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6 May 2020

From disruption to resilience in the Hindu Kush Himalaya

Brij Rathore & Nanki Kaur

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Investments in renewable energy, green transport systems, and sustainable construction must be prioritized in the post-pandemic recovery path to resilience. (Photo: Prabesh Devkota/ICIMOD)

NANKI KAUR & BRIJ RATHORE

The COVID-19 pandemic has disrupted the world as we know it and laid bare the vulnerabilities of mountain communities already impacted by climate change. Do we return to business as usual or turn this into an opportunity for concrete climate action and transformative change?

Investments in renewable energy
Investments in renewable energy, green transport systems, and sustainable construction must be prioritized in the post-pandemic recovery path to resilience. (Photo: Prabesh Devkota/ICIMOD)

 

The COVID-19 pandemic has left economies reeling and has underlined the fragility of communities already vulnerable to climate change.  As Hindu Kush Himalayan (HKH) countries prepare to absorb and recover from the economic and social fallout of the lockdown, we have a crucial window of opportunity to transform our growth path. Post-pandemic recovery should build on the spirit of innovation and collective action to push for ambitious climate action in the region. We offer eight actions to limit the rise of global temperature to 1.5°C and to build inclusive and resilient societies in the HKH.

Disruptive shocks in the HKH

The HKH is the pulse of the planet. The mountainous region covers four million square kilometres across eight countries: Afghanistan, Bangladesh, Bhutan, China, India, Myanmar, Nepal, and Pakistan. Its diverse ecosystems and rich biodiversity support niche mountain enterprise and the livelihoods of 240 million people in the region and 1.65 billion people who live in the river valleys downstream. It also has a rich social fabric that supports collective action.

Despite these attributes, shocks like the pandemic and climate change expose the vulnerability of economic, social, and environmental systems in the region.

Economic activity in the HKH takes place largely in the informal sector. Mountain communities rely on agriculture, tourism, and remittance – sectors that are sensitive to market and climate shocks. With the global economy likely to contract by 3% as a result of the pandemic and the global lockdown associated with it, emerging and developing Asian countries are likely to witness a 1% growth in 2020. The International Labour Organization (ILO) estimates that the workers and enterprises in the informal economy and key sectors like retail trade, manufacturing, hospitality, and food services along with remittances will be hardest hit. These sectors employ the largest share of women and play an essential role in the HKH. For instance, the World Bank projects a 22% decline in remittances to South Asia in 2020. This will have huge impacts for countries like Nepal, where remittances account for 30% of GDP. Similarly, the World Tourism Organization estimates international tourist arrivals could decline by 20%–30% in 2020. A decline in economic growth and employment opportunities will have severe implications for poverty reduction. The ILO estimates that in India alone this could push 400 million workers in the informal economy into poverty.

In terms of social disruption, impacts on social equity and food security are of primary concern. The pandemic has exposed the plight of workers and small businesses in the informal sector. We also know that disasters and public health emergencies affect people differently, based on factors such as gender, age, social status, and location. The pandemic is likely to heighten gender inequalities in the HKH. Projections for 2020 by the World Food Programme indicate that the cumulative impacts of climate change, fragility, and COVID-19 will undermine nutrition, food access, and food availability – especially in the agro-pastoral systems associated with high mountain communities. Around 11.3 million people in Afghanistan and 1.27 million people in Pakistan are likely to face a food crisis in 2020.

Beyond economic and social disruptions, ecosystems across the HKH are vulnerable to a range of drivers of change, including climate change. The mammal species richness, land use change and intrusion into wildlife habitats, and trade in wildlife and wildlife parts also make this region a zoonotic disease hotspot.

Unfortunately, the economic, ecological, and social disruptions related to COVID-19 will only add to the vulnerability of communities already exposed to climate and other change. Under current emission scenarios the region is expected to see a 5.5°C increase in temperature. This will result in two-third loss in glacial volume and frequent droughts and floods, which will have implications for ecosystem health, food and water security, human health, and economic growth. Local economies across the region already face a collapse because of increased frequency and magnitude of extreme weather events and changes in weather patterns.

Responding to disruptive shocks

There is an urgent need to respond to the disruption caused by the pandemic in a way that addresses the climate emergency. We also need to ensure that short-term response measures set us on a long-term recovery path that supports resilient mountain communities.

