kathmandu, 11 percent of PM₂.₅ and 34 percent of PM₁₀ were from resuspended dust and that 28-30 percent of PM2.5 was made up of organic carbon, which originated from garbage burning (15-21 percent), biomass burning (10-17 percent) and fossil fuel combustion (14-26). x TOWA R DS C LE A N AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Box A.1: Interplay between human activities and physical processes: The morning and evening pollution peaks in the Kathmandu Valley. A detailed study of morning and evening peaks in carbon monoxide and particulate matter in the Kathmandu Valley during the dry season using modeling, simultaneous sampling around the valley and on nearby hills, and detailed analysis of special occasions (festivals, evenings with bonfires), found the valley’s pollution pattern to result from a close interplay between topography and emissions patterns (Panday et al., 2009; Panday & Prinn, 2009): During the afternoon (when pollution levels are low) the valley is well ventilated by winds entering through the western passes and exiting through the eastern passes, with a smaller inflow also occurring up the Bagmati Valley from the South (Kitada & Regmi, 2003; Regmi et al., 2003). Post-sunset cooling begins the formation of a pool of cold air in the valley bottom that isolates the valley bottom from winds aloft while suppressing ventilation of ongoing emissions. During wintertime this happens before the evening rush hour, so a larger fraction of evening emissions is trapped compared to in other seasons, when emissions from the evening rush hour can easily leave the valley. Later at night, air quality in the valley bottom improves, as emissions decrease, while down-slope winds bringing cleaner air from the surrounding mountains that pushes underneath the polluted layers, which rise overnight, leading to increased pollution levels after midnight on the smaller hills in the valley. In the morning the ground heats up, vertical mixing resumes, and polluted layers mix down again, creating a morning peak in pollution that begins shortly after sunrise and includes both down-mixed pollutants from the evening before and new emissions taking place in the morning. Pollutant levels drop rapidly once vertical mixing is sufficient for winds entering through the western passes to sweep down to the surface level again – the timing of this is not dependent on emissions patterns, but on meteorology. Measurements of carbon monoxide carried out in 2012-2013 in Bode, in the eastern Valley, found a much smaller night-time dip in CO levels during those months when nearby brick kilns operated all night – the nighttime dip was much more during July to October when the brick kilns were not operating (Singh Mahata et al., 2017). The same study also ran a second CO instrument at Chanban, a background site outside of the valley, for two months, and found that the daily minima of CO in Bode coincided with the levels observed in Bode, and these fluctuated depended on regional inflow of polluted air. A complementary study (Mahata, Rupakheti, et al., 2017) found that Bhimdhunga Pass on the western end of the valley did not experience an evening peak in pollution in the Spring – this makes sense given the prevailing westerly winds, and the isolation of site from valley bottom air. Anne x A : D etailed Assessment of A ir Q uality in Nepal xi A.5 Details on air quality monitoring network Table A.1 provides details on air quality monitoring stations along with the information on air pollution sources near these stations, as compiled from the annual report published by the DoE on the Status of Air Quality in Nepal. Figure A.4 shows the annual average concentrations of PM₁₀ for ten monitoring stations across Nepal for the year 2023. All stations exceeded WHO’s standard for PM10 of 15 µg/m³ of annual average exposure. Table A.1: Information on air quality monitoring stations of Nepal Names District Longitude Latitude Location information Sources of air pollution Achaam Achaam 81.28 29.14 Bhaisipati Kathmandu 85.30 27.65 • Lies inside the premises of • Vehicles and commercial Bhaisepati Housing office activities • urban area Bhaktapur Bhaktapur 85.42 27.67 • Lies inside the premise • Vehicles and commercial of Sainik Awasiya activities Mahavidyalaya (school) • semi-urban area Bharatpur Chitwan 84.44 27.67 Bhimdatta Kanchanpur 80.18 28.96 • Lies adjacent to the northern • Vehicles and commercial boundary of Bhimdatta activities municipality office • urban area Biratnagar Morang 87.27 26.45 • Lies inside the premises of • Vehicles and commercial Mahendra Morang Campus activities premises • urban area Damak Jhapa 87.70 26.67 • Lies inside the premises • Local or pollutants of Saraswati Madhyamik transported from other Bidyalaya (school) places • Urban flat land Dang Dang 82.53 27.99 • Lies near Ghorahi Rampur • Local or pollutants road transported from other places • semi-urban area Deukhuri Dang 82.71 27.84 Dang Dhangadhi Kailali 80.60 28.70 • Lies in the center of • Burning of agricultural Dhangadhi city residue during pre-monsoon season. • Urban area • Since this is near to border trans boundary air pollution is also an issue of this location. Dhankuta Dhankuta 87.34 26.98 • Lies in the premises of • Forest fire, agriculture Dhankuta metropolitan city residue burning, vehicles or office pollutants transported from other regions • Small town xii TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TI ON SO URC ES, A ND SO L UTIO NS Names District Longitude Latitude Location information Sources of air pollution Dhulikhel Kavre 85.55 27.61 Hetauda Makwanpur 85.03 27.42 Ilam Ilam 87.84 27.04 Janakpur Dhanusha 85.93 26.74 • Lies inside the premises • Vehicles and industries of office chief minister of • Agricultural residues burning Madhesh province • Near to border trans • Urban area boundary air pollution Jhumka Sunsari 87.20 26.66 • Lies inside a Regional • Vehicles and commercial Agriculture Training