20th AIM International Workshop
National Institute for Environmental Studies
Tsukuba, Japan
23-24 January 2015

Analyses of Some Low Carbon Scenarios:
Case of Nepal
Ram M. Shrestha

Asian Institute of Technology and Management
Lalitpur, Nepal

1

Presentation Outline• Background• Objective• Scenario Description• Effects of Carbon Tax• Conclusion

2

Background

Objectives

Scenarios

AnalysisConclusion

Population Growth
Population (millions)
45
40
35
30
2520
2010

2015

2020

Low growth

2025

2030

2035

Medium growth

2040

2045

2050

High growth• Three growth scenario projected by UN Population Division (UNPD)• Population will increase by 0.15, 0.36 and 0.58 times during 2010-2050
in low, medium and high variant growth rate.

3Background

Objectives

Scenarios

AnalysisConclusion

National Economic and Demographic Trend
Demographic Projection

GDP (billion 2010 USD)

35
30
25
20
15
105
2010

2020

2030

Population (millions)

2040

2050

Urban share (%)• Share of urban population will increase
from 17% in 2010 to 36% in 2050.

120

3,000

100

2,500

80

2,000

60

1,500

40

1,000

20500

0

2010 2020 2030 2040 2050
GDP (billion USD)

GDP/capita (USD/capita)• GDP growth: 4% p.a. (2010-2015)
5.56% p.a. (2015-2050)• GDP/capita to increase by 5 folds
4GDP per capita (2010 USD)

Economic Projection

40

Background

Objectives

Scenarios

AnalysisConclusion

Objectives• To analyze the effects of carbon tax on energy
mix and GHG emission reduction• To identify cost effective low carbon options indifferent carbon tax scenarios

5Background

Objectives

Scenarios

AnalysisConclusion

Scenario Description• One business as usual scenario (base case)and three carbon tax scenarios• Carbon tax scenarios include– 3 AME carbon tax paths (starting from 2017)• 10 USD/tCO2e @ 2020 (CT10) increasing at 5% p.a.
• 30 USD/tCO2e @ 2020 (CT30) increasing at 5% p.a.
• 50 USD/tCO2e @ 2020 (CT50) increasing at 5% p.a.

6

Background

Objectives

Scenarios

AnalysisConclusion

Primary Energy Supply
Base case (Mtoe)

CT10 case (Mtoe)

2525

Cumulative TPES increased by 1.23 times

20

20

15

15

10

10

5502010

2015

2020

Traditional Biomass

2025
Coal

2030
Petroleum

2035
LPG

2040
Hydro

2045

25

15
105002010

Other Renewables

CT30 case (Mtoe)

202050

Cumulative TPES increased by 1.31 times

Cumulative TPES increased by 1.28 times

2015

2020

Traditional Biomass

2025
Coal

2030

Petroleum

2035
LPG

2040
Hydro

2045

2050

Other Renewables

CT50 case (Mtoe)
25
20

Cumulative TPES increased by 1.29 times

15
10
50
2010

7
2015

2020

2025

2030

2035

2040

2045

2050

Background

Objectives

Scenarios

AnalysisConclusion

Primary Energy Supply• In the base case,• TPES increases by 1.23 times in 2050
• Traditional biomass decreases in 2050 by 30% compared to2010.
• Coal, petroleum, LPG, hydro and other renewables increases by3, 8.7,8.1,15.9 and 7.4 times in 2050 compared to 2010.
• In CT10,• TPES increases by 1.28 times in 2050
• Biomass and hydropower use in 2050 increases by 12% and 1%
compared to the base case• No significant change in other renewables, coal and petroleum• LPG use decreases by 11%8

Background

Objectives

Scenarios

AnalysisConclusion

Primary Energy Supply
•
•
•
•
•
•
•
•
•
•
•
•

In CT30,
TPES increases by 1.31 times in 2050
In 2050, Biomass use increases by 18% compared to the base case
Similarly, hydro and other renewables use increases by 6% and 3%
respectively compared to the base case
There is not significant change in coal and petroleum. LPG use decreases by29%
Biofuel has a share of less than 1% in Primary Energy in 2050
In CT50
TPES increases by 1.29 times in 2050
In 2050, biomass use increases by 18% compared to the base case
Similarly, hydropower and other renewables use increases by 24% and 3%
respectively
Coal and petroleum decreases by 46% and 2% respectively. LPG use
decreases by 71%
Biofuel has a share of 2.1% in Primary Energy in 2050
9Background

Objectives

Scenarios

AnalysisConclusion

GHG Emission in Different Scenarios
GHG emissions

Emissions (MtCO2e)40

CT3035CT5020.5% reductionin CT50 in 2050

CT1030Base case2520
1510502010

2015

2020

Base case2025
CT102030

2035
CT302040

2045

2050

CT50

• Cumulative GHG reduction in CT10, CT30 and CT50 are 1%, 4% and 9.5% respectively• In 2030, GHG reduction in CT30 and CT50 are 2% and 2.3% respectively.
• In 2050, GHG reduction in CT10, CT30 and CT50 are 1%, 6% and 20.5% respectively 10

