Transition to Deep Decarbonized Energy Systems in Nepal: The Macroeconomic Perspectives

Salony Rajbhandari, Bundit Limmeechokchai

Abstract


This study analyzed the macroeconomic impacts of the Nationally Determined Contribution (NDC) and the deep decarbonization pathways aligning with the 2°C and 1.5°C scenarios in Nepal using the computable general equilibrium (CGE) model. The analysis shows that the NDC, the 2°C and the 1.5°C scenarios would be achievable at the expense of national economic loss in Nepal. Results show that extending the NDC targets beyond 2030 without strengthening them would result in a greenhouse gas (GHG) emission reduction of 9.9% by 2050, which is far behind the level of reductions compared to that which could be required under the ideal mitigation pathways needed to confine the temperature rise to 2°C and 1.5°C compared to the pre-industrial levels. Results indicate that the NDC scenario of Nepal could be achievable at a carbon price of US$ 4.0 per tCO2eq in 2050. However, the results of the CGE modelling analysis of Nepal showed that a much higher carbon price of US$ 21 per tCO2eq and US$ 245 per tCO2eq would be needed by 2050 to achieve the 2°C and the 1.5°C scenarios respectively.

Keywords


1.5°C; Computable general equilibrium; Nationally Determined Contribution; Nepal; Paris Agreement

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References


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