KATHMANDU, March 13: Nepal’s decision to take a Rs 7 billion loan from the World Bank to improve air quality has sparked debate, with critics raising several questions about the rationale, transparency and long-term implications of the move.
Concerns have been raised after it was revealed that part of the initiative aims to make around 400 industries smoke-free in order to reduce pollution. Critics argue that relying on public borrowing to address emissions from private industries could shift the burden of pollution control onto taxpayers.
They question whether it is appropriate for citizens to shoulder the cost through public debt when industries themselves are responsible for the pollution they produce. Some have described the approach as effectively “privatising profits while socialising losses,” warning that it undermines the widely accepted environmental principle that polluters should pay for the damage they cause.
Another concern relates to the pollution tax already being collected on petrol and diesel. The government has been levying this tax for years, but critics say the funds have not been transparently used for environmental protection, despite repeated court directives and public criticism.
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They have asked how the money collected so far has been spent to reduce pollution, and why the government is seeking new loans for air quality improvement without publicly disclosing the utilisation of existing pollution-related funds.
Questions have also been raised about the nature of international climate financing provided to countries like Nepal. Since Nepal contributes only a very small share of global carbon emissions, some argue that financial support for environmental protection should come primarily in the form of grants rather than loans.
Critics say it is unfair for vulnerable and low-emitting countries to take on additional external debt to tackle a climate crisis largely driven by industrialised nations.
Others have pointed to a broader public finance concern. They argue that loans are generally expected to be invested in projects that generate economic returns capable of repaying the debt. In this case, questions remain about how the government will generate direct revenue to repay foreign-currency loans taken for air quality improvement.
They warn that borrowing for projects without direct financial returns could increase the country’s long-term debt burden.
Some commentators have also questioned the government’s commitment to tackling air pollution. They argue that the state could begin with policy measures that do not require borrowing, such as committing that government vehicles purchased in the future will not run on petrol.
They have also called for stricter enforcement of existing air pollution control laws and regulations, noting that many environmental rules already in place are weakly implemented.
Adding to the debate, social media users have suggested broader policy measures to reduce pollution, including improving infrastructure for walking and cycling, imposing higher taxes on fossil-fuel-powered vehicles, and providing tax incentives for electric vehicles.
Others have expressed concern about Nepal’s growing dependence on loans from international financial institutions, arguing that structural reforms and reductions in government spending should be prioritised instead of taking on additional debt.
