Financed under ADB-Australia South Asia

Development Partnership Facility
Economics of Reducing
Greenhouse Gas Emissions
in South Asia
Options and Costs
Economics of Reducing
Greenhouse Gas Emissions
in South Asia
Options and Costs
Ram Manohar Shrestha
Mahfuz Ahmed
Suphachol Suphachalasai
Rodel Lasco
December2012
Financed under ADB-Australia South Asia
Development Partnership Facility
©2013As|anDeve|opmentBank
A||r|ghtsreserved.Pub||shed2013.
Pr|nted|nthePh|||pp|nes.
lSBN978-92-9092-143-1(Pr|nt},978-92-9092-383-1(PDF}
Pub||cat|onStockNo.BKK135371-2
Oata|og|ng-|n-Pub||cat|onData
Shrestha,R.M.,M.Ahmed,S.Suphacha|asa|,andR.D.|asco.
Econom|csofreduc|nggreenhousegasem|ss|ons|nSouthAs|a:Opt|onsandcosts.
Manda|uyongO|ty,Ph|||pp|nes:As|anDeve|opmentBank,2013.
1.O||matechange. 2.M|t|gat|on. 3.SouthAs|a. l.As|anDeve|opmentBank.
The v|ews expressed |n th|s pub||cat|on are those of the authors and do not necessar||y refect the v|ews and po||c|es of
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Contents
Tables, Figures, and Boxes |v
Foreword v||
Abbreviations |x
Weights and Measures x
Executive Summary x|
1 Introduction 1
2 Regional Overview 3
Soc|oeconom|cBackground 3
EnergyResources,Product|on,andÜse 3
Act|v|t|esNotÜs|ngEnergy 12
GHGEm|ss|onsandO||mateTrends 14
3 Methodology 26
Assess|ngTechno|ogyandResourceOpt|onsforEnergy-Üs|ngAct|v|t|es 26
Assess|ngTechno|ogyandResourceOpt|onsforAct|v|t|esNotÜs|ngEnergy 30
GHGAbatementOostAna|ys|s 31
Scenar|osÜsed|ntheStudy 33
Re|atedProjectAct|v|t|es 37
||m|tat|onsoftheStudy 38
4 Options and Costs to Reduce GHG Emissions in 2005–2030 40
Energy-Üs|ngAct|v|t|es 40
Act|v|t|esNotÜs|ngEnergy 62
Summary 78
5 Challenges and Enabling Conditions 80
Oha||engestoO|eanTechno|ogyDeve|opment 80
Enab||ngOond|t|onsandPo||c|esforPromot|ng|ow-OarbonDeve|opment 85
6 Conclusion and Way Forward 100
Techno|ogy 100
Po||cy 100
F|nance 101
Appendixes 104
1 OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts
|nEnergy-Üs|ngAct|v|t|esandKeySectors 104
2 OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts
|nAct|v|t|esNotÜs|ngEnergy 125
References 133
Tables, Figures, and Boxes
Tables
1 Se|ectedSoc|a|andEconom|clnd|catorsofSouthAs|anOountr|es 4
2 B|omassandB|ogasProduct|onPotent|a|andTota|Number
ofB|ogasP|antslnsta||ed|nSouthAs|a 5
3 Theoret|ca|andEconom|cHydropowerPotent|a||nSouthAs|a 6
4 W|ndPower,So|arPower,andOoa|Resources|nSouthAs|a 7
5 StructureofTota|Pr|maryEnergySupp|y|nSouthAs|a,2005and2009 10
6 Energylnd|cators|nSouthAs|a,2005and2009 11
7 Structureoflnsta||edE|ectr|c|tyGenerat|onOapac|ty|nSouthAs|a,2011(MW} 11
8 Tota|F|na|EnergyOonsumpt|onbySector,SouthAs|a,2009(%} 12
9 Annua|GrowthRatesofSe|ectedOropsand||vestock,SouthAs|a,
2000–2010(%} 13
10 Se|ected|and-Üselnd|cators|nSouthAs|a,2000and2010 14
11 ForestAreasandOarbonStockB|omass,SouthAs|a 15
12 Tota|GHGEm|ss|ons|nSouthAs|a(m||||ontonsOO
2
e} 16
13 GHGEm|ss|onbySector,SouthAs|a,1994and2000(m||||ontonsOO
2
e} 17
14 GHGEm|ss|onsfromEnergy-Üs|ngAct|v|t|es,SouthAs|a(m||||ontonsOO
2
e} 17
15 H|stor|ca|andProjectedO||mateTrends|nSouthAs|a 19
16 Datalnputs 34
17 Tota|Pr|maryEnergySupp|ybySourceunderBaseOaseandOarbonTax,
SouthAs|a(%} 42
18 Energylntens|ty,SouthAs|a(toeper$1,0002005PPP} 44
19 Share|nE|ectr|c|tyGenerat|onbyFue|SourceunderBaseOase
andOarbonTax,SouthAs|a(%} 46
20 SectorEnergyÜse|nSouthAs|a(PJ} 48
21 SectorShare|nTota|F|na|EnergyOonsumpt|onunderBaseOase
andOarbonTax,SouthAs|a(%} 50
22 Oontr|but|onstoTota|GHGEm|ss|onsofEnergy-Üs|ngSectors
underBaseOaseandOarbonTax,SouthAs|a(%} 53
23 |oca|Po||utantEm|ss|onReduct|onundertheBaseOaseandOarbonTax,
SouthAs|a(Exc|ud|nglnd|a},2020and2030(’000tons} 59
24 Tota|GHGEm|ss|onsatSe|ectedlncrementa|AbatementOosts|n2020,
SouthAs|a(Exc|ud|nglnd|a} 60
25 SectorShares|nTota|GHGEm|ss|onAbatementatSe|ected
lncrementa|AbatementOosts,SouthAs|a(Exc|ud|nglnd|a}(%} 61
26 BaseOaseTota|GHGEm|ss|onsfromAct|v|t|esNotÜs|ngEnergy,
SouthAs|a,2005and2030(m||||ontonsOO
2
e} 65
27 Tota|GHGAbatementPotent|a|andOostsfromAct|v|t|esNotÜs|ngEnergy,
SouthAs|a(Exc|ud|nglnd|aandtheMa|d|ves},2020 75
v Tab|es,F|gures,andBoxes
28 TargetsforO|eanerTechno|og|esandOpt|ons|nSouthAs|a 89
29 P|pe||neODMProjects|nSouthAs|aasofJune2012 95
Figures
1 Overv|ewoftheMARKA|Framework 28
2 AReferenceEnergySystem 28
3 GHGAbatementOostOurve:Anl||ustrat|on 32
4 Oarbon Pr|ce Prof|e under the Oarbon Tax Scenar|o 37
5 Tota|Pr|maryEnergySupp|y|nSouthAs|a(Exc|ud|nglnd|a},2005–2030 41
6 StructureofTota|Pr|maryEnergySupp|y|nSouthAs|a(Exc|ud|nglnd|a},
2005and2030 41
7 E|ectr|c|tyGenerat|on|nSouthAs|a(Exc|ud|nglnd|a},2005–2030 45
8 E|ectr|c|tyGenerat|onSharebyFue|Type|nSouthAs|a(Exc|ud|nglnd|a},
2005and2030 45
9 SectorShare|nTota|F|na|EnergyOonsumpt|on,SouthAs|a
(Exc|ud|nglnd|a},2005–2030 49
10 SectorGHGEm|ss|ons,SouthAs|a(Exc|ud|nglnd|a},2005–2030 51
11 SectorShares|nGHGEm|ss|ons,SouthAs|a(Exc|ud|nglnd|a},
2005and2030 51
12 Pr|maryEnergySupp|yundertheBaseOaseandOarbonTax|nSouthAs|a
(Exc|ud|nglnd|a} 55
13 E|ectr|c|tyGenerat|onunderBaseOaseandOarbonTax|nSouthAs|a
(Exc|ud|nglnd|a} 56
14 F|na|EnergyOonsumpt|onunderBaseOaseandOarbonTax,SouthAs|a
(Exc|ud|nglnd|a} 57
15 SectorGHGEm|ss|onsunderBaseOaseandOarbonTax,SouthAs|a
(Exc|ud|nglnd|a} 58
16 Tota|GHGEm|ss|onsfromAct|v|t|esNotÜs|ngEnergy,SouthAs|a
(Exc|ud|nglnd|aandtheMa|d|ves},2005–2030 64
17 SectorShare|nTota|GHGEm|ss|onsfromAct|v|t|esNotÜs|ngEnergy(Except
Forestry},SouthAs|a(Exc|ud|nglnd|aandtheMa|d|ves},2005and2030 64
18 Tota|GHGEm|ss|onsfromAct|v|t|esNotÜs|ngEnergy
(Exc|ud|ngForestryandlndustr|a|Processes},lnd|a,2005–2030 66
19 SectorShare|nTota|GHGEm|ss|onsfromAct|v|t|esNotÜs|ngEnergy
(Exc|ud|ngForestryandlndustr|a|Processes},lnd|a,2005and2030 67
20 Share|nTota|GHGEm|ss|onsofAgr|cu|tura|Act|v|t|es,SouthAs|a
(Exc|ud|nglnd|aandtheMa|d|ves},2005and2030 68
21 Shares|nTota|GHGEm|ss|onsofAgr|cu|tura|Act|v|t|es,SouthAs|a
(Exc|ud|ngtheMa|d|ves},2005and2030 68
22 GHGEm|ss|onsfrom||vestockRa|s|ng,SouthAs|a
(Exc|ud|nglnd|aandtheMa|d|ves},2005–2030 69
23 GHGEm|ss|onsfrom||vestockRa|s|ng,SouthAs|a(Exc|ud|ngtheMa|d|ves},
2005–2030 69
24 GHGEm|ss|onsfromOropProduct|on-Re|atedAct|v|t|es,SouthAs|a
(Exc|ud|nglnd|aandtheMa|d|ves},2005–2030 70
25 GHGEm|ss|onsfromOropProduct|on-Re|atedAct|v|t|es,SouthAs|a
(Exc|ud|ngtheMa|d|ves},2005–2030 71
vi Tab|es,F|gures,andBoxes
26 GreenhouseGasS|nkOapac|tyoftheForestrySector,SouthAs|a
(Exc|ud|nglnd|aandtheMa|d|ves},2005–2030 71
27 GreenhouseGasEm|ss|onsfromtheWasteD|sposa|Sector,SouthAs|a
(Exc|ud|nglnd|aandtheMa|d|ves},2005–2030 72
28 GreenhouseGasEm|ss|onsfromtheWasteD|sposa|Sector,SouthAs|a
(Exc|ud|ngtheMa|d|ves},2005–2030 72
29 GreenhouseGasEm|ss|onsfromlndustr|a|Processes,SouthAs|a
(Exc|ud|nglnd|aandtheMa|d|ves},2005–2030 73
30 SubsectorShares|nlndustr|a|Process-Re|atedGreenhouseGasEm|ss|ons,
SouthAs|a(Exc|ud|nglnd|aandtheMa|d|ves},2005and2030 74
31 Barr|erstoO|eanTechno|ogyDeve|opment|nSouthAs|a 81
Boxes
1 F|nanc|ngBarr|erstoRenewab|eEnergyProjects|nlnd|a 82
2 Generat|on-Basedlncent|vesforW|ndandSo|arPower|nlnd|a 91
3 Bachat|ampYojana|nlnd|a 91
4 So|arSuccess|nGujarat,lnd|a 92
5 Potent|a| Benefts of Transport Sector E|ectr|fcat|on |n Nepa| 94
6 Bhutan’sDagachhuHydropowerProject—TheF|rstOross-Border
O|eanDeve|opmentMechan|smProject|ntheWor|d 96
7 SuccessoftheGrameenShakt|So|arHomeSystem|nBang|adesh 102
Foreword
T
hemajorcha||engefortheAs|anDeve|op|ngMemberOountr|es(DMOs}|showto
ach|evesusta|nedandrap|deconom|cgrowthfora||ev|at|ngpovertywh||ereduc|ng
the overa|| |ntens|ty of energy use, |ncreas|ng energy effc|ency, and mov|ng to
c|eaner energy forms. ln th|s context they need to exam|ne the|r resource and energy
opt|ons |n order to deve|op a |ow-carbon path that can a|so prov|de susta|ned, h|gh
econom|cgrowthandabategreenhousegas(GHG}em|ss|onsat|oworevennegat|ve
costs, and prov|de other benefts such as energy secur|ty, |mproved hea|th, and more
emp|oymentopportun|t|es.
SouthAs|a,wh|ch|shometothemajor|tyofwor|d’spoorestpeop|e,|sexpectedtobear
a s|gn|fcant share of the consequences of the g|oba| |mpacts assoc|ated w|th c||mate
change.Aga|nstabackdropofcont|nu|ng|ncrease|ntheem|ss|onofGHGs,theSouth
As|a DMOs of the As|an Deve|opment Bank (ADB} have been w|tness|ng a steady r|se
|n energy demand and consumpt|on, keep|ng pace w|th the|r econom|c growth and
deve|opment asp|rat|ons. Th|s trend |s ||ke|y to cont|nue, a|though st||| |ower than |n
ne|ghbor|ngSoutheastAs|aordeve|opedcountr|esasawho|e.
ADBhas|aunchedaser|esofstud|esontheeconom|csofc||matechangeacrossAs|a
and the Pac|fc, w|th the frst report on Southeast As|a pub||shed |n 2009. The present
study,ontheReg|ona|Econom|csofO||mateOhange|nSouthAs|a(REOOSA},exam|nes
the econom|cs of (|} c|eaner techno|og|es that promote |ow-carbon deve|opment
and c||mate change m|t|gat|on (Part 1}, and (||} adaptat|on to c||mate change |mpacts
(Part 2}. The frst part, wh|ch was |mp|emented through techn|ca| ass|stance on ADB-
Australia South Asia Development Partnership Facility,exam|nedtheopt|onsandcosts
of resource- and energy-effc|ent techno|og|es to m|t|gate GHG em|ss|ons; |dent|fed
constra|nts and barr|ers to c|ean techno|ogy deve|opment; and out||ned recommended
act|onsandenab||ngcond|t|onstoovercomethecha||enges.Th|sreportsynthes|zesthe
resu|ts of nat|ona| stud|es under Part 1 conducted |n fve South As|a DMOs-Bang|adesh,
Bhutan,theMa|d|ves,Nepa|,andSr||anka.lnd|awasnot|nc|udedbecausetherehave
beenanumberofrecentstud|eson|tsGHGem|ss|onsreduct|onandc|eantechno|ogy
potent|a|s,wh|chwereusedas|nformat|onandreferences|nth|sreport.Theresu|tsofthe
part2studyw|||formaseparatereport.
The study suggests that the annua| energy-re|ated GHG em|ss|ons |n the fve countr|es are
togethersettor|semorethanfour-fo|dfrom58m||||ontonsofcarbond|ox|deequ|va|ent
|n 2005 to 245 m||||on tons |n 2030, wh||e pr|mary energy use by 2030 |s ||ke|y to be
a|most3,600petajou|es,2.4t|mesh|gherthan|n2005,|arge|yduetor|s|ngconsumpt|on
by|ndustryandtransport.Thereporta|sorevea|sexce||entopportun|t|es|n|ow-carbon
green growth by adopt|ng resource- and energy-effc|ent techno|og|es that wou|d |ower
viii Foreword
GHG em|ss|ons at a |ow cost or even cost sav|ngs (benefts}. At a cost of up to $10 per
ton,near|y20%annua|reduct|oncanbeach|evedby2020.lntroduct|onofacarbontax
cou|dspurgreateruseofc|eanerenergysources||kenatura|gas,hydropower,b|omass,
mun|c|pa|so||dwaste,andw|nd,andcou|dreducetota|GHGem|ss|onsbymorethana
ffth up to 2030. These are str|k|ng resu|ts on GHG em|ss|ons and the costs and benefts
of reduc|ng them |n the fve South As|a DMOs.
The study`s fnd|ngs and conc|us|ons on the feas|b|||ty of des|gn|ng systems and processes
forreduc|ngGHGem|ss|onsacrosssectorsareseenasanopportun|tyforSouthAs|an
countr|estomovetoward|ow-carboneconom|es,wh||ep|ay|ngapart|nag|oba|so|ut|on
to c||mate change. Many fund|ng sources and |n|t|at|ves, though not adequate, are
a|readyava||ab|ethatcou|dhe|pSouthAs|aDMOsbu||dc||materes|||entand|ow-carbon
econom|es.ADBw|||cont|nuetodo|tsparttosupporttheAs|anDMOsw|thknow|edge,
techno|og|es, and fnance |n the|r response to c||mate change. ln 2009, ADB deve|oped a
c||matechange|mp|ementat|onp|anthatsetsoutthestrategyand|nvestmentpr|or|t|es|n
SouthAs|aDMOs.ltsupportsadaptat|onandm|t|gat|onefforts|nthetransport,energy,
urban, water supp|y and san|tat|on, and agr|cu|ture and natura| resources sectors. ln
2011,approva|sof|oansandgrantsbyADBforc||matechangeadaptat|onandm|t|gat|on
measuresreached$1.039b||||on,|natota||nvestmentof$2.300b||||on.
Thereportwaspreparedunderthed|rect|onofJuanM|randa,D|rectorGenera|,SouthAs|a
Department.SekharBonu,D|rectorofSouthAs|aReg|ona|Oooperat|onandOoord|nat|on
D|v|s|onandHansOar|sson,HeadofPortfo||o,Resu|tsandQua||tyOontro|Ün|t,prov|ded
superv|s|ontothestudyteam.Mahfuzudd|nAhmed,Pr|nc|pa|O||mateOhangeSpec|a||st,
|ed the fna||zat|on and pub||cat|on of th|s synthes|s report. Experts (consu|tants} Ram
ManoharShresthaandRode||asco|edthemode||ngworkonenergyandnon-energy
re|atedact|v|t|es,respect|ve|y.TasneemM|rzaandSupacho|Suphacha|asa|,Econom|sts,
coord|natedtheconsu|tant|nputs.Severa|ADBstaffwere|nvo|ved|nthe|mp|ementat|on
ofthetechn|ca|ass|stanceunderwh|chthestudywascarr|edout.They|nc|udeJuzhong
Zhuang, Deputy Oh|ef Econom|st; Bruno Oarrasco, D|rector; and Ngyong Ouong, Hu|
Ph|ng, and Ruzette Mar|ano. Jay Mac|ean ed|ted the pub||cat|on, w|th ass|stance from
consu|tants Roberta Gerpac|o and Haeze| Barber. P|a Oorr|na Reyes and consu|tant
AnnaB|es||daMenesescoord|natedthepub||cat|onprocess.
We are gratefu| to the Government of Austra||a for fnanc|ng the reg|ona| techn|ca|
ass|stance.Werecogn|zethesupportandcooperat|onoftheconcernedgovernments|n
theconductofth|sstudy.Wea|soacknow|edgetheexperts,spec|a||sts,andsc|ent|sts
whoprov|dedthetechn|ca||nputsandadv|ceforthestudy.Wehopethatthe|nformat|on
andknow|edgega|nedthroughth|sstudyw|||he|pAs|anDMOs|nthe|rquestforwaysto
reduceGHGem|ss|onsandtomovetoward|ow-carbongreengrowth.
Xiaoyu Zhao Bindu N. Lohani
v|ce-Pres|dentforOperat|ons1 v|ce-Pres|dentforKnow|edgeManagement
andSusta|nab|eDeve|opment
Abbreviations
ADB As|anDeve|opmentBank
AEPO A|ternat|veEnergyPromot|onOentre(Nepa|}
ASEAN Assoc|at|onofSoutheastAs|anNat|ons
BlGOO b|omass-based, |ntegrated gas|fcat|on, comb|ned cyc|e
OAGR compoundedannua|growthrate
OOS carboncaptureandstorage
ODM O|eanDeve|opmentMechan|sm
OEO cert|fed em|ss|on cred|ts
OER cert|fcate of em|ss|on reduct|on
OF| compact fuorescent |amp
OH
4
methane
ONG compressednatura|gas
OO
2
carbond|ox|de
OO
2
e carbond|ox|deequ|va|ent
OSlRO Oommonwea|th Sc|ent|fc and lndustr|a| Research Organ|sat|on
DMO deve|op|ngmembercountry
EOHAM5 EuropeanOenterHamburgMode|-5
FlT feed-|ntar|ff
GBl generat|on-based|ncent|ve
GOM genera|c|rcu|at|onmode|
GDP grossdomest|cproduct
GEF G|oba|Env|ronmentFac|||ty
GHG greenhousegas
G|OF g|ac|a| |ake outburst foods
lAO |ncrementa|abatementcost
lAOO |ncrementa|abatementcostcurve
lDOO| lnfrastructureDeve|opmentOompany||m|ted(Bang|adesh}
lPOO lntergovernmenta|Pane|onO||mateOhange
lREDA lnd|anRenewab|eEnergyDeve|opmentAgency
|ED ||ght-em|tt|ngd|ode
|NG ||quefed natura| gas
|PG ||quefed petro|eum gas
|ÜOF |and-usechangeandforestry
|v ||ghtveh|c|e
MARKA| marketa||ocat|on
MSW mun|c|pa|so||dwaste
NOx n|trogenox|de
N
2
O n|trousox|de
PFBO pressur|zed fu|d|zed bed combust|on
PPP purchas|ngpowerpar|ty
PRO Peop|e’sRepub||cofOh|na
Pv photovo|ta|c
x Abbrev|at|ons
R&D researchanddeve|opment
REO reduced em|ss|on cert|fcate
REOOSA Reg|ona|Econom|csofO||mateOhange|nSouthAs|a
REPO renewab|eenergypurchaseob||gat|on
SO
2
su|furd|ox|de
TERl TheEnergyandResourceslnst|tute
TFEO tota| fna| energy consumpt|on
TPES tota|pr|maryenergysupp|y
ÜMMB urea-mo|assesmu|t|-nutr|entb|ock
ÜNDP Ün|tedNat|onsDeve|opmentProgramme
ÜNEP Ün|tedNat|onsEnv|ronmentProgramme
ÜNFOOO Ün|tedNat|onsFrameworkOonvent|ononO||mateOhange
ÜTS urea-treatedstraw
vAT va|ue-addedtax
Weights and Measures
cm cent|metre
GJ g|gajou|e
GW g|gawatt
GWh g|gawatt-hour
ha hectare
kg k||ogram
kg/m
3
k||ogrampercub|cmeter
KJ k||ojou|e
ktoe thousandtonsofo||equ|va|ent
kv k||ovo|t
KWh k||owatt-hour
m
3
cub|cmeter
m meter
mm m||||meter
MW megawatt
MWh megawatt-hour
PJ petajou|e
ppmv partsperm||||onbyvo|ume
t ton
TJ terajou|e
toe tonofo||equ|va|ent
TWh terawatt-hour
Executive Summary
T
he As|an Deve|opment Bank (ADB} South As|a deve|op|ng member countr|es
(DMOs}, compr|s|ng Bang|adesh, Bhutan, lnd|a, the Ma|d|ves, Nepa|, Sr| |anka,
had a comb|ned popu|at|on of around 1.4 b||||on |n 2011, w|th about 33%
(465.5 m||||on} ||v|ng be|ow the $1.25 (PPP} per day poverty ||ne, or about 6.7% of the
g|oba| popu|at|on (ADB 2011}. The reg|on |s cons|dered vu|nerab|e to the |mpacts and
consequences of c||mate change, |nc|ud|ng sea |eve| r|se |n Bang|adesh, lnd|a, the
Ma|d|ves, and Sr| |anka; me|t|ng H|ma|ayan g|ac|ers |n Bhutan, lnd|a, and Nepa|; and
|ncreased frequency of typhoons, part|cu|ar|y |n Bang|adesh. Notw|thstand|ng these
cha||enges,susta|nedandrap|deconom|cgrowth|snecessaryforthereg|ontoach|eve
s|gn|fcant poverty reduct|on, up||ft the econom|c we||-be|ng of |ts peop|e, and |ncrease
|tsres|||encetoenv|ronmenta|shocksandnatura|d|sasters,|nc|ud|ngthoseassoc|ated
w|thc||matechange.
Aga|nstabackdropofcont|nu|ng|ncrease|ntheem|ss|onofgreenhousegases(GHGs}
that are respons|b|e for g|oba| c||mate change, energy consumpt|on and use of foss||
fue|s|nSouthAs|aDMOsaregrow|ngrap|d|y.ln2030,thetota|pr|maryenergyuse|n
Bang|adesh,Bhutan,theMa|d|ves,Nepa|,andSr||ankacou|dbe2.4t|mesthat|n2005.
lnlnd|a,tota|commerc|a|energyconsumpt|on|n2031cou|dbe5.4t|mesthat|n2006,
a|thoughthereare|argevar|at|ons|nest|matesoffutureenergygrowthacrossstud|es.
Thecountr|esneedanew|ookatthe|rresourceandenergyopt|ons|nordertodeve|op
a|ow-carbonpaththatcanprov|desusta|nedh|gheconom|cgrowthands|mu|taneous|y
abateGHGem|ss|ons.
Th|sreportsynthes|zestheresu|tsofstud|esconductedunderanADBtechn|ca|ass|stance
on the Reg|ona| Econom|cs of O||mate Ohange |n South As|a Phase 1 (REOOSA 1} |n
fve countr|es (Bang|adesh, Bhutan, the Ma|d|ves, Nepa|, and Sr| |anka}. The stud|es
est|mated the ||ke|y growth of GHG em|ss|ons to 2030 under a scenar|o of expected
energy-usem|xes,|nc|ud|ngpenetrat|onofsomec|eantechno|og|es,andthe|mpactof
ac||matepo||cy|ntheformofacarbontaxtostab|||zeGHGproduct|onatanacceptab|e
|eve|.Thestud|esusedasoph|st|catedmarketa||ocat|onmode||ng(MARKA|}approach
toexam|netwoscenar|os:(|}thebasecase,wh|chcons|dersenergysystemdeve|opment
w|thout any c||mate po||cy |ntervent|ons dur|ng 2005-2030; and (||} the carbon-tax
scenar|o,wh|chana|yzedtheevo|ut|onoftheenergym|x,e|ectr|c|tygenerat|onsystem,
GHGem|ss|ons,andenergysystemcostunderana|ternat|vec||matepo||cy(|ntheform
ofacarbontax/carbonpr|ce}forach|ev|ngtheg|oba|stab|||zat|ontargetofcarbond|ox|de
(OO
2
}concentrat|on.Theana|ysesonlnd|awerebasedonex|st|ng||terature.
W|thoutanyc||matepo||cy|ntervent|ons(underthebasecase},SouthAs|awou|dbecome
|ncreas|ng|y carbon |ntens|ve dur|ng 2005–2030. The consumpt|on of foss|| fue| wou|d
xii Execut|veSummary
grow by over fvefo|d |n lnd|a and over threefo|d |n the other fve countr|es as a group, w|th
s|m||ar |ncreases |n the use of |mported natura| gas. The s|gn|fcant growth of coa| use
|nthereg|onwou|dhoweverbeofpart|cu|arconcern.Thetransportsector|sthefastest
grow|ng|ntermsofenergyconsumpt|on|nSouthAs|aoverthestudyper|od,ma|n|ydue
to|tsveryh|ghgrowth|nlnd|a.
Tota| power generat|on capac|ty |n the fve countr|es of South As|a (w|thout lnd|a} wou|d
|ncrease by 256% dur|ng 2005÷2030 |n the base case, and wou|d be 3.26% h|gher
w|th the carbon tax. The tota| |nvestment requ|rement for power generat|on |n the fve
countr|es|nthe25-yearper|odwou|dbes|m||ar|nthetwocasesataround$104b||||on.
The tota| energy-re|ated GHG em|ss|ons |n the fve South As|an countr|es (w|thout lnd|a}
wou|dbe3.2t|mesh|gher|n2030thanthat|n2005|nthebasecase.Powergenerat|on,
|ndustry,andtransportwou|dbethethreemajorcontr|butors,w|them|ss|onsfromthe
powersector|ncreas|ngdur|ngtheper|od.
ln a carbon tax reg|me that |s cons|dered necessary to stab|||ze GHG concentrat|on at
550partsperm||||onbyvo|ume(ppmv}ofcarbond|ox|deequ|va|ent(OO
2
e},thepr|mary
energy m|x of the fve South As|an countr|es (w|thout lnd|a} wou|d move toward more
aggress|ve use of c|eaner resources, |.e., natura| gas, hydropower, b|omass, mun|c|pa|
so||dwaste,w|nd,andnuc|earenergy.Thetota|consumpt|onofcoa|andpetro|eum|n
2030 wou|d be 68.0% and 2.1% |ower than that |n the base case, respect|ve|y. There
wou|da|sobeacumu|at|vereduct|on|nenergy-re|atedGHGem|ss|onsbyaround971
m||||ontons(t}ofOO
2
edur|ng2005–2030,ascomparedtothecumu|at|veGHGem|ss|on
of 4,011 m||||on t of OO
2
e dur|ng the same per|od |n the base case. The tota| annua|
energy-re|ated GHG em|ss|ons |n the fve countr|es wou|d decrease by 6.1% (8.4 m||||on
tOO
2
e}by2020andby22.0%(53.8m||||ontOO
2
e}by2030.
Atthecountry|eve|,thecarbontaxwou|dreducecumu|at|veGHGem|ss|onsby9.4%
|nBang|adeshand21.8%|nSr||anka.However,|tseffectwou|dbem|n|ma||nBhutan
and Nepa|, where b|omass and hydropower are the ma|n sources of energy; and |n the
Ma|d|ves,wheretheava||ab|||tyofmajorrenewab|eenergysources(b|omass,w|nd,and
hydropower}|sverysma||.
Not a|| c|eaner opt|ons are expens|ve. The study found a number of c|ean techno|ogy
opt|ons that are cost-effect|ve even w|thout any c||mate po||cy |ntervent|ons. These
techno|og|es range from energy-effc|ent |amps, a|r cond|t|oners, and so|ar and e|ectr|ca|
cook|ng stoves |n res|dent|a| and commerc|a| sectors, energy-effc|ent e|ectr|c motors
and d|ese| bo||ers |n |ndustr|a| sector, effc|ent d|ese| tractors |n agr|cu|ture to part|a| moda|
sh|fts|ntheroadfre|ghttora||ways|nthetransportsector.GHGabatementcostana|ys|s
shows that a tota| reduct|on potent|a| of about 13.3 m||||on t OO
2
e em|ss|ons cou|d be
ach|eved |n 2020 |n the fve countr|es at no add|t|ona| cost, by dep|oy|ng 'no-regret" c|ean
and energy-effc|ent opt|ons. ln the same year, around 27.9 m||||on t OO
2
e(20.1%ofthe
basecaseem|ss|on}cou|dbeabatedatthe|ncrementa|abatementcost(lAO}ofupto
$10pertonofOO
2
e,w|thmostofthetota|GHGreduct|oncom|ngfromthepowersector.
For act|v|t|es not us|ng energy |n South As|a (w|thout lnd|a and the Ma|d|ves}, GHG
em|ss|onsfromagr|cu|ture,|ndustr|a|processes,andwastegenerat|onareest|matedto
xiii Execut|veSummary
near|y doub|e |n 2005÷2030, w|th crop product|on hav|ng the dom|nant share (50%–
52%}.lnadd|t|on,carbons|nk(sequestrat|on}capac|tyoftheforestrysector|sest|mated
to dec||ne by about 15%. Among the abatement opt|ons cons|dered for act|v|t|es not
us|ngenergy,thefo||ow|ngoffertheh|ghestpotent|a|abatementcapac|t|esatreasonab|e
per-tonlAOs:(|}agr|cu|ture:urea-mo|assesmu|t|-nutr|entb|ocksupp|ementat|onforda|ry
catt|e; and |nterm|ttent|y-|rr|gated r|ce |and under s|ng|e aerat|on; (||} forestry: conservat|on
of the ex|st|ng carbon s|nk; (|||} waste management: compost|ng of so||d waste; and
(|v} |ndustr|a| processes: add|t|on of capac|ty of cement p|ants ftted w|th post-combust|on
carboncaptureandstoragetechno|ogy.
Wh||e|t|scruc|a|forSouthAs|ancountr|estoreduceenergy-re|atedGHGem|ss|onsper
un|t of the|r GDPs over the next two decades, po||cy and regu|atory barr|ers, perverse
subs|d|esonconvent|ona|foss||fue|s,anduncerta|nfuturecarbonpr|cescurrent|yreduce
|ncent|ves to |nvest |n |arge-sca|e deve|opment of c|ean energy resources and GHG
em|ss|on-reduc|ng techno|og|es. Access to techno|og|es and |nnovat|ve and affordab|e
fnances are a|so ||m|t|ng factors for |nvestments |n techno|og|es w|th |ow lAOs.
Overa||, techno|ogy access, po||cy and fnanc|ng |ssues w||| cont|nue to |nfuence the
deve|opmentofc|eantechno|og|esandmovetoward|ow-carbongrowth|nSouthAs|a.
|arge-sca|e deve|opment of c|ean energy resources to s|gn|fcant|y reduce carbon
|ntens|ty and GHG em|ss|ons w||| be cruc|a|. Th|s can be ach|eved by South As|an
countr|es by pr|or|t|z|ng |nvestments |n techno|og|es across sectors w|th |ow lAOs and
other co-benefts, such as reduc|ng em|ss|ons of other |oca||y-damag|ng po||utants and
prov|d|ngeconom|copportun|t|esforcommun|t|es.Thescopeofthese|nvestmentscan
cover (|} promot|on of energy effc|ency and deve|opment of renewab|e energy; (||} |ow-
carbon transport |nfrastructure; (|||} urban serv|ces, |nc|ud|ng emp|oy|ng cost-effect|ve
and |ncome-generat|ng waste management mechan|sms; (|v} energy-effc|ent bu||d|ngs
and other |nfrastructure; and (v} energy-effc|ent |rr|gat|on pumps, |nc|ud|ng use of so|ar
energy.Reg|ona|energycooperat|onandtradeaswe||assouth-southandnorth-south
cooperat|onontechno|ogyandknow|edgeshar|ngw|||pavethewayforamovetowards
|ow-carbonandgreendeve|opment|nSouthAs|a.
1 Introduction
T
he As|an Deve|opment Bank (ADB} South As|a deve|op|ng member countr|es
(DMOs}, compr|s|ng Bang|adesh, Bhutan, lnd|a, the Ma|d|ves, Nepa|, Sr| |anka,
had a comb|ned popu|at|on of around 1.4 b||||on |n 2011, w|th about 33%
(465.5 m||||on} ||v|ng be|ow the $1.25 (PPP} per day poverty ||ne, or about 6.7% of the
g|oba| popu|at|on (ADB 2011}. The reg|on |s a|so cons|dered vu|nerab|e to the |mpacts
andconsequencesofc||matechange,|nc|ud|ngsea|eve|r|se|nBang|adesh,lnd|a,the
Ma|d|ves, and Sr| |anka; me|t|ng H|ma|ayan g|ac|ers |n Bhutan, lnd|a, and Nepa|; and
|ncreased frequency of typhoons, part|cu|ar|y |n Bang|adesh. Notw|thstand|ng these
cha||enges,susta|nedandrap|deconom|cgrowth|snecessaryforthereg|ontoach|eve
s|gn|fcant poverty reduct|on, up||ft the econom|c we||-be|ng of |ts peop|e, and |ncrease
|tsres|||encetoenv|ronmenta|shocksandnatura|d|sasters,|nc|ud|ngthoseassoc|ated
w|thc||matechange.
Wh||egreenhousegas(GHG}em|ss|on|nSouthAs|a|sh|stor|ca||y|ow,rap|durban|zat|on
and |ndustr|a||zat|on are push|ng |t toward a more carbon-|ntens|ve deve|opment path.
SouthAs|acurrent|yshowsan|ncreas|ngdemandformotor|zedtransportande|ectr|c|ty,
hence a|so for |mported foss|| fue|, mak|ng |t vu|nerab|e to pr|ce vo|at|||t|es and supp|y
|nstab|||ty|nthe|nternat|ona|markets.Thecountr|es|nSouthAs|awou|dneedtoexam|ne
the|rresourceandenergyopt|ons|nordertopursuegreen-growthstrateg|esandadopt
a |ow-carbon deve|opment path, for more |nc|us|ve and susta|nab|e econom|c growth.
The |dent|fcat|on, promot|on, and ut|||zat|on of c|ean techno|og|es and renewab|e energy
resourcesp|ayacruc|a|ro|e|nach|ev|ngthesegoa|s.
Th|sreportsynthes|zesthedeta||edana|ys|softhetechn|ca|ass|stanceontheReg|ona|
Econom|csofO||mateOhange|nSouthAs|aPhase1(REOOSA1}thatwasconducted|n
fve ADB South As|a DMOs-Bang|adesh, Bhutan, the Ma|d|ves, Nepa|, and Sr| |anka,
w|thlnd|a’sr|ch||teratureofnumerousre|evantstud|esexhaust|ve|yusedas|nformat|on
and reference. The reg|ona| study attempted to |dent|fy potent|a| energy and non-
energy-re|ated c|ean techno|og|es and opt|ons, est|mate the|r benefts |n terms of GHG
abatement and co-benefts, and eva|uate feas|b|e opt|ons and measures at d|fferent (or
se|ected}carbonpr|cescenar|os.W|ththese|nformat|on,|ta|mstohe|pthereg|ona|and
nat|ona|dec|s|onmakersreachaconsensustopromotetheaccesstoandut|||zat|onof
c|eantechno|og|esandopt|ons,andestab||shthereg|on’scontr|but|ontog|oba|efforts,
foraddress|ngc||matechange.
The second chapter prov|des a br|ef prof|e of South As|a`s soc|oeconom|c deve|opment;
energy resource potent|a|, product|on and use; and act|v|t|es not produc|ng energy
(agr|cu|ture, forestry, and |and-use change}. lt a|so presents observed and projected
c||mate change and |ts emerg|ng |mpacts |n the reg|on. Ohapter 3 d|scusses the
2 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
methodo|ogy used to project, for 2005÷2030, GHG em|ss|ons from act|v|t|es us|ng
energy (hereafter referred to as the “energy sector”} and act|v|t|es not us|ng energy
(the“non-energysector”}.Ohapter4prov|destheopt|onsandcostsofreduc|ngthese
em|ss|ons.Ohapter5presentsthecha||engestoandenab||ngpo||c|esfortheadopt|on
ofc|eantechno|og|es|nthereg|on,andthe|astchapteroffersrecommendat|onsforthe
furtherdeve|opmentandpromot|onofc|eanenergyresourceopt|onsandtechno|og|es
|nSouthAs|a.
2 Regional Overview
Socioeconomic Background
lnth|sstudy,SouthAs|acompr|sess|xcountr|es:Bang|adesh,Bhutan,lnd|a,theMa|d|ves,
Nepa|,andSr||anka.Thereg|onhash|gh|yd|verseandr|checo|og|ca|zones,fromthe
H|ma|ayan range that hosts the h|ghest peak |n the wor|d, Mount Everest |n Nepa|, to
thecora|reef|s|andsoftheMa|d|ves.W|thatota||andareaofabout3.38m||||onsquare
k||ometers(2.57%ofthewor|dtota|},thereg|onwashometo1.378b||||onpeop|e(20%
of the wor|d popu|at|on} |n 2010 and has the h|ghest popu|at|on dens|ty |n the wor|d
(Wor|d Bank 2012}. lnd|a’s popu|at|on compr|ses about 85.8% of the reg|ona| tota|. lts
popu|at|on growth rate of 1.56% (|n 2010} |s bound to |ncrease the pressure on the
natura|resourcesandenv|ronment.Thereg|on’sexpand|ngurbanareasand|ncreas|ng
urban popu|at|on—29.3% of the tota| |n 2010—further contr|bute to th|s pressure
(ADB 2011}. The reg|on |s very r|ch |n natura| resources, espec|a||y water, but scores
very|ow|nsoc|oeconom|c|nd|cators.A|ongs|de|tseconom|c,demograph|c,andsoc|a|
character|st|cs,|tsun|quegeograph|candc||mat|ccond|t|onsmakeSouthAs|aoneofthe
wor|d’smostvu|nerab|ereg|onstoc||matechange|mpact.
Dur|ng 2005–2010, South As|a posted good econom|c growth, w|th a reg|ona| gross
domest|cproduct(GDP}thatgrewat7.9%perannum(Tab|e1}.lnthesameper|od,|ts
percap|tarea|GDP|npurchas|ngpowerpar|ty(PPP,atconstant2005|nternat|ona|$}
grewatacompoundedannua|growthrateof8.45%.As|nanyotherreg|on,SouthAs|an
countr|essawm|xedgrowthrates|nthes|x-yearper|od.Thereg|on|s|edbylnd|aw|than
8.5%growthrate|n2010.
The agr|cu|ture and |ndustry sectors together account for over 40% of GDP |n most
countr|es|nSouthAs|a,wh||etheserv|cesectorhastheh|ghestshare|nGDP(Tab|e1}.
Thecontr|but|onofagr|cu|turetoGDPgenera||ydec||nedacrossthereg|onbetween2005
and2010,andthatof|ndustry|ncreased.TheMa|d|veshas||m|tedscopeforexpans|on
of|tsagr|cu|turesectorandtendstobeheav||ydependentontheserv|cesector.
Energy Resources, Production, and Use
Energy Resource Potentials
Theendowmentofenergyresourcesvar|esw|de|yacrossSouthAs|a.lnd|ahasabundant
coa| resources and Bang|adesh has a modest depos|t of natura| gas and some coa|
reserves. Bhutan, the Ma|d|ves, Nepa|, and Sr| |anka have no apprec|ab|e foss|| fue|
reserves.Thereg|onhasno|nd|genouso||resources,exceptforsma||reserves|nlnd|a
4 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
and Bang|adesh. Bhutan and Nepa|—the H|ma|ayan countr|es—have r|ch hydropower
potent|a|,butno|nd|genousfoss||energyresources.lnd|a’shydropowerpotent|a||sa|so
s|gn|fcant a|though |t may not be cons|dered b|g g|ven the country`s |arge demand for
e|ectr|c|ty.
Biomass
Tab|e 2 presents the potent|a| for b|omass energy resources (fue|wood, agr|cu|tura|
res|dues, and an|ma| waste} |n South As|a. lnd|a has h|gh fue|wood potent|a| because
of |ts |arge |and and forest areas. The tota| susta|nab|e annua| forest y|e|d |n Bhutan
|s equ|va|ent to about 3.9 m||||on tons (t}, of wh|ch on|y 40% (about 1.57 m||||on t} |s
est|matedtobeextractab|e(RGoBDoE2007}.lnSr||anka,energycropp|antat|onsto
produceb|oethano|andb|od|ese|havethepotent|a|toproduce24,000g|gawatt-hours
(GWh}peryear(N|ssankaandKonar|s2010}.
Thetota|annua|amountofrecoverab|eagr|cu|tura|cropres|dues|nBang|adesh|sabout
44.1 m||||on t, of wh|ch 60% |s fe|d res|dues and 40% |s process res|dues (Monda| 2010}.
lnBhutan,thetota|b|omassava||ab|||typotent|a|fromagr|cu|tura|res|dues|sest|matedat
0.308m||||ontperannumofsoftstemres|dues
1
and0.058m||||ontofpowderyres|dues
2