Background

Objectives

ScenariosAnalysis

Conclusion

Sectoral Shares in Fossil Fuel Consumption
in Base case2010

Industrial
13.9%

Power0.2%

2050

Agriculture
6.8%

Industrial
34.6%

Transport
43.3% Commercial
5.1%

Residential
8.9%

Transport
65.4%

Agriculture
6.7% Commercial
6.1%

Residential
9.0%
1.4 Mtoe

11.5 Mtoe• Fossil fuel consumption increases by 7.2 times in 2050.
• Transport sector has the largest share in total fossil fuel consumption

11

Background

Objectives

Scenarios

AnalysisConclusion

Sectoral GHG Emissions in Base Case
2010

2050
Industrial
17.3%

Industrial
35.9%

Transport
36.4%

Agriculture
6.7%
Commercial
4.4%

Agriculture
5.8%
Commercial
Residential
5.2%
16.7%
5.2 MtCO2e

Transport
63.3%

Residential
8.3%

36.5 MtCO2e• GHG emissions will increase by 6 fold.
• Transport Sector would be the largest emitter followed by industrial, residential,agriculture and commercial and sectors during 2010-2050.
• Share of the transport in GHG emission increases from 36.4% in 2010 to 63.3% in 122050.

Background

Objectives

Scenarios

AnalysisConclusion

Sectoral GHG Emissions in Base Case and CT Cases
40-1%

Emissions (MtCO2e)35-6%-20.5%30252015105020102030
BAUTransport

2030
CT10Residential2030
CT302030
CT50

Commercial2050
BAU2050CT10Agriculture

2050
CT302050
CT50Industry• GHG emissions in 2050 would increase by 6.1, 6.0, 5.6 and 4.6 times in basecase, CT10, CT30 and CT50 from the level of 2010.
• In 2050, GHG emissions decrease by 1%, 6% and 20.5% in CT10, CT30 and CT50. 13

Background

Objectives

Scenarios

AnalysisConclusion

Cumulative GHG Emission in CT cases andSectoral Shares in GHG Reduction
Cumulative GHG emissions (MtCO2e)

Cumulative GHG reduction (MtCO2e)

60620
600580602

597

50-4%

578560540-9.4%545520500

CT10CT30CT5032%

4030
1023%

2411%
26%

200

Base case

57.1

5.8

58%

CT10

CT30Transport

Residential

Commercial• Cumulative emission decreases by 1%, 4% and 9.4% in CT10, CT30 and CT50cases.
• The share of transport, residential, commercial and industrial sector in
cumulative reduction in CT30 is 5%, 58%, 26% and 11%.
• The share of transport, residential, commercial and industrial sector in
cumulative reduction in CT50 is 18%, 27%, 23% and 32%.

27%
18%
CT50
Industry

14Background

Objectives

Scenarios

AnalysisConclusion

GHG Emission Reduction by Sector in CT cases in 2050
Sectoral GHG emission Reduction
in 2050 (MtCO2e)

GHG Reduction (MtCO2e)

During 2010-2050 in CT50 (MtCO2e)
88

7.5

6637%

4415%

220

2.2
36%

0.4

50%

21%

CT30

CT5002010

2020

Transport

Residential

2030

2040

Commercial

2050
Industry

CT10Transport

27%

Residential

Commercial

Industry• GHG Emission reduction in 2050 is achieved mainly from residential sector inCT10 and CT30.
• In CT50, GHG emission reduction in 2050 from industrial, residential, transportand commercial are 37%, 27%, 21% and 15% respectively.

15Background

Objectives

Scenarios

AnalysisConclusion

Effect of Carbon Tax on Cumulative GHG Emission
during 2010-2050 in Different Sector
Cumulative GHG emission in residential
sector (MtCO2e)
60
50

54.5

-6.6%

50.9

40-25.6%

40.6

38.8

CT30

CT5030Base caseCT10-28.8%

Cumulative GHG emissions in industry(MtCO2e)
160
150

153.9

153.7-11.9%

140
135.5

130
Base case

CT10CT30

2520151050

CT50

21.2-9.5%

19.1-30%-61%

14.88.3
Base case

CT10CT30

CT50

Cumulative GHG emission in transport
sector (MtCO2e)336
332-2.3%

150.4

Cumulative GHG emissions in commercial
sector (MtCO2e)

335.2

335.2

334.9
-3%

328
324

325.0

320
Base case

CT10CT30

16CT50Background

Objectives

Scenarios

AnalysisConclusion

Effect of Carbon Tax on Fuel Mix in Residential Sector
Cumulative LPG consumption during 2010-2050(Mtoe)
1412
10

Cumulative electricity consumption during 20102050 (Mtoe)
34-11%

13-46%

1234-51%

33833674031CT30CT50

Cumulative biomass consumption during 20102050 (Mtoe)

