Transiting to green growth: natural resources in Nepal

Project summary

In recent years, increasing global concerns for the well-being of the earth’s environmental resources and growing human population has led to the emergence of the concept of the green economy: how can human well-being and environmental resource management be simultaneously improved? The transition to green growth is relevant in many developing countries characterized by fast population growth, widespread poverty and inequality, and high rates of environmental degradation. However, transition is rendered difficult by lack of knowledge, e.g. how can green growth create more jobs for the poor while making sure that natural resources are not overexploited?

This research project investigates the potential for transition to green growth in the commercial medicinal and aromatic plant (MAP) sector in Nepal. The trade involves millions of people, from harvesters in remote villages to large regional wholesalers and consumers in China and India. Raw and processed MAPs constitute a largely informal export commodity of national economic importance to Nepal, and the potential for generating new benefits when transiting to green growth appears attractive, e.g. overharvesting of species is common and producers receive low prices as they remain uninformed of end user demands. The project will describe and quantify this south-south trade, including its governance and impact on the resource base. Outcomes will include specific measures to enhance resource use sustainability, augment pro-poor employment, increase business competitiveness, and improve institutional frameworks. The project will build human and social capacity at key Nepalese universities and is committed to the dissemination of results and participation in policy improvement processes throughout the project period.


Project completion report
The two-fold purpose of the project was to (i) investigate and analyse the global production network for medicinal plants harvested in and traded from Nepal, and (ii) build up the capacity to undertake such research in Nepal. This was achieved in collaboration between the University of Copenhagen, the Federation of Community Forestry Users Nepal, Tribhuvan University, and the Agriculture and Forestry University in Nepal.

The main body of data was generated through a string of structured interviews (540 harvesters, 393 traders, 73 central wholesalers, 78 regional wholesalers, and 79 processing industries) supplemented with purpose-target additional data generation, such as on consumers. We find that the export of unprocessed medicinal plants constitutes the most valuable (yet not recorded) export item from Nepal. The trade is huge, important to local household incomes, and with potential to shift to a bioeconomy. In general, products are primary processed (air-dried and packaged) and traded through well-established production networks of harvesters, traders, and wholesalers, primarily destined for secondary processing in India and China, though the domestic processing sector in Nepal has also expanded rapidly in the past two decades. An unspecified but substantial amount of the trade is undocumented and illegal. Trade is dynamic, with price fluctuations and changes in species composition, driven by domestic infrastructural developments, in particular road and telecommunication expansions, and increasing international demand reflecting rising incomes in China and India.

Demand is expected to further increase in response to continuously increasing incomes, new infrastructural developments including the Belt and Roads Initiative and the rise of e-commerce. The sustainability of the trade is unknown but our biophysical results provide findings that allow promotion of sustainable harvest for endangered species. Future research should focus on species-level demand drivers, findings ways to integrate and scale-up existing data to promote sustainable harvests and identify transition pathways to the bioeconomy.
In relation to capacity building, the project contributed to the next generation of renewable natural resource researchers in Nepal through its four PhD students. A number of master and bachelor students also did their thesis work in connection to the project. A continuous dialogue was undertaken with the medicinal plant sector in Nepal - from private enterprises to government agencies - through the annual meetings of the Advisory Board as well as a string of supplementary activities, including data sharing and publication of policy briefs. Together, these activities have created a solid foundation for identifying a theory of change for the medicinal plant sector in the country: explicitly formulating and agreeing on the pathways to ensure sustainable harvests and continued income streams.

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