Countries like Bangladesh, Bhutan, India, Myanmar, Nepal, and Pakistan are highly exposed to climate impacts but least equipped financially to cope. Afghanistan, Nepal, and Pakistan, in particular, spend far more than global income-group averages on disaster response and adaptation.
The Hindu Kush Himalaya (HKH) region, often called the “Water Tower of Asia” and a critical lifeline for billions of people across eight countries, is staring at a colossal climate financing shortfall that could undermine its resilience against escalating environmental threats.
A groundbreaking new report by the International Centre for Integrated Mountain Development (ICIMOD) reveals that the region requires approximately USD 12.065 trillion from 2020 to 2050 to adequately fund climate adaptation and mitigation efforts. This translates to an staggering annual average of USD 768.68 billion.
Launched at the “Enhancing Climate Actions in the Hindu Kush Himalaya” conference in Paro, Bhutan, the report titled Climate Finance Synthesis Report: Needs, Flows and Gaps in the Hindu Kush Himalaya Countries paints a sobering picture of current funding inadequacies.
“Mobilising the ambitious target of USD 12 trillion is like climbing the Everest of funding,” said Ghulam Ali, ICIMOD’s Innovative Investment Specialist and the report’s lead author. “The strategy to mobilise these resources has to be creative, comprehensive, and collective to achieve such significant goals.”
The HKH stretches nearly 3,500 kilometers across Afghanistan, Bangladesh, Bhutan, China, India, Myanmar, Nepal, and Pakistan. It serves as a vital water source, feeding major rivers that sustain agriculture, hydropower, and livelihoods for over two billion people downstream.
Yet, the region is disproportionately vulnerable to climate change, experiencing faster warming than the global average, rapid glacial melt, biodiversity loss, and increasingly frequent extreme weather events like floods, droughts, and landslides.
Stark Disparity
The report highlights a stark disparity: China and India account for 92.41 per cent of the total projected needs, with China requiring about USD 8.464 trillion and India USD 2.686 trillion over the period. However, smaller, more vulnerable nations face financing burdens that are crippling relative to their economies.
For instance, annual per capita climate finance needs vary dramatically – from as low as USD 24 in Afghanistan to over USD 2,126 in Bhutan. In some cases, these needs represent up to 57 per cent of the GDP in Bhutan, forcing policymakers into impossible trade-offs between development priorities and survival measures for vulnerable populations.
Countries like Bangladesh, Bhutan, India, Myanmar, Nepal, and Pakistan are highly exposed to climate impacts but least equipped financially to cope. Afghanistan, Nepal, and Pakistan, in particular, spend far more than global income-group averages on disaster response and adaptation, trapping them in a cycle of perpetual repair with little left for proactive resilience-building.
“Evidence and analysis are an important part of advocating and influencing policy development for climate financing in the region,” noted Pema Gyamtsho, ICIMOD’s Director General. “The grounded data this report offers enhances understanding of the actions required to address the financial needs of our region to build economic resilience.”
Disproportionately Low Shares
The crisis extends beyond environmental concerns – it is fundamentally an issue of economic inequality and justice. While global climate finance flows reached USD 1.3 trillion annually in recent years, much of it has prioritized mitigation in wealthier or larger emerging economies.
The HKH, by contrast, receives disproportionately low shares, with critical sectors like agriculture, water management, and disaster risk reduction chronically underfunded.
Actual flows to the region between 2018 and 2021 tell a tale of gaps: India saw USD 80.6 billion in flows against massive needs, while smaller nations like Bhutan received limited disbursements despite high vulnerability.
To close this multi-trillion-dollar chasm, the report advocates a three-track approach:
- Improving access to existing multilateral funds, such as the Green Climate Fund and Adaptation Fund.
- Pioneering innovative financing mechanisms, including debt-for-climate swaps, green and blue bonds, and voluntary carbon markets tailored to mountain economies.
- Boosting domestic public spending targeted at mountains and environmentally sensitive areas, alongside enhanced private sector engagement through incentives and de-risking tools.
Broader recommendations include building institutional capacities, establishing an HKH Climate Finance Network for regional collaboration, improving data infrastructure for better risk assessments, and fostering policy coherence across borders.
The report’s release comes at a pivotal moment, following global climate negotiations and amid growing recognition of mountain-specific challenges. ICIMOD, an intergovernmental body serving the eight HKH nations, emphasizes the need for collective action to safeguard this irreplaceable ecosystem.
Without urgent, scaled-up financing, the consequences could be catastrophic: accelerated glacier loss threatening water security, intensified disasters displacing communities, and widened inequalities exacerbating poverty in one of the world’s most populous and vulnerable regions.
Image: ICIMOD

