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Emergy accounting is an environmental assessment tool that accounts for all the energy pathways in production systems. In this regard, the System Thinking Experimental Learning Laboratory Animation (STELLA) with emergy model are used for a retrospective and prospective assessments. Nepal, a country having a relatively small economy but with faster recent growth as well as its geographical position and potentially high vulnerability to climate change was analyzed as a case study using data for 1998–2015 (retrospective) and 2015–2040 (prospective). As per our results, the rising use of non-renewable resources and decreasing use of locally extracted materials caused higher environmental load and reduced emergy sustainability scores. In addition, the effect of natural disasters, such as the Gorkha earthquake, on environmental performance of Nepal was analyzed by emergy accounting. Futuristic emergy analysis for 2015–2040 showed that total and non-renewable emergy would rise considerably, and the emergy sustainability index could further decrease by 33%. Based on these findings, small yet rapidly growing economies, such as Nepal, could improve their environmental management by reducing the material trade deficit (i.e., by increasing domestic material extraction and reducing imports of non-renewable resources), minimizing the use of non-renewables, improving soil fertility, and promoting renewable resource consumption.

Regional sustainability assessment using emergy accounting approach: The case of Nepal in South Asia