The Hindu Kush Himalaya (HKH) region, a critical water source for billions, is facing a massive climate financing gap, requiring an estimated USD 12 trillion between 2020 and 2050. A recent regional analysis highlights that current funding commitments are falling drastically short of what is needed to address the escalating climate crisis in the region.
The report, conducted by the International Centre for Integrated Mountain Development (ICIMOD), points out the immense pressure on vulnerable nations as they attempt to balance development priorities with the urgent need for climate resilience. The annual climate finance requirement for the eight HKH countries is approximately USD 768.68 billion. While India and China account for more than 92% of this total, the report emphasizes that smaller and poorer mountain countries face the greatest strain relative to the size of their economies.
Bhutan, for example, will require an estimated USD 20.49 billion in climate finance between 2020 and 2050 to cope with escalating climate risks. However, climate finance flows between 2018 and 2021 amounted to only USD 724 million, with a mere USD 38.9 million disbursed during that period. This leaves a significant gap, with the country's annual per capita climate finance requirement estimated at USD 2,126.5 – equivalent to 57% of its per capita gross domestic product.
The HKH region is particularly vulnerable to climate change impacts, including biodiversity loss, habitat degradation, rising temperatures, and disruptions to hydropower generation due to changing water availability. Adaptation needs overwhelmingly dominate the long-term financial requirements. For Bhutan, adaptation finance alone is estimated at USD 14 billion between 2021 and 2050, accounting for nearly 94% of total climate finance needs.
Ghulam Ali, the lead author of the ICIMOD report, likened mobilizing the required USD 12 trillion to "climbing the Everest of funding". He stressed the need for a creative, comprehensive, and collective strategy to bridge this financial gap. The report proposes a three-track approach to address the financial disparity, which includes improving access to existing multilateral funds, innovating mechanisms such as debt-for-climate swaps, and increasing public spending for environmentally sensitive areas.
The report underscores the urgent need for targeted interventions to enhance resilience in the most vulnerable countries. It serves as a crucial reminder of the significant financial challenges faced by the Hindu Kush Himalaya region and the importance of collective action and increased investment to secure a sustainable future for the region and the billions who depend on it.