(RGoBDoE2007}.lnlnd|a,a|though388m||||ontofagr|cu|tura|res|duesareava||ab|e,
1
Oropsw|thbu|kdens|tybetween30k||ogramspercub|cmeter(kg/m
3
}and60kg/m
3
,andwh|chcanbe
ba|edandcompressed||kepaddy,wheat,bar|ey,mustard,ma|ze,andm|||et.
2
Oropsw|thbu|kdens|tyofabout100kg/m
3
||kepaddyhusk,ma|zehusk,andcob.
Table 1 Selected Social and Economic Indicators of South Asian Countries
Indicators
Bangladesh Bhutan India The Maldives Nepal Sri Lanka World
2005 2010 2005 2010 2005 2010 2005 2010 2005 2010 2005 2010 2005 2010
Popu|at|on
(m||||on}
a
137 146.2 0.6 0.7 1,101 1,182.1 0.3 0.3 24.9 28.9 19.6 20.7 6,506 6,895
Popu|at|on
growthrate(%}
a
1.3 1.3 1.3 1.8 1.5 1.4 1.5 1.7 2.3 2.2 0.9 1.0 1.2 1.1
%Ürban
popu|at|on
a
25.7 28.1 31.0 34.7 28.7 30 33.8 40.1 15.9 18.6 14.7 14.3 28.7 30.0
GDPpercap|ta,
PPP(constant
2005$}
b
1,195 1,488 3,552 4,780
c
2,286 3,039 5,248 7,387 1,045 1,079 3,550 4,601 2,286 3,535
Growthrateof
rea|GDP
a
6.0 5.8 7.0 6.7 9.5 8.5 (7.1} 9.9 3.5 4.6 6.2 8.0
Sector contribution to GDP (%)
a
Agr|cu|ture 20.1 18.8 23.3 18.7 18.8 19.0 7.7 5.3 35.2 35.0 13.5 12.8
lndustry* 27.2 28.5 36.6 42.0 28.1 26.3 15.5 12.4 17.1 15.0 32.2 29.4
Serv|cesand
others
52.6 52.6 40.1 38.1 53 54.7 77.4 82.8 47.7 50.1 54.3 57.8
(}=negat|ve,GDP=grossdomest|cproduct,PPP=purchas|ngpowerpar|ty.
*lnc|udesmanufactur|ng,m|n|ng,construct|on,ande|ectr|c|ty,gas,andwater.
Sources:

a
ADB.2011.Key Indicators for Asia and the Pacific 2011, 42nd Edition.Man||a.
b
Wor|dBank.2012.World Development Indicators.http://data.wor|dbank.org/data-cata|og/wor|d-deve|opment-|nd|cators,accessedon21August2012.
c
2009data.
Reg|ona|Overv|ew 5
thenetusab|eamount|son|y182m||||ont(Sarkar2007}.ln2008/2009,Nepa|’ssupp|y
potent|a|ofagr|cu|tura|res|dueswasest|matedat19.4m||||ont,equ|va|entto243m||||on
g|gajou|es(GJ}ofenergy(GoNWEOS2010}.
An|ma| waste |s the th|rd s|gn|fcant source of potent|a| b|omass energy |n South As|a,
espec|a||y|ntherura|areas.Basedontheava||ab|||tyofcatt|edung|nlnd|a,anest|mated
12m||||onun|tsoffam||y-typeb|ogasp|antscanbe|nsta||ed,togenerateanaverageof
about 15,000 m||||on cub|c meters (m
3
} of b|ogas annua||y. As of 31 Ju|y 2012, about
4.28 m||||on un|ts (35.7%} had been |nsta||ed around the country (Gol MNRE 2012a}.
Nepa| has the techn|ca| potent|a|
3
to |nsta|| 1.3 m||||on–2.9 m||||on b|ogas p|ants (GoN
WEOS2010}.
3
Techn|ca| potent|a| |s defned as the ach|evab|e energy generat|on of a part|cu|ar techno|ogy g|ven system
performance, topograph|c ||m|tat|ons, env|ronmenta|, and |and-use constra|nts (Source: http://www.nre|
.gov/g|s/re_potent|a|.htm|}.lnotherwords,techn|ca|potent|a||sthetheoret|ca|max|mumamountofenergy
use that cou|d be d|sp|aced by the techno|ogy be|ng eva|uated (e.g., energy effc|ency, comb|ned heat,
and power} d|sregard|ng a|| non–eng|neer|ng constra|nts (source: http://www.epa.gov/state|oca|c||mate/
resources/g|ossary.htm|}.
Table 2 Biomass and Biogas Production Potential and Total Number of Biogas Plants
Installed in South Asia
Country Reference/Source Year
Biomass Potential (million tons) Theoretical Annual
Biogas Production
Potential
h

