Nature is the connective fabric of all existence, and the sustainability of human well-being cannot be envisioned without safeguarding it. Every policy designed to strengthen economies and improve livelihoods ultimately depends on the health of natural systems. Yet many contemporary goals, whether advanced by the private or public sector, often collide with ecological limits, encroaching too closely on nature’s boundaries. Nature encompasses a stable climate, accessible freshwater, fertile soils, thriving forests, clean air, and other essential resources. These elements form the foundation upon which all policies rest. Without a stable climate and a healthy environment, sustained human development becomes meaningless.

The intellectual and institutional foundations of sustainable resource management have evolved over millennia. These foundations can be traced back to the statecraft of Kautilya’s Arthashastra (321-296 BCE) and extend through the seminal contributions of Robert Malthus (1798), Garrett Hardin (1968), Amartya Sen (1979), Elinor Ostrom (1997), and others. This knowledge culminated in landmark international frameworks such as the 1972 Stockholm Conference on the Human Environment, the Brundtland Commission’s Our Common Future (1987), and the 1992 Rio Earth Summit. Across this historical trajectory, a consistent theme emerges: the imperative to use renewable resources rationally, meeting present needs without compromising the welfare of future generations.

The Role of the Conference of the Parties (COP)

The Conference of the Parties (COP) serves as the supreme decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC). With participation from all 198 signatory and ratifying countries, the COP represents one of the most extensive multilateral platforms within the UN system. Its work is supported by two permanent subsidiary bodies: the Subsidiary Body for Implementation (SBI) and the Subsidiary Body for Scientific and Technological Advice (SBSTA). In addition, the COP functions as the meeting of the parties to both the Kyoto Protocol (CMP) and the Paris Agreement (CMA), convening global leaders annually to deliberate on climate action.

The Kyoto Protocol, adopted in 1997, established legally binding emission reduction targets for developed nations, requiring a collective reduction of 5 percent below 1990 levels during the 2008-2012 commitment period. A key innovation of the Protocol was its introduction of market-based mechanisms, such as the Clean Development Mechanism (CDM), which enabled emission reduction projects in developing countries while fostering sustainable economic development. This linkage between climate mitigation and broader developmental goals remains a cornerstone of international climate governance.

COP30 (10-21 November 2025) in Belém, Brazil, proposed to launch an Action Agenda designed to mobilise diverse coalitions and accelerate the implementation of existing commitments, guided by the findings of the first Global Stocktake (GST-1). The COP30 Presidency proposed translating GST-1 outcomes into a framework of six thematic pillars and thirty key objectives. These pillars encompass mitigation, adaptation, finance, technology, and capacity building, with specific priorities including:

- Transitioning energy, industry, and transport sectors

- Stewarding forests, oceans, and biodiversity

- Transforming agriculture and food systems

- Building resilience in cities, infrastructure, and water systems

- Advancing human and social development

- Mobilising finance, technology, and capacity building

Collectively, these priorities constitute the thirty objectives of the Action Agenda. Beyond meeting climate goals, COP30 offered an opportunity to advance clean energy and socioeconomic development. Rather than initiating new efforts, COP30 aimed to connect, support, and scale existing initiatives through thirty dedicated activation groups.

For Nepal, COP30 presented a critical opportunity to advance a compelling case for a climate-responsive economy centred on hydropower. Hydropower offers dual benefits: safeguarding the welfare of future generations while positioning Nepal as a regional leader in clean energy. Yet Nepal’s participation in international climate forums has often been reduced to tokenism—marked by attendance only or photo opportunities, without substantive engagement or strategic dialogue.

Hydropower: Promise and Governance Failure

Nepal’s hydropower sector holds immense potential to meet domestic electricity demand and stimulate economic development. Despite decades of planning, however, Nepal has developed only about 3,600 MW of its hydropower capacity. Severe shortages persist during the dry season, when generation falls to roughly 30 percent of installed capacity.

This paradox of scarcity amid abundance stems not from inadequate water resources or technological limitations but from systemic governance paralysis, institutional weakness, and political short-sightedness. The National Water Plan of 2005 was never effectively implemented, and repeated recommendations from development partners—such as the Government of Norway’s call for a comprehensive river-basin master plan—remain unheeded. Nepal has yet to articulate a coherent national strategy for hydropower development.

The sector is encumbered by outdated bureaucracy, fragmented decision-making, and political interference. Projects routinely face protracted delays in licensing, land acquisition, land ownership issues, forest clearance, environmental approvals, and financial closure. Institutions intended to streamline development, such as the Investment Board Nepal, often function as additional bureaucratic checkpoints. Similarly, the Securities Board of Nepal has struggled to cultivate a transparent and attractive capital market.

A core structural flaw lies in the monolithic Nepal Electricity Authority, which operates in a quasi-feudal manner by combining the conflicting mandates of generation, transmission, distribution, and trading under a single entity—stifling efficiency and competition. Transmission infrastructure has failed to keep pace with generation capacity, creating chronic power-evacuation bottlenecks. Seasonal river flows further exacerbate these weaknesses, producing surpluses during the monsoon and deficits in the dry season.

The Road Ahead

Unlocking Nepal’s hydropower future requires not incremental adjustments but a transformation of governance and institutional culture. Hydropower must be recognised as more than an infrastructure project: it is a national economic and climate strategy. A comprehensive reform blueprint should include:

- Establishing a single-window digital clearance system for project approvals to enhance accountability and transparency

- Professionalising and unbundling the Nepal Electricity Authority into separate entities for generation, transmission, distribution, and trading to foster efficiency and competition

- Confronting corruption directly through enforceable consequences for negligence and rent-seeking

- Revising Securities Board policies to ensure transparent and predictable investment processes

- Ensuring policy stability across political transitions to provide long-term certainty for investors

- Strengthening transmission interconnections with India and Bangladesh to secure reliable markets and anchor investor confidence

- Mandating inclusive community engagement through equity participation, royalty allocation, and local development funds to build social harmony and project sustainability

These reforms are not aspirational; they are prerequisites for unlocking the international financial partnerships that Nepal could secure at COP30 and beyond.

Conclusion

As COP30 propels the global community toward accelerated climate action, Nepal stands at a pivotal juncture. Hydropower represents more than an energy option; it is a once-in-a-generation opportunity to redefine the national economy within a climate-compatible framework. Yet the world will not invest in promises unsupported by reform, nor will it finance projects mired in bureaucratic inertia and political uncertainty.

Nepal’s water resources are conduits to its future, and the global renewable energy transition offers an unprecedented chance to convert this natural wealth into sustainable prosperity. For this to materialise, Nepal must evolve from an obstacle into an enabler. Hydropower can become Nepal’s most compelling success story, but only if integrity, transparency, and accountability replace inertia and corruption. The technology is available, capital awaits deployment, and regional demand is growing. The missing element is political and bureaucratic will.

COP30 offered Nepal an opportunity to redefine its path. Whether that opportunity is seized or squandered will shape not only the future of the hydropower sector but also the country’s economic and climate trajectory for decades to come.

Republica