The Stringency Index shows HKH governments have put in place strict measures to address the immediate impacts of the pandemic. Along with containment, we outline three broad responses led by the community and the government. These immediate responses are positive and can help build the institutional capacity to deal with climate challenges.

Local action and collaboration: Local action by communities, faith-based organizations, and local governments has helped raise awareness and track and manage the epidemic. For instance, collaboration between the administration and civil society in the Union Territory of Ladakh has helped develop a COVID-19 tracking app and repurposed the tourism sector to manufacture protective gear. Regional collaboration in the form of a SAARC strategy and an emergency COVID-19 fund has helped coordinate and strengthen response measures.

Learning and innovation: Digital services to track the spread and management of COVID-19, support learning and communication, and improve access to markets and financial services have allowed communities to learn fast and innovate effective responses to the pandemic. For instance, Bangladesh Bank has used mobile financial services to pay the salaries of workers impacted by the shutdown.

Fiscal and monetary responses: The eight HKH countries have allocated 0.1%–2.5% of GDP to help absorb the immediate social and economic impacts of the pandemic. These responses target vulnerable groups (sick, poor, disadvantaged, and wage labourers) and vulnerable sectors (health; agriculture; tourism; and micro, small, and medium enterprises [MSMEs]).

Fiscal measures focus on the provision of health care, social protection, and economic stability of priority sectors. For instance, Bhutan has announced a National Resilience Fund to mitigate COVID-19 linked job losses and salary cuts. The country will frontload investment in tourism, agriculture, and infrastructure under its 12th Five-Year Plan. All eight HKH countries have scaled-up the provision of social protection – cash and food transfers – to support the poor, disadvantaged, and daily wage workers.

Monetary measures in the eight countries aim to inject liquidity into the financial system and provide relief to affected households, corporates, and key sectors, including agriculture, tourism, finance, and MSMEs. Measures include reduction of interest rates, expansion of lending facilities, changes to loan repayment schedules; and purchase of bonds by the central banks.

Mountain communities rely on agriculture, tourism, and remittance
Mountain communities rely on agriculture, tourism, and remittance – sectors that are sensitive to market and climate shocks. The COVID-19 pandemic will have major impacts on social equity and food security in the HKH region. (Photo: Jitendra Bajracharya/ICIMOD)

 

From disruption to resilience in the HKH

The unprecedented disruption calls for a good look at the development narrative and the very cause of these disruptions – be it COVID-19 or climate change. Over reliance on GDP-led growth has seriously compromised environmental and social concerns and increased vulnerabilities in the HKH region.

Countries need to address the structural roots of this crisis as we move from immediate to short- and long-term responses. A business-as-usual recovery that supports fossil fuel-intensive, inequitable, and unsustainable growth is not an option. Because our immediate and short-term actions will set the trajectory for longer-term responses, we need actions that will both respond to the crisis and set us on a path towards inclusive and resilient development. Inclusive and resilient recovery will ensure more sustainable economic growth, generate better employment opportunities, and improve wellbeing.

We offer eight actions to include in economic recovery packages that can help communities rebound, strengthen collaboration, and spur investment in low-carbon and climate-resilient development to build a resilient and equitable society that can respond better to future shocks.