Centre activities • Urban area Khumaltar Lalitpur 85.32 27.65 Kirtipur Kathmandu 85.29 27.68 • Lies inside premises of • Agriculture residue burning Tribhuvan University • Background area Lumbini Rupandehi 83.28 27.50 Nepalganj Banke 81.62 28.05 • Lies inside district office of • Vehicles and commercial Banke activities • Urban area Phora Kathmandu 85.32 27.71 • Lies in the premises of • Vehicles and commercial Durbar US club at the heart of activities Kathmandu Pokhara Kaski 83.97 28.21 DHM Pokhara GBS Kaski 83.97 28.26 • Lies in the premises of • Vehicles Gandaki Boarding School • Emissions from fires in that is situated in Pokhara the other regions is also Metropolitan City transported to pokhara. • Urban area; recently heavily urbanized Pokhara Kaski 84.09 28.14 • Lies inside premises of girls’ • Vehicles and commercial University hostel of Pokhara University activities • Urban area Pulchowk Lalitpur 85.32 27.68 • Lies at the top floor terrace • Vehicles and commercial of Pulchowk Engineering activities Campus Rara Mugu 82.09 29.51 • Lies inside the premises of • Either forest fire or pollutants Rara national park transported • High Mountain Ratnapark Kathmandu 85.32 27.71 • Lies inside a park near Rani • Vehicles and commercial Pokhari activities • Heart of Kathmandu, urban area. Sauraha Chitwan 84.50 27.57 Shankapark Kathmandu 85.34 27.73 • Lies within the premises of a • Vehicles and commercial park close to the road activities Anne x A : D etailed Assessment of A ir Q uality in Nepal xiii Names District Longitude Latitude Location information Sources of air pollution Simara Bara 85.00 27.16 • Lies inside premises of • Industries as it lies near armed police force bara-parsa industrial corridor • Semi-urban area • Trans-boundary pollution Surkhet Surkhet 81.62 28.60 US Embassy Kathmandu 85.34 27.74 • Lies in the premises of US • Vehicles and commercial embassy activities Yala Rasuwa 85.61 28.21 • Lies near the Yala glacier, • Trans-boundary sources approx. 4900 m above sea level • High mountain Figure A.4: Annual average PM10 for the Kathmandu Valley and the Terai, for the period 2021 and 2023 Source: World Bank based on DoE’s annual reports on Status of Air Quality in Nepal, 2021 and 2023. Note: For stations where the latest PM1 data were not reported, 2021 data is included to ensure broader representation. By 2023, DoE has reported data from a total of sixteen stations within the Kathmandu Valley and the Terai, stations which had minimal gaps. xi v TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS A.6 Improving air quality 102 out of 353 days in Bode, east of Kathmandu city center (Mahata et al., 2018). DoE’s stations have monitoring been measuring ozone since 2016 in Chitwan and 2017 in Lumbini and around Kathmandu, but the The Department of Environment (DoE) may choose DoE has yet to report ozone data to any audience. to increase the reliability and accessibility of data from existing stations. The DOE has long-term Given the severity of air pollution in Nepal it plans to expand their monitoring network for is imperative to bring in newer monitoring a total of 56 stations that would provide reliable technologies. There is a need to produce multi-day and continuous air quality information across the pollution forecasts. Running models well over the country. With more than half of their eventual Himalaya is not easy: Models using global input data target number of stations in place, there is need tend to systematically underestimate the pollution to shore up the existing stations with reliable power in the Kathmandu Valley, as seen in WRF-CHEM supply and communication infrastructure at all air simulations of black carbon (Mues et al., 2018), monitoring stations in Nepal. The GoN needs to MERRA2 reanalyses of PM2.5 (Becker et al., 2021; identify and support an appropriate mechanism for Bhatta & Yang, 2023). While it may take time for Nepal hiring of agencies to provide continuous operation, to have systems and human resources in place to maintenance and management (supply of spare parts reliably run pollution forecasts, the Indian Institute and attending to repairs) for monitoring stations, of Tropical Meteorology in Pune, India, already does even across fiscal years, which currently presents an so over the entire South Asian region. Currently, for issue due to complex procurement rules. The GoN domestic Indian consumption they apply a “cookie needs to build capacity of federal and provincial cutter” onto the map to only display forecasts over officials in air quality monitoring (analysis and India, but with the right agreements they would easily interpretation of data, operation and maintenance be able to supply the DoE and other government of stations, development of action plans, etc.), to agencies in Nepal with forecasts as well. There is also develop Standard Operating Procedures (SOPs) and a need to integrate into daily use in Nepal satellite Quality Assurance/Quality Control (QA/QC) protocols observations, such as the Korean GEMS satellite, which for various functions of the monitoring stations, United Nations Economic and Social Commission for procure hardware and software for monitoring data Asia and the Pacific (UNESCAP) is trying to connect processing and management and begin to establish to decisionmakers around Asia. a source apportionment network. These activities include implementing data quality control protocols To establish accurately PM2.5 trends for multiple and enhancing public data availability, which are stations, consistent data across all seasons for all severely lagging. Once those problems have multiple years is needed. For the analysis to be been addressed, there is also a need to add more meaningful, at least 70 percent of data should be measurement parameters to existing stations such available for each season every year. Figure A.5 shows as Sulfur Dioxide (SO₂), Nitrogen Oxide (NOX) and that only three stations of the