(million cubic meters)
Total No.
of Installed
Biogas Plants Fuelwood
Agricultural
Residues
Animal
Waste
Bang|adesh Monda|(2010} 10.9
a
44.1 40 22,549
GPRBMPEMRPD
(2012b}
8.60
Bhutan RGoBDoE(2007} 2005 3.9 0.366 0.3 8.86
lnd|a GolMNRE(2012a} 2011 500
GolMNRE
(2012b,2012c}
15,000
b
4,404,762
d
Sarkar(2007} 2011 388
TheMa|d|ves EON(2004a,2004b} 2005 0.009
e
0.015
f
0.023
g
n.a.
Nepa| GoNWEOS(2010}
2008/2009
12.5 19.4 14.9 1,865.3
AEPO(2012a} 256,662
Sr||anka FAO(2009} 2011 8.9
ADB(2004} 2011 1.96
SSEA(2012a} 2011 0.01
N|ssankaand
Konar|s(2010}
1,168
c
GJ=g|gajou|e,kg=k||ograms,kJ=k||ojou|e,n.a.=datanotava||ab|e,TJ=terajou|e.
a
Recoverab|eb|omass,ca|cu|atedcons|der|nga100%recoveryrateandunchang|ngproduct|onrate(Monda|2010}.
b
Oa|cu|atedfrom35m||||onm
3
/daypotent|a|.
c
Oa|cu|atedfrom3.2m
3
/daypotent|a|.
d
Oumu|at|vephys|ca|ach|evementsasof31March2011.
e
Net ca|or|fc va|ue of fue|wood |s cons|dered to be 14,400 kJ/kg to convert 130 TJ to tons.
f
Net ca|or|fc va|ue of agr|cu|tura| res|due |s cons|dered to be 15 GJ/ton to convert 220 TJ to tons.
g
Net ca|or|fc va|ue of an|ma| waste |s cons|dered to be 8.8 GJ/ton to convert 200 TJ to tons.
h
Basedonan|ma|wasteon|y.
6 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Hydropower
Thetota|econom|chydropowerpotent|a|
4
|nSouthAs|a|sest|matedat152,580megawatts
(MW}, wh||e the tota| theoret|ca| potent|a|
5
across three countr|es (Bhutan, lnd|a, and
Nepa|}|sabout264,000MW(Tab|e3}.Bothparametersvaryw|de|yamongthecountr|es
|nthereg|on,fromneg||g|b|e|ntheMa|d|vesto149,000MWand84,040MW,respect|ve|y,
|n lnd|a.
6
However, a|though lnd|a has the h|ghest exp|o|tab|e theoret|ca| hydropower
potent|a||nabso|uteterms,|trankson|yth|rd|npercap|taterms,afterBhutanandNepa|
(|nthatorder}.
Nepa| env|s|oned deve|op|ng |ts hydropower potent|a| over severa| 5-year per|ods:
2,057 MW |n 2009-2013; 12,423 MW |n 2014-2019; 5,114 MW |n 2020-2024; and
18,034MW|n2025–2029(GoNMoWR2009}.However,deve|opment|ssevere|y|agg|ng
beh|ndthetargets,w|ththe|nsta||edhydropowercapac|ty|nthecountrybe|ng652MW,
asof2011,|.e.,on|y1.6%of|tseconom|chydropowerpotent|a|(Tab|e3}.lncontrast,
Sr||ankahasa|readydeve|oped70%of|tseconom|chydropowerpotent|a|andst|||has
scopetodeve|opsma||hydropowerprojectsthathaveanest|matedpotent|a|of400MW
(SSEA2012b}.
As of 2011, lnd|a, Bang|adesh, and Bhutan had |nsta||ed 46.7%, 29.7%, and 6.3%
of the|r econom|c hydropower potent|a|s, respect|ve|y (Tab|e 3}. ln Bhutan, most of
4
Econom|cpotent|a||sthesubsetoftechn|ca|potent|a|that|seconom|ca||ycost–effect|ve(e.g.,ascompared
to convent|ona| supp|y-s|de energy resources}. Est|mates of econom|c potent|a| do not address market
barr|ersto|mp|ementat|on(Source:http://www.epa.gov/state|oca|c||mate/resources/g|ossary.htm|}.
5
Theoret|ca| potent|a| |s the annua| energy potent|a||y ava||ab|e |n the country |f a|| natura| fows were turb|ned
downtosea|eve|ortothewater|eve|oftheborderofthecountry(|fthewatercourseextends|ntoanother
country} w|th 100% effc|ency from the mach|nery and dr|v|ng waterworks.
6
lnlnd|a,theest|matedpotent|a|forpowergenerat|onfromsma||hydropowerprojects(|.e.,projectsupto
25-MWcapac|ty}|s15,380-MW(GolMNRE2012a}.
Table 3 Theoretical and Economic Hydropower Potential in South Asia
Country Reference/Source
Theoretical
Hydropower
Potential
(megawatt)
Theoretical
Hydropower
Potential per
Capita (kilowatt
as of 2010)
Economic
Hydropower
Potential
(EHP in
megawatts)
Installed
Hydropower
Capacity
(megawatts as
of 2011)
Installed
Hydropower
Capacity
(% of EHP)
Bang|adesh GPRB(2011} n.a. – 775 230 29.7
Bhutan RGoBNEO(2011} 30,000 42.86 23,765 1,505.32 6.3
lnd|a GolMoEF(2012}
GolMPOEA(2012}
149,000 0.13 84,040
a
39,291.40 46.8
TheMa|d|ves n.a. n.a. n.a. n.a. n.a.
Nepa| GoNWEOS(2011} 83,000 2.87 42,000 652.09 1.6
Sr||anka Youngandv||hauer
(2003}
DSRS|OBS|(2012}
n.a. n.a. 2,000 1,399 70.0
Total 264,000
b
0.21 152,580 43,077.8 28.2
n.a.=notava||ab|e,–=nodata.
a
at 60% p|ant factor;
b
forfourcountr|es.
Reg|ona|Overv|ew 7
th|s hydropower |s exported to lnd|a, and the government a|ms to generate a tota| of
10,000MWby2020(RGoBNEO2011}.
Wind
Exceptforlnd|a,countr|es|nSouthAs|ahave||tt|eornore||ab|edataforacomprehens|ve
assessmentofw|ndenergypotent|a|,andareon|ybeg|nn|ngtoco||ectre||ab|ew|ndspeed
dataformapp|ngthe|rw|ndenergyresources.Tab|e4presentsthe||m|ted|nformat|on
co||ected|nth|sstudy,andshowsthatlnd|a|eads|ntermsofw|ndpower(aswe||asso|ar
and coa|-fred power}.
lnd|ahasanest|matedtota|w|ndpotent|a|of48,561MW,ofwh|chabout36.3%hasbeen
|nsta||ed(asofJune2012}.Thegovernmenta|mstoproduceanadd|t|ona|2,500MWof
w|ndpower|n2012/2013(GolMNRE2012c}.
lnBang|adesh,thew|ndpowerpotent|a||sest|matedat4,614MW,buton|y2%(92.3MW}
|scons|deredtechn|ca||yexp|o|tab|ebecauseof||m|tedgr|daccessandscatteredw|nd
powers|tes(Monda|2010}.Meanwh||e,pre||m|naryassessment|nBhutangaveaw|de
rangeofw|ndenergypotent|a|atbetween5MWand3,670MW(G||man,Oow||n,and
He|m|||er 2009}. The tota| w|nd potent|a| of the Ma|d|ves |s yet to be assessed (NRE|
2008},wh||ethatofNepa|wasreported|ynoth|gh(GoNWEOS2010}.
Table 4 Wind Power, Solar Power, and Coal Resources in South Asia
Country
Reference/
Source
Wind Power (MW) Technical
Solar Power
Potential (MW)
Coal
Reserves
(ton)
Installed Coal-
Fired Power
Plants (MW) Potential Installed
Bang|adesh Monda|(2010} 4,614 92.3 50,175
GPRBEMRD
(2012}
3.3b||||on 250
Bhutan G||man,Oow||n,
andHe|m|||er
(2009}
5–3,670 91m||||onkWh
RGoBNEO
(2011}
1.96m||||on
lnd|a GolMNRE
(2012b}
48,561 17,644
GolMoO(2011} 114b||||on 116,333
TheMa|d|ves NRE|(2008} 793MWh/year
Nepa| AEPO(2008} 3,000 9.2kW
GoNWEOS
(2010}
2,920GWh
Sr||anka Youngand
v||hauer(2003}
24,000
DSRS|OBS|
(2012}
3
DSRS|MoPE
(2012}
0 300
GWh=g|gawatt-hour,kWh=k||owatt-hour,MW=megawatt,MWh=megawatt-hour.
8 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Solar Power
South As|a has good so|ar power resource w|th so|ar rad|at|on of 4–7 k||owatt-hour
per square meter per day (kWh/m
2
/day} |n most countr|es, except |n the Ma|d|ves and
Nepa|where|t|s3.5–5.0kWh/m
2
/dayand3.6–6.2kWh/m
2
/day,respect|ve|y(Youngand
v||hauer 2003; G||man, Oow||n, and He|m|||er 2009; GoN WEOS 2010; Gol MNRE 2012d;
GPRB MPEMR 2012a; SSEA 2012a}.
Theannua|averageva|uesofg|oba|hor|zonta|so|arrad|at|on|nBhutanare4.0–5.5kWh/
m
2
perday.Thecountryhasanest|matedtota|theoret|ca|so|arpowerpotent|a|forgr|d
connected photovo|ta|c systems to be 58,000 MW (DO}, an amount equ|va|ent to the
annua| generat|on of about 92 m||||on kWh (DO} and 82 m||||on kWh (AO} of e|ectr|c|ty
(G||man,Oow||n,andHe|m|||er2009}.Thecountrya|sohaspotent|a|for50,000un|tsof
100wattspeakso|arpowersystems,wh|chwou|dhaveaGHGabatementpotent|a|of
8,800tOO
2
equ|va|ent(OO
2
e}(RGoBNEO2011}.
AsofJune2012,lnd|a’stota|so|arpower|nsta||edcapac|ty|sreportedtobe1,030.66MW
(GolMNRE2012c},w|ththegovernmenttarget|ng800-MWofso|arpower|n2012/2013.
The rea||zab|e techno-econom|c potent|a| for so|ar-powered water heat|ng systems |n
lnd|a|sest|matedat40m||||onm
2
ofco||ectorarea,ofwh|chnear|y5m||||onm
2
hadbeen
|nsta||edasof2011(GolMNRE2012b}.
lnNepa|,thetheoret|ca|annua|so|arpowerpotent|a|wasest|matedat2,920GWh(GoN
WEOS 2010}, w|th the commerc|a| potent|a| for gr|d-connected so|ar power est|mated
at 2,100 MW (AEPO 2008}. By 2011, a tota| of 64,300 so|ar home systems based on
photovo|ta|chadbeen|nsta||ed|nthecountry(AEPO2012b}.
Coal
Asof2011,thetota|provencoa|reserve|nSouthAs|awasest|matedat117.3b||||ont,
ofwh|ch97.2%(114b||||ont}was|nlnd|a.
7
Bang|adeshandBhutanhavecoa|reservesof
about3.3b||||ont(GPRBEMRD2012}and1.96m||||ont(RGoBNEO2011},respect|ve|y.
Noothercountry|nthereg|onhasapprec|ab|ecoa|reserves.
As of 2011, South As|a has a tota| 116,883 MW of |nsta||ed capac|ty of coa|-fred power
p|ants. Th|s |nc|udes lnd|a’s 116,333 MW, wh|ch |s 56.6% of |ts tota| |nsta||ed power
generat|on capac|ty (Gol MoO 2011}, and Bang|adesh`s 250-MW coa|-fred power p|ant
|nBoropukur|am|ne(GPRB2011}.
Sr| |anka has no coa| resources, but has begun add|ng coa|-based power generat|on
capac|ty |nto the nat|ona| gr|d us|ng |mported coa|. Üp to 300 MW |n coa|-fred power
p|antswere|nsta||edby2011,w|thanother600MWbe|ng|nsta||ed(DSRS|MoPE2012}.
Oil
Bhutan,theMa|d|ves,andNepa|havenoo||reservesandarefu||ydependenton|mported
o|| supp|y. Sr| |anka has |dent|fed commerc|a|-|eve| potent|a| o|| reserves and proven o||
reserves(the|atteron|y|n2011}.However,thecountrycont|nuestore|yon|mportsfor|ts
petro|eumrequ|rements(DSRS|OBS|2012}.
7
Th|s |s about 40% of the tota| coa| resource potent|a| |dent|fed |n lnd|a (Gol MoO 2011}.
Reg|ona|Overv|ew 9
Bang|adesh, w|th on|y about 8 m||||on t of proven o|| reserves (Üdd|n 2006 as c|ted |n
Monda| 2010}, |mported 1.2 m||||on t of crude o|| and 2.6 m||||on t of refned petro|eum
products|n2010(GPRB2011}.
ln 2010–2011, lnd|a’s recoverab|e crude o|| reserve was est|mated at 757.4 m||||on t,
wh|ch was st||| not adequate to meet the country’s grow|ng energy requ|rements (Gol
MPNG2011}.lnthesameper|od,lnd|a|mported163.5m||||ontofcrudeo||(about79.3%
of tota| consumpt|on}, 8.95 m||||on t of ||quefed petro|eum gas (|PG}, and 17.3 m||||on t of
petro|eumproducts(GolMPNG2011}.
Natural Gas
Natura|gas|san|mportantsourceofenergyforBang|adeshandlnd|a.Bang|adeshhas
a tota| extractab|e reserve of around 20.5 tr||||on cub|c feet, of wh|ch about 9.4 tr||||on
cub|c feet had been ut|||zed as of December 2011. Of the 23 natura| gas fe|ds d|scovered
across Bang|adesh, 17 fe|ds are under act|ve product|on (GPRB 2011}.
lnd|a’srecoverab|enatura|gasreservehasbeenest|matedat1,241b||||oncub|cmeters
(m
3
}.Grossproduct|on|n2010–2011was52.2m||||onm
3
,wh|chwasa|most10%h|gher
thanthat|n2009–2010.Desp|tethesteady|ncrease,demandoutstr|pssupp|y,andthe
country has been a net |mporter s|nce 2004. Net |mports of natura| gas reached an
est|mated429b||||oncub|cfeet|n2010(GolMPNG2011}.
Energy Production and Use
Theenergyeconomy|nSouthAs|ancountr|es|scharacter|zedby|ow|eve|sofe|ectr|c|ty
access, per cap|ta e|ectr|c|ty consumpt|on, and per cap|ta modern energy consumpt|on;
re|at|ve|y h|gh dependence on b|omass energy; and grow|ng dependence on |mported
foss||fue|s,espec|a||ypetro|eumproducts.
Total Primary Energy Supply
Tab|e5presentstheovera||structureofthetota|pr|maryenergysupp|y(TPES}|nSouth
As|afor2005and2009.TPES|ncreasedby15.6%|nSouthAs|a,|nc|ud|nglnd|a,dur|ng
th|s per|od, and at 25% exc|ud|ng lnd|a. Supp|y |ncreased at a compounded annua|
growthrateof5.9%|nlnd|a,5.2%|nBang|adesh,and3.7%|nNepa||nthesameper|od
(lEA2011}.Atthereg|ona||eve|,theshareofcoa|andnatura|gas|ntheTPES|ncreased,
wh||ethatofb|omassandhydropowerdecreased.
Asexpected,thecountr|es|nSouthAs|ashowa|arged|fference|nthe|renergysupp|y
m|x. Foss|| fue|s dom|nate the TPES of Bang|adesh, lnd|a, and the Ma|d|ves, wh||e
renewab|e energy sources (ma|n|y b|omass and hydropower} are dom|nant |n Bhutan,
Nepa|,andSr||anka(Tab|e5}.Ooa||sthes|ng|e|argestenergyresourceused|nlnd|a,
wh||e |t |s natura| gas |n Bang|adesh and petro|eum products |n the Ma|d|ves (wh|ch
depends a|most ent|re|y on o||}. Dur|ng 2005–2009, Bang|adesh and lnd|a showed a
grow|ngdependenceonnatura|gas,andtherestofthereg|ononpetro|eumproducts.
Based on per cap|ta |nd|cators, TPES across South As|a |ncreased from 0.45 t of o||
equ|va|ent(toe}|n2005to0.53toe|n2009(Tab|e6},wh|ch|s70%|essthantheg|oba|
fgure of 1.8 toe. TPES per cap|ta |ncreased |n a|| countr|es between 2005 and 2009,
10 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Table 5 Structure of Total Primary Energy Supply in South Asia, 2005 and 2009
Indicators
Bangladesh Bhutan
a
India
The
Maldives
b
Nepal Sri Lanka
South Asia
including
India
South Asia
excluding
India
2005 2009 2005 2009 2005 2009 2005 2008 2005 2009 2005 2009 2005 2009 2005 2009
TPES(toe} 24.2 29.6 0.4 n.a. 537 675.8 0.2 0.3 8.6 9.9 9.0 9.3 579.5 725.0 42.4 49.1
Energy resource share in TPES (%)
B|omass 34.3 29.8 57.6 n.a. 29.7 24.8 1.3 0.2 87.5 86.2 52.9 51.0 31.1 26.2 49.0 45.0
Ooa| 1.4 2.1 6.8 n.a. 39.1 42.7 0.0 0.0 2.0 1.9 0.7 0.6 36.3 39.9 1.8 2.4
Petro|eum
products
19.1 15.9 19.9 n.a. 24.2 23.9 98.7 99.8 8.3 9.1 43.2 44.7 24.1 23.7 22.2 20.6
Natura|gas 44.7 51.8 0.0 n.a. 5.4 7.3 0.0 0.0 0.0 0.0 0.0 0.0 6.9 8.9 25.3 30.7
Hydropower 0.5 0.4 15.8 n.a. 1.6 1.3 0.0 0.0 2.2 2.7 3.2 3.6 1.6 1.3 1.6 1.3
n.a.=notava||ab|e,toe=tonofo||equ|va|ent,TPES=tota|pr|maryenergysupp|y.
Sources
lEA(lnternat|ona|EnergyAgency}.2011. World Energy Outlook 2011.Par|s.
a
2005datafromRGoBDoE(Roya|GovernmentofBhutan,DepartmentofEnergy}.2007.Bhutan Energy Data Directory 2005.M|n|stryofTradeand
lndustry.Th|mphu.
b
RoMMMA(Repub||coftheMa|d|ves,TheMa|d|vesMonetaryAuthor|ty}.2011.Annual Economic Review 2010.Ma|e.http://www.mma.gov.mv/ar/
ar10.pdf?bcs|_scan_9688b637a46568db=0&bcs|_scan_f|ename=ar10.pdf
except Bang|adesh and Sr| |anka. The Ma|d|ves posted the |argest |ncrease. S|m||ar|y,
foss||fue|consumpt|onande|ectr|c|tyuse|ncreasedacrossthereg|on,except|nSr||anka.
The reg|on’s per cap|ta e|ectr|c|ty consumpt|on of 2,045 kWh |n 2009 was 25% |ower
thantheg|oba|averageof2,730kWh(lEA2011}.
A country`s energy |ntens|ty of GDP |s defned as |ts energy use (|.e., TPES} per un|t of
GDP, wh|ch prov|des a p|cture of the economy`s energy use effc|ency, |.e., the amount
of energy requ|red per do||ar of GDP. (To compare across countr|es, GDP |n constant
2005PPPwasapp||ed|nth|sstudy.}SouthAs|a’senergy|ntens|tyofGDPdec||nedfrom
0.21toe/PPP$1,000|n2005to0.18toe/PPP$1,000|n2009,wh|chwascomparab|eto
theg|oba|averageof0.19toe/PPP$1,000(Tab|e6}.S|m||ar|y,thereg|on’se|ectr|c|tyuse
perun|tofGDPdec||nedbutfoss||fue|useperun|tofGDP|ncreaseddur|ng2005–2009.
Structure of Electricity Production
Asof2011,thetota||nsta||ede|ectr|c|tygenerat|oncapac|ty|nSouthAs|awasest|mated
at218,895MW(Tab|e7}.ltrangedfrom106MW|ntheMa|d|vestomorethan205,000
MW|nlnd|a,wh|ch|sabout93.8%ofthereg|on’stota|capac|ty.Energycompos|t|onwas
53.2%coa|,19.7%hydropower,and13.5%o||andgas.
O|| and gas-powered sources compr|sed the major|ty of |nsta||ed e|ectr|c|ty generat|on
capac|ty|nBang|adesh(95%}andSr||anka(54%},wh||ehydropowersourcesdom|nated
|n Bhutan (99%} and Nepa| (92%}. ln lnd|a, coa| contr|buted the most (57%} to tota|
e|ectr|c|tygenerat|oncapac|ty,fo||owedbyhydropowersourcesat19%.TheMa|d|ves|s
tota||ydependentono||andgasfore|ectr|c|tygenerat|onandon|ylnd|ahasanuc|ear-
powerede|ectr|c|tygenerat|onsystem|nsta||ed.
Reg|ona|Overv|ew 11
Energy Consumption by Sector
Tab|e 8 presents South As|a`s tota| fna| energy consumpt|on (TFEO} and sector shares
|n2009.TFEO|nthereg|on|ncreasedat5.6%peryear|n2005–2009,w|ththeshareof
e|ectr|c|ty|nTFEO|ncreas|ngfrom11%|n2005to13.5%|n2009.Theres|dent|a|sector
accountedforthe|argestshare|nTFEO,fo||owedbythe|ndustr|a|andtransportsectors.
Table 6 Energy Indicators in South Asia, 2005 and 2009
Indicators
Bangladesh Bhutan India The Maldives Nepal Sri Lanka
South Asia
including
India
2005 2009 2005
a
2009 2005 2009 2005 2009 2005 2009 2005 2009 2005 2009
TPESpercap|ta(toe} 0.2 0.2 0.63 n.a. 0.49 0.58 0.75 1.10 0.35 0.36 0.46 0.45 0.45 0.53
Foss||fue|consumpt|onper
cap|ta(toe}
0.07 0.08 0.17 n.a. 0.14 0.19 0.74 1.10 0.04 0.04 0.15 0.13 0.13 0.17
E|ectr|c|tyusepercap|ta
(kWh}
133 250 1,052 n.a. 434 602.2 1,686 1,777 71 96 370 357 1,926 2,045
TPES/GDPatPPP(toeper
constant2005$1,000}
0.15 0.13 0.18 n.a. 0.21 0.18 0.14 0.15 0.33 0.31 0.13 0.10 0.21 0.18
Foss||fue|/GDPatPPP(toe
perconstant2005$1,000}
0.06 0.05 0.05 n.a. 0.06 0.06 0.14 n.a. 0.04 0.03 0.11 0.10 6.61 9.21
E|ectr|c|tyuse/GDPatPPP
(kWhperconstant2005
$1,000}
111 163 280 n.a. 190 186 1,276 897 68 82 104 77 898 685
GDP=grossdomest|cproduct,kWh=k||owatt-hour,n.a.=notava||ab|e,PPP=purchas|ngpowerpar|ty,toe=tonofo||equ|va|ent,TPES=tota|
pr|maryenergysupp|y.
Sources:
lEA(lnternat|ona|EnergyAgency}.2007.World Energy Outlook 2007, [the People’s Republic of] China and India Insights.OEOD/lEA.Par|s.
lEA(lnternat|ona|EnergyAgency}.2011.World Energy Outlook 2011.Par|s.
a
RGoBDoE(Roya|GovernmentofBhutan,DepartmentofEnergy}.2007.Bhutan Energy Data Directory 2005.M|n|stryofTradeandlndustry.Th|mphu.
Table 7 Structure of Installed Electricity Generation Capacity in South Asia, 2011 (MW)
Country Reference/Source Coal Oil and Gas

