Nepal’s digital economy is expanding at breakneck speed. According to the national telecom statistics, internet use is increasing by more than 25 percent each year, while millions of new smartphones are imported annually, driven by the rapid spread of mobile internet and digital payment platforms. Across the country, digitalization is reshaping how governments deliver services, how businesses operate and how citizens interact with the economy. QR payments have replaced cash at neighborhood shops, public services are increasingly accessed online, and app-based platforms now mediate food delivery, transport, and commerce in urban centers. There is little doubt that Nepal is making steady progress toward its digitalization goals. The country is becoming more connected, more cashless and more reliant on digital systems in everyday life. If these trends continue, digital infrastructure will soon form a core pillar of Nepal’s economic and social life.
What is less acknowledged, however, is that digitalization is not environmentally weightless and carries environmental costs of its own. Digital systems rest on physical foundations such as electricity-intensive networks, backup power systems, rapidly turning-over devices and expanding streams of electronic waste. These impacts often escape scrutiny precisely because they are not immediately visible, especially when digitalization is framed primarily as a tool for efficiency and development.
For now, these impacts remain largely absent from Nepal's environmental conversation. As Binod Deuba, cofounder of Harian Nepal, a youth-led climate justice movement shared, "Environmental discussions in Nepal still tend to focus on just what is immediately visible. The environmental footprint of digital infrastructure, its energy use, material demand and waste are not yet in public debate." Even among young people, he added, digital environmental impacts are rarely treated as a core concern, despite rapid adoption of digital lifestyles.
Deuba traces this gap largely to a lack of awareness. “Many people, especially young users, still believe digitalization is inherently green,” he said. “There is very limited awareness of the environmental costs of data use, energy-intensive infrastructure, and electronic waste.” That perception, he says, allows digital consumption to expand without serious reflection on its ecological footprint.
That gap extends beyond public awareness and into policymaking as well. According to Vishal Ghimire, spokesperson for the Ministry of Forests and Environment, the environmental side of digitalization is only starting to be discussed within government, and that it has not yet been an area where much attention or action has been possible.
“At present, there are no specific laws, rules, or regulations that directly address the environmental impacts of digital infrastructure or digital waste,” he said. “That should not be seen as a failure, but as a reflection of how new and rapidly evolving this issue is.”
Globally, the environmental footprint of digital infrastructure is becoming increasingly difficult to ignore. A widely cited peer-reviewed lifecycle assessment by Swedish researcher Jens Malmodin , published in 2018 , estimated that the global information and communications technology (ICT) sector accounted for roughly four percent of global electricity use and about 1.4 percent of greenhouse-gas emissions, a scale comparable to other energy-intensive sectors long recognized in climate debates. The aviation industry, responsible for an estimated two to three percent of global carbon dioxide emissions , has faced sustained scrutiny and public attention for decades. Yet digital systems, whose emissions are growing rapidly alongside rising data traffic and rapid device turnover, have largely avoided similar examination. Malmodin's research further showed that a substantial share of ICT's footprint comes not from data centers alone, but from end-user devices and their energy- and resource-intensive manufacturing.
Recent analysis by the United Nations Conference on Trade and Development (UNCTAD) suggests the scale may be even larger when digital systems are viewed in their entirety. According to UNCTAD’s Digital Economy Report 2024, the production and use of digital devices, data centers, and ICT networks together may account for between 6 and 12 percent of global electricity use, underscoring how central digital infrastructure has become to global energy demand.
Demand has continued to rise alongside internet and data use. World Bank data show that the share of Nepalis using the internet rose from near zero in 2000 to around 56 percent by 2023–24. At the same time, regional and global trends suggest that per-user data consumption has increased sharply, with smartphone users in many markets now consuming well over 10 gigabytes of mobile data per month. In Nepal, this broader trend is reflected in rapid growth in connectivity. According to DataReportal's Digital 2025: Nepal report, the country had 16.5 million internet users at the start of 2025, a figure that includes users accessing the internet via both mobile and fixed connections. At the same time, mobile connections exceeded the total population, with more than 80 percent operating on broadband (3G, 4G, or 5G) networks, indicating a shift toward faster, more data-intensive forms of digital use. UNCTAD notes that these patterns mirror global dynamics: annual smartphone shipments have more than doubled since 2010, reaching around 1.2 billion devices in 2023, while the number of connected Internet of Things (IoT) devices is projected to surge to 39 billion by 2029.