Kathmandu Valley Ozone (O3). Particulate matter is not the only pollutant (Bhaisepati, Ratnapark, Pulchowk) have more than of concern in Nepal. Already in 2013-2014, ozone 70 percent data availability across all seasons for exceeded the WHO’s 8-hour standard of 50 ppb on only three years. All other stations fall below this 159 out of 357 days in Nagarkot on the Kathmandu threshold and have less data. Due to these limitations Valley’s eastern valley rim, and on 132 out of 354 in data availability, the current dataset is insufficient days in Paknajol in Kathmandu’s city center and on to establish clear and meaningful air quality trends. Figure A.5: Percentage of PM2.5 data available across air quality monitoring stations in the Kathmandu Valley and the Terai (2016-2023). Note: The seasons are categorized as JJA ( June-July-August, Monsoon), MAM (March-April-May, Summer), SON (September-October-November, Autumn), and DJF (December-Janu- ary-February, Winter). Stations with at least 70 percent data availability across all seasons are highlighted in grey, indicating more reliable datasets for trend analysis. A nne x A : D etailed Assessment of Air Q uality in N epal xv xv i TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Annex B: Air Quality Standards B.1 Standards for the industry sector Table B.1: Standard on emission and stack height for brick kilns Types of Kiln Suspended Particulate Matter (mg/Nm ³ ) Height of Stack (meter) Bull's Trench Kiln, Forced Draft (Fixed Chimney) 350 17 Bull's Trench Kiln, Natural Draft (Fixed Chimney) 500 30 Hoffmann Kiln, Forced Draft 350 17 Hoffmann Kiln, Natural Draft 500 30 Vertical Shaft Brick Kiln (VSBK) 250 15 Hybrid Hoffmann Kiln (HHK) 200 7 Tunnel Kiln 100 10 Table B.2: Standard on emission and sampling method for cement plants Category Emission Limit Total Suspended Particulate Matter Less than 500 µg/Nm³ Sample Collection Method Testing Method Reference The sampling point must be located at a position in Gravimetric IS 11255 (Part One) the cement industry where the emissions are carried in the direction of the airflow, at 300-500 meters from the source. Table B.3: Standard on emission and sampling method for crusher plants Category Emission Limit Total Suspended Particulate Matter Less than 600 µg/Nm³ Sample Collection Method Testing Method Reference The sampling point must be located 10-40 meters Gravimetric IS 11255 (Part One) away from the controlled point of crusher industry. Screening should be performed at the controlled point, and it is considered central for sampling. Anne x B: A ir Q ualit y Standards x v ii Table B.4: Emission limits for new diesel generators (g/kWh) Category (kW) CO HC + NO x PM kW < 8 8.00 7.50 0.80 8 = kW < 19 6.60 7.50 0.80 19 = kW < 37 5.50 7.50 0.60 37 = kW < 75 5.00 4.70 0.40 75 = kW < 130 5.00 4.00 0.30 130 = kW < 560 3.50 4.00 0.20 Table B.5: Emission Limits for in-use diesel generators (g/kWh) Category (kW) CO HC NO x PM kW < 8 8.00 1.30 9.20 1.00 8 = kW < 19 6.60 1.30 9.20 0.85 19 = kW < 37 5.50 1.30 9.20 0.85 37 = kW < 75 5.00 1.30 9.20 0.70 75 = kW < 130 5.00 1.30 9.20 0.54 130 = kW < 560 5.00 1.30 9.20 0.54 Table B.6: Standard on emission and sampling method for industrial boilers Steam Generation Capacity of Boiler (Kg/hour) Pollutant Emission Limit (mg/Nm ³ ) Less than 2000 Particulate Matter 1200 2000 to less than 10000 800 10000 to less than 15000 600 15000 and above 150 Sample Collection Method Testing Method Reference Sampling point located at a height of one-third of the Gravimetric IS 11255 (Part One) stack's height from the ground. Standard on chimney height for industrial boilers The chimney height for industrial boilers using solid or liquid fuels must comply with the following formula: H = 14Q0.3 Where: • H = Total height of the chimney above ground level (in meters). • Q = Emission rate of sulfur dioxide (SO₂) in kilograms per hour (kg/hr). Additionally, under no circumstances should the chimney height be less than 11 meters. xv iii TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS B.2 Standards for the mobility sector The NVMES guidelines stipulated that carbon monoxide (CO) emissions for four-wheelers registered prior to 1980 must not surpass 4.5 percent of their overall emissions, with a hydrocarbon (HC) limit set at 1000 ppm. Similarly, the CO emission cap for two-wheelers is also 4.5 percent of total emissions, but with a stricter hydrocarbon threshold of 7800 ppm or less. In 2012, the NVMES was revised to include the adoption of Euro-III standards. By then, 1.37 million registered vehicles in Nepal supposedly adhered to Euro-I or Euro-II standards (Shrestha, 2020). The permissible limits for various pollutants as mandated by NVMES are provided in the Table B.7 to Table B.9. Table B.7: Emission standards as per NVMES, 20006 Fuel Vehicle type CO (% by volume) HC (ppm) Petrol Four-wheelers 1980 or older 4.5 1000 Four-wheelers 1981 3 1000 onwards Three-wheelers 4.5 7800 Two-wheelers (two stroke) 4.5 7800 Two-wheelers (four-stroke) 4.5 7800 Gas Four-wheelers 3 1000 Three-wheelers 3 7800 Diesel Older than 1994 - 75 1995 onward - 65 Table B.8: Emission standards for petrol vehicles, as per the revised NVMES of 2012 (MOFE, 2019) Vehicle Type Limit Values (Grams per Kilometer, g/km) CO HC NO x Passenger Cars 2.3 0.2 0.15 Light Commercial Vehicles (LCVs) RM <= 1305 kg 2.3 0.2 0.15 1305 > RM <= 1760 kg 4.17 0.25 0.18 RM > 1760 kg 5.22 0.29 0.21 Two-Wheelers Class I (displacement < 150 cc) 2.0 0.8 0.15 Class II (displacement >= 150 cc) 2.0 0.3 0.15 Three-Wheelers 1.0 0.15 0.65 Note: RM signifies Reference Mass that represents unloaded vehicles with no driver and passengers but having full tank fuel with tools and spare tire adding another extra 100 kg weight or relative weight. 