The United Nations Environmental Program (UNEP) has classified Nepal as the highest risk zone in Asia with respect to the ecological crisis. The root cause of all environmental problems is poverty compounded by an ever-growing population. The direct impact of the country's socio-economic realities on the natural and cultural diversity is magnified by widespread illiteracy, inaccessibility to social services and managerial and financial deficiencies and constraints.
The country is predominantly agricultural. Roughly half of the nation's population lives in climatically hostile and rugged mountain terrain. Over 90% of Nepal's over 20 million people are subsistence farmers. This population growing at an alarming rate of 2.08% per annum has serious repercussions on the nation's economy and ecology. About 40% of farmers live below the poverty line. They depend on marginal lands for agriculture and fast depleting forests for fuel, fodder and timber.

"The green forest is the wealth of Nepal" used to be a popular saying prior to the 1960s. But with the increasing population, which has more than doubled in the last 30 years, and consequent exploitation of the forest resources for their livelihood and existence, the forest started disappearing at an alarming rate.
Commercial logging, shifting cultivation; uncontrolled grazing and encroachment of forested lands, has further aggravated the situation. Consequently, annually over 50,000 ha of forestland are lost. All this has resulted in increased soil erosion, sedimentation, floods and landslides. It is estimated that annually 240 million tones of topsoil are washed down from the hills of Nepal to the Bay of Bengal. Similarly, the lack of ecological consideration in development activities and the uncontrolled influx of visitors in ecologically fragile regions have further intensified environmental degradation.