Nuclear Hydropower
Other
Renewables Total
Bang|adesh BPDB(2011} 200 7,679 0 220 0.018 8,099
Bhutan RGoBDoE(2011} 0 20 0 1,486 0 1,505
lnd|a GolMPOEA(2012} 116,333 20,103 4,780 39,291 24,833 205,340
TheMa|d|ves Sankareta|.(undated} 0 106 0 0 0 106
Nepa| GoNNEA(2011} 0 53.4 0 652.1 0.1 706
Sr||anka DSRS|OBS|(2012} 0 1,690 0 1,399 50 3,139
Total 116,533 29,651 4,780 43,048 24,883 218,895
%Tota| 53.2 13.5 2.2 19.7 11.4 100.0
Note:Otherrenewab|es|nc|udegeotherma|,so|ar,w|nd,andothers.
12 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Activities Not Using Energy
Agriculture
8
Crop Production and Fertilizer Use
Themajorcropsproduced|nSouthAs|aarer|ce,ma|ze,wheat,andm|||et.lnSr||anka,
coconut,tea,andrubberarea|so|mportantcrops.Acrossthereg|on,r|ce|stheb|ggest
agr|cu|tura|crop,a|though|tsproduct|onhadthes|owestgrowthaton|y0.3%peryear
dur|ng2000–2010(Tab|e9}.lnd|aaccountedformorethan67%ofthereg|on’stota|r|ce
product|on,82%ofma|ze,and97%eachofwheatandm|||et.TheMa|d|vesre||esmost
heav||yon|mportedfoodgra|ns.
South As|a posted a 2.1% annua| |ncrease |n n|trogen fert|||zer use dur|ng 2000–2010
(Tab|e 9}, ma|n|y to support the need for h|gher crop product|on. A|| countr|es posted
pos|t|veannua|growthrates|ntheuseofn|trogenfert|||zerforagr|cu|ture,rang|ngfrom
Sr||anka’s1%to15.2%|ntheMa|d|ves.
Livestock
lngenera|,SouthAs|a’s||vestockproduct|onhasgrownmuchfasterthancropproduct|on.
The popu|at|ons of buffa|oes, catt|e, and goats |ncreased by 20%, 9%, and 39%,
respect|ve|y,dur|ng2000–2010,wh||ep|gnumbersdecreasedby25%.lnd|aaccounted
for94%ofthebuffa|opopu|at|on|nthereg|on.Tab|e9showstheannua|growthratesof
se|ectedcropsand||vestock|nSouthAs|ancountr|esdur|ng2000–2010.
8
Th|ssect|onreferstoact|v|t|es|nagr|cu|turethatem|tGHGsw|thout|nvo|v|ngenergycombust|on.
Table 8 Total Final Energy Consumption by Sector, South Asia, 2009 (%)
Sectors Bangladesh Bhutan
a
India

The
Maldives Nepal Sri Lanka
South
Asia,
including
India
South
Asia,
excluding
India
5PUBMÙOBMFOFSHZ
consumption
(ktoe)
23,135 2,395 449,270 n.a. 9,878 8,010 492,688 43,418
Agr|cu|ture 5.0 1.2 3.8 n.a. 1.4 0.1 3.7 3.1
Oommerc|a| 1.6 10.3 3.3 n.a. 1.6 3.9 3.2 2.5
lndustr|a| 21.1 25.2 30.4 n.a. 3.6 26.7 29.3 18.3
Res|dent|a| 52.0 49.0 37.6 n.a. 87.7 43.0 39.5 58.3
Transport 11.3 14.4 11.5 n.a. 5.8 23.2 11.5 12.4
Others 0.1 n.a. 4.8 n.a. 0 2.0 4.4 0.4
Non-energyuse 8.9 n.a. 8.6 n.a. 0 1.1 8.3 5.0
ktoe=thousandtonsofo||equ|va|ent,n.a.=notava||ab|e.
Note:Bhutandataasof2005.
Sources:
lEA(lnternat|ona|EnergyAgency}.2011.World Energy Outlook 2011.Par|s.
a
RGoB DoE (Roya| Government of Bhutan, Department of Energy}. 2010. Integrated Energy Management Master Plan. Prepared
for Department of Energy, M|n|stry of Econom|c Affa|rs. Th|mphu. TERl Press. The Energy and Resources lnst|tute. http://www.
nec.gov.bt/nec1/wp-content/up|oads/2012/11/EnergyMasterP|an2010.pdf?bcs|_scan_9688b637a46568db=0&bcs|_scan_
f|ename=EnergyMasterP|an2010.pdf
Reg|ona|Overv|ew 13
Table 9 Annual Growth Rates of Selected Crops and Livestock, South Asia, 2000–2010 (%)
Commodity Bangladesh Bhutan India
The
Maldives Nepal Sri Lanka
South Asia,
including India
Paddyr|ce 2.8 3.4 (0.6} 0.0 (0.5} 4.1 0.3
Ma|ze 56.6 1.3 1.6 3.5 2.8 17.9 2.3
M|||et 2.1 3.2 0.8 0.0 1.0 3.9 0.8
Wheat (6.9} 0.3 0.5 0.0 2.8 0.0 0.5
N|trogenusefor
agr|cu|ture
3.5 6.1 2.0 15.2 4.3 1.0 2.1
Buffa|oes 4.3 (4.0} 1.7 0.0 3.2 3.3 1.8
Oatt|e 0.3 (1.6} 0.9 0.0 0.2 0.2 0.8
P|gs 0.0 (6.8} (3.2} 0.0 1.9 1.7 (2.8)
Goats 6.6 2.3 2.2 0.0 3.4 (2.8} 3.3
Oh|ckens 5.6 0.6 8.8 0.0 3.3 2.8 7.8
(}=negat|ve.
Source:FAO.2012.FAOSTATdatabase(accessed12August2012}.
Land-Use Change and Forestry
Land Use and Land-Use Change
Near|y60%(196.5m||||onhectares[ha|}ofthe|andarea|nSouthAs|a,|nc|ud|nglnd|a,|s
devotedtoagr|cu|tureandabout23%(78m||||onha}areforests(Tab|e10}.Tota|agr|cu|tura|
area decreased dur|ng 2000–2008 and tota| forest area |ncreased dur|ng 2000–2010.
A|though Bang|adesh, Bhutan, and Sr| |anka showed |ncreases, the dec||ne |n lnd|a’s
agr|cu|tura| area by near|y 3 m||||on ha |nfuenced the overa|| reg|ona| trend. S|m||ar|y,
the |ncrease |n forest areas of lnd|a and Bhutan overtook the respect|ve decreases |n
Bang|adesh,Nepa|,andSr||anka.lnd|a’sagr|cu|tura|andforestareasareabout91%and
87%ofthereg|ona|tota|.ExceptforNepa|andSr||anka,theuseof|andforotherpurposes
(|.e., fe|ds, pastures, and sett|ements} appears to have genera||y decreased |n South As|a.
Forests and Forest Resources
Asaproport|onofthecountry’stota||andarea|n2010,forestcover|nthereg|onwas
h|ghest|nBhutanand|owest|ntheMa|d|ves.Acrossthereg|on,21%ofthetota|forest
area was pr|mary forest. However, Bang|adesh, Nepa|, and Sr| |anka posted s|gn|fcant
deforestat|ondur|ng2000–2010(Tab|e11}.Wh||elnd|ahasexertedcons|derab|eeffortto
|ncrease|tsforestarea,Nepa|andSr||ankabothfacemass|vedeforestat|on—seem|ng|y
ofthe|rpr|maryforests—duetofue|woodharvest|ngandconvers|onof|andforagr|cu|ture.
On average, around 10,000 ha of pr|mary forest per year was put to other |and uses
dur|ng 2000–2005. To compensate for th|s, forest p|antat|ons |n South As|a |ncreased
from7.7m||||onha|n2000to10.7m||||onha|n2010,w|thlnd|acontr|but|ngthemost
|ncrease. The reg|on’s forest p|antat|on area rema|ns |n dec||ne when lnd|a |s exc|uded
fromtheana|ys|s.
Asexpected,the2010est|matedcarbonstock|nforestb|omasswash|ghest|nlnd|aat
2,800m||||ont,and|owest|nSr||ankaat61m||||ont(Tab|e11}.Onaper-hectarebas|s,
Nepa|andBhutanhavetheh|ghestcarbonstocks|nforestb|omass,andSr||ankaand
14 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
lnd|athe|owest.ln2010,SouthAs|a’stota|carbonstock|nforestb|omasswasest|mated
at3,762m||||ont,wh|chwasaround1.3%oftheg|oba|tota|.
GHG Emissions and Climate Trends
GHG Emissions
ln 1994, South As|a’s tota| GHG em|ss|on |nc|ud|ng those from |and-use change and
forestry (|ÜOF} amounted to 1,425.6 m||||on t OO
2
e, of wh|ch lnd|a contr|buted 86%.
Based on ava||ab|e data, the comb|ned tota| GHG em|ss|on of Bhutan, lnd|a, and Sr|
Table 10 Selected Land-Use Indicators in South Asia, 2000 and 2010
a
Country/Year
Total Land
Area (million
hectare)
Land Use as % of Total Land Area
Coastline
(‘000 km) Agriculture
b
Forest Others
Reference ADB (2011) ADB (2011) FAO (2010) Authors’
estimates
ADB (2011)
Bang|adesh 13.0 0.6
2000 69.8 11.5 18.7
2010 71.4 11.1 17.5
Bhutan 4.7 0.0
2000 13.9 64.6 21.5
2010 14.7 69.1 16.2
lnd|a 297.3 7.0
2000 61.4 21.5 17.1
2010 60.4 23.0 16.6
TheMa|d|ves 0.03 0.6
2000 33.3 30.0 0
2010 3.3 3.3 0
Nepa| 14.3 0.0
2000 29.5 33.7 36.8
2010 29.4 25.4 45.2
Sr||anka 6.5 1.3
2000 37.5 36.4 26.1
2010 42.1 28.8 29.1
SouthAs|a|nc|lnd|a 335.8 9.6
2000 59.2 22.5 18.2
2010 58.5 23.4 18.1
SouthAs|aexc|lnd|a 38.5 2.6
2000 42.5 30.4 27.0
2010 43.9 26.5 29.6
a
Reg|ona| tota|s and fgures on other |and uses were ca|cu|ated based on the ava||ab|e country fgures. The other |and uses
|nc|ude fe|ds, pastures, and sett|ements.
b
The 2010 agr|cu|ture fgures are 2008 data.
Reg|ona|Overv|ew 15
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16 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
|ankawas1,309.0m||||ontOO
2
e|n2000,anapparentdecrease(|mprovement}fromthe
1994|eve|of1,332.4m||||ontOO
2
e(Tab|e12}.
Energy-us|ng act|v|t|es were a major source of GHG em|ss|ons |n South As|a. These
|nc|uded spec|fc act|v|t|es |n energy convers|on, manufactur|ng, transportat|on, agr|cu|ture,
res|dent|a|, and commerc|a| sectors. Based on ava||ab|e data from Bhutan, lnd|a, and
Sr| |anka, energy-re|ated em|ss|ons |ncreased from 61.3% of the|r tota| em|ss|ons |n
1994to79.4%|n2000,ora27.1%|ncreasebetweenthetwoper|ods(Tab|e13}.Wh||e
GHGem|ss|onsfromact|v|t|esnotus|ngenergy—|nagr|cu|tureandwasteproduct|on—
|ncreased between 1994 and 2000, those |n |and-use change and forestry dec||ned
bymorethan700%,mak|ngthethreecountr|esanets|nkforGHGem|ss|ons.Across
Bhutan,lnd|a,andSr||anka,GHGem|ss|onsfroma||act|v|t|esdec||nedby1.8%dur|ng
1994–2000.
Tota| GHG em|ss|ons of energy-us|ng act|v|t|es across South As|a |ncreased by 98.2%
dur|ng 1990–2005, wh||e g|oba| em|ss|ons |ncreased by on|y 30.8% (Tab|e 14}. Of the
|ncreases, Nepa| had the h|ghest (233.3%}, and lnd|a the |owest (95.5%}. The reg|on’s
contr|but|ontog|oba|GHGem|ss|onsfromenergy-us|ngact|v|t|es|ncreasedfrom2.9%
|n1990to3.7%|n1995and4.4%|n2005.
Historical and Projected Climate Trends
Accord|ngtothelntergovernmenta|Pane|onO||mateOhange(lPOO}FourthAssessment
Report, past and present c||mate trends and var|ab|||ty |n a|| of As|a are genera||y
character|zedby|ncreas|ngmeansurfacea|rtemperature,a|thoughvary|ngbycountry
andseason.lnrecentdecades,theobservedtemperature|ncreases|nsomepartsofAs|a
haverangedfrom|essthan1
o
Oto3°Opercentury(lPOO2007}.lntermsofprec|p|tat|on,
Table 12 Total GHG Emissions in South Asia (million tons CO
2
e)
Total (Net)
National
Emissions,
including LUCF
CO2e Emissions*
1994 Reference 2000 Reference
Bhutan (2.2} RGoBNEO(2000} (4.8} RGoBNEO(2011}
Bang|adesh 53.8 GPRBMoEF(2002}
lnd|a 1,228.6 GolMoEF(2004} 1,301.2 GolMoEF(2012}
TheMa|d|ves 0.16 RoMMHHE(2001}
Nepa| 39.3 GoNMoPE(1994}
Sr||anka 106.1 DSRS|MoE(2000} 12.6 DSRS|MoE(2011}
Total South Asia 1,425.6 1,309.0
Tota|of
Bhutan,lnd|a,
andSr||anka
1,332.4 1,309.0
(}=negat|ve,OO2e=carbond|ox|deequ|va|ent,|ÜOF=|and-usechangeandforestry.
* Thedeta||edGHGdatafrom|anduse,|and-usechange,andforestryfor1994and2000camefromthecountr|es’F|rstand
SecondNat|ona|Oommun|cat|onstotheÜn|tedNat|onsFrameworkOonvent|ononO||mateOhange(ÜNFOOO}.The2000
dataforBang|adesh,theMa|d|ves,andNepa|werenotava||ab|e.
Reg|ona|Overv|ew 17
Table 13 GHG Emission by Sector, South Asia, 1994 and 2000 (million tons CO
2
e)
Sector
South Asia
1994
Bhutan, India, and Sri Lanka
World
2000
1994 as %
South Asia 1994 2000
1994–2000 %
Change
Energy 835.8 97.8 817.2 1,038.8 27.1 26,890.4
lndustr|a|
process
104.6 98.6 103.1 89.3 (13.4} 1,369.4
Agr|cu|ture 405.2 86.4 349.9 361.3 3.3 5,729.3
|and-use
changeand
forestry
54.6 70.7 38.6 (235.1} (709.1} 7,618.6
Waste
product|on
25.4 92.5 23.5 54.6 132.3 1,360.5
Total 1,425.6 1,332.4 1,309.0 (1.8) 43,058.2
(}=negat|ve,OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Sources:
RGoB NEO (Roya| Government of Bhutan, Nat|ona| Env|ronment Oomm|ss|on}. 2000. Initial National Communication
Under the United Nations Framework Convention on Climate Change (UNFCCC). November. Th|mphu. http://unfccc.
|nt/resource/docs/natc/bhunc1.pdf?bcs|_scan_9688b637a46568db=1&bcs|_scan_97e98328e2b67804=0&bcs|_scan
_f|ename=bhunc1.pdf