6 Air Quality Standard. Accessed through https://www.scribd.com/document/466521849/Air-Quality-Standard-docx. Anne x B: A ir Q ualit y Standards xix Table B.9: Emission standards for diesel vehicles, as per the revised NVMES 2012 (MOFE, 2019) Vehicle Type Limit Values (Grams per Kilometer, g/km) CO NO x HC+NO x PM Passenger Cars 0.64 0.56 0.50 0.05 Light Commercial Vehicles (LCVs) RM <= 1305 kg 0.64 0.56 0.50 0.05 1305 > RM <= 1760 kg 0.80 0.72 0.65 0.07 RM > 1760 kg 0.95 0.86 0.78 0.10 Vehicle Type Limit Values (Grams per Kilometer, g/km) CO NO x HC+NO x PM Heavy Duty Vehicles (HDVs) 2.1 0.10-0.13 0.66 5.0 RM > = 3.5 ton xx TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Annex C: Literature on Health Impacts from Air Pollution and Air Q+ Health Analysis Methodology C.1 Air Quality-related health impact research There is evidence of negative health outcomes of air pollution in Nepal. While more research is needed, several studies have been conducted in Nepal and show, for example, that a 10 μg/m3 increase in PM2.5 level was associated with increased risks of hospitalization of 1.00 percent, 1.70 percent and 2.29 percent for total, respiratory and cardiovascular admissions, respectively (Gurung et al., 2017). A study examining the health effects on individuals Globally, PM2.5-associated preterm births were residing near a brick kiln in the Bhaktapur estimated at 2.7 million in 2010, with South district found that 50 percent of respondents Asia having the highest percentage (Malley et faced health problems, particularly respiratory al., 2017). In China, exposure to air pollutants like illnesses, allergies, and eye irritation, confirming PM2.5, PM₁₀, SO2, and O₃ was linked to preterm births that both short-term and chronic exposure to and low birth weight (Zhou et al., 2022; Liu et al., air pollution is associated with an increased 2009). In Nepal, 15.7 percent of total deliveries were risk of non-communicable diseases (NCDs) in premature among women exposed to indoor air Nepal (Pariyar et al., 2013). Outpatient data from pollution from cooking with solid fuels (Acharya et the Department of Health Services (DoHS) in Nepal al., 2021; Koirala & Bhatta, 2015). Pre-term births show that respiratory diseases are the top reason and their role in contributing to neo-natal deaths for outpatients’ consultations with both upper and as a risk factor associated with air pollution were lower respiratory tract infections being within the included in the Global Burden of Disease calculations top 4 and COPD being the top cause of mortality for the first time in 2019 and are no longer left out among inpatients (Kurmi et al., 2016). Many studies of such calculations. have confirmed the association of high levels of household air pollution (HAP) in Nepal and negative Emerging research has shed light on the link health outcomes (Budhathoki et al., 2020; Acharya between air pollution and childhood stunting et al., 2021; Devakumar et al., 2015). in South Asia, particularly in regions with high baseline levels of PM2.5. Prolonged exposure to air pollutants during critical developmental stages, A nne x C: L iterature on H ealth Im pacts fro m A ir P ollution and A ir Q + H ealth A nalysis Methodology xxi such as pregnancy, can lead to stunting, and reduced C.2 AirQ+ health analysis cognitive development, with lifelong consequences (e.g., stunting leads to lower productivity later in life). methodology The prevalence of childhood stunting in South Asia is The AirQ+ tool is designed to estimate the approximately 38 percent of children under five years short-term and long-term health impacts of of age affected (World Bank, 2022). In South Asia, indoor and ambient air pollution, particularly for each 1 µg/m³ increase in PM2.5 during pregnancy, PM2.5 pollution. The short-term effects are quantified childhood stunting increases by 0.5 percent (Heft-Neal by impact assessment and long-term effects by the et al., 2024). Stunting effects are most severe between burden of disease. ages 1 and 3, disproportionately affecting children from socioeconomically disadvantaged households AirQ+ uses the Integrated Exposure-Response (IER) that are frequently exposed to higher pollution levels. function from the Global Burden of Disease (GBD) study to calculate the health impacts of prolonged Emerging research also suggests that air pollution exposure to PM2.5. By inputting the average annual may have adverse neurological effects. These effects PM2.5 concentration, AirQ+ quantifies the number of on the nervous system can potentially increase the risk deaths or cases attributable to PM2.5 exposure through of neurodegenerative diseases such as Alzheimer’s the Population Attributable Fraction (PAF). This links and Parkinson’s. Impacts associated with air pollution PPM2.5 exposure to specific health outcomes, such include cognitive decline (Power et al., 2016; Peters as chronic obstructive pulmonary disease (COPD), et al., 2018) and dementia in later life (Carey et al., ischemic heart disease (IHD), acute lower respiratory 2018). infections (ALRI), and lung cancer. The PAF is a key Studies have documented negative impacts of air metric used to indicate the fraction of deaths from pollution on cognitive and learning outcomes across these diseases caused by long-term exposure to various age groups. Exposure to PM2.5 can impair PM2.5. PAFs also indicate how much of a particular basic cognitive abilities such as attention, memory, health issue could have been prevented if the harmful and problem-solving, with the largest effects among exposure to air pollution had been eliminated. prime working age adults (La Nauze & Severnini, 2021). A detailed analysis of the burden of disease Acute exposure to fine particulate matter can alter attributable to ambient PM2.5 exposure was brain cells found in the hippocampus, a region of conducted for both Kathmandu and Terai in 2021 the brain critical for learning and memory processes and 2035. In Kathmandu, PM2.5 concentrations in (Davis et al., 2013). Chronic exposure is associated 2021 was at 37 µg/m³, but by 2035, this concentration with declines in episodic memory (ability to recall is projected to rise to 51 µg/m³. This increase in past events) and dementia risks, especially among exposure will result in higher PAF for various diseases, older adults (Ailshire & Clarke, 2015). In children, indicating a greater burden of mortality linked to air pollution can impair academic achievement by air pollution. By 2035, the burden of all diseases disrupting their learning potential (Ebenstein et al., in Kathmandu is projected to increase, with lung 2016). This, in turn, affects their earning potential in cancer showing the largest growth in attributable the future as children exposed to air pollution are proportions. The PAF for lung cancer increases from more likely to achieve lower educational outcomes 16 percent (PAF 0.1566) in 2021 to 20 percent (PAF that limit their lifetime earnings.7 0.1984) in 2035 reflecting a 27 percent increase in lung-cancer related deaths. COPD (19.4 percent), IHD (7.8 percent), and ALRI (17.5 percent) will also see significant increases. 7 Harvard T.H. Chan. 2024. Air pollution exposure in infancy may limit economic mobility in adulthood. Accessed through: https://hsph. harvard.edu/news/air-pollution-exposure-in-infancy-may-limit-economic-mobility-in-adulthood/. xxii TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS The Terai region had slightly lower PM2.5 The PAF for lung cancer increases from 16 percent concentration in 2021 (39 µg/m³), which is expected (PAF 0.1598) in 2021 to 17 percent (PAF 0.1723) in to rise to 42 µg/m³ by 2035. While the concentration 2035, with lung cancer related deaths rising by 7.8 increase is less dramatic than in Kathmandu, the percent. Similarly, COPD (5.8 percent) and ALRI (5.3 health burden still increases across all diseases. By percent) show moderate increases in their attributable 2035, the Terai region is expected to face a higher burdens between 2021 and 2035, and IHD (2.7 percent) burden of disease from PM2.5 exposure, with lung shows a slight increase. cancer experiencing the most significant increase. A nne x D: T he GA INS modeling tool xxiii Annex D: The GAINS modeling tool D.1 Introduction To provide air quality management in Nepal with a good understanding of where pollution is currently coming from and how pollution can be reduced most effectively in the future, the analysis employs a version of the well-established GAINS model framework that has been tailored to the Kathmandu Valley and the Terai. The GAINS (Greenhouse gas – Air pollution policy analyses in, inter alia, China, South Africa, Interactions and Synergies) model, developed by Vietnam, the European Union, and the parties to the the International Institute for Applied Systems Convention on Long-range Transboundary Air Pollution Analysis (IIASA), brings together information on (LRTAP). Over the last years, a special version of the the sources of emissions and their socio-economic GAINS model has been developed for the airshed drivers with advanced modeling of atmospheric of the Indo-Gangetic Plain and Himalayan Foothills chemistry and transport of pollution (Amann et (IGP-HF) and applied for air quality management al. 2011). It quantifies the spatial distribution and planning in IGP States in India, Punjab province in origins of observed pollution concentrations in Pakistan and the Greater Dhaka Area in Bangladesh. ambient air. Based on given projections of future economic, energy and agricultural development, GAINS estimates the future improvements in air D.2 The GAINS implementation quality and population exposure that are offered by 1,100 proven emission control options and the for the Kathmandu Valley and costs that would occur to the overall economy (the the Terai blue boxes in Figure D.1). To inform decision making about the cost-effectiveness of alternative policy For Nepal, the GAINS model has been implemented intervention options, GAINS explores cooperative for two regions, i.e., Kathmandu Valley and Terai. multi-sectoral portfolios of measures that achieve Starting from the GAINS model for South Asia that given air quality and/or climate policy targets at has been developed by IIASA for the World Bank least cost (the red boxes in Figure D.1). report on airshed management in South Asia (World Bank 2023a), these localized versions capture the Building on robust scientific understanding and characteristic emission sources in Nepal and assess quality-controlled local data, GAINS analyses have ambient air quality in the two regions with a 1 km informed decision makers and stakeholders in the x 1 km resolution. Input data (the orange boxes in selection of measures that delivered the effective Figure D.1) have been compiled from a host of local air quality improvements around the world. Local statistics, measurement data and policy documents versions have been implemented and applied for that were provided by local experts (Table D.1). The xxi v TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS project team brought together international experts of Engineering (IoE) and the Central Department on the GAINS modeling from the IIASA and Iowa State of Environmental Science of Tribhuvan University University, and local experts on emission inventories, as well as the Department of Chemical Science and air quality monitoring and atmospheric chemistry Engineering of Kathmandu University. from the Centre for Energy Studies (CES), Institute Figure D.1: Information flow in the GAINS-IGP model analysis Source: International Institute for Applied Systems Analysis (IIASA). Table D.1: Key approach and data sources employed for the GAINS implementations for the Kathmandu Valley and the Terai Sectoral emission inventory of PM2.5 precursors Compiled from local activity statistics and GAINS-South Asia emission factors Downscaled to 1*1 km using plant locations, population density, road maps, land use data Monthly variation for brick kiln and forest fire emissions Dispersion calculations Local dispersion