Low Carbon Development Scenarios for Nepal to Attain a 2⁰C Target

Ram M. Shrestha1, Bijay Bahadur Pradhan2

Bundit Limmeechokchai2

1Asian Institute of Technology and Management, Lalitpur, Nepal 2Sirindhorn International Institute of Technology, Thammasat University, Thailand

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23rd AIM International Workshop November 27-28, 2017

National Institute of Environmental Studies (NIES)Tsukuba, Japan

Key Issues in This Study

• How much reduction in GHG emission would be required with 2 degree C target under SSP5?

• How would this compare with GHG emissions under the present NDC from energy using sectors?

• Implications for energy mix, investment requirement, energy security and local pollutant emissions?

----------------Analysis using AIM/Enduse model of Nepal

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Scenario DescriptionThree scenarios are considered:1. BAU scenario: does not consider any climate change

policy (e.g., GHG emission reduction targets and carbon tax); the technology and energy use follows the historical change pattern

2. BREF scenario: does not consider any climate change policy; shares of energy resources and technologies depends not limited to their historical levels.

3. 2 degree-SSP5 scenarios: Similar to BREF but considers carbon price profiles for Asia under SSP5 scenario from three different models: AIM-CGE (“AIMC”), GCAM4 (“GCAM”) and REMIND-MAGPIE (“RMDM”)

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Socio-economic parameters in BAU

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2010 2020 2030 2040 2050

GDP (2010 USD) 18.9 30.8 51.1 96.0 181.0

GDP/capita (2010 USD/cap.) 723.0 1,014.2 1,511.6 2,646.8 4,793.2

Population (million) 26.1 30.4 33.8 36.3 37.8

Urban (million) 4.4 7.4 11.1 15.3 19.3

Rural (million) 21.7 23.0 22.7 21.0 18.4

Population, urban population and GDP growth rates are based on SSP5 scenario.

Socio-economic growth rates in SSP5

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2010-2020 2020-2030 2030-2040 2040-2050

GDP growth (%) 5.01 5.18 6.51 6.54

Population growth (%) 1.52 1.07 0.71 0.40

Urban population growth (%) 5.2 4.2 3.2 2.4

Carbon price in SSPS5 scenario for Asia

6Source: SSP Public Database Version 1.1. https://tntcat.iiasa.ac.at/SspDb

0

100

200

300

400

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600

2010 2020 2030 2040 2050

Car

bon

pric

e(2

010

US$

/tCO

2e) AIMC

RMDM

GCAM

2010 2020 2030 2040 2050

AIMC 0 0 235 471 518

RMDM 0 6 46 160 289

GCAM 0 22 22 135 220

Cleaner options considered in different sectors Transport Sector:• Fuel cell vehicle• Biofuel vehicle• MRT • Trolley bus• Electric ropeway• Electric rail

Industrial Sector:• Efficient electric motor• Vertical shaft brick kiln in brick industry• Energy efficient boilers (coal, fuelwood

and bagasse)• CCS in cement industry

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Residential and Commercial Sector:• Electric stove• Briquette stove• Solar cooker• LED display TV• Energy efficient air conditioner/fan• LED lamp

Agriculture Sector:• Solar water pump• Energy efficient electric pump• Energy efficient diesel pump

*BECCS in power and industry sector has not been considered in this study

Energy and EnvironmentalImplications

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Cost-effective Mitigation Options in 2 degree Scenarios

Mitigation options in the Residential and Commercial Sectors:• Improved cook stoves• Biogas cooking• Electric cooking• Solar water heater• LED lamps in lighting

Mitigation options in Agriculture• Electric pumps • Solar pumping in AIMC and RMDM

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Mitigation options in the Transport Sector:• Biofuel vehicles (ethanol and biodiesel

blend), • Flexi-fuel vehicles in AIMC• Electric cars in all three scenarios; • Electric buses in AIMC and RMDM• Gasoline hybrid vehicles (i.e., car and taxi)• Diesel hybrid vehicles (i.e., Pickup)• Diesel hybrid vehicles (i.e., Trucks)

Mitigation options in the Industrial Sector• Electric motor (motive power)• Improved fixed chimney brick kiln• Energy efficient coal boiler• Bagasse and Fuelwood boiler• CCS in cement industry (from 2025 in

AIMC, 2037 in RMDM and 2039 from GCAM)

Declining Dominance of Traditional Biomass in TPES in BAU Scenario

• Traditional biomass share decreases from 85% to 48% during 2010-2050• Oil product share increases from 9% to 25% • share of renewables (mainly hydropower) increases from 3% to 18%