  1. Strengthen local action: The social capital of mountain communities is strong and supports collective action, disaster management, innovation, and entrepreneurship. Economic incentives should strengthen the capacity of decentralized institutions to plan and respond to shocks. Nepal’s Framework for Local Adaptation Planning supports local climate action. There are good examples of community action in shared risk environments, such as the community glacier watch system in Pakistan. Women-led farming collectives and reciprocal labour exchange traditions in the HKH can help revive local agriculture, provide new economic opportunities for women, strengthen the resilience of local supply chains, and improve local food security.
  2. Strengthen collaboration among different stakeholders at local, national, regional, and global scales to address interconnected shocks and to build resilient communities in the HKH. The Regional Flood Information System and Community Based Flood Early Warning System are examples of regional collaboration to address flood related disasters. The Hindu Kush Himalaya Assessment report and the HKH Call to Action support regional platforms like the Upper Indus Basin Network and the Renewable Energy and Energy Efficient Capability for the HKH to share data and coordinate policy and investment responses for resilient communities in the HKH.
  3. Scale up social protection systems to provide a safety net to the most vulnerable people and help them absorb the impact of disruptive shocks. Safety net programmes like India’s Mahatma Gandhi National Rural Employment Guarantee Act can improve the quality of ecosystem services and contribute to poverty reduction and climate resilience. Going forward, HKH countries should enhance the effectiveness of existing social protection programmes; integrate risk management into the provision of social protection; and converge and layer social protection instruments with other risk management instruments to scale up delivery during shocks (Global Commission on Adaptation).
  4. Strengthen entrepreneurial ecosystems to support small mountain enterprises to create goods and services that deliver resilient economic benefits alongside environmental and social benefits. Economic measures should support small mountain enterprises to innovate and deliver resilient businesses at scale; establish strategic partnerships across mountain value chains; and access financial and market services. Bhutan’s Start-Up Center for resilient enterprise development is an example. Selco Foundation’s network of small enterprises show how innovation and technology can help navigate disruptive shocks.
  5. Invest in nature-based solutions to protect and enhance ecosystem services that provide a lifeline to communities in the HKH and beyond. Global investment of USD 1.8 trillion in dryland agriculture, mangrove protection, water resources management, early warning systems, and resilient infrastructure can generate USD 7.1 trillion in total net benefits. Taking a holistic social-ecological systems approach at landscape and river basin levels can promote resilient ecosystems across the HKH. Investments in nature-based solutions can be scaled up through transboundary landscape programmes that strengthen conservation and management of mountain rangelands, organic agricultural systems, and high biodiversity areas. Similarly, strengthening capacity, learning, and use of innovative tools for forest conservation in the HKH can reduce emissions from deforestation and degradation.
  6. Invest in resilient infrastructure to encourage low carbon growth: Economic incentives should be announced to encourage investments in renewable energy, green transport systems, and sustainable construction as a priority. Every USD 1 invested in a renewable energy and energy efficient pathway will bring a return of USD 3–8. The transition will keep global warming below 2˚C, increase global GDP by 2.4%, and improve people’s wellbeing by 13.5% by 2050 as compared with the current energy scenario (IRENA).
  7. Transform labour markets to create sustainable employment opportunities: Resilient enterprises and investment in nature-based solutions and resilient infrastructure will create new and sustainable employment opportunities. For instance, 5.2% of the 42 million jobs in renewables will be in South Asia. The ILO estimates that 650 and 200 sustainable jobs will be created in India and China, respectively, for every USD 1 million invested in adaptation infrastructure in the construction sector. Economic measures should support workers in the informal economy to develop skills to access new employment opportunities. LabourNet, a social enterprise, shows how sustainable skill development in the informal sector can build resilience. Economic measures should also scale up employment guarantee and pension schemes to provide safe and secure jobs; and strengthen digital systems to support skill development, resource management and transfer of remittances.
  8. Strengthen the financial landscape to align financial services in the HKH with inclusive and resilient investment. Countries can ensure climate-related financial disclosure to make investments in the mountains more transparent and resilient. They can use fiscal frameworks like Bangladesh’s Climate Fiscal Framework to plan and allocate finance for inclusive and resilient development. Countries can establish national and regional risk finance facilities to scale-up financial support to mountain communities in times of disasters. The Emergency Assistance Facility introduced by the New Development Bank illustrates how international cooperation and timely intervention can support financial recovery. In addition, economic measures should promote investment in digital systems to deliver financial services that are responsive to the needs of mountain communities. China’s trial of a digital currency along with digital payment platforms will transform financial decision making and access in mountain regions. Finally, countries should design monetary measures to prioritize lending for resilient investments in the HKH. For instance, central banks could prioritize green and social impact bonds as part of their attempts to stimulate private sector investment in resilient growth.

 

(With review and inputs from David Molden, Eklabya Sharma, Golam Rasul, Nakul Chettri, Chanda Gurung Goodrich, Arun B Shrestha, Pradyumna JB Rana, Mewang Gyeltshen, Amina Maharjan, Nand Kishor Agrawal, Dhrupad Choudhury, Arabinda Mishra, and Laurie Vasily from ICIMOD; and Jaiveet Dhillon, Director and Cluster Head, Standard Chartered Bank, Mumbai.)

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