Table 12.5: Percentage Share of Major Commodities in Nepal'sOverseas Exports in FY2004 (2060/61) (NRs ‘ 000)Commodity Unit Quantity Value Share in %Readymade garments pcs. 38,994,326 9,552,544 45.6Woolen carpet s sq.m 1,648,9<strong>18</strong> 5,461,301 26.1Woolen and pashminagoods1,473,675 7.0Handicrafts 427,<strong>18</strong>9 2.1Sugar t 9,250 404,165 1.9Nepali paper & products 348,482 1.7Silverware and jewelry 321,569 1.5Pulses (lentils) t 7,590 294,554 1.4Hides and goatskin sq.ft. 6,627,864 286,117 1.4Towels 249,393 1.2Cardamom (large) t 1,111 228,963 1.1Tea t 1,002.2 106,897 0.5Wooden goods 46,810 0.2Other 1,740,002 8.3Total 20,941,661 100.0pcs = pieces, sq.ft. = square foot, sq.m = square meter, t = metric to nSource: Trade Promoti on <strong>Centre</strong> (2004)Table 12.6: Major Trading Partners of Nepal : Exports (NRs ’000)Country FY2002 FY2003 FY2004India 27,956,200 26,430,000 31,244,300United States 9,377,832 12,686,537 9,695,977Germany 4,043,2<strong>18</strong> 3,555,327 3,567,036United Kingdom 808,751 1,070,737 1,677,085Italy 566,557 530,869 589,370France 473,472 453,961 581,762Canada 305,978 383,651 546,403Japan 492,833 474,247 525,601Bangladesh NR 411,335 421,308Switzerland 382,823 NR 306,255Portugal NR 414,680 NRBelgium 295,140 NR NRSubtotal 44,702,804 46,411,344 49,155,097Other countries 2,683,984 3,599,778 5,261,517Grand total 47,386,788 50,011,122 54,416,614NR = not ranked in that year , only top ten countries are listed.Source: Trade Promotion C entre (2004)Table 12.7: Major Trading Partners of Nepal: Imports (NRs ’000)Country FY2002 FY2003 FY2004India 56,622,100 70,924,200 81,651,900Singapore 7,346,919 9,039,197 8,698,647China, People’s Rep. of 4,315,803 4,760,342 5,433,815Thailand 3,278,165 2,988,929 4,320,169Malaysia 4,8<strong>18</strong>,356 4,009,640 3,676,428Indonesia 2,877,654 3,976,734 3,253,785Korea, Republic of 2,500,974 3,380,348 3,080,644Saudi Arabia 3,654,905 2,363,956 2,547,901Germany NR 2,278,356 1,977,896Japan NR NR 1,690,396Hong Kong 2,461,194 2,276,995 NRUnited States 2,525,603 NR NRSub total 90,401,673 105,998,697 116,331,581Other countries <strong>18</strong>,233,128 22,229,437 22,421,154Grand Total 108,634,801 128,228,134 138,752,735NR = not rank ed in that year, only top ten countries are listed.Note: Trade with India for FY2002 and 2003 are revised, and is provisional for FY2004.Source: Trade Promotion <strong>Centre</strong> (2004)Valley and its satellite towns. This largedemand and the consequent trade haveresulted in extensive deforestation of Teraiforests, some in very critical ecosystemssuch as the Churia and the wetlands. Alongwith deforestation, the rich biodiversity ofthe Terai’s subtropical forests has alsodiminished significantly. Roughly 4–5% ofNepal’s exports to India consist of nontimberforest products and herbs, andthere is concern about unsustainableharvesting of these products (Dhakal 2004,Tiwari et al. 2004). Another major impact ofthis deforestation has been the widespreadflooding of the Terai plains causingextensive damage to crops and agriculturalland, frequent changes in river courses,bank erosion, and debris deposits. Some ofthis occurs naturally, but the impact ofanthropogenic factors has increasedconsiderably (Banskota 2005) as a result ofthe rapid increases in population,deforestation, and expansion inagricultural land. The argument here is notto suggest that trade is bad. However, itdoes have environmental effects thatshould be carefully studied.Trade involves transport, and intoday’s world motorized transport is usingfossil fuel that adds to the carbon dioxidein the atmosphere and releases harmfulgases. A recent study has highlighted someof the health effects in Kathmandu (CENand ENPHO 2003). The time has come tobetter understand the environmentaleffects of increasing domestic trade andidentify possible corrective measures.International TradeInternational trade has grown rapidly overthe years with the trade/GDP ratio almostdoubling in two decades. Today it stands at40%. However, other smaller nations thatdepend on trade have ratios as high as 80%(NTCS 2003), suggesting that there arefurther potentials for expanding trade.Nepal imports many environmentallysensitive products such as petroleumproducts, insecticides, and chemicalswhich are critical inputs into variousproduction processes. These need to becarefully handled. Increasing use of fossilfuel is now seen as the main factor behindthe deterioration of air quality inKathmandu Valley (CEN 2003); this isalready beginning to have many health<strong>18</strong>6 Environment Assessment of Nepal : Emerging Issues and Challenges