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2010 2015 2020 2025 2030 2035 2040 2045 2050

Mto

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BAU scenario

Electricity importOther RenewablesHydroPetroleumCoalTraditional Biomass

Fossil fuel Consumption in BAU

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• Total fossil fuel (coal and petroleum) would increase at CAGR of 5.1%.• Coal consumption would increase at CAGR of 4.9% (mainly cement industry, shift

from clinker import to limestone based cement manufacturing)• Petroleum product consumption would increase at 5.2%

0123456789

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2010 2020 2030 2040 2050

Mto

e

Petroleum

Coal

Total Primary Energy Supply in BAU and 2⁰C Scenarios

In 2050, TPES • In AIMC is 12.4 % below that in BAU• 11.7% lower in RMDM and 11.2% lower in GCAM • 4.3% lower in BREF

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2010 2020 2030 2040 2050

Mto

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BAUBREFAIMCRMDMGCAM

Lower total primary energy supply and higher share of hydropower in 2⁰ C Scenarios

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During 2010-2050 Cumulative TPES reduced by• 11% in AIMC• 8.3% in RMDM • 7.8% in GCAM ; 5.1% in BREF

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BREF scenario

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Primary Energy Supply during 2010-2050 under Different Scenarios

Compared to BAU:• Cumulative use of traditional biomass during 2010-2050 to

decrease by 5.6 % in GCAM to 9.6% in AIMC • Cumulative fossil fuel supply during 2010-2050 to decrease

by 43.4% in GCAM to 57.4% In AIMC,

- Cumulative use of RE (mainly from hydropower generation) to increase by 52.9% in GCAM to 75.2% in AIMC

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Fossil fuel consumption lowest under AIMC and highest under GCAM among the 2 degree scenarios.Highest increase in the use of RE (mainly hydro) under AIMC(Highest reduction in biomass use under AIMC since CH4 and NOx emissions from biomass is considered)

Need for energy efficiency improvement in final energy use under 2⁰C scenarios

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• Final energy consumption would be smaller in 2 degree cases (with largest reduction in AIMC) indicating improved energy efficiency in the endues sectors

• In 2030, FEC would decrease by (than in BAU)• 18.1% in AIMC, 10.7% in RMDM and 9.5% in GCAM; 8.3% in BREF

• In 2050, FEC would decrease by (than in BAU)• 15.6% in AIMC, 14.5% in RMDM and 13.9% in GCAM; 4.8% in BREF

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2010 2030 2050

Mto

e AgricultureCommercialIndustrialTransportResidential

Final Energy Consumption

Requirement for huge increase in electricity supply under 2 degree scenarios

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Electricity supply in the BAU in 2050 would increase by more than 13 times compared to 2010 levelCumulative electricity supply during 2010-2050 in BAU: 825 TWhCumulative electricity supply during 2010-2050 would be • 79% higher in AIMC (than that in BAU)• 59% higher in RMDM and 55% higher in GCAM

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120

2010 2015 2020 2025 2030 2035 2040 2045 2050

TW

h

BAU

BREF

AIMC

GCAM

RMDMBAU: 53.2 TWh(In 2050)

BREF: +19%

AIMC :+110%

GCAM :+92%

RMDM :+97%

In 2050, supply increases by

Massive increase in power generation capacity required!

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Compared to BAU,, installed generation capacity in 2030 needs to increase by• 14% in GCAM to 51% in AIMCIn 2050, installed capacity needs to increase by• 92% in GCAM to 110% in AIMC

*Assuming capacity factor of 50% and additional power required to support peak load is 30%

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GW

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BREF

AIMC

RMDM

GCAM

GHG implications

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GHG emission from energy use in different scenarios

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• In 2050 GHG emission in BAU would be 5 times of the emission level in 2010. • In 2050, the emission would 70.6% less in AIMC, 62.5% less in RMDM and 59.2% less in GCAM• Cumulative GHG emissions during 2010-2050 would be 647 MtCO2e in the BAU• Cumulative GHG emissions would be 6% less in BREF, 49% less in AIM-CGE, 38% less in RMDM and 36% less

in GCAM than that in the BAU

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2010 2015 2020 2025 2030 2035 2040 2045 2050

MtC

O₂

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BREF

AIMC

RMDM

GCAM

Sectoral Cumulative GHG Emissions during 2010-2050

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• Largest reduction in GHG emission from the industry sector• Compared to the BAU, cumulative GHG emission during 2010-2050 would decrease :

- in Transport sector: by 25% in GCAM to 51% in AIMC ; - in Industry sector: by 47% in GCAM to 54% in AIMC;- in Residential sector: by 39% in GCAM to 45% in AIMC; - in Commercial Sector: by 52% in GCAM to 59% in AIMC; - in Agriculture Sector: by 0.8% in RMDM to 9% in AIMC.