On paper, Nepal appears well positioned to support this expansion. More than 90 percent of domestic electricity generation comes from hydropower. However, operational data from the Nepal Electricity Authority (NEA) reveals a slightly complex reality. In its FY 2079/80 report , the NEA recorded more than 238,000 megawatt-hours of electricity interruptions over the year. During the dry season, electricity imports surged exceeding 318,000 megawatt-hours in the month of Falgun alone while more than 1.33 million megawatt-hours were exported during monsoon months. Much of the electricity imported during the dry season is generated in fossil fuel–based power plants in India, meaning that digital infrastructure operating continuously during these months relies on significantly higher-carbon electricity than Nepal's hydropower-heavy grid would suggest.
This shows that Hydropower that is often seen as “clean” source of energy has only been able to perform the best during certain months. But digital infrastructure requires year-round reliability. Telecom towers, banks, digital payment platforms, and data centers cannot afford interruptions. The gap is increasingly filled by diesel generators, particularly outside major urban centers.
The climate implications of this reliance are significant. Electricity consumed during Nepal's wet season may carry a carbon intensity as low as 0.05 kilograms of CO₂ per kilowatt-hour . During the dry season, electricity supplied through imports and diesel backup can exceed 0.4 to 0.7 kilograms per kilowatt-hour. Because digital systems operate continuously, they draw disproportionately on higher-emissions electricity, inflating their true environmental footprint.
This challenge becomes even more apparent when examining data centers. Globally, UNCTAD estimates that data centers consumed as much electricity as the whole of France, around 460 terawatt-hours, in the year 2022, with the International Energy Agency projecting consumption could approach 1,000 terawatt-hours by 2026. In some countries, data centers already account for a substantial share of national electricity demand. Beyond electricity, such facilities also require vast quantities of water for cooling, with studies showing that individual data centers can consume millions of liters of water per day which is a growing concern in water-stressed regions.
Nepal currently hosts only small- and medium-scale data centers, but demand is expected to rise rapidly as digital financial services, cloud storage, and e-governance platforms expand. Regional benchmarks suggest that even existing facilities already consume tens of gigawatt-hours of electricity annually once cooling systems and operational overhead are included. If larger facilities emerge without environmental planning, pressure on both energy and water systems could intensify significantly.
Bhushan Tuladhar, a veteran environmentalist, cautions that acknowledging these hidden costs does not mean dismissing digital progress altogether. Digitalization, he notes, has made daily life significantly easier for many Nepalis, particularly through e-governance services that allow people to access essential processes remotely. He believes that for now Nepal’s environmental exposure through digitalization remains relatively limited and less compared to other countries. “At this stage, the benefits still outweigh the environmental risks,” Tuladhar said. “But this balance will not hold automatically in the future.”
For Tuladhar, this early stage is precisely why the issue deserves attention now. “At the moment, Nepal does not have large data centers, so their environmental impacts may appear minimal or even negligible,” he said. “But that is exactly why we must prepare for the future. Once large-scale digital infrastructure is built without environmental safeguards, the impacts become locked in and very difficult to reverse.”
Nepal, indeed, is still early in its digital build-out phase before large-scale data centers, nationwide cloud systems, and long-term infrastructure investments lock in energy demand and waste streams for decades. But this timing should be used as a rare window of opportunity for us to align digital expansion with environmental planning while systems are still taking shape, rather than attempting costly corrections once digital infrastructure becomes deeply entrenched.
Beyond energy use, the most immediate environmental risk associated with Nepal's digital expansion lies in electronic waste and the devices that make digitalization possible. Nepal imports millions of smartphones each year, typically between four and six million units annually. Lifecycle assessments show that 70 to 80 percent of a smartphone's carbon footprint occurs during manufacturing, not during use, with each device carrying an estimated 50 to 90 kilograms of carbon dioxide equivalent before it ever reaches a consumer. UNCTAD highlights the material intensity behind this footprint: producing a two-kilogram computer can require as much as 800 kilograms of raw materials, while a single smartphone requires roughly 70 kilograms of materials over its lifecycle.
With smartphones typically replaced every two to three years, rising device turnover is accelerating both embedded carbon emissions and the volume of electronic waste entering Nepal's already strained waste-management system. For Nepal, this translates into thousands of tons of embedded carbon emissions annually from smartphone imports alone, emissions generated largely outside the country's borders, but whose downstream waste impacts Nepal must manage.