300

270260269272

Base case

CT10•9%•295295•

CT30CT50

343332

Base case

9%25031302902802%3231

CT107%

3262
Base case

6%CT10CT30CT50

Cumulative LPG use decreases by 11%,46% and 51% in CT10, CT30 and CT50
Cumulative electricity use increases by2%, 6% and 7% in CT10, CT30 and CT50
Cumulative biomass use increases by1%, 9% and 9% in CT10, CT30 and CT50
17Background

Objectives

Scenarios

AnalysisConclusion

Effect of Carbon Tax on Fuel mix and Energy Efficiency inCommercial Sector
Cumulative LPG consumption during 2010-2050(Mtoe)

Cumulative electricity consumption during 20102050 (Mtoe)

7126-11%510-30%22%

84-66%

3261645450%

211987200Base case

10CT10CT30

CT50

Base case

Cumulative biomass consumption during 20102050 (Mtoe)••

98814%

15%

18%

9910•
••

7
Base case

CT10CT30

CT50

CT10CT30

CT50

Cumulative LPG use decreases by 11%, 30%
and 66% in corresponding scenarios.
Cumulative electricity use increases by 7%,
22% and 50% in CT10, CT30 and CT50.
Cumulative biomass use increases by 14%, 15%
and 18% in CT10, CT30 and CT50
Share of LPG in cooking and water heating
decreases in CT cases.
Efficient space cooling devices (efficient fan)cost effective after 2040 in all carbon tax
18scenarios.

Background

Objectives

Scenarios

AnalysisConclusion

Deployment of Low Carbon Transport Options
Scenario

2030

2035

2040

Base case

Fossil Fuel Vehicles

CT10

Fossil Fuel Vehicles

CT302045

Fossil Fuel Vehicles
Biofuel Vehicles
Fossil Fuel Vehicles

CT50Biofuel Vehicles
Electric Vehicles

2050

Background

Objectives

Scenarios

AnalysisConclusion

Effect of Carbon Tax on GHG Emission in Transport Sector
GHG emissions in 2050 (MtCO2e)
242323232323-7%

2222222121••

Base case

CT10CT30CT50In CT50, GHG emission reduction compared to base case in transport
sector is 0.03%, 0.2% and 7% in CT10, CT30 and CT50 cases.
CT10 and CT30 are not effective to promote electric vehicles intransport sector
20

Background

Objectives

Scenarios

AnalysisConclusion

Effect of Carbon Tax on Fuel Use in the Industry Sector
Coal consumption (Mtoe)
35343332
3130
292827

Oil consumption (Mtoe)
834.2

34.2

34.0

12.7%
reduction
29.9

48%
increment

64

5.1

5.1

5.1

Base case

CT10CT30

7.6

20

Base case

CT10

CT30

CT50

CT50

• Cumulative coal consumption decreases by 0.6% andpetroleum consumption increases by 0.3% in CT30.
• Cumulative coal consumption decreases by 12.7% but
petroleum consumption increases by 48% in CT50.
• Diesel will replace coal boiler in CT50 after 2042.
21

BackgroundObjectives

Scenarios

AnalysisConclusion

Effect of Carbon Tax on GHG Emissions in theIndustry Sector
GHG Emissions (MtCO2e)76

6.3

5-12.5%6.3

5.5-44.1%

432

3.3

3.3

3.3

3.3

Base

CT10

CT30

CT50

3.5

102030Base

CT10

CT30CT502050• GHG emissions in 2050 from industrial sector decreases by0.1%, 12.5% and 44.1% in CT10, CT30 and CT50.
• Reduction in GHG emissions due to substitution of coal byother fuels and energy efficiency in CT cases.
22

Background

Objectives

Scenarios

AnalysisConclusionDeployment of Low Carbon Options in Industry
2010 ……….. 2030
BasecaseCT10CT302035

2040

2045

Energy efficiency
Biomass co-firing/Fuel substitution
Energy efficiency
Biomass co-firing in BI/Fuel substitution in boiler
Energy efficiency
Co-firing/Fuel substitution
CCS in CI

CT50

Energy efficiency
Co-firing/Fuel substitution
CCS in Cement Industry
VSBK
Diesel boiler

2050
Energy efficientelectric motor,
biomass boiler,
energy efficient
coal boiler,
biomass co-firingin brick industry
Also CCS incement industry
after 2045
CCS effective
after 2035.
Also VSBK in BI
after 2040,
Diesel boiler
replacing coal

Background

Objectives

Scenarios

AnalysisConclusion

Conclusion• Transport sector is the major emitter of GHG emissions during
2010-2050• However, highest GHG emission reduction occurs in residential
Sector in CT10 and CT30; in CT50, highest GHG reduction takes
place in the industry sector.
• Commercial sector accounts for the second highest level of GHG
mitigation in CT10 and CT30, while residential sector accounts forthe second highest level of mitigation in CT50.
• Reduction in GHG emission occurs mainly through the substitutionof LPG with electricity in the residential sector and substitution ofcoal by oil and biomass in the industrial sector.
• CCS becomes cost effective from 2045 in CT30 and from 2035 inCT50.
• Biofuels in transport are cost effective after 2040 in CT30 and after
2035 in CT50.
24

Thank you25