Citation: Havukainen, M.; Mikkilä, M.; Kahiluoto, H. Climate Policy Reform in Nepal through the Lenses of the Institutional Analysis and Development Framework. Sustainability 2022, 14, 7391. https:// doi.org/10.3390/su14127391 Academic Editor: Samuel Asumadu-Sarkodie Received: 19 April 2022 Accepted: 10 June 2022 Published: 16 June 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). sustainability Article Climate Policy Reform in Nepal through the Lenses of the Institutional Analysis and Development Framework Minna Havukainen, Mirja Mikkilä * and Helena Kahiluoto Department of Sustainability Science, School of Energy Systems, Lappeenranta-Lahti University of Technology, P.O. Box 20, 53851 Lappeenranta, Finland; minna.havukainen@lut.fi (M.H.); helena.kahiluoto@lut.fi (H.K.) * Correspondence: mirja.mikkila@lut.fi Abstract: Successful climate change mitigation requires the commitment of rapidly developing low-income countries. Although most of them have strategies to tackle a fair share of the burden, implementation is low despite large amounts of international aid. We aimed to identify the dynamics underpinning their low implementation, using Nepal as a case study. Aid-dependent Nepal is vulner- able to climate change and committed to its mitigation while pursuing democracy and development. We applied an institutional analysis and development framework as well as an institutional grammar tool to analyze national climate policy. We found that the current national institutions did not enable effective climate change mitigation. Despite relevant political decisions being made, the arrangements were enacted slowly. Contrary to development issues, climate issues were not tackled across all of the relevant sectors, such as waste management, traffic, and agriculture, nor across governance levels, while there was little coherence between development and climate policies. Instead, community forestry was set in the main charge of climate actions, as explained by the history of development collaboration. Additionally, climate education was mainly addressed to local communities rather than to decision-makers. We conclude that building local institutions and funding addressed effectively, even to local actors, are key options to improve the implementation of the national climate strategies of Nepal and low-income countries. Keywords: climate change mitigation; climate policy; institutional analysis and development framework; institutional grammar tool; Nepal 1. Introduction The climate crisis, as a major collective action problem, reveals the conflicting interests between parties [1] To extend and manage the global commons, such as the climate, understanding the barriers and enablers of national climate actions through the perspective of less-powerful nations and people is needed [2]. Low-income countries are committed to carrying a fair share of the mitigation burdens if they have access to sufficient resources, as stated in the nationally determined contributions (NDCs) [3]. While the NDCs framework of the Paris Agreement explicitly allows countries to simultaneously consider national policies and global climate objectives [4], often the at- tributes of communities where climate actions take place and the interactions between states are neglected, leading to an unclear picture of the decision-making process in climate change [5]. Furthermore, the success of international agreements has been evaluated on the basis of measurable environmental impacts [6], human health [7], technology transfers [8], and people’s experiences [9]. However, the dynamics and causes underlying the successes or failures remain unknown. To address this gap, qualitative case study methods allow investigations into how institutional arrangements shape policy outcomes, and institutional analyses offer a sys- tematic basis for characterizing key institutional features. The IAD framework enlightens the institutional, technical, and participatory aspects of collective action problems and their Sustainability 2022, 14, 7391. https://doi.org/10.3390/su14127391 https://www.mdpi.com/journal/sustainability