Those end-of-life impacts are already becoming visible. According to the Global E-waste Monitor , produced by the International Telecommunication Union and the UN Institute for Training and Research, electronic waste is the world's fastest-growing waste stream, reaching 62 million tons globally in 2022 and projected to rise to 82 million tons by 2030, expanding nearly three times faster than plastic waste.
Nepal is not separated from this trend. While the country does not yet have a formal system to measure e-waste generation on an annual basis, available evidence from academic studies, fragmented government inventories, and international estimates points to a rapidly escalating problem. The Global E-waste Monitor estimated that Nepal generated roughly 28,000 tons of electronic waste in 2019. More recent studies estimate per-capita e-waste generation at around 1.4 kilograms, implying a national total of approximately 41,500 to 42,000 tons by 2023–24. This is a rise of more than 50 percent in just five years, with volumes continuing to grow at an estimated 10 to 15 percent annually. This challenge is compounded by low recovery rates: UNCTAD estimates that less than one quarter of digital and electronic waste is formally collected and recycled worldwide, leaving the majority to be dumped, informally processed or exported without adequate safeguards.
At the same time, digital platforms are reshaping Nepal's cities in visible and resource-intensive ways. App-based food delivery, ride-hailing, and e-commerce services now generate tens of thousands of daily trips in the Kathmandu Valley alone, most still powered by petrol motorbikes. These services increase vehicle kilometers traveled, fuel consumption, congestion, and local air pollution, while packaging waste compounds the problem. Food deliveries and online orders layers produce of plastic, cardboard, and insulation that municipal waste systems already struggle to manage, embedding additional environmental costs into everyday digital convenience.
Tuladhar believes this lack of reliable measurement of e-waste in Nepal is itself a warning sign. “E-waste is not like plastic or organic waste,” he said. “It contains hazardous materials and requires specialized handling.” Without formal systems in place, he warned, Nepal risks allowing informal recycling and unsafe disposal practices to expand before the scale of the problem is fully recognized.
For his part, spokesperson Ghimire acknowledged these concerns and said the ministry views them positively. He noted that while the issue has not yet received sustained policy attention, it is gaining importance as Nepal's digital economy expands. "As digitalization accelerates, issues related to energy use, electronic waste, and environmental sustainability will increasingly become part of our priorities in the near future," Ghimire said.
UNCTAD further warns that developing countries disproportionately bear the environmental costs of digitalization while capturing fewer economic benefits. They export low-value raw materials, import expensive digital devices and are left to deal with growing piles of electronic waste, all placing them at the most environmentally damaging end of the global digital economy. This helps explain why countries like Nepal face rising ecological pressures, even as much of the profit and value generated by digitalization flows elsewhere.
In parallel, Nepal is grappling with more immediate environmental challenges, particularly those linked to climate change and natural disasters, which tend to dominate national agendas and donor priorities. Both Deuba and Tuladhar point to this as a deeper structural reason why the environmental impacts of digitalization remain marginal. As Tuladhar noted, donor funding often shapes which issues receive sustained attention and institutional support. “Most of donor priorities have been in climate change and natural disasters until now. Thus, Digital environmental impacts have been less visible in activism and not yet framed as immediate threats,” he said.
Responsibility, however, does not rest with policymakers alone. Young people who are among the most active users of digital platforms, also play a role in shaping the direction of digitalization through everyday choices. “Reflecting on how often devices are replaced, how much data is consumed, and how platforms are designed must become part of modern environmental activism,” Deuba said. Tuladhar echoed this concern, warning that “excessive gadget use already carries social consequences, particularly for children, and could translate into environmental harm if current patterns persist.”
As awareness of these issues grows, Ministry of Forests and Environment has signaled openness to deeper engagement. According to spokesperson Ghimire, the ministry “appreciates this topic being raised” and is open to suggestions. “We want to work in this area and make our approach stronger from an environmental perspective,” he said.
Digitalization will continue. As Nepal builds its digital future, the choices made now will shape whether “smart” development also becomes sustainable development. That begins with measuring what is currently invisible, aligning digital and environmental policy and recognizing digital infrastructure not as a weightless virtual space, but as part of Nepal's very real material and environmental economy. (This article was produced as part of the SAWTEE Media Fellowship.)
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