______.2011.Second National Communication to the United Nations Framework Convention on Climate Change (UNFCCC).
November. Th|mphu. http://unfccc.|nt/resource/docs/natc/bhunc2.pdf?bcs|_scan_97e98328e2b67804=0&bcs|_scan
_f|ename=bhunc2.pdf.
GolMoEF(Governmentoflnd|a,M|n|stryofEnv|ronmentandForest}.2004.India’s Initial National Communication to the
United Nations Framework Convention on Climate Change (UNFCCC).NewDe|h|.
______. 2012. India Second National Communication to the United Nations Framework Convention on Climate Change
(UNFCCC).NewDe|h|.
DSRS| MoE (Democrat|c Soc|a||st Repub||c of Sr| |anka, M|n|stry of Env|ronment}. 2000. Initial National Communication
Under the United Nations Framework Convention on Climate Change (UNFCCC), Final Draft.Oo|ombo.http://unfccc.|nt/
ttc|ear/pdf/TNA/Sr|%20|anka/Sr||ankalNO_fna|draft.pdf.
______.2011.Second National Communication on Climate Change to the UNFCCC.Oo|ombo.
Table 14 GHG Emissions from Energy-Using Activities, South Asia (million tons CO
2
e)
GHG Emissions
% Change 1990–2005 1990 1995 2000 2005
Bhutan 0.09
Bang|adesh 13.6 20.5 25.2 36.3 166.9
lnd|a 586.9 779.6 968.4 1,147.5 95.5
TheMa|d|ves 0.13
Nepa| 0.9 1.74 3.1 3.0 233.3
Sr||anka 3.74 5.5 10.8 12.3 228.9
South Asia 605.1 807.6 1,007.5 1,199.1 98.2
World 20,783.3 21,810.0 23,455.1 27,136.0 30.6
SouthAs|aas%
oftheWor|d
2.9 3.7 4.3 4.4
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source: lEA (lnternat|ona| Energy Agency}. 2007. World Energy Outlook 2007, [the People’s Republic of] China and India
Insights.OEOD/lEA.Par|s.
18 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
thereg|ongenera||yexper|encedpro|ongeddryspe||sand|ncreased|ntens|tyofra|nfa||.
Tab|e15summar|zestheh|stor|ca|andprojectedtrends|nsurfacea|rtemperatureand
prec|p|tat|on|nthes|xSouthAs|ancountr|escovered|nth|sstudy.
Stud|es on c||mate change |n South As|a vary |n the|r est|mates of future temperature
andprec|p|tat|onduetod|fferences|ntypeofmode|susedandscenar|oscons|dered.ln
genera|, however, warm|ng |s projected across the reg|on; |n lPOO`s moderate scenar|o,
a|readywarmareassuchastheMa|d|vesandSr||ankaareprojectedtohavethe|owest
temperature r|se of about 1
o
O and the h|gher a|t|tude areas of Bhutan and Nepa| to
havea1.5–2.5°Or|se(Nak|cenov|candSwart2000,asc|ted|nWor|dBank2009}.The
project|onsonfutureprec|p|tat|onsuggestthatthewetreg|onsw|||getwetter,andthe
dryreg|onsdr|er,w|thh|gherbutmorevar|ab|eand|ntensera|nfa||expectedacrossSouth
As|a(except|nwesternlnd|a,wh|chcou|dseeeven|essra|nfa||}(Wor|dBank2009}.
Üs|nglPOOscenar|oA1F1(that|s,theh|ghestfutureem|ss|onstrajectory},theaverage
surfacea|rtemperature|nSouthAs|a|sprojectedto|ncreaseby1.17°O|nthe2020s(from
thebase||ne1961–1990|eve|}dur|ngDecembertoFebruary,andby0.54°OfromJune
toAugust.The2020sprec|p|tat|on|sest|matedtodecreaseby3%dur|ngDecemberto
February,and|ncreaseby5%|nJunetoAugust,aga|nstthe1961–1990|eve|.
S|m||ar|y, under lPOO scenar|o B1 (w|th the |owest future em|ss|on trajectory}, average
temperature |s est|mated to r|se by 1.11°O and 0.55°O dur|ng December to February
and June to August, respect|ve|y. Thus, projected warm|ng |n South As|a |n the 2020s
w|||appeartobemorepronounceddur|ngw|nterthandur|ngsummer.Prec|p|tat|on|nthe
2020s|sprojectedto|ncrease,by4%|nDecembertoFebruaryandby7%dur|ngJuneto
August.Reg|ona||y,mostmode|sproject|owerra|nfa||dur|ngw|nter,butw|than|ncrease
|nheavyra|nfa||eventsandadecrease|ntheannua|numberofra|nydays,poss|b|ybyup
to15days,overa|argepartofthereg|on(lPOO2007}.
Emerging Impacts of Climate Change
Theaboveproject|ons|nd|catethatc||matevar|at|ons|nSouthAs|aw|||beheterogeneous,
w|th some reg|ons exper|enc|ng more |ntense prec|p|tat|on and |ncreased food r|sks,
wh||e others encounter sparser ra|nfa|| and pro|onged droughts. The |mpacts w||| a|so
varyacrosssectors,|ocat|ons,andpopu|at|onsandaffectmostsectors,|nc|ud|ngwater,
energy,foodsecur|ty,b|od|vers|ty,humanhea|th,andcoasta|resourcesandcommun|t|es
(S|vakumarandStefansk|2011}.
Water Resources
O||matechangew|||affectthewaterava||ab|||ty|nSouthAs|aduetochanges|nprec|p|tat|on
andrun-offpatterns.Rap|ddep|et|onofwaterresource|sa|readyacauseforconcern|n
manycountr|es|nSouthAs|a.lt|sest|matedthatabout2.5b||||onpeop|e|nthereg|onw|||
beaffectedbywaterstressandscarc|tyby2050(ÜNDP2006}.
Asaresu|tofg|oba|warm|ng,thesnowmassoftheH|ma|ayashasbeendecreas|ngatan
acce|eratedrate.Th|scanhaveser|ousadverse|mpactsastheH|ma|ayasare||fe||nesto
some 1.5 b||||on peop|e ||v|ng |n the foodp|a|ns of |ts severa| r|vers. The h|gher temperature
|s pred|cted to cause marked changes |n seasona| rather than annua| ava||ab|||ty. The
reduced water ava||ab|||ty dur|ng the summer months may have ser|ous |mpacts on
Reg|ona|Overv|ew 19
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Reg|ona|Overv|ew 21
|rr|gat|on and hydropower, espec|a||y |n downstream countr|es ||ke Bang|adesh, where
92% or more of the country’s annua| run-off |s dependent on the transboundary r|vers
(GPRBMoEF2005}.lntheshortterm,ther|se|ntemperaturesw||||ncreaseg|ac|erme|t|ng
and |ncrease r|ver fow. However, the contr|but|on of g|ac|er me|t to run-off w||| gradua||y
decrease over the next few decades (lPOO 2007; Sharma et a|. 2009}.
Recent observat|ons have est|mated the max|mum rate of g|ac|er retreat at about
41metersperyear(m/yr}|nthelnd|anH|ma|ayas,74m/yr|nNepa|,and160m/yr|nBhutan
(Bajracharyaeta|.2007}.Assessmentsoftheg|oba|warm|ngc||matemode|sest|mate
theg|ac|erretreat|ndebr|s-coveredg|ac|ersfor2010–2039tobe78.2–168.0m/yr.For
debr|s-freeg|ac|ers,theretreatratesfor2040–2069areest|matedtobe20.1–43.2m/yr.
Th|s |mp||es more frequent g|ac|a| |ake outburst food (G|OF} events by 2010-2039 and
evenmoreso|n2040–2069(RGoBNEO2011}.
River Run-off
O||mate change |s ||ke|y to affect the annua| var|ab|||ty |n r|ver fow pattern, wh|ch |s
attr|buted more to changes |n prec|p|tat|on than to temperature changes (lPOO 2001}.
ln the snow-fed r|vers, as the peak me|t|ng season co|nc|des w|th summer monsoon
season,acce|eratedsnowandg|ac|erme|t|ngcomb|nedw|than|ncreasedprec|p|tat|on
w||| resu|t |n |ncreased r|ver run-off and a ||ke|y occurrence of foods |n the Brahmaputra
and Kosh| bas|ns wh|ch cou|d be as h|gh as 20%–40% above the base||ne (Gosa|n,
ShresthaandRao2010}.
W|th|ncreasedme|t|ngofsnowandg|ac|ers,thereg|onw||||n|t|a||yhave|ncreasedr|ver
run-off|nthe|eanseason.Butw|ththedecreaseofsnowmass,wh|chactsasasource
ofwater|nther|versdur|ngthe|eanseason,waterava||ab|||tyw|||bereducedsubstant|a||y
|n the |ong term, affect|ng the ||ve||hood and energy systems |n the downstream
countr|es. Prec|p|tat|on var|ab|||ty affects the run-off patterns of the ra|nfed r|vers. ln
lnd|a,c||matechange|s||ke|ytoadverse|yaffect|rr|gatedagr|cu|tureand|nsta||edpower
capac|ty due to reduced fows |n the dry season and h|gher fows |n the wet season,
wh|ch w||| a|so cause severe droughts and food prob|ems |n both urban and rura| areas
(GolMoEF2012}.
lnlnd|a,assessmentsbasedonthePREOlSreg|ona|c||matemode|w|thprojectedc||mate
changeunderlPOOA1Bscenar|oshowan|ncrease|ntheprec|p|tat|onatthebas|n|eve|
|nthemajor|tyofther|versystemsexcept|nBrahmaputra,Oauvery,andPennar|nthe
nearterm(2021–2050}.However,|nthe|ongerterm(2071–2098},a||r|versystemsare
foundtoexh|b|tan|ncrease|nprec|p|tat|on.Manyofthesebas|nsare,however,veryb|g
andhavecons|derab|espat|a|var|ab|||ty(GolMoEF2012}.
ln Bhutan, reports of dw|nd||ng water sources are |ncreas|ng and c||mate change may
render the country much more vu|nerab|e even though |t has not exper|enced severe
watershortages|nthepast.However,c||mate|mpactassessmentsunderA1Bscenar|o
(based on EOHAM5 and HadOM3Q0 mode|s} est|mate no major negat|ve |mpacts of
c||mate change on water coverage |n the country dur|ng 2010–2039 and 2040–2069
(RGoBNEO2011}.
Glacial Lake Flood Outburst. The |ncreased g|ac|a| me|t |n the H|ma|ayas |s resu|t|ng
|n the format|on and cont|nu|ng growth of g|ac|a| |akes; th|s |s ||ke|y to resu|t |n |ncreased
22 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
frequency and |ntens|ty of extreme events ||ke food|ng or G|OF events. G|OFs adverse|y
affectthedownstream||ve||hoodandenergy|nfrastructures.Accord|ngtolOlMOD(2010},
24|akes|nBhutanand21|akes|nNepa|arerecogn|zedaspotent|a||yunstab|e,pos|ngthe
r|sk of outburst foods to out|y|ng commun|t|es. Severa| G|OF events have been reported
|nthepast|nthenorthernreg|onw|thsomehav|ngtransboundary|mpacts,||ketheD|g
Tsho |ake outburst at Bhote Kos| R|ver bas|n |n Nepa| |n 1985 and the 140-m deep
|uggyeTshooutburst|nBhutan,wh|chre|eased10m||||onm
3
of food water |n 1994.
Floods and Droughts.ManypartsofAs|aarea|readyexper|enc|ng|ncreas|ngfrequency
and |ntens|ty of droughts, part|cu|ar|y dur|ng the summer and norma||y dr|er months,
attr|buted |arge|y to a r|se |n temperature. The northern reg|ons of lnd|a, Nepa|, and
Bang|adesh have seen ser|ous and recurrent foods dur|ng 2002-2004 (lPOO 2007}. ln
lnd|a, extreme events ||ke foods and droughts have become a common feature. lt |s
est|matedthat40m||||onhaof|ts|andarea(|.e.,12%ofthetota|areaofthecountry}|s
food prone, wh||e 51 m||||on ha (|.e., 16% of the tota| area} |s drought prone (Gol MoEF
2012}.
Impacts on Hydropower
Oneofthemajor|mpactsofchanges|n|eve|andseasona|patternofprec|p|tat|on,run-
off,andextremeevents||keG|OF|sonhydropowergenerat|oncapac|tyande|ectr|c|ty
generat|onfromhydropowerp|ants|nd|fferentseasons.Accord|ngtoOhau|aga|n(2006},
the g|ac|ers |n the Nepa|ese H|ma|ayas have been retreat|ng so fast |n recent decades
thathydropowerpotent|a||s||ke|ytodecreaseby6%evenw|thoutanyfurtherwarm|ng.
However, hydropower generat|on may beneft or suffer depend|ng on the run-off var|ab|||ty
and the reservo|r type (storage or run-of-r|ver type} of the project. |ands||des and foods
wou|d resu|t |n |ncreased s||tat|on |n r|ver fows, wh|ch wou|d |ower reservo|r capac|ty and
damagemechan|ca|equ|pment.
ln Bhutan, a study us|ng two c||mate scenar|os (A2 and B1}, tak|ng |nto account
g|ac|a| mass ba|ance, snow storage, subsurface water storage, and stream fow
between1981–2010and2021–2050,est|matedthechange|nmeanannua|d|scharge
ava||ab|e for hydropower product|on to vary between 13% decrease and 7% |ncrease
for a|| catchments and both A2 and B1 scenar|os. The mean annua| d|scharge
ava||ab|e for hydropower product|on |n the |onger term, from 1981–2010 to 2071–
2100, w||| be affected by the reduced contr|but|on of g|ac|er |ce me|t to stream fow
(Be|dr|ng2011}.
Groundwater
TheMa|d|vesma|n|ydependsongroundwaterandra|nwaterasasourceoffreshwater.
Both are h|gh|y vu|nerab|e to changes |n the c||mate and sea |eve| r|se. The projected
sea|eve|r|se|s||ke|ytoforcesa|twater|nto|ow-|y|ngfreshwaterresources.Eventhough
thegroundwater|srechargedthroughra|nfa||andra|nfa|||spred|ctedto|ncreaseunder
c||matechange,thespat|a|andtempora|d|str|but|on|nra|nfa||pattern|snotc|ear(M|n|stry
ofEnv|ronmentandOonstruct|on2005,asc|ted|nS|vakumarandStefansk|2011}.
Sea Level Rise and Coastal/Marine Resources
The reg|on’s |ong and dense|y sett|ed coast||nes are h|gh|y vu|nerab|e to sea |eve| r|se
andoccurrenceofextremesea|eve|-re|atedevents.Thecoasta|areasareexpectedto
|ncur coasta| |nundat|on and eros|on, d|sp|acement of commun|t|es, |ncreased coasta|
Reg|ona|Overv|ew 23
managementanddefensecosts,andpotent|a|formore|ntensetrop|ca|cyc|ones.Poor
peop|e|nthe|ow-|y|ngr|verde|tasofBang|adesh,lnd|a,theMa|d|ves,andSr||ankaare
attheh|ghestr|sk.
The very surv|va| of the Ma|d|ves |s |n jeopardy, as the average he|ght of |ts |s|ands |s
1.5metersabovemeansea|eve|,and|tsh|ghestpo|nt|s|essthan2metersabovesea
|eve|.A|argeproport|onofSr||anka’scoasta||and|s|essthan1meterabovesea|eve|
andcou|dbesubmergedw|thr|s|ngwater,a|ongw|thcr|t|ca|transport|nfrastructure.
Accord|ngtolPOO(2007},thecurrentrateofsea|eve|r|se|nthecoasta|areasofAs|a
|s1–3m||||meters(mm}peryearwh|ch|sabovetheaverageg|oba|sea|eve|r|se|nthe
secondha|fofthe20thcentury(1.8±0.3mmperyear}.Dur|ngtheear|y21stcentury,
sea |eve| r|se |n the order of 2–3 mm per year as a resu|t of c||mate change has been
est|mated.
lnBang|adesh,sea|eve||spred|ctedtor|se45cent|meters(cm}by2050,affect|ng10%–
15%ofthe|andareaandanest|mated35m||||onpeop|e(ADB2010c}.lnlnd|a,sea|eve|
|s projected to r|se by around 15–38 cm, p|ac|ng major c|t|es ||ke Koch|, Ko|kata, and
Mumba|atr|sk.
Sea |eve| r|se threatens dr|nk|ng water supp|y, agr|cu|ture, and aquacu|ture by a||ow|ng
sa||newater|ntrus|on.lnBang|adesh,morethan100m||||onhaofarab|e|andareaffected.
A|| of the Ma|d|ves |s affected by sa||ne water |ntrus|on due to r|s|ng sea |eve|. Ooasta|
areasofSr||ankafaces|m||arconcerns.
Ooasta|ecosystemsacrossthereg|onarea||vu|nerab|etothe|mpactsofsea|eve|r|se
duetotheb|each|ngofcora|reefs,wh|chcou|dk|||thecora|sand|eadtodec||ne|nreef-
dependentspec|es,d|stort|ngthedynam|csoftheecosystems(Wor|dBank2009}.
lnBang|adesh,cyc|onesandstormsareest|matedtobecomemore|ntensew|thc||mate
changew|thdevastat|ngeffectsonhuman||fe(GPRBMoEF2005}.Oyc|onesor|g|nat|ng
fromtheBayofBenga|havebeendecreas|ngs|nce1970.However,the|r|ntens|tyhas
|ncreased (|a| 2001, c|ted |n lPOO 2007}, caus|ng severe foods and s|gn|fcant damage
tohab|tat|onnearthecoasta|areas.Thecountry|s||ke|ytofacetheprob|emof|ncreased
food|ng resu|t|ng from c||mate change as both coasta| (from sea- and r|ver water} and
|n|and food|ng (from r|vers/ra|n water} are expected to |ncrease (GPRB MoEF 2005}. ln
lnd|a,theeasterncoast|spart|cu|ar|yvu|nerab|etostormsurgesgeneratedbytrop|ca|
cyc|ones|ntheBayofBenga|.S|mu|at|onsus|ngthePREOlSc||matemode||nd|catethat
the 100-year return |eve| for the occurrence of cyc|ones w||| |ncrease by about 15%–
20% |n 2071–2100 compared to the 1961–1990 base||ne |n a|| the stat|ons north of
v|sahkhapatnam.However,the|ncrement|sest|matedtobe|essthan5%|nanothertwo
c|t|es|ntheeastcoast,SagarandKo|kata(GolMoEF2012}.
Agriculture
Temperature r|se w||| |ower r|ce and wheat y|e|ds |n trop|ca| parts of South As|a; these
cropsarea|readybe|nggrownc|osetothe|rtemperatureto|erancethresho|d|nthereg|on
(Ke|kar and Bhadwa| 2007, as c|ted |n S|vakumar and Stefansk| 2011}. E|sewhere, for
examp|e |n Nepa|, a 4ºO r|se |n temperature and 20% |ncrease |n prec|p|tat|on cou|d
resu|t |n an |ncrease |n the marg|na| y|e|d of r|ce from 0.09% to 7.5%. Beyond those
24 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
temperatureandprec|p|tat|on|ncreases,they|e|dwou|ddec||ne.lnthecaseofwheat,
y|e|dwasobservedto|ncreasew|thr|se|ntemperature|nthewesternreg|onofNepa|,
wh||e|tdec||ned|notherreg|onsofthecountry(GoNMoPE2004}.
Add|t|ona||y, more frequent and extreme events, such as droughts and foods, are
expected to make |oca| crop product|on even more d|ffcu|t. lt |s expected that crop y|e|ds
cou|ddec||nebyupto30%|nSouthAs|abym|d-21stcentury(lFADundated}.
W|ththe|mmensegeograph|ca|d|vers|ty|nlnd|a,theprojected|mpactsofc||matechange
oncropy|e|dsareexpectedtoexh|b|tvar|at|onsacrossd|fferentreg|onsofthecountry.
lnar|dreg|ons,wherecropsa|readysufferheatstress,asma|||ncrease|ntemperature
cou|d |ead to a dramat|c dec||ne |n the|r y|e|ds. However, |t cou|d resu|t |n an |ncrease
|ny|e|ds|nthecoo|erH|ma|ayas(Wor|dBank2009}.Thefoodandnutr|t|onsecur|tyof
lnd|a current|y depends, to a great extent, on the product|on of wheat and r|ce, wh|ch
together accounted for 78% of the tota| food gra|n product|on |n 2009/10. The food
supp|y s|tuat|on w||| become more cha||eng|ng as demand grows over t|me; for examp|e,
|t|sest|matedto|ncreaseby30%–50%by2020(GolMoEF2012}.
F|e|dexper|mentsw|the|evatedatmospher|ccarbond|ox|de|eve|s,to550partsperm||||on
(ppm} under contro||ed env|ronment cond|t|ons, have |mproved y|e|ds of wheat, ch|ck
pea, green gram, p|geon pea, soybean, tomato, and potato, by 14%–27% (Gol MoEF
2012}.S|m||ar|y,crops||ker|ce,tea,andcoconut|nSr||ankastud|edundercontro||ed
cond|t|onsshowedpos|t|veresponsetocarbond|ox|dee|evat|on(DSRS|MoE2011}.
Orop mode||ng stud|es for projected c||mate changes up to 2100 show Sr| |anka’s
tea |ndustry to be a|so vu|nerab|e to c||mate change. The y|e|d of h|gh e|evat|on tea |s
expectedto|mprovewh||ethatofthem|d-and|ow-e|evat|onp|antat|ons|sexpectedto
dec||ne(DSRS|MoE2011}.
lnBhutan,theagr|cu|turesector|sfac|ng|ossofcropsduetounusua|outbreaksofpests
and d|seases, errat|c ra|nfa||s, w|ndstorms, droughts, and fash foods/|ands||des that are
|ncreas|ng annua||y. But d|fferent c||mate mode|s g|ve conf|ct|ng project|ons on the future
|mpactsofc||matechangeoncropsthere.Anassessment(basedonHadOM3Q0}under
the lPOO A1B scenar|o showed r|ce y|e|d to decrease s||ght|y dur|ng 2010–2039 but
|ncreasedramat|ca||ydur|ng2040–2069.Anotherassessment(basedonEOHAM5/A1B}
shows r|ce y|e|ds wou|d decrease |n both per|ods. S|m||ar|y, ma|ze y|e|d |s expected to
decrease|nboththefutureper|odsaccord|ngtoanassessmentbasedonHadOM3Q0,
wh||eanassessmentbasedonEOHAM5projectsthaty|e|dswou|ddecrease|n2010–
2039but|ncrease|n2040–2069(RGoBNEO2011}.
ln Bang|adesh, c||mate change |s projected to |ncrease the |ntens|ty and frequency of
natura| d|sasters and to cause changes |n agr|cu|tura| y|e|ds, w|th potent|a||y severe
|mp||cat|onsforrura|poverty(Wor|dBank2009}.
Forests
There are few stud|es on |mpacts of c||mate change on forests |n South As|a, most|y
focused on lnd|a. An assessment under lPOO scenar|os A2 and B2 shows that of the
forestedgr|ds|nlnd|a,39%are||ke|ytoundergosh|fts|nforesttypeunderA2scenar|oand
34%underB2scenar|obytheendofth|scentury(Ohaturved|eta|.2011}.Theassessment
Reg|ona|Overv|ew 25
est|matesthenetpr|maryproductoftheforeststo|ncreaseby68.8%underA2scenar|o
and51.2%underB2scenar|o.S|m||ar|y,so||organ|ccarbon|sprojectedto|ncreaseby
37.5% under A2 and 30.2% under B2 scenar|o. The same study fnds that about 39%
of the forested gr|ds |n lnd|a are vu|nerab|e to projected c||mate change, w|th forests |n
upper H|ma|ayas and parts of centra| lnd|a be|ng among the most vu|nerab|e. A study
byRav|ndranatheta|.(2006}|nd|catesash|ftunderA2andB2scenar|ostowardwetter
foreststypes|nthenortheasternreg|onanddr|erforesttypes|nthenorthwesternreg|on.
Another assessment, us|ng the lntegrated B|osphere S|mu|ator for the A1B scenar|o,
|nd|catesanexpans|onoftrop|ca|evergreenforests|ntheeasternlnd|ap|ateauand|nthe
Western Ghats; a|most no change |n the vegetat|on type |n the northeast of the country;
andas||ghtexpans|onofforests|ntothewesternpartofcentra|lnd|a.Further,thenet
pr|maryproductwou|d|ncreaseoverlnd|a|ntheA1Bscenar|o,byanaverageof30.3%
by2035,andby56.2%by2085(GolMoEF2012}.
ln Nepa|, |ncreased |nc|dence of forest fres w||| ||ke|y occur and affect the ava||ab|||ty of
a|readyscarcefue|woodsources|nthefuture(GoNMoEnv2010}.lnBhutan,assessments
basedontwoc||matemode|s(HadOM3Q0andEOHAM5},coup|edw|ththeHo|dr|dge
Forest O|ass|fcat|on System, show a genera| northward m|grat|on of the major forest
c|asses of the country |n the future under the A1B scenar|o, w|th subtrop|ca| spec|es
|nvad|ngthesouthernmarg|nsanda|p|nespec|esdecreas|ngonthenorthernmarg|nsof
thecountry(RGoBNEO2011}.
Human Health
ln South As|a, human hea|th |s affected by changes |n the frequency and |ntens|ty of
temperature extremes and sever|ty of weather events, such as heat waves, food|ng,
and |ncreased |ntens|ty of trop|ca| cyc|ones and storm surges (Wor|d Bank 2009}. The
d|recthea|th|mpactcanbeheatstroke,wh||e|nd|rect|mpacts|nc|uded|arrhea|orother
water-re|ated d|seases from water contam|nat|on v|a food|ng; h|gher r|sk of morta||ty from
the |mpact of |arge-sca|e |oss of ||ve||hoods due to extreme events; and deter|orat|on |n
nutr|t|ona|hea|thar|s|ngfromcropfa||urecausedbydroughtsandespec|a||yfromh|gh
n|ghttemperatures.
Ohanges|nc||matemaya|terthed|str|but|onof|mportantvectorspec|es(forexamp|e,
mosqu|toes}. Ma|ar|a |s a|ready one of the most |mportant vector-borne d|seases |n
Bang|adesh, lnd|a, and Sr| |anka. ln Nepa| too, many of the common d|seases such
asma|ar|a,Japaneseencepha||t|s,andkala-azar(achron|cparas|t|cd|seaseof|nterna|
organs}mayspreadtonewreg|onsasanadverse|mpactofc||matechange(Regm|and
Adh|kar| 2008}. Ohanges |n temperature and prec|p|tat|on patterns have the potent|a|
toexpandthegeograph|crangeofma|ar|a|ntotemperateandar|dpartsofSouthAs|a
(Ha|eseta|.2003,asc|ted|nWor|dBank2009}.
ln Bhutan, accord|ng to HadOM3Q0 and EOHAM5 mode||ng, there wou|d be s||ght
|ncreaseornochange|nthenumberofcasesofcho|eraandPFM(ma|ar|a},andmoderate
to s|gn|fcant |ncreases |n the |nc|dence of d|arrhea, dysentery, other k|nds of ma|ar|a, and
typho|d for both Th|mphu and Phuntsho||ng reg|ons. The EOHAM5 mode| for dengue
showsamoderate|ncrease|n|nc|denceacrossthewho|eofBhutandur|ng2010–2039
and a s|gn|fcant |ncrease |n 2040-2069, wh||e the HadOM3Q0 mode| projects a s|gn|fcant
decrease|ndengue|nc|dence(RGoBNEO2011}.
3 Methodology
T
h|schapterdescr|bestheapproachesapp||edtoassessc|eantechno|og|esand
resourceopt|onsdur|ng2005–2030foreconom|cact|v|t|es/sectorsus|ngenergy
and those not us|ng energy, |n Bang|adesh, Bhutan, the Ma|d|ves, Nepa|, and
Sr||anka.lnthecaseoflnd|a,d|scuss|onsre|atedtoenergy-us|ngact|v|t|esarebased
onresu|tsgeneratedbytheTERl-MoEFmode|(a|sobasedontheMARKA|framework}
(Gol MoEF 2009}, wh|ch was presented at the O||mate Mode||ng Forum (2009}. The
chaptera|sod|scussesthemethodo|ogyusedtoassessthe|ncrementa|costsandGHG
abatementpotent|a|assoc|atedw|thapp|y|ngc|eantechno|ogyandresourceopt|ons|n
p|aceoftheconvent|ona|ones.
9
Assessing Technology and Resource Options
for Energy-Using Activities
Theassessmentoftechno|ogyandresourceopt|onsforenergy-us|ngeconom|cact|v|t|es
usedanenergysystemopt|m|zat|onmode|basedontheMARKetA||ocat|on(MARKA|}
frameworkthatdeterm|nesthecost-effect|vesetoftechno|og|esandenergyresources
to meet projected demand for serv|ces |n d|fferent sectors |n future years (F|gure 1}; and
mode|stoprojectthe|eve|sofserv|cedemands|nfutureyears.
Energy System Model
Th|s study used country-spec|fc energy system mode|s based on the MARKA| framework
todeterm|ne|east-costtechno|ogyandenergyresourceopt|onstomeettheprojected
serv|cedemandsandassoc|atedcostsandest|mateGHGem|ss|onsdur|ng2005–2030
|n the fve countr|es. The mode| |s a mu|t|-per|od, bottom-up, dynam|c opt|m|zat|on mode|
pr|mar||ydr|venbyprojecteddemandsforserv|ces.ltcons|dersfeas|b|ea|ternat|vepaths
ofareferenceenergysystem
10
(F|gure 2} for the fow of an energy resource from |ts supp|y
9
S|nce th|s study was comp|eted, a report by the Wor|d Bank (lnternat|ona| Bank for Reconstruct|on and
Deve|opment/The Wor|d Bank 2012} has eva|uated and compared the enab||ng env|ronment for pr|vate
sector|nvestment|nc|eanenergytechno|og|es|nsevera|SouthAs|ancountr|es.Thereporta|soprov|desa
O||mate lnvestment Read|ness lndex that scores and compares the countr|es |n terms of techn|ca|, fnanc|a|,
market,andregu|atorybarr|ersand|ncent|vestopr|vatesector|nvestment.
10
The reference energy system (RES} |s a network representat|on of a|| of the techn|ca| act|v|t|es requ|red
to supp|y var|ous forms of energy to end-use act|v|t|es-extract|on, refnement, convers|on, transport,
d|str|but|on, and ut|||zat|on. Each of these act|v|t|es |s represented by a ||nk |n the network for wh|ch effc|ency,
env|ronmenta| |mpact, and cost coeffc|ents may be spec|fed. The network |s quant|fed for a g|ven year w|th
the |eve| of energy demands and the energy fows through the supp|y act|v|t|es that are requ|red to serve
thosedemands(http://adsabs.harvard.edu/abs/1976STlN...7717574B}.
Methodo|ogy 27
source to po|nts of end use and pass|ng through the |ntermed|ate stages of energy
convers|onandtransm|ss|on,asmaybenecessary.
The energy system mode| computes energy ba|ances at a|| |eve|s of the RES (|.e.,
pr|maryenergysources,energyconvers|on,transm|ss|onandprocess|ngtechno|og|es,
and end-use energy-us|ng serv|ces} and fnds the set of techno|ogy opt|ons and energy
commod|tyorfue|typethatm|n|m|zethetota|d|scountedsystemcostofmeet|ngserv|ce
demandsovertheent|rep|ann|nghor|zon.Thetota|systemcost|nc|udestheannua||zed
|nvestment cost of techno|og|es; fxed and var|ab|e operat|on and ma|ntenance costs;
cost of |mported energy and mater|a|s; cost of domest|c energy resource product|on;
fue| and mater|a| de||very costs; and taxes and subs|d|es assoc|ated w|th energy sources,
techno|og|es, and em|ss|ons (|ou|ou, Go|dste|n, and Nob|e 2004}. The mode| cons|sts
of four modu|es: pr|mary energy supp|y, convers|on and process techno|ogy, end-use
serv|ce energy demand, and env|ronmenta| em|ss|ons. The end-use serv|ce demand
modu|e covers fve econom|c sectors-agr|cu|ture, commerc|a|, |ndustr|a|, res|dent|a|,
andtransport.Thesesectorsarefurthersubd|v|ded|ntoend-useserv|ces,thedemands
forwh|chhavetobeprov|dedasan|nputtothemode|.Est|mat|onofGHGem|ss|ons
cons|st|ngofcarbond|ox|de(OO
2
},methane(OH
4
},andn|trousox|de(N
2
O}aredea|tw|th
|ntheenv|ronmenta|em|ss|onsmodu|e.
The energy system mode| |s dr|ven by the demands for energy-us|ng serv|ces (e.g.,
||ght|ng, cook|ng, space heat|ng, space coo||ng, and passenger and fre|ght transport
serv|ces}ratherthanthedemandsford|fferentk|ndsofenergycommod|t|esorsources
per se |n d|fferent sectors of the economy. For examp|e, the mode| uses the demand
forpassengertransportserv|ces(e.g.,passenger-k||ometersoftheserv|ces}andfre|ght
transport serv|ces (e.g., ton-k||ometers of serv|ces} |nstead of est|mat|ng d|rect|y the
demandfortransportfue|s(e.g.,gaso||neandd|ese|}asadr|v|ngforce|nthetransport
sector.Th|sa||owstheenergysystemmode|tocons|dera|ternat|vetechno|ogyandfue|
opt|ons that cou|d be used to meet future transport serv|ce demands. S|m||ar|y, |n the
caseofcook|ng,themode|norma||yusesasadata|nputtheprojecteddemandforusefu|
energyneededforcook|ng|nsteadoftheamountsof|nd|v|dua|fue|s.Th|swou|da||owthe
mode|tocons|dera|ternat|vecook|ngtechno|og|esandfue|s(e.g.,stovesus|ng|mproved
or convent|ona| b|omass, b|ogas, ||quefed petro|eum gas [|PG|, kerosene, e|ectr|c|ty,
etc.}tomeetthedemandforcook|ng.
Themode||srequ|redtosat|sfyanumberofconstra|nts|nordertoproper|ycharacter|ze
the assoc|ated energy supp|y and use system |n the economy. Key constra|nts |n the
energy system mode| |nc|ude the cond|t|ons that need to be sat|sfed |n re|at|on to
energy-us|ngserv|cedemands,|eve|oftechno|ogypenetrat|on,energyconvers|onand
transm|ss|oncapac|ty,e|ectr|c|tyandheatba|ance,peak|ngreserveconstra|nt,base|oad,
seasona|ava||ab|||tyfactors,andem|ss|onconstra|nts.
Data Requirements
Thedeve|opmentofaMARKA|-basedenergysystemmode|requ|resdatathat|nc|ude
(|}costsofenergyresources/energyextract|onandde||very,pr|ceof|mportedfue|s,costs
of energy convers|on-, transm|ss|on- and ut|||z|ng-dev|ces, fxed and var|ab|e operat|on
and ma|ntenance costs; (||} techno|ogy character|st|cs (s|ze or capac|ty of dev|ces, fue|s,
|n/out effc|ency, techno|ogy ava||ab|||ty year, ||fespan of dev|ces, etc.}; (|||} s|ze of energy
28 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
resources ava||ab|e; (|v} projected va|ues of serv|ce demand for each end-use category;
(v} env|ronmenta| em|ss|on factors; and (v|} other data, such as d|scount rate, seasona|/
day-n|ghtfract|ons,e|ectr|creservemarg|n,startyear,andt|mehor|zon.
National Service Demand Projection
Thedemandsforthevar|ousend-useserv|cesareest|matedseparate|y.lntheres|dent|a|
sector, end-use serv|ces cons|dered |nc|ude ||ght|ng, cook|ng, water heat|ng, space
Figure 1 Overview of the MARKAL Framework
Source:Zonooz,M.R.F.,Z.M.Nop|ah,A.M.Yusof,andK.Sop|an.2009.ARev|ewofMARKA|Energy
Mode||ng.European Journal of Scientific Research.26(3}:352–361.
Energy Economy
Availability of Technologies
Constraints
on Imports
and Mining
of Energy
Energy
Consumption
Ecological Effects
Emissions
Environment
Demand
for
Energy
Services
Economy
and
Society
Capital Needs and
Technology Deployment
MARKAL
Figure 2 A Reference Energy System
Source: Seebregts, Ad J., G.A. Go|dste|n, and K. Smekens. Ündated. Energy-Environmental Modeling
with the MARKAL Family of Models. Energy Research Oenter of the Nether|ands (EON}. lnternat|ona|
ResourcesGroup|td.
RESOÜROES
E×PORT
lMPORT
E|EOTRlOlTY
HEAT
D
E
M
A
N
D
S
END-ÜSE
DEvlOES
REFlNERlES
FÜE|
PROOESSlNG
EMlSSlON
OONTRO|S
STOOKS
MlNlNG
PROOESSES GENERATlON ENERGY
SERvlOES
Methodo|ogy 29
heat|ng,spacecoo||ng,agro-process|ngandan|ma|feedpreparat|on,
11
andotherserv|ces
us|ng e|ectr|ca| app||ances. The commerc|a| sector |s d|saggregated |nto educat|on,
hea|th, hote| and restaurant, and other subsectors; end-use serv|ce demands are ||ght|ng,
space heat|ng, space coo||ng (a|r cond|t|on|ng}, water heat|ng, and other e|ectr|ca|
app||ances.Thetransportsector|sd|saggregated|ntoroad-,a|r-,ra||-,andwater-based
mass transport systems; serv|ce demands are d|saggregated |nto fre|ght and passenger
transport serv|ces. The |ndustry sector |s d|saggregated |nto cement, br|ck, |ron and
stee|,sugar,andpu|pandpapersubsectors,w|ththerema|n|ngmanufactur|ngact|v|t|es
groupedas“other|ndustr|es.”
Foreachcountry,end-useserv|cedemandsforthebaseyear2005areest|matedus|ng
ava||ab|e|nformat|ononsectorenergyconsumpt|on,nat|ona|energyba|ance,andend-
use serv|ce demand techno|og|es |n d|fferent sectors. The fo||ow|ng sect|ons br|efy
descr|be the approaches used to est|mate end-use serv|ce demands for 2005–2030.
Theapproachesapp||edd|ffereddepend|ngonthedataava||ab|e|neachcountry.
12
Therespect|vefuturedemandsforend-useserv|ces|ntheagr|cu|ture,commerc|a|,and
|ndustrysectorsareest|matedcons|der|ngthattheserv|cedemand|scharacter|zedbya
constante|ast|c|tydemandfunct|onofthecorrespond|ngsectorva|ueaddedasg|venby
t
t o
o
VA
SD SD
VA
o
| |
= ×
|
\ .
whereSD
t
andSD
0
represent serv|ce demand |n year t and year 0 (base year}, respect|ve|y;
andvA
t
andvA
0
denotethesectorva|ueadded|nyeartandbaseyeara|so,respect|ve|y.
ln the absence of data, th|s study assumed that the va|ue added e|ast|c|ty of serv|ce
demand(o}wasun|ty.
Thetota|demandforeachend-useserv|ce|ntheres|dent|a|sector|sest|matedus|nga
Oobb-Doug|asdemandfunct|onofpopu|at|on(a|ternat|ve|y,tota|numberofhouseho|ds}
andtota||ncome,representedbyGDP.lntheabsenceofthet|me-ser|esdataonserv|ce
demand,thedemandfortheend-useserv|ce|nafutureyear|sest|matedby
| o
|
|
.
|