effects. Kathmandu Valley has a specialenvironmental problem of temperature inversion,due to which air pollutants do not disperse veryeasily (Tuladhar 2003). Unleaded petrol wasintroduced in the country only recently, and there isconcern about adulteration in the fuels available. Ifimproving the quality of fossil fuel to minimize thepresence of harmful substances is one aspect, thereis also a need for the carriers to be environmentallyfriendly. Many of the vehicles are in a very poor state,and these are responsible for a lot of the pollution.Another major problem is related to imports ofpesticides and toxic and harmful substances. Theirproper handling, use, storage, and transport arerelatively unknown at present. Some studies on theuse of pesticides have shown that few precautionshave been taken, and that pesticides could becomea public health hazard at any time (Pokharel 2003).While developed countries are introducing stringentregulations on many harmful and toxic chemicals,there is little monitoring of what is happening inNepal. Nepal’s weak monitoring and policingcapacity could make it an attractive candidate fordumping harmful and chemical substances, whosetoxicity may only become known after they are in thecountry. This is an important area and needs to begiven serious attention in light of the long and highlyporous open border with India.What about environmentally sensitive exports?So far Nepal has been fortunate because no majorexport consignment has been rejected onenvironmental grounds. Environmental standards inthe European Union (EU) and the US have becomehighly stringent and some aspects of this arediscussed in the next section. Discussions withdifferent experts 1 , have identified several current andlikely problems regarding exports to the EU:(i) Exports of woolen carpets to Germany wererequired (voluntarily) to have ecolabels.(ii) India imposed quarantine restrictions onginger exports from Nepal, and exports werefrequently stranded at the border because ofthe delay by India on pest risk analysis. Nepalcould not provide the necessary data to Indiain time for the analysis. Now the quarantineproblem on ginger has been solved.(iii) Italy recently returned a shipment ofChywanprash because of the presence oftoxic substances.(iv) Some concerns have been expressed aboutpesticides and other prohibited residues intea samples from Nepal.(v) Nepal honey is not in the open list of the EUbecause of an insufficient residuemonitoring plan and lack of legislation inNepal to control the quality of honey. Further,the considerable production by indigenoushoneybees is not recognized as “honey”under EU directives.There may be other cases, but very little of thisknowledge is in the public domain. Although the listis small so far, the lists of prohibited items in the USand the EU are very large, and care must be taken toensure that farmers and producers from Nepal arewell aware of these requirements. So far Nepal’sexports have been limited and therefore theproblems are also small. Some positivedevelopments in this respect have been the award ofOeko-Tex 100 ecolabel certificates to five Nepaliexporters to EU countries. There have also beenefforts to promote cleaner production measures inindustrial units, some of which are exporters(Adhikari 2004). Similarly the practice of organicfarming and integrated pest management is alsobeing encouraged. While these are positive signs,boosting Nepal’s future exports will require majorefforts to ensure that these are safe for theenvironment and humans, and meet the emergingstandards in different parts of the world.Trade and Environment-relatedExperience of Other CountriesKirchbach (ITN 2001) highlights a number ofinteresting points regarding trade-relatedenvironmental barriers. He points out that of 4,917products examined in world trade, only 24% did notface some kind of environment-related trade barrierin 2001. While the number of products is large, theirvalue as a percentage of total trade is only 13%. Eitherexporters are focusing their attention on restriction offree markets or these are mostly low-value productsof agricultural, forest, or mineral origin. About 90% ofthe barriers are concentrated in 44 products. Themost common ones are food items, plants, bulbs andcut flowers, boneless bovine cuts, large automobiles,trucks, smaller automobiles, motor vehicle parts,coniferous timber, natural gas, footwear, medicine,telephones, and wildlife products. Apart from straightbans on imports, these barriers can take manyforms—surcharges, internal taxes, advance paymentrequirements, transfer delays, quality control, priorauthorization, quotas, obligations to return usedproducts, and so on. Exports from less developedcountries have been subjected most frequently toenvironment-related trade barriers.What are the reasons for these barriers? Basedon a review of the provisions in the WTO rules, as1Dr. Krishna P. Pant, Senior Economist, Ministry of Agriculture and Cooperatives; Dr. Deb B. Shakya, Agro Enterprise Center, Federation of Nepalese Chambers ofCommerce and Industry (FNCCI); Mr. Ratnakar Adhikari, Executive Director, South Asia Watch on Trade, Economics and Environment (SAWTEE)Chapter 12: Environment and Trade<strong>18</strong>7
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About the OrganisationsAsian Develo
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© 2006 International Centre for In
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AcknowledgementsWe would like to ex
