The government has allocated Rs12.31 billion for the forestry, environment and climate change sector in the budget for fiscal year 2026-27.

Presenting the budget at the joint session of the Parliament on Friday, Finance Minister Swarnim Wagle said the government will issue green energy bonds and diaspora bonds while adopting a policy to maximise the use of available climate funds.

Around Rs1 billion has been allocated for water source conservation, pond construction, landslide control and embankment works to sustain the water cycle in the Chure and Tarai-Madhesh regions.

The government also plans to begin purchasing medicinal herbs and non-timber forest products by fixing a support price, while establishing a herbal processing centre in Karnali Province.

Wagle said a results-based REDD+ programme will be implemented to reduce carbon emissions, with priority given to local communities in sharing benefits from carbon finance.

The budget also proposes enabling private sector access to concessional capital from international climate funds, the finance minister said.

For disaster and environmental monitoring, the government will use drones and satellite systems to provide real-time information for forest fire control. A human-wildlife coexistence programme will also be implemented in high-risk areas.

The government further said air pollution monitoring centres in major cities will be strengthened, alongside upgrades to the central environmental laboratory to improve environmental data and regulation.