of primary PM2.5: Iowa Urban Dispersion/HySplit model 1*1 km resolution Long-range transport of primary PM into KV: EMEP dispersion model, 0.1°* 0.1°, 15 min calculations, monthly results, 2018 meteorology Formation of secondary PM2.5: EMEP dispersion model, 0.5°* 0.5°, 15 min calculations, monthly results for KV, downscaled to KV Monitoring data Daily observations of DoE 2018-2023 Daily observations of the low-cost sensor network for 2023 Daily observations of US-EPA for US-Embassy and Durbar Square Missing daily observations assimilated (interpolated to match the overall station trend relative to all KV observations) Anne x D: T he GA INS modeling tool xx v D.3 Estimates of current and Emission factors are primarily derived from local measurements that are deemed representative future precursor emissions of for the specific sources in the region (i.e., in South PM2.5 Asian countries), and local emission inventories to the extent they are available. The plausibility and The GAINS model distinguishes about 400 emission robustness of local data is validated with international source categories, for which it estimates the literature. In total, GAINS-IGP-HF considers about annual quantities of precursor emissions that 1,100 proven emission control options for which generate secondary PM2.5 in ambient air. These the emission removal efficiencies are derived from include primary PM2.5, sulfur dioxide (SO2), nitrogen world-wide literature considering the local conditions oxides (NOx), ammonia (NH3) and volatile organic in Nepal and other regions in South Asia with similar compounds (VOC) and the six Kyoto greenhouse characteristics. gases. For each source category, annual emissions of a pollutant are estimated as a function of the level Total emissions of a given source category in of economic activity, (uncontrolled) emission factors an administrative unit are spatially distributed that reflect typical conditions in the area without any based on statistics for large point sources and emission controls, as well as the removal efficiencies using appropriate surrogate data for distributed and application shares of applied control measures. sources (e.g., maps of population distribution, road Activity rates (i.e., the quantities of emission-generating networks, land-use data, agricultural statistics) (Table activities) are compiled from relevant local statistics D.2). Region-specific diurnal and seasonal time profiles or, if unavailable, estimated based on experience from as well as the heights at which emissions occur are other countries/states with comparable conditions. considered for the emissions of each source category. Table D.2: Data sources for the implementations of the GAINS model for the Kathmandu Valley and the Terai Sector Activity statistics Spatial pattern Observations Residential • For provinces 1, 2, 3: Fuel consumption by • Household census (dominant • Less consumption of fuel district provided by the energy statistics of cooking fuel) 2021 by wood than in national energy Water and Energy Commission (WEC) 2019 districts, municipal, wards statistics • For the other provinces: Energy consumption • Further distributed by • GAINS emission factors per household reported for the 3 provinces population density 1km*1km (distinguishing Terai and the hilly/ mountainous rest of the country) applied to census household statistics Commercial • For provinces 1, 2, 3: Fuel consumption by • Population density 1km*1km • GAINS emission factors district provided by the energy statistics of Water and Energy Commission (WEC) 2019 • For the other provinces: Residual fuel consumption to National energy statistics Brick kilns • Inventory of brick kiln types provided by Amico • Inventory of brick kiln locations provided by Amico • Average brick production, fuel consumption, emission factors by type Cement plants • Inventory of cement plants (clinker production • Locations of cement plants • GAINS specific fuel provided in CemNet.com 2023) provided in CemNet.com consumption and emission 2023 factors Other industry • For provinces 1, 2, 3: Fuel consumption by • For Kathmandu: polygons of • GAINS emission factors district provided by the energy statistics of industrial areas provided by Water and Energy Commission (WEC) 2019 Amico • For the other provinces: Residual fuel • For other areas in the 3 consumption to National energy statistics provinces: district data distributed by population density • Other areas: Population density 1km*1km xx vi TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS Data for the 2020 baseline year have been corrected to represent actual emission levels and fuel consumption from 2021, which was not impacted as significantly by COVID lockdowns. These estimates serve as input for simulating ambient PM2.5 concentrations in 2021. Figure D.2: Primary emissions of PM2.5 from the various source sectors in the Kathmandu Valley in 2021 (tons/cell) Anne x D: T he GA INS modeling tool xx vii Figure D.3: Total primary PM2.5 emissions in the Kathmandu Valley in 2021 (tons/cell) Figure D.4: Density of primary PM2.5 emissions from the various sectors in Nepal, 2021 xx viii TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLUTIO N SO URC ES, A ND SO L UTIO NS D.4 PM2.5 concentrations in PM2.5 in the Terai, the import of primary PM2.5 into the Kathmandu Valley and the Terai, and the formation ambient air and transport of secondary PM2.5 is derived from the EMEP atmospheric chemistry model (Simpson et al., With the resulting emission fields of all PM2.5 2012) for entire South Asia using a 0.1° longitude precursor emissions, annual mean concentrations x 0.1° latitude (11 km x 11 km) spatial resolution. of PM2.5 in ambient air are computed at a 1 km x The underlying computations of the EMEP model 1 km spatial resolution for the Kathmandu Valley have been performed at hourly time steps for the and 10 km x 10 km for the Terai. For this purpose, full year, employing the