215204

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154 162

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109117 121

27 2711 12 13

184 191

8499 97

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Transport Residential Commercial Industry Agriculture

GH

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(MtC

O₂

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Sectoral contributions to total GHG reduction in 2030 and 2050, %

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0

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AIMC RMDM GCAM

2030

Agriculture

Industries

Transport

Commercial

Residential

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AIMC RMDM GCAM

2050

• In 2030: GHG reduction mostly from industry and residential sectors at the lower tax scenarios (GCAM and RMDM),

• In 2050: largest reduction from the transport sector in all three tax scenarios

Overall CO2 Intensity

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• In the BAU, by 2050 CO2 intensity would be increased by 90% compared to the 2010 level.

• By 2050, CO2 intensity would have to be reduced by 68%, 58% and 54% in AIMC, RMDM and GCAM scenarios respectively compared to the intensity under BAU.

• Up to 35% reduction in the CO2 intensity would be required during 2010-2050.

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2010 2020 2030 2040 2050

CO₂

inte

nsity

[201

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lue

= 1.

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BAUBREFAIMCRMDMGCAM

How good are present NDCs to meet the 2⁰ target?

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• In 2050, in GHG emission in high NDC scenario would be • 68% higher than emission level in AIMC • 31% higher than that in RMDM• 21% higher than that in GCAM

13.4 12.7

7.610.3 10.6 11.0

33.730.7

9.912.6 13.7

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Total investment requirement during 2010-2050

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• Total investment requirement would increase by 11% in GCAM to 17% in AIMC; 3% in BREF.

425436

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477 472

380

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BAU BREF AIMC RMDM GCAM

billi

on U

SD

Investment

Total cost and tax revenue during 2010-2050

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• Total cost would increase by 8% in GCAM to 18% in AIMC scenarios• Total tax revenue as % of total cost varies from 11.6% in GCAM to 12.6% in AIMC

scenarios.

79.0

41.535.2

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AIMC RMDM GCAM

billi

on U

SD

Tax Revenue

574 576

680

632 623

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BAU BREF AIMC RMDM GCAM

billi

on U

SD

Total Cost

Cumulative SO₂ and NOx emissions

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• Compared to BAU, SO₂ emissions (cumulative during 2010-2050) would decrease by

• 29% in both RMDM and GCAM to 44% in AIMC; 3% in BREF• NOx emissions (cumulative 2010-2050) would decrease by

• 17% in GCAM to 33% in AIMC; 6% in BREF

308 298

171 218 220

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BAU BREF AIMC RMDM GCAM

thou

sand

tons

SO₂

4,685 4,411

3,149 3,824 3,906

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BAU BREF AIMC RMDM GCAMth

ousa

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NOx

Energy Security

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• Reduced dependency in imported energy; but more concentration on hydropower (and reduced diversification of energy resources!)

• NEID would decrease from 32.6% in BAU to 8.6% in AIMC, 11.6% in RMDM and 12.9% in GCAM in 2050.

Net Energy Import Dependency (NEID), %

BAU BREF AIMC RMDM GCAM

2010 12.0

2030 20.9 21.5 12.4 16.7 17.5

2050 33.8 31.5 8.6 11.6 12.9

Shannon Weiner Index (SWI)

BAU BREF AIMC RMDM GCAM

2010 0.6

2030 1.1 0.6 1.0 1.0 1.0

2050 1.4 1.4 1.1 1.1 1.1

Summary of Key findings• Large shift to hydropower based electrification required to meet the 2 degree

target.• Electricity generation capacity under the 2 degree cases would be about twice as

high as the capacity in BAU.• Biomass share in TPES would be reduced under the 2 degree tax scenarios and

increased role of electricity. • Total cost during 2010-2050 under the three 2 degree tax scenarios would be 8

to18% higher than that in BAU case.• Total investment requirement would be 11 to 17% higher than that in the BAU

scenario.• GHG emission intensity by 2050 would have to be reduced by up to 35% from the

2010 level.• Present energy related NDCs are largely inadequate to meet GHG emission

reduction requirement to meet even 2 degree target (not to mention the 1.5 degree target)

• The GHG emissions under energy related NDCs are 21% to 68% higher than the total allowable emissions under the three 2 degree scenarios considered.

=> Need for larger interventions

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Thank You!!

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(Email: ram.m.shrestha@gmail.com)