\
|
×
|
|
.
|

\
|
× =
o
t
o
t
o t
I
I
POP
POP
SD SD
where POP
t
and POP
0
are the tota| popu|at|on |n year t and base year, and l
t
and l
0

are the year t and base year GDP, respect|ve|y, and o and | are the popu|at|on and
GDP e|ast|c|t|es of serv|ce demand, respect|ve|y. Ün|tary va|ues of e|ast|c|t|es o and |
are assumed |n the absence of data that w||| a||ow est|mat|ng them econometr|ca||y.
ln add|t|on, the popu|at|on |n areas us|ng e|ectr|c ||ght|ng was d|st|ngu|shed from the
popu|at|on|nareasw|thoute|ectr|c||ght|ng(e.g.,kerosene-based||ght|ng}|nthecourse
ofest|mat|ngthedemandfor||ght|ng|ntheres|dent|a|sector.
11
Agro-process|ngandan|ma|feedpreparat|on|nNepa|andBhutanare|nc|udedundertheres|dent|a|sector.
12
The deta||s of the country-spec|fc approaches are d|scussed |n the |nd|v|dua| country reports.
30 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Demandforpassengertransportserv|ces|nyeart(PTS
t
}|sprojectedby
t t
t o
o o
POP GDP
PTS PTS
POP GDP
q µ
| | | |
= × ×
| |
\ . \ .
where PTS
0
|s the passenger transport serv|ce demand |n the base year; and GDP
t