meteorological conditions the GAINS-Nepal model combines dispersion char- of 2018 and considering for all emission sources the acteristics of (i) local primary PM2.5 emissions, (ii) characteristic seasonal and diurnal time patterns the long-range transport characteristics of primary and distinguishing three emission heights. PM2.5emissions from all of South Asia into the Kathmandu Valley, and (iii) the formation and transport Although public attention and legislative air quality of secondary PM2.5 emitted throughout South Asia. The management focuses on episodic concentration atmospheric dispersion of primary PM2.5 emissions peaks at pollution hot spots, worldwide epidemi- within the Kathmandu model domain is derived at a ological evidence indicates long-term exposure to 1 km x 1 km spatial resolution from the Iowa Urban PM2.5 as the most powerful predictor for adverse Dispersion model. These calculations are based on health impacts. With a focus on public health, hourly hourly forwards trajectories of air movements for all results are aggregated to annual mean concentrations of 2018 computed by the HySplit model (https://www. as the most relevant metric associated with public arl.noaa.gov/hysplit/), a three-dimensional Lagrangian health impacts. Annual mean concentrations of PM2.5 model that utilizes open access global meteorological computed for the Kathmandu Valley and the Terai inputs to study dispersion. The dispersion of all primary are shown in Figure D.5 and Figure D.6, respectively. Figure D.5: Computed annual average concentrations of PM2.5 in the Kathmandu Valley (µg/m3), 2021 Anne x D: T he GA INS m odeling tool xxix Figure D.6: Computed annual average concentrations of PM2.5 in the Terai (µg/m3), 2021 However, as clearly shown by the monitoring data (see Figure 1.4 and Figure 1.5 in the main report), Nepal’s air quality is characterized by strong seasonal variations of pollution due to meteorology (dry season, monsoon periods) and the seasonality of some emission sources (e.g., forest and agricultural fires, brick kilns). The model calculations capture this seasonality well as shown by the results for January and July 2021 for the Kathmandu Valley (Figure D.7). Figure D.7: Computed monthly average PM2.5concentrations for January and July 2021 in Kathmandu (µg/m3) xxx TOWA R DS C LE AN AIR I N N E PAL: BE N E FI TS, POLLU TIO N SO URC ES, A ND SO L UTIO NS D.5 Model validation with ambient air quality data Although Nepal’s AQM monitoring network has grown significantly over the last years, there is only a limited number of Stations available that enable a robust assessment of annual average PM2.5 concentrations (see Section 1.4 in the main report). To this end, model results have been compared for stations for which valid observations are available for more than 15 days in each month (in order to capture the seasonal variations). Missing data have been assimilated, i.e., interpolated to match the overall ratio between the average of the available observations of the given station in the year and the average of the measurements of all stations in model domain Valley on the same days. Following these criteria, for the Kathmandu Valley 24 annual averages could be established for the period 2020-2023, composed of eight stations from the DoE monitoring network, 14 stations from the low-cost sensor network, and two stations operated by the US-Embassy (Figure D.9). The locations of the stations are shown in Figure D.8. For the Terai, 22 annual averages could be established for eight DoE stations, although some of them with rather poor data coverage (Figure D.10, Figure D.11). Figure D.8: Locations of the monitoring stations with sufficient data coverage in the Kathmandu Valley. Figures refer to recent measurements of annual average PM2.5 concentrations (µg/m3) Anne x D: T he GA INS m odeling tool xxxi Figure D.9: Annual average concentrations of PM2.5 measured at monitoring stations in the Kathmandu Valley Figure D.10: Locations of the monitoring stations with sufficient data coverage in the Terai xxxii TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLUTIO N SO URC ES, A ND SO L UTIO NS Figure D.11: Annual average concentrations of PM2.5 measured at monitoring stations in the Terai The comparison of monitored and modelled PM2.5 concentrations reveals a reasonable fit given the prevailing multiple uncertainties. The average PM2.5 concentrations that have been determined for these stations were then compared against the GAINS estimates of the average concentration of the 1 km x 1 km grid cell in which the stations are located (Figure D.12). Discrepancies are mainly due to the significant uncertainties in the monitoring of annual average PM2.5 concentrations, the systematic differences between point measurements and the variability ofPM2.5 concentrations within the surrounding 1 km x 1 km grid cell, the uncertainties in the spatial patterns of the estimated emissions, and general uncertainties in the atmospheric dispersion calculations. Anne x D: T he GA INS m odeling tool xxxiii Figure D.12: Validation of estimated annual mean PM2.5 concentrations at specific locations in the Kathmandu Valley against modelled PM2.5concentrations in the surrounding 1 km x 1 km grid cells. Figure D.13: Validation of estimated annual mean PM2.5 concentrations at specific locations in the Terai against modelled PM2.5 concentrations in the surrounding 1 km x1 km grid cells. xxxi v TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLUTIO N SO URC ES, A ND SO L UTIO NS D.6 Source apportionment of population exposure to PM2.5 The geo-physical approach of the GAINS model enables a tracking of the contributions from individual emission sources within the airshed to total PM2.5concentrations in ambient air at a given location or region. For the Kathmandu Valley, the contributions to PM2.5 concentrations from the key sectors are shown in Figure D.14. Note that PM2.5 in ambient air