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PM2.5PAHRSSAARCSACEPSEASO 2TSPUKUND
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Chapter 6: Energy Resources 65Intro
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List of FiguresFigure 2.1: People a
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Table 6.1: Energy Consumption and P
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forests are also used for infrastru
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as data gathered by different agenc
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Table 2.1: Population Growth Rates
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mortality rates for rural and urban
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Agglomeration village in the centra
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soil erosion, and depletion of wate
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provision remains inadequate becaus
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Malnutrition remains a serious obst
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Table 2.24: Existing and Projected
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Table 2.28: Income Poverty Indicato
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Table 2.31: Change in Employment St
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In 2004, the average annual househo
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Mountain areas have the most food i
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Schaffner, U. 1987. “Road Constru
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B. PradhanImpacts of land degradati
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Carson, B. 1985. “Erosion and Sed
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The trend of forest coverage in the
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BiodiversityState of BiodiversityNe
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The Government has given legal prot
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Different ways of maintaining biodi
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Appendix 4.2: Protected Plant and W
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Table A4.2.3: Nepal's Share in Plan
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to intense weathering, and percolat
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Table 5.5: Water Supply and Water T
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Table 5.9: Water Quality of Shallow
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species are reported to be endanger
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Ministry of Water Resources (MOWR).
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Definition, Forms, and UnitsEnergy
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Table 6.5: Hydropower PotentialRive
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Chilime Hydroelectric Project: An E
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load occurs from 6 pm to 9 pm with
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assessment of wind energy and lack
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Review of Dams and Development by t
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IUCNElizabeth Khaka, UNEP-NairobiRu
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therefore reflect the three guiding
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is a seasonal dust storm. Anthropog
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Figure 7.3: Average Air Quality, Ja
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matter, hydrocarbons, and NO x (Nae
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Figure: 7.9: Vehicle Registered in
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Brick Kilnchlorofluorocarbons (HCFC
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Climate ChangeA region’s climate
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India. Available: http://www.cleana
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Appendix 7.1: World Health Organiza
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Table 8.1: Criteria for Urban Statu
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accommodate the rapidly increasing
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managing solid waste. They are part
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In most municipalities, hazardous w
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Min BajracharyaB. PradhanVehicles a
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earthquakes; and awareness raising
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Sub-regional LinkagesOther developi
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Figure 9.1: The Key Environmental I
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environmental governance can be bet
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can vary considerably. Both sides h
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