and GDP
0
denote GDP |n year t and base year, respect|ve|y, and q and µ represent
popu|at|on and GDP e|ast|c|t|es of passenger transport serv|ce demand, respect|ve|y.
Exceptforthose|nSr||anka,thepopu|at|onandGDPe|ast|c|t|es(q andμ}ofpassenger
transportserv|cedemandwereassumedtobeun|tydueto|ackofdatatoest|matethem
econometr|ca||y.
13
ThePTS
0
|sest|matedas
0 , 0 , 0 , 0 i i i
OC AAKM VS PTS × × =
_
wherevS
|,0
denotesthestockofveh|c|etype||nthebaseyear,wh||eAAKM
|
,
0
andOO
|,0
arethebaseyearannua|averaged|stance|nk||ometerstrave|edby,andoccupancyrate
of,veh|c|etype|,respect|ve|y.
Thedemandforfre|ghttransportserv|ce|nyeart(FTS
t
}hasbeenest|matedas
t
t o
o
VA
FTS FTS
VA
u
| |
= ×
|
\ .
whereFTS
0
|sthebaseyearfre|ghttransportserv|cedemandandvA
t
andvA
0
arethe
respect|vetransportsectorva|ueadded|nyearstand0andu|stheva|ueaddede|ast|c|ty
offre|ghttransportserv|cedemand.Aga|ndueto|ackoftherequ|redt|me-ser|esdataand
except|nSr||anka,theva|ueaddede|ast|c|ty(u}offre|ghtserv|cedemand|sassumed
tobeun|ty.
Assessing Technology and Resource Options
for Activities Not Using Energy
The future |eve|s of act|v|t|es not us|ng energy or “non-energy-us|ng act|v|t|es” |n (sub}
sectors ||ke forestry, agr|cu|ture, |and-use change, waste product|on, and |ndustr|a|
processes|nthebase||ne(orbus|nessasusua|}casewereprojectedbyassum|ngthat
theact|v|ty|eve|s|nthebaseyear(2005}w|||growatthe|rh|stor|ca|averageannua|growth
rates.||m|tsonthegrowthoftheact|v|ty|eve|sassoc|atedw|thresourceconstra|nts(e.g.,
||m|ted|andava||ab|eforr|cecu|t|vat|on}arecons|dered|nsodo|ng.
Ün||ke the case of act|v|t|es us|ng energy, a M|crosoft Exce|-based spreadsheet mode|
fo||ow|ng the Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories
(lPOO1997}wasusedtoest|mateGHGem|ss|onfromact|v|t|esnotus|ngenergy.
13
Econometr|c passenger and fre|ght serv|ce-demand mode|s were est|mated and used for demand
project|ons|nthecaseofSr||anka.Theseared|scussed|ndeta|||ntheSr||ankacountryreport.
O O O O
Methodo|ogy 31
Projectedact|v|ty|eve|s|neachsectorandcorrespond|ngem|ss|onfactorswereusedto
der|vetheem|ss|onest|matesforfutureyears.Theem|ss|onfactorswerebasede|theron
therev|sed1996lPOOgu|de||nesoronthecountry’sF|rstNat|ona|Oommun|cat|ontothe
Ün|tedNat|onsFrameworkOonvent|ononO||mateOhange(ÜNFOOO}.
ln the GHG m|t|gat|on scenar|o, the frst step |n the ana|ys|s |nvo|ves |dent|fy|ng, based
on ||terature rev|ew and expert op|n|on, c|eaner opt|ons to rep|ace the convent|ona|
techno|og|es and pract|ces for each of the non-energy-us|ng act|v|t|es. Targets are
then set to rep|ace the |eve| of usage of convent|ona| opt|ons w|th the c|eaner ones |n
future years to 2030. The correspond|ng annua| GHG em|ss|ons w|th the adopt|on of
the c|eaner opt|ons are est|mated cons|der|ng the future act|v|ty |eve|s, target |eve| of
c|eaner opt|ons cons|dered, and appropr|ate em|ss|on factors for the c|eaner and the
convent|ona|opt|ons.
GHG Abatement Cost Analysis
Abatement Cost Analysis for Activities Using Energy
AGHGabatementcostcurveprov|des|nformat|ononthem|t|gat|onpotent|a|of|nd|v|dua|
c|eantechno|ogyopt|onsandthecorrespond|ng|ncrementa|abatementcost(lAO}.The
GHGabatementcostcurve|sder|vedfromthefo||ow|ngsteps:
1. ldent|fythesetofconvent|ona|techno|og|es|nase|ectedyear|nthebasecase
thatcou|dberep|acedw|thc|eantechno|og|es.
2. Rep|ace the sector-spec|fc convent|ona| techno|ogy w|th a more effc|ent or
c|eaneropt|on.
3. App|ytheMARKA|-basedenergysystemmode|toest|matethechanges|nthe
tota|systemcostandGHGem|ss|onw|ththeadopt|onofthec|eanertechno|ogy
opt|on.
4. Repeat steps 2 and 3 for a|| convent|ona| techno|og|es |dent|fed |n step 1, to
generate (|} pre||m|nary va|ues of lAO and GHG m|t|gat|on (em|ss|on reduct|on}
potent|a|foreachc|eaneropt|oncons|dered,and(||}an|n|t|a|rank|ngofc|eaner
techno|ogyopt|onsbasedonthe|rabatementcosts.
5. The c|eaner opt|ons w|th the frst and second |owest lAOs are cons|dered together
torep|acethecorrespond|ngconvent|ona|techno|og|es,andtheGHGem|ss|ons
andtota|cost(w|ththeadopt|onofthetwoc|eaneropt|ons}areca|cu|atedus|ng
theenergysystemmode|.
6. Opt|ons w|th the three |owest lAOs (based on the |n|t|a| rank|ng |n step 4} are
cons|dered together, and the va|ues of lAO and GHG m|t|gat|on potent|a| are
reca|cu|atedfortheopt|onrank|ngth|rd|n|t|a||y.
7. Repeat the process unt|| a|| the |dent|fed c|eaner opt|ons are adopted together,
andthelAOandGHGm|t|gat|onpotent|a|ofeachopt|on|sreca|cu|ated.Anew
rank|ngofc|eaneropt|ons|sestab||shedbasedonthe|rreca|cu|atedlAOva|ues.
32 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
8. Repeatthewho|eprocessunt||therank|ngofopt|onsbetweentwoconsecut|ve
|terat|ons becomes the same; these are the fna| va|ues of lAO and GHG m|t|gat|on
potent|a|.
The |ncrementa| abatement cost curve (lAOO} |s der|ved us|ng the fna| va|ues of the lAO
and GHG m|t|gat|on potent|a| of the c|eaner opt|ons cons|dered, wh|ch are presented
|n|ncreas|ngorderofthe|rlAOs.F|gure3|||ustratesatyp|ca|lAOO,wherethew|dthof
ab|ock|nthehor|zonta|ax|s|stheGHGm|t|gat|on(em|ss|onreduct|on}potent|a|ofthe
correspond|ngopt|on,andthehe|ghtoftheb|ock(vert|ca|ax|s}showstheopt|on’slAO.
Forexamp|e,|nF|gure3,techno|ogyopt|on1(T1}hasthe|owestlAO,wh||etechno|ogy
opt|on 8 (T8} has the h|ghest lAO. The GHG abatement potent|a| of opt|on T8 |s g|ven
byE
8
*
-E
7
*
(thehor|zonta|w|dthoftheT8b|ock},wh||etheopt|on’slAO|sg|venbyb|ock
he|ghtlAO
8
.
Figure 3 GHG Abatement Cost Curve: An Illustration
OO2=carbond|ox|de,GHG=greenhousegas,lAO=|ncrementa|abatementcost.
Source:Authors.
lAO$/tOO
2
0
T1
T2
T3
T4
T5
T6
T7
T8
lAO
4
lAO
8
lAO
7
lAO
6
lAO
5
E
8
* E
7
* E
6
* E
5
*
Abatement Cost Analysis for Activities Not Using Energy
S|m||ar to that for energy-us|ng act|v|t|es, the frst step |n the ana|ys|s |nvo|ves |dent|fy|ng
c|eaneropt|onstorep|acetheconvent|ona|opt|ons|ntheact|v|t|esnotus|ngenergy.A
target|sthensettorep|aceaconvent|ona|opt|onw|thac|eanerone|nthese|ectedyear.
The respect|ve reduct|ons |n GHG em|ss|ons and annu|t|zed va|ues of the |ncrementa|
costs assoc|ated w|th adopt|ng the c|eaner opt|ons are est|mated. The |ncrementa|
abatement cost of a c|eaner opt|on |n the se|ected year |s then obta|ned by d|v|d|ng
the annu|t|zed va|ue of the |ncrementa| abatement cost by the est|mated |eve| of GHG
m|t|gat|on(em|ss|onreduct|on}|nthatyear.
Methodo|ogy 33
Ün||ke |n the case of energy-us|ng act|v|t|es, the approach used here |s not based on
|dent|fcat|on of opt|ons that m|n|m|ze tota| cost of non-energy-us|ng act|v|t|es as a who|e.
Rather, the approach ca|cu|ates the abatement cost assoc|ated w|th the rep|acement
of a convent|ona| opt|on emp|oyed |n a non-energy-us|ng act|v|ty w|th a prese|ected
c|eaneropt|on.
Scenarios Used in the Study
Two scenar|os are cons|dered |n th|s ana|ys|s: a base case (a|so ca||ed “base”}, and a
scenar|o w|th carbon-tax prof|e for ach|ev|ng the g|oba| GHG concentrat|on stab|||zat|on
target of 550 parts per m||||on by vo|ume (ppmv} of OO
2
e (a|so ca||ed the “carbon-tax
scenar|o”}.
Base Case
The base case cons|ders energy system deve|opment w|thout any c||mate po||cy
|ntervent|onsdur|ng2005–2030.Themarketpenetrat|on|eve|ofthec|eanertechno|ogy
opt|ons for meet|ng the demand for an end-use serv|ce has been set to not exceed
50% of tota| serv|ce demand |n 2030, wh||e that of the convent|ona| (|ess effc|ent}
techno|og|es|sassumedtogradua||ydecreaseto50%ofthe2005tota|serv|cedemand
|eve|.Th|sassumpt|on|snecessarytomaketheana|ys|smorerea||st|cw|ththerea|wor|d
phenomenon of phas|ng out of the o|d techno|og|es, and newer and effc|ent techno|og|es
rep|ac|ngthem.Forexamp|e,|ftheshareoffue|woodcook|ngstoves|nthetota|res|dent|a|
cook|ng serv|ce demand |s 12% |n 2005, then the correspond|ng fgure |n 2030 wou|d be
constra|nedtonotfa||be|ow6%.
Tab|e16summar|zesthenat|ona|data|nputsused|nth|sstudy.FortheMa|d|ves,the
study used the med|um growth rate scenar|o of projected popu|at|on for 2005–2030.
For Nepa|, the 2001–2021 popu|at|on growth rates projected by GoN OBS (2003} for
thed|str|cts(|.e.,mounta|n,h|||s,Tera|,andKathmanduva||ey}wereused|nth|sstudyto
projectthepopu|at|onbyphys|ograph|creg|on
14
for2005–2020.Nepa|’stota|popu|at|on
|sprojectedtogrowatadec||n|ngrateunt||2021(GoNOBS2003},wh|ch|sassumed|n
th|sstudytocont|nuedur|ng2025–2030.
Thetota|popu|at|onofSouthAs|a|sest|matedto|ncreaseby40%dur|ng2005–2030,
or by 1.2% per year. ln each of the s|x countr|es, the proport|on of urban popu|at|on
|s projected to |ncrease, and that of rura| popu|at|on to decrease, |n the same per|od.
Reg|ona||y,therura|popu|at|on|sest|matedtodec||nefrom71%ofthetota|popu|at|on
|n2005to60%|n2030,wh||etheurbanpopu|at|on|sprojectedto|ncreasefrom29%|n
2005to40%|n2030.
14
Nepa| |s d|v|ded |nto fve major phys|ograph|c reg|ons, wh|ch run |n more or |ess para||e| bands from
northwest to southeast. Each reg|on has a d|st|nct|ve agr|cu|tura| and forestry |and-use pattern. These
reg|onsareknownasTera|,S|wa||ks,M|dd|eMounta|ns,H|ghMounta|ns,andH|ghH|ma|,fromsouthto
northd|rect|on(http://www.rrcap.unep.org/|c/cd/htm|/countryrep/nepa|/|ntro.htm|}.
34 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
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Methodo|ogy 35
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36 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Otherfactorsorcomponentsthatwerecons|dered|nth|sstudyaresummar|zed|nthe
matr|xbe|ow.
Factor/Component Details
Energyresourcesorresource
opt|ons
(|} Foss|| fue|s (petro|eum products, natura| gas, and coa|};
(||} Renewab|eenergyresources(suchast|da|power,w|nd,
so|arenergy,nuc|earenergy,fue|wood,agr|cu|tura|
res|dues, an|ma| waste, and mun|c|pa| so||d waste};
(|||}B|ofue|s(w|th5%and10%b|od|ese|,gasoho|w|th5%,
10%,and85%b|oethano|},hydrogenfue|,hybr|denergy
system(suchasso|ar/d|ese|,w|nd/d|ese|,andw|nd/
||quefed natura| gas}
Techno|ogyopt|onsformeet|ng
futureserv|cedemands
(|} Oonvent|ona| techno|og|es;
(||} O|eaner techno|og|es (energy-effc|ent techno|og|es,
renewab|eenergytechno|og|es,andemerg|ng
techno|og|es}
lntheres|dent|a|andcommerc|a|sectors,emerg|ng
techno|og|es|nc|ude||ght-em|tt|ngd|ode(|ED}|amps,
and|EDandp|asmate|ev|s|onsets.lnagr|cu|ture,water
pumps and |and t|||ers w|th d|fferent effc|ency |eve|s and
fue|requ|rementswerecons|dered.lnthetransportsector,
effc|ent d|ese| veh|c|es, p|ug-|n veh|c|es, so|ar/d|ese| hybr|d
veh|c|es,b|od|ese|veh|c|es(B5andB10},
a
ethano|veh|c|es
(E5,E10,andE85},
b
e|ectr|c,andso|ar-powerede|ectr|c
veh|c|eswerecons|dered.
Powergenerat|onopt|ons(|n
SouthAs|a,exc|ud|nglnd|a}
Oonvent|ona| coa|-fred steam p|ants; gas-fred comb|ned
cyc|e p|ants; gas-fred s|mp|e cyc|e p|ants; gas-fred steam
turb|ne p|ants; hydropower p|ants; d|ese| p|ants; o||-fred
s|mp|e cyc|e p|ants; and o||-fred steam turb|ne p|ants.
Newe|ectr|c|tygenerat|on
techno|og|es
Oonvent|ona| b|omass steam power p|ant; b|omass-based,
|ntegrated gas|fcat|on, comb|ned cyc|e (BlGOO} p|ant;
supercr|t|ca| coa| steam power p|ant; pressur|zed fu|d|zed
bed combust|on (PFBO} coa| power p|ant; coa|-based lGOO
power p|ant; coa| steam PFBO power p|ant w|th carbon
capture and storage (OOS}; coa|-based lGOO power p|ant
w|th OOS; gas-fred comb|ned cyc|e w|th OOS; nuc|ear power
p|ant (|n Bang|adesh}; so|ar photovo|ta|cs, w|nd, fue| ce||-coa|,
fue|ce||-gas,andmun|c|pa|so||dwastepowerp|ants.
Pr|ces Futurepr|cesof|mportedcrudeo||andcoa|fromthe
“ProjectedAnnua|Wor|dO||Pr|ceto2030”(ElA2009}
Bang|adesh:extract|oncostofnatura|gasfromBang|adesh
O||,GasandM|nera|Oorporat|on(BOGMO2005}.
Sr| |anka: pr|ce of ||quefed natura| gas (|NG} from the
Departmentofln|andRevenue,M|n|stryofF|nanceand
P|ann|ngDeve|opment
A||costsareexpressed|nconstant2005do||ars.
a
B5meansafue|m|xtureof5%b|ofue|and95%d|ese|.S|m||ar|y,B10meansafue|m|xtureof10%b|ofue|
and90%d|ese|.
b
E5, E10, and E85 mean a fue| m|xture of 5%, 10%, and 85% of ethano|; and 95%, 90%, and 15% of gaso||ne,
respect|ve|y.
Methodo|ogy 37
Carbon-Tax Scenario
The study’s second scenar|o ana|yzed the evo|ut|ons of the energy m|x, e|ectr|c|ty
generat|onsystem,GHGem|ss|ons,andenergysystemcostunderana|ternat|vec||mate
po||cy(|ntheformofacarbontax/carbonpr|ce}forach|ev|ngtheg|oba|stab|||zat|ontarget
ofOO
2
concentrat|on.Fo||ow|ngEdmonds(2009,persona|commun|cat|on},thecarbon
pr|ce prof|e
15
wou|dbeat$15pertonOO
2
(atconstant2005pr|ces}|n2010,$25perton
OO
2
|n2020,andatta|nava|ueof$41pertonOO
2
by2030(F|gure4},a||othercond|t|ons
rema|n|ng the same as |n the base case. The carbon pr|ce prof|e |s based on the outputs
obta|ned from the g|oba| Second Generat|on Mode| (SGM}. S|m||ar carbon pr|ce prof|e
has a|so been used by Shuk|a et a|. (2008} for GHG stab|||zat|on target of 550 ppmv
ofOO
2
e.
Related Project Activities
The conduct of th|s study |nvo|ved a number of steps done for each of the fve South
As|a DMOs: (|} prepar|ng an |nventory of past and current em|ss|on |eve|s of carbon
d|ox|de (OO
2
} and other GHGs; (||} construct|on of future scenar|os on popu|at|on and
gross domest|c product (GDP} growth and techno|og|ca| deve|opment/penetrat|on for
the next 20 years (unt|| 2030}; (|||} est|mat|on of nat|ona| future demands for energy-us|ng
serv|ces for the same t|me per|od, correspond|ng to changes |n popu|at|on, GDP, and
techno|og|ca| penetrat|on under each scenar|o; (|v} est|mat|on of future nat|ona| |eve|s
ofact|v|t|esnotus|ngenergy,butcontr|but|ngtoGHGem|ss|onsoverthenext20years
(unt|| 2030} under each scenar|o; (v} est|mat|on of em|ss|ons of OO
2
andotherGHGsfrom
energy and non-energy-re|ated act|v|t|es for the same t|me per|od under the reference
15
The carbon pr|ce prof|e for OO2stab|||zat|on|eve|at450ppmv|scons|deredtobec|osertothe550ppmv
stab|||zat|on|eve|ofOO2equ|va|ent(OO2e},account|ngfora||GHGs(O|arkeet.a|.2008}.Th|sstudycons|ders
the 2010-2030 carbon pr|ce prof|e as the carbon tax prof|e |n the same per|od.
Figure 4Ÿ #ARBONŸ0RICEŸ0ROÚLEŸUNDERŸTHEŸ#ARBONŸ4AXŸ3CENARIO
Source:Edmonds,J.2009.persona|commun|cat|on.PNN|,R|chmond,Wash|ngton.
15.3
19.5
24.9
32.4
41.3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2010 2015 2020 2025 2030
2
0
0
5

$
/
t
o
n

C
O
2
38 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
and other scenar|os; and (v|} |dent|fcat|on of prom|s|ng c|ean techno|og|es and opt|ons,
wh|ch may |nc|ude |mprovements |n energy effc|ency, sw|tch|ng to a|ternat|ve energy
sources w|th |ower GHG em|ss|ons, emerg|ng techno|og|es (e.g., carbon capture and
storage},andotheropt|ons|nact|v|t|esnotre|atedtoenergyuse.
The m|t|gat|on ana|ys|s was carr|ed out through (|} scop|ng and ||terature rev|ew of
|nternat|ona|, reg|ona|, and country-spec|fc stud|es and research to obta|n country and
reg|ona| data on c||mate change and future trends; (||} reg|ona| consu|tat|ons and nat|ona|
experts workshops; and (|||} GHG prof||ng/data ana|ys|s and |dent|fcat|on of techno|ogy
gaps,fo||owedbymapp|ngfutureenergydemandunderd|fferentg|oba|scenar|osofthe
lntergovernmenta|Pane|onO||mateOhange(lPOO}andana|ys|sofmarg|na|abatement
costcurves.
The scop|ng and ||terature rev|ew mapped the current reg|ona| and nat|ona| c||mate
change s|tuat|on, |nc|ud|ng trends and poss|b|e |oca| |mpacts of c||mate change, GHG
em|ss|on |eve|s, ex|st|ng c||mate change po||c|es, and c|ean techno|og|es and opt|ons
ava||ab|e domest|ca||y for each country. The scop|ng act|v|ty assemb|ed reg|ona| and
countrydataand|nformat|onregard|ngvu|nerab|eareas/sectors(e.g.,agr|cu|ture,water
resources, and human hea|th} and segments of popu|at|on (e.g., the poor, non-poor,
and rura| and urban popu|at|ons}; current GHG em|ss|ons and project|ons (|nc|ud|ng key
sources and s|nks}; potent|a| c|ean techno|og|es and opt|ons and the|r su|tab|||ty to each
of the part|c|pat|ng countr|es; nat|ona| |aws, agreements or regu|at|ons |mp|emented,
adopted, proposed, or under preparat|on; and reg|ona| |n|t|at|ves to address c||mate
change|ssues.Thedatawereco||ectedfrompub||shedandunpub||shedreports,journa|
art|c|es,work|ngpapers,etc.,byacadem|cs,governmentagenc|es,research|nst|tutes,
|nternat|ona|organ|zat|ons,andnongovernmentorgan|zat|ons.
Limitations of the Study
Thestudyapp||edabottom-upenergysystemmode|basedontheMARKA|framework,
wh|ch |s extreme|y data |ntens|ve |n terms of techno|ogy character|st|cs, resource
ava||ab|||ty, and serv|ce demands. To the extent ava||ab|e, country-spec|fc data on
techno|ogy character|st|cs and pr|ces were used. ln the absence of such data, those
fromanothercountry|nthereg|on,wheres|m||artechno|og|esare|nuse,wereadopted.
Oneofthekeydr|versofthemode||sthefuturedemandforend-useserv|ces|nd|fferent
sectors (e.g., passenger-k||ometer of transport serv|ces, usefu| energy requ|rements
for heat|ng, and amount of ||ght|ng needed}. The project|on of future serv|ce demands
wou|d|dea||yrequ|reserv|cedemandmode||ng,e.g.,aneconometr|cest|mat|onofthe
re|at|onsh|p between a serv|ce demand and |ts exp|anatory var|ab|es. However, the
||m|ted data ava||ab|e under the present study d|d not a||ow such est|mat|on |n most
ofthecountr|es.Th|srequ|reds|mp||fy|ngsomeassumpt|onstoest|matefutureserv|ce
demands.Forexamp|e,|nsevera|cases,serv|cedemandperun|tofGDPwasassumed
torema|nthesameasthat|nthebaseyearandthat|t|snotaffectedbyenergypr|ces
and serv|ce-prov|d|ng dev|ces; both are qu|te a s|mp||fcat|on.
Methodo|ogy 39
Th|sstudyd|dnotest|matethere|at|onsh|pbetweentechno|ogypenetrat|onrateand|ts
under|y|ngfactors.Assumpt|onswere|nsteadmadeaboutthe||m|tsonfuturepenetrat|on
|eve|sofvar|oustechno|og|es,part|cu|ar|ythec|eaneropt|ons.
lnthecarbon-taxscenar|o,theoret|ca||y,the|ntroduct|onofcarbontax|s||ke|ytoaffectthe
costs(orpr|ces}ofserv|cesthatusefoss||fue|sandtherebythe|eve|ofserv|cedemands.
Th|s wou|d aga|n requ|re a serv|ce-demand mode| w|th fue| pr|ce as an exp|anatory
var|ab|e.Nosuchmode||ngwasdone|nth|sstudyandserv|cedemandswereassumed
tobe|nsens|t|vetocarbontax.Further,theeffectsofcarbontaxontheoutputsofd|fferent
sectorsoftheeconomywerebeyondthescopeofthebottom-upenergysystemmode|
used|nthepresentstudy.
A carbon tax generates revenue that |s norma||y recyc|ed through subs|d|es for c|ean
techno|og|es.Recyc||ngcarbontaxrevenueaffectsthecho|ceoftechno|og|esand|eve|of
energyconsumpt|on.However,th|sstudyd|dnotcons|derrecyc||ngcarbontaxrevenue.
lnadd|t|on,thestudycons|deredon|ythed|rect(or|nterna|}costofus|ngfue|s(through
the|rpr|ces},andd|dnot|nc|udetheexterna|costsofenergycombust|on.
ln ana|yz|ng the GHG abatement potent|a| and cost of c|eaner opt|ons, the number of
abatement opt|ons and the|r |eve| of penetrat|on to rep|ace the convent|ona| (|.e., |ess
energy-effc|ent or more carbon-|ntens|ve} opt|ons |n the base case were cons|dered
basedonthemode|er’sbestjudgmentandnotonadeta||edana|ys|s.
|ast|y,amajor||m|tat|onofthepresentstudy|stheexc|us|onoftheposs|b|||tyofcross-
border energy resource deve|opment and trade |n South As|a. The opportun|ty offered
through a reg|ona| energy trade mechan|sm for one country to use c|eaner energy
resources ava||ab|e |n other countr|es w|th|n the reg|on |s not captured |n the mode|.
Thus, the econom|c effc|ency, energy secur|ty, and env|ronmenta| co-benefts of reg|ona|
energyresourcedeve|opmentandtradewerenotana|yzed.
4 Options and Costs to Reduce
*+*(PLVVLRQVLQu
T
h|s chapter d|scusses the GHG em|ss|ons and c|ean techno|ogy and resource
opt|onsforGHGabatementfrombothenergy-andnon-energy-re|atedact|v|t|es
|nSouthAs|adur|ng2005–2030.lta|soana|yzestheabatementcostandGHG
m|t|gat|onpotent|a|ofse|ectedc|eantechno|ogyandresourceopt|ons|n2020.lnthecase
ofenergy-re|atedact|v|t|es,energysystemdeve|opmentandGHGem|ss|onsareana|yzed
underabasecase(orreferencescenar|o}andacarbontaxforBang|adesh,Bhutan,the
Ma|d|ves, Nepa|, and Sr| |anka us|ng country-spec|fc energy system mode|s. ln the case
ofnon-energyre|atedact|v|t|es,theana|ys|sofGHGem|ss|onsandabatementpotent|a|
of c|eaner opt|ons |s focused on agr|cu|ture, forestry, |ndustr|a| processes, and waste
|nBang|adesh,Bhutan,Nepa|,andSr||anka.Theresu|tsfromthese|nd|v|dua|country
stud|es form the bas|s of the reg|ona| ana|ys|s presented |n th|s chapter. The lnd|a-spec|fc
|nformat|on re|evant for the reg|ona| ana|ys|s came from an |ntens|ve rev|ew of ex|st|ng
stud|esava||ab|e|nthe||terature.
Energy-Using Activities
Base Case
Structure of Energy Supply (Energy Development)
F|gures5and6showthestructureoftota|pr|maryenergysupp|y(TPES}|nSouthAs|a
(exc|ud|nglnd|a}
16
dur|ng2005–2030.ln2005,SouthAs|a’sTPESwas1,866petajou|es
(PJ}, of wh|ch b|omass had the |argest share (45.6%}, and o|| and gas had s|m||ar
contr|but|ons(about23.0%}.Ooa|,hydropower,andotherrenewab|eresourcestogether
accountedfor|essthan10%ofTPES|nthatyear.
ln the base case, South As|a |s projected to become more foss|| fue| dependent
(Tab|e17}.Theshareofcoa||ntheenergym|xofthereg|on|sest|matedto|ncreasefrom
2.0%|n2005to27.6%by2030ma|n|yduetotheh|ghandgrow|ngcoa|dependence
ofBang|adesh.A|thoughtheshareofo|||sexpectedtodec||nefrom22.9%to21.7%
dur|ng 2005-2030, |t wou|d rema|n a s|gn|fcant source of energy. S|m||ar|y, the shares
ofb|omassandnatura|gas|nthereg|on’sTPESareprojectedtodec||ne,a|thoughthe|r
use|ntheabso|utetermswou|d|ncreasedur|ng2005–2030.
16
Ün|essotherw|sestated,“SouthAs|a”|nth|schapterw|||refertoSouthAs|aexc|ud|nglnd|a(|.e.,Bang|adesh,
Bhutan,theMa|d|ves,Nepa|,andSr||anka}.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 41
Figure 5 Total Primary Energy Supply in South Asia (Excluding India),
2005–2030
PJ=petajou|e.
Source:REOOSA1countrystud|es(unpub||shed}.
0
1,000
2,000
3,000
4,000
5,000
2005 2010 2015 2020 2025 2030
P
J
OtherRenewab|es
B|omass
Hydropower
Natura|Gas
Petro|eum
Ooa|
Figure 6 Structure of Total Primary Energy Supply
in South Asia (Excluding India), 2005 and 2030
PJ=petajou|e,TPES=tota|pr|maryenergysupp|y.
Source:REOOSA1countrystud|es(unpub||shed}.
Ooa|
2.0%
Petro|eum
22.9%
Natura|Gas
23.0%
Hydropower
2.6%
B|omass
45.6%
Other
Renewab|es
3.9%
2005
TPES:1,866PJ
Ooa|
27.6%
Petro|eum
21.7%
Natura|Gas
18.6%
Hydropower
3.0%
B|omass
26.0%
Other
Renewab|es
3.1%
2030
TPES:4,528PJ
42 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
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44 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Est|matesoffutureTPES|nlnd|avaryw|de|yamongd|fferentstud|es.TERl(2006}est|mated
lnd|a’sTPES(exc|ud|ngb|omassenergy}at16,412PJ|n2005,|ncreas|ngto88,886PJ|n
2030atacompoundedannua|growthrate(OAGR}of7.0%.However,thestudyom|tted
b|omass,wh|chaccountsforuptoath|rdofpresentTPES.lEA(2007}est|matedthatlnd|a’s
TPESwou|d|ncreaseataOAGRof3.6%from22,148PJ|n2005to54,387PJ|n2030.
Theshareofb|omass|ntheTPESwas29%|n2005andwou|ddecreaseto15%by2030,
whereastheshareofcoa|wou|d|ncreasefrom39%|n2005to48%|n2030.Theshare
of o|| (25%} |n lnd|a’s TPES |n 2030 wou|d be s||ght|y h|gher than that |n 2005. Another
study(GolMoEF2009}foundthatlnd|a’scommerc|a|energyuse|n2030–2031wou|dvary
from 45,511 PJ to 89,974 PJ across fve d|fferent c||mate mode||ng stud|es. The d|fferent
est|mated va|ues of the future TPES refect the fve stud|es` d|fferences |n the mode|s used
andassumpt|onsmadeonGDPandpopu|at|ongrowthratesandotherfactors.
17
Ünderthebasecase,SouthAs|a’senergy|ntens|ty|sprojectedtodecreasefrom1.63t
of o|| equ|va|ent (toe} per $1,000 (PPP} |n 2005 to 1.13 toe per $1,000 (PPP} |n 2030
(Tab|e18}.Theenergy|ntens|tyoflnd|ahasbeenest|matedtodecreasefrom0.15toeper
$1,000(PPP}|n2005to0.12toeper$1,000(PPP}|n2030(TERl2006}.
18
Electricity Generation
F|gure 7 shows the contr|but|on of fue| sources to e|ectr|c|ty generat|on |n South As|a
dur|ng2005–2030.ln2005,natura|gaswasthemost|mportantsourceat57.7%ofthe
tota|, fo||owed by hydropower, o||, and other renewab|e resources (|.e., mun|c|pa| so||d
waste,so|ar,andw|nd}.Apartfromlnd|a,Bang|adeshwastheon|ycountry|nthereg|on
tousenatura|gastogeneratee|ectr|c|ty|n2005.
Ünder the base case, the share of o|| and gas |n power generat|on |n South As|a |s
est|mated to dec||ne, wh||e that of coa| |s est|mated to grow from a|most zero to 61%
dur|ng2005–2030(F|gure8andTab|e19}.Atthesamet|me,theshareofhydropower
17
Across the fve mode||ng stud|es comp||ed by Gol MoEF (2009}, the GDP growth rates ranged from 7.66%
to8.84%,wh||eTERl(2006}cons|deredan8%GDPgrowthrateandlEA(2007}assumed|tat7.2%dur|ng
2005–2015and5.8%dur|ng2015–2030.TERl(2006}assumedapopu|at|ongrowthratethatvar|esfrom
1.37% to 0.92% dur|ng 2001–2031, wh||e lEA (2007} assumed 1.4% for 2005–2015 and 1.0% dur|ng
2015–2030.
18
The1993constantGDPoflnd|awasconvertedto2005constantGDPbasedonpurchas|ngpowerpar|ty
(PPP} us|ng the PPP/market exchange rate rat|o g|ven |n the Wor|d Deve|opment lnd|cators (http://data.
wor|dbank.org/|nd|cator/PA.NÜS.PPPO.RF?page=1}fortheca|cu|at|onoftheenergy|ntens|tydata|nthe
respect|veyears.
Table 18 Energy Intensity, South Asia (toe per $1,000 2005 [PPP])
2005 2010 2015 2020 2025 2030
SouthAs|a(exc|ud|nglnd|a} 1.63 1.48 1.32 1.21 1.14 1.13
lnd|a 0.15 0.14 0.13 0.13 0.12 0.12
PPP=purchas|ngpowerpar|ty,toe=tonofo||equ|va|ent.
Note:Forlnd|a,thedatafor2005,2010,2015,2020,2025,and2030refersto2006,2011,2016,2021,2026,
and2031,respect|ve|y.Theenergy|ntens|tyoflnd|ahasbeenest|matedtodec||nefrom0.11toe/$1,000(PPP}
|n2001/02to0.06toe/$1,000(PPP}|n2031/32(GolMoEF2009}.
Source: TERl (The Energy and Resources lnst|tute}. 2006. National Energy Map for India: Technology Vision
2030. Offce of the Pr|nc|pa| Sc|ent|fc Adv|ser. New De|h|.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 45
Figure 7 Electricity Generation in South Asia (Excluding India), 2005–2030
Note:Oneterawatt-hour(TWh}|s1,012k||owatt-hours.lnd|a’sfuturee|ectr|c|tygenerat|onbyfue|source
was not |nc|uded |n th|s fgure due to |ack of such est|mates |n TERl (2006}.
Source: TERl (The Energy and Resources lnst|tute}. 2006. National Energy Map for India: Technology
Vision 2030. Offce of the Pr|nc|pa| Sc|ent|fc Adv|ser. New De|h|.
0
40
80
120
160
200
2005 2010 2015 2020 2025 2030
T
W
h
Others
B|omass
Gas
Ooa|
O||
Hydropower
Figure 8 Electricity Generation Share by Fuel Type in South Asia
(Excluding India), 2005 and 2030
TWh=terawatt-hour.
Source:REOOSA1countrystud|es(unpub||shed}.
B|omass
0.3%
Others
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2005
E|ectr|c|ty
Generat|on:
41TWh
Hydropower
17.9%
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Natura|
Gas
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28.6%
O||
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Ooa|
0.0%
Natura|Gas
57.7%
B|omass
0.0%
Others
0.1%
46 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
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48 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
|s est|mated to dec||ne. A major reason beh|nd th|s cou|d be the fact that no reg|ona|
tradeofe|ectr|c|tyhasbeencons|dered|nthepresentana|ys|s.Theshareofe|ectr|c|ty
generated from other renewab|e energy resources, such as b|omass, mun|c|pa| so||d
waste(MSW},w|nd,andso|arpower,hasbeenest|matedto|ncreases||ght|y.
lnc|ud|nglnd|a,theshareofb|omass,coa|,nuc|earenergy,andotherrenewab|esources
|n generat|ng e|ectr|c|ty for South As|a |n 2030 w||| |ncrease from the|r respect|ve 2005
|eve|s(Tab|e19}.lncontrast,thecontr|but|onofhydropower,natura|gas,andpetro|eum
productstothereg|on’se|ectr|c|tygenerat|onw|||dec||nebetweenthetwoper|ods.
Sector Energy Use/Consumption
Tab|e20presentsenergyconsumpt|onbysector|nSouthAs|a,both|nc|ud|ngandexc|ud|ng
lnd|a.Thetota|sectorenergyconsumpt|on|nthereg|on,|nc|ud|nglnd|a,wou|d|ncreasefrom
12,856.7PJ|n2005to66,724.2PJ|n2030,ataOAGRof6.8%.The|ndustr|a|,transport,
andres|dent|a|sectors(|nth|sorder}arecons|stent|ythetopthreemajorenergy-consum|ng
sectors|nthereg|on.Thetransportand|ndustr|a|sectorsarea|sothetwofastest-grow|ng
sectors|ntermsofenergyuse,w|tharat|oof6.6and5.8,respect|ve|y,between2005and
2030. The |ndustr|a| sector accounted for ha|f of the tota| fna| energy consumpt|on |n South
As|a (|nc|ud|ng lnd|a} |n 2005 and |ts share |s est|mated to |ncrease s||ght|y (to 55.4%} by
2030; s|m||ar|y, the share of the transport sector wou|d |ncrease from 23.5% |n 2005 to
29.9% |n 2030. The tota| fna| energy consumpt|on of the res|dent|a| sector wou|d decrease
from 17.4% |n 2005 to 9.9% |n 2030. The agr|cu|ture sector accounted for 5.9% of tota| fna|
energyuse|n2005,wh|chwou|ddecreaseto1.7%|n2030.Notethatwh||eTab|e20shows
thetrends,b|omassenergydataforlnd|aarenot|nc|uded.
Table 20 Sector Energy Use in South Asia (PJ)
Sector 2005 2010 2015 2020 2025 2030
Ratio
2030/2005
Including India*
Agr|cu|ture 757.1 805.9 895.9 984.5 1,030.8 1,119.2 1.5
Oommerc|a| 411.2 547.2 778.2 1,054.4 1,460.6 2,044.2 5.0
lndustr|a| 6,423.0 8,921.0 12,607.6 17,892.7 25,573.4 36,976.8 5.8
Res|dent|a| 2,240.7 2,906.9 3,682.6 4,654.8 5,595.2 6,634.7 3.0
Transport 3,024.8 4,712.2 7,083.5 10,094.4 14,254.7 19,949.4 6.6
Total 12,856.7 17,893.3 25,047.8 34,680.7 47,914.7 66,724.2 5.2
Excluding India
Agr|cu|ture 45.3 52.3 58.5 63.4 67.8 72.5 1.6
Oommerc|a| 34.4 44.8 66.4 91.4 120.8 160.1 4.7
lndustr|a| 352.1 463.7 633.4 852.4 1,122.5 1,472.7 4.2
Res|dent|a| 900.9 981.0 1,044.9 1,096.0 1,157.2 1,233.7 1.4
Transport 219.6 274.2 342.8 422.9 522.0 648.3 3.0
Total 1,552.3 1,816.0 2,146.0 2,526.1 2,990.3 3,587.3 2.3
PJ=petajou|e.
* Note:Forlnd|a,thedataof2005,2010,2015,2020,2025,and2030referto2006,2011,2016,2021,2026,and2031,
respect|ve|y.Thesectorenergyconsumpt|onforlnd|adoesnot|nc|udeb|omassenergyconsumpt|on.
Source:TERl(TheEnergyandResourceslnst|tute}.2006.National Energy Map for India: Technology Vision 2030. Offce of
the Pr|nc|pa| Sc|ent|fc Adv|ser. New De|h|.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 49
Exc|ud|ng lnd|a, South As|a’s energy use across sectors wou|d |ncrease at a OAGR of
3.4% from 1,552.3 PJ |n 2005 to 3,587.3 PJ (Tab|e 20}. The res|dent|a| and |ndustr|a|
sectors are the top two energy-consum|ng sectors, w|th the transport sector as a far
th|rd.ln2005,theres|dent|a|,|ndustr|a|,andtransportsectorsshared58.0%,22.7%,and
14.1% of South As|a`s tota| fna| energy use, respect|ve|y (F|gure 9}. The share |n energy
useoftheres|dent|a|sector|sest|matedtodecreaseto34.4%by2030.The|ndustr|a|
sectorwou|dthenbecomethe|argestconsumerofenergy.
Figure 9 Sector Share in Total Final Energy Consumption, South Asia
(Excluding India), 2005–2030
Source:REOOSA1countrystud|es(unpub||shed}.
0
20
40
60
80
100
2005 2010 2015 2020 2025 2030
S
h
a
r
e