is composed of primary and secondary PM2.5, whose contributions are shown in Figure D.15. Figure D.14: Contributions of the various emission source sectors to annual mean PM2.5 concentrations in the Kathmandu Valley in 2021 (µg/m3) A nne x D: T he GA INS m odeling tool xxx v Figure D.15: Annual mean concentrations of primary and secondary PM2.5 in Kathmandu 2021 (µg/m3) Due the narrow shape of the Terai and its location in the IGP with very high emissions, a significant share of PM2.5 in its ambient air originates from outside regions, especially from India (Figure D.16). Figure D.16: The spatial origin of PM2.5 concentrations in the Terai East (upper panel) and the Terai West (lower panel) in 2021 (µg/m3) xxx v i TOWA R DS C LE AN AI R IN N E PAL: BE N E FITS, POLLUTIO N SO URC ES, A ND SO L UTIO NS The contributions to ambient PM2.5 in the Terai from the different source sectors in the Terai are shown in Figure D.17. Figure D.17: Contributions of the various emission source sectors to annual mean PM2.5 concentrations in the Terai in 2021 (µg/m3) Anne x D: T he GA INS m odeling tool xxx v ii While the maps above provide valuable insights into the spatial diversity of the sectoral contributions to PM2.5 concentrations throughout a region, aggregated metrics that summarize contributions in a larger region or at specific locations are more informative to address the burden of air pollution on public health and to maximize health benefits from pollution control interventions. The spatial and sectoral origins of population exposure in a region or at a location can be illustrated by so-called source apportionment diagrams. The situation in the Kathmandu/Terai in 2021 is depicted in Figure D.18 and Figure D.19, respectively. These graphs indicate the contributions to population-weighted PM2.5 exposure that originate from (i) from other countries and natural sources (soil dust), (ii) from other regions in Nepal except the Kathmandu/Terai, and from the Kathmandu/Terai itself. Furthermore, the graphs distinguish the contributions of primary and secondary PM2.5. Figure D.18: Spatial and sectoral origin of PM2.5 in ambient air in the Kathmandu Valley, 2021 Source: GAINS-Nepal, developed for this report. Figure D.19: Spatial and sectoral origin of PM2.5 in ambient air in the Terai region, 2021 Source: GAINS-Nepal, developed for this report. xxx v iii TOWA R DS CLE AN AI R IN N E PAL: BE N E FITS, POLL UTIO N SO URC ES, A ND SO L UTIO NS D.7 Cost-effectiveness analysis To inform decision making about the cost-effectiveness of alternative policy intervention options, the GAINS-Nepal model explores cooperative multi-sectoral portfolios of measures that achieve given air quality and/or climate policy targets at least cost to the economy. This cost-effectiveness analysis considers the specific costs of the measures and their impact on air quality/population exposure and/or greenhouse gas emissions. The GAINS-Nepal model estimates the economic or resource costs of about 1,100 emission control options that would occur to the overall economy of Nepal, with the aim to quantify the value of resources that would be diverted from other productive purposes. Considered resource costs include, inter alia, upfront investments, costs of capital, as well as operating costs for labor and material input, waste disposal, costs for domestic energy extraction and energy imports, and revenues from the sale of by-products. However, markups charged over production costs by manufacturers or dealers are ignored in the economic analysis as they do not represent actual resource use of the society. Similarly, transfer payments such as taxes and subsidies are excluded. The focus of the analysis on the overall economy is different from the perspectives of private and public firms driven by profits or at least cost recovery and for households on the ground. Firms and households operate within financial settings where costs, prices as well as investment and behavioral decisions are affected by taxes, subsidies, regulations, profit expectations and individual risks. A recent extension to the GAINS model explores transfer payments (taxes and subsidies) that would make measures that emerge as cost-effective for societies financially attractive for profit-oriented enterprises and private households and estimates their impact on government budgets. However, this extension is not yet available for South Asia. Cost data for each option are based on international literature and market statistics and adjusted to local conditions in Nepal considering local wage rates and purchasing power parities. Technology-spe- cific data, such as removal efficiencies, unit investment costs, and non-labor operating and maintenance costs, are derived from international literature and experience, to represent the conditions in a competitive world market. However, local circumstances lead to justifiable differences in the actual costs at which a given technology removes pollution at different sources. Country- and region-specific parameters considered in the cost calculation include, inter alia, labor costs, energy prices, size distributions of plants, plant utilization, fuel quality, animal fodder prices, paper collection rates, composting rates, the state of technological development, and the extent to which emission control measures are already applied. The analysis for Nepal draws primarily on local information collected for these factors. Data gaps have been filled with information from countries with comparable conditions provided by the global GAINS database and adjusted to local conditions considering, inter alia, local labor costs, fuel quality, age of plants, operating hours, etc. The feasible and cost-effective measures are then ranked by their marginal costs, and the resulting sequence of measures is presented in the form of a marginal cost curve (see Chapter 4.4 in the main report). A nne x D: T he GA INS modeling tool xxxix