Analysis finds multi-trillion-dollar climate financing gap in crucial Hindu Kush Himalaya region 

Image: Alex Treadway/ ICIMOD

Paro, Bhutan, 5 January 2025 – The Hindu Kush Himalaya (HKH), a vital water source for billions in the region, faces a staggering climate financing shortfall, according to a new regional analysis. The report finds current financial commitments are insufficient to address the region’s adaptation and mitigation needs, projecting a required total of USD 12.05 trillion by 2050.

“Mobilising the ambitious target of USD 12 trillion is like climbing the Everest of funding,” stated Ghulam Ali, Innovative Investment Specialist and lead author of the report. “The strategy to mobilise these resources has to be creative, comprehensive, and collective to achieve such significant goals.”

The analysis, conducted by the International Centre for Integrated Mountain Development (ICIMOD), concludes that the annual climate finance requirement for the eight HKH countries is approximately USD 768.68 billion. China and India account for 92.4% of the total projected need.

“Evidence and analysis are an important part of advocating and influencing policy development for climate financing in the region,” said Pema Gyamtsho, Director General of ICIMOD. “The grounded data this report offers enhances understanding of the actions required to address the financial needs of our region to build economic resilience.”

The report identifies a stark disparity in climate vulnerability and financial capacity. Countries highly exposed to climate effects, including Bangladesh, Bhutan, India, Myanmar, Nepal, and Pakistan are also the least equipped to manage these risks. The HKH region faces an adaptation burden far exceeding global averages, forcing nations like Afghanistan, Nepal, and Pakistan to spend significantly more than income-group averages on disasters and adaptation, trapping them in a cycle of repair with limited funds for other needs.

The crisis is framed as an economic equality issue. The annual per capita climate finance needs ranges from as low as USD 24 in some countries to over USD 2,126 in others, representing 6% of GDP to a crippling 57%, respectively. This places immense pressure on policymakers who are facing trade-offs between development and survival for vulnerable populations.

To bridge the funding gap, the report recommends a three-track approach: improve access to existing multilateral funds, pioneer innovative mechanisms like debt-for-climate swaps, and increase public spending for mountains and environmentally sensitive areas. 

The report, ’Climate Finance Synthesis Report: Needs, Flow and Gaps in the Hindu Kush Himalaya Countries’, was launched at the “Enhancing Climate Actions in the Hindu Kush Himalaya” conference in Paro, Bhutan.

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