(
%
)
Transport
Res|dent|a|
lndustr|a|
Oommerc|a|
Agr|cu|ture
Tab|e 21 presents the base case est|mated tota| fna| energy consumpt|on (TFEO} by
sectorandcountry|nSouthAs|afor2005and2030.
Energy-Related GHG Emissions
Thetota|energy-re|atedGHGem|ss|onsfromSouthAs|a(exc|ud|nglnd|a}wou|d|ncrease
ataOAGRof5.9%fromaround58.2m||||ontOO
2
e|n2005to244.7m||||ontby2030
(F|gure10}.ln2005,OO
2
em|ss|onswerearound95.6%ofthetota|energy-re|atedGHG
em|ss|ons from the reg|on, fo||owed by methane (OH
4
} (3.6%} and n|trous ox|de (N
2
O}
(0.8%}em|ss|ons.By2030,thesesharesareest|matedtobe98.6%,0.9%,and0.5%
respect|ve|y.
ln 2005, e|ectr|c|ty (power} generat|on was the s|ng|e |argest energy-re|ated GHG-
em|tt|ngact|v|ty|nSouthAs|a(exc|ud|nglnd|a},account|ngfor30.0%ofthetota|energy-
re|atedGHGem|ss|ons,fo||owedbythetransportand|ndustrysectors(F|gure11}.The
res|dent|a|, agr|cu|tura|, and commerc|a| sectors together accounted for about 21% of
tota|energy-re|atedGHGem|ss|ons|n2005.ln2030,thepowergenerat|onsectorwou|d
50 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Table 21 Sector Share in Total Final Energy Consumption under Base Case and Carbon Tax,
South Asia (%)
Agriculture Commercial Industrial Residential Transport
Total TFEC
(PJ)
Bangladesh
2005 4.9 1.6 29.9 47.7 15.9 855.1
2030Basecase 2.9 2.3 49.6 32.5 12.7 2,009.2
2030Oarbontax 3.0 3.3 50.1 30.8 12.8 1,989.3
Bhutan
2005 1.3 10.4 22.7 52.6 13.6 15.4
2030Basecase 0.6 13.4 41.9 13.2 31.1 71.1
2030Oarbontax 0.6 13.4 41.9 13.2 31.1 71.1
India
2005 6.3 3.3 53.7 11.9 24.8 11,304.4
2030Basecase 1.7 3.0 56.2 8.6 30.6 63,136.9
2030Oarbontax * * * * * *
The Maldives
2005 0.0 19.0 13.8 15.5 50.0 5.8
2030Basecase 0.0 9.9 7.4 11.9 70.8 35.3
2030Oarbontax 0.0 9.9 7.7 11.9 70.7 35.2
Nepal
2005 0.8 1.4 3.3 90.7 3.6 365.0
2030Basecase 2.1 6.4 8.3 69.8 13.7 533.0
2030Oarbontax 2.1 6.4 8.1 70.2 13.2 530.0
Sri Lanka
2005 0.2 4.2 25.7 48.9 20.9 311.9
2030Basecase 0.2 7.2 42.5 20.9 29.2 937.8
2030Oarbontax 0.2 7.2 46.6 16.5 29.5 928.0
South Asia
(excluding India)
2005 2.9 2.2 22.7 58.0 14.1 1,552.3
2030Basecase 2.0 4.5 41.0 34.4 18.1 3,587.3
2030Oarbontax 2.0 5.1 42.3 32.4 18.2 3,553.6
South Asia
(including India)
2005 5.9 3.2 50.0 17.4 23.5 12,856.7
2030Basecase 1.7 3.1 55.4 9.9 29.9 66,724.2
2030Oarbontax * * * * * *
PJ = petajou|e, TFEO = tota| fna| energy consumpt|on.
*Noana|ys|sunderthecarbon-taxscenar|owasdoneforlnd|a.
Notes:Forlnd|a,the2005and2030datarefersto2006and2031,respect|ve|y.Thesectorenergyconsumpt|onforlnd|a
doesnot|nc|udeb|omassenergyconsumpt|on(TERl2006}.
Source:REOOSA1countryreports(unpub||shed}.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 51
Figure 10 Sector GHG Emissions, South Asia (Excluding India), 2005–2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:REOOSA1countrystud|es(unpub||shed}.
Agr|cu|ture
Oommerc|a|
Res|dent|a|
lndustry
PowerGenerat|on
Transport
0
50,000
100,000
150,000
200,000
250,000
2005 2010 2015 2020 2025 2030
'
0
0
0


t
o
n
s

C
O
2
e
Figure 11 Sector Shares in GHG Emissions, South Asia (Excluding India),
2005 and 2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:REOOSA1countrystud|es(unpub||shed}.
Transport
27.4%
Power
Generat|on
30.0%
lndustry
21.2%
Res|dent|a|
14.2%
Oommerc|a|
1.9%
Agr|cu|ture
5.2%
2005
Tota|GHG
Em|ss|ons:
58.2m||||ontonsOO2e
2030
Tota|GHG
Em|ss|ons:
244.7m||||ontonsOO2e
Transport
19.1%
Power
Generat|on
46.6%
lndustry
21.9%
Res|dent|a|
8.0%
Oommerc|a|
2.4%
Agr|cu|ture
2.0%
52 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
st|||contr|butethemost(46.6%}tothetota|energy-re|atedGHGem|ss|on,fo||owedby
the|ndustry,transport,res|dent|a|,commerc|a|,andagr|cu|turesectors(|nth|sorder}.The
sharesofthetransportandres|dent|a|sectorswou|ddec||nema|n|yduetotheadopt|on
of c|eaner and more effc|ent veh|c|es and cook|ng stoves, respect|ve|y. Tab|e 22 shows
the base case est|mated tota| GHG em|ss|ons by energy-us|ng act|v|t|es |n 2005 and
2030forSouthAs|a(exc|ud|nglnd|a}.
Forlnd|a,GolMoEF(2009}est|matedthetota|OO
2
em|ss|on|n2031/32tobe4,900m||||on
t.Anotherstudy(Shuk|a2006}est|matedthatthecountry’sGHGem|ss|onswou|dgrow
from1,454m||||ontOO
2
e|n2000to2,839m||||ontOO
2
e|n2020and3,507m||||ontOO
2
e
|n2030underlPOOscenar|oA2.TheshareofOO
2
|nGHGem|ss|onswou|d|ncreasefrom
66%|n2000to73%|n2030,wh||ethatofOH
4
wou|ddec||nefrom27%|n2000to15%
|n2030.AstudybyMcK|nseyandOompany(2009}est|matedGHGem|ss|onsofaround
1,570m||||ontOO
2
e|nlnd|a|n2005,wh|chwou|d|ncreasetoaround3,312m||||ontOO
2
e
and5,742m||||ontOO
2
eby2020and2030,respect|ve|y.lEA(2007}est|matedthatOO
2

em|ss|onsfromenergyuse|nlnd|awou|d|ncreasefromaround1,147m||||ont|n2005to
1,804m||||ontand3,314m||||ont|n2015and2030,respect|ve|y.
TheOO
2
|ntens|tyofSouthAs|awou|ds||ght|y|ncreasefrom0.18kgOO
2
per$GDP(PPP}
|n2005to0.20kgOO
2
per$GDP(PPP}|n2030.TheOO
2
|ntens|tyoflnd|a
19
was0.18kg
OO
2
per $ GDP (PPP} |n 2001, and est|mated by d|fferent c||mate mode||ng stud|es to
rangeat0.15–0.28kgper$GDP(PPP}by2031.
Cost-Effective Clean Energy Options
Severa| of the energy-effc|ent opt|ons cons|dered |n the study are a|ready found cost-
effect|veunderthebasecase|nBang|adesh,Bhutan,theMa|d|ves,Nepa|,andSr||anka.
Thefo||ow|ngmatr|xsummar|zestheseopt|onsbysector.
19
TheOO2 |ntens|ty of GDP for lnd|a was est|mated to be 0.37 per $ GDP at PPP |n 2003-2004; the est|mated
|ntens|ty|n2031–2032|sfoundtovary|ntherangeof0.18-0.28kgOO2per$GDPatPPPacrossfour
mode||ng stud|es (Gol MoEF 2009}. The OO2 |ntens|ty of 0.18 kg OO2 |n 2031–2032, based on a TERl-
MOEF study as reported |n Gol MoEF (2009}, has been used for lnd|a wh||e ca|cu|at|ng the tota| OO2
|ntens|tyofthewho|ereg|on(thes|xcountr|es}for2030.
Sector #OST%FFECTIVEŸ%NERGY%FÚCIENTŸ/PTIONSŸFORŸ'REENHOUSEŸ'ASŸ%MISSIONŸ-ITIGATION
Agr|cu|ture Energy-effc|ent d|ese| fsh|ng boats; effc|ent d|ese| pumps; effc|ent t|||ers; effc|ent e|ectr|c
pumps; effc|ent d|ese| tractors; effc|ent e|ectr|c threshers
lndustry Effc|ent fue|wood gas|fer; effc|ent sme|t|ng furnace; |mproved arc furnace; energy-effc|ent
motors; b|omass bo||ers; effc|ent coa| bo||ers; effc|ent Hoffman k||ns |n the br|ck |ndustry;
|mproved and energy-effc|ent bo||ers |n text||e, fert|||zer, and paddy parbo|||ng |ndustr|es;
effc|ent cont|nuous process |n the sugar |ndustry
Res|dent|a| lmproved fue|wood cook|ng stove; so|ar cook|ng stove; e|ectr|c cook|ng stove; effc|ent
||quefed petro|eum gas (|PG} and so|ar water heaters; energy effc|ent fan and refr|gerator;
effc|ent a|r-cond|t|oners, compact fuorescent |amps, ||ght-em|tt|ng d|ode (|ED} |amps
Power
generat|on
Ooa|-based |ntegrated gas|fcat|on comb|ned cyc|e power p|ant; mun|c|pa| so||d waste-
basedandw|ndenergypowergenerat|onopt|ons
Transport Effc|ent d|ese| truck, effc|ent d|ese| and e|ectr|c buses, b|od|ese| (B5}-based bus, ||ght
trucks and three-whee|ers; gasoho| (E5}-us|ng tax|, two-whee|ers and three-whee|ers;
effc|ent gaso||ne two-whee|ers, p|ug-|n hybr|d gaso||ne tax|; effc|ent d|ese| and effc|ent
e|ectr|c ra||way |ocomot|ves; and effc|ent d|ese| water vesse|s
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 53
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Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 55
lt shou|d be noted that |f the above-ment|oned renewab|e and energy-effc|ent opt|ons
were not used, the tota| cumu|at|ve GHG em|ss|on from South As|a (exc|ud|ng lnd|a}
dur|ng2005–2030wou|dbe3.2%h|gherat4,141m||||ontcomparedto4,011m||||ont|n
the base case. Th|s emphas|zes the |mportance of promot|ng the use of energy-effc|ent
opt|onsasaGHGm|t|gat|onstrategy|nSouthAs|aevenw|thoutacarbonpr|cepo||cy.
A|though these opt|ons are cost-effect|ve, most of them are yet to be adopted due to
var|ousnon-costbarr|ers.
Carbon-Tax Scenario
Total Primary Energy Supply
Ünder a carbon tax, the tota| pr|mary energy supp|y of South As|a (exc|ud|ng lnd|a}
wou|dbe|owerthanthat|nthebasecaseby0.1%|n2020andh|gherby1.8%|n2030.
Thepr|maryenergysupp|ym|xofthesecountr|eswou|dmovetowardmoreaggress|ve
useofnatura|gas,hydropower,b|omass,andotherrenewab|eresources
20
(F|gure12}.
Ooa|consumpt|onwou|dbereducedby18.4%|n2020and68.0%|n2030.Theuseof
petro|eumproductsunderacarbontaxwou|da|sobereducedbya|most3%|n2030.
Tab|e17|nc|udestheest|matedfue|shares|ntota|pr|maryenergysupp|y|nSouthAs|a
underthebasecaseandacarbontax.
20
Nuc|earenergyw|||bepartofthem|x|n2030forBang|adesh.
Figure 12 Primary Energy Supply under the Base Case and Carbon Tax
in South Asia (Excluding India)
PJ=petajou|e.
Source:REOOSA1countrystud|es(unpub||shed}.
0
1,000
2,000
3,000
4,000
5,000
Base OarbonTax Base OarbonTax Base
2005 2020 2030
P
J
OtherRenewab|es
B|omass
Nuc|ear
Hydropower
Natura|Gas
Petro|eum
Ooa|
56 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Electricity Generation
Tota| power generat|on capac|ty |n South As|a (exc|ud|ng lnd|a} wou|d |ncrease from
8.45 GW |n 2005 to 30.1 GW |n 2030 |n the base case; w|th the carbon tax, the tota|
capac|ty|n2030wou|dbe3.26%h|gher(atabout31.1GW}thanthat|nthebasecase.
Thetota|e|ectr|c|tygenerat|on|nSouthAs|a|nthecarbon-taxscenar|owou|dbe0.2%
|ess|n2020and0.8%|ess|n2030than|nthebasecase(F|gure13}.Theenergym|x
|n e|ectr|c|ty generat|on wou|d s|gn|fcant|y change w|th reduct|ons |n the shares of coa|,
o||,andhydropower,wh||ethatofnatura|gas,nuc|ear,b|omass,andotherrenewab|es
wou|d|ncreaseby2020and2030.Ooa|-basede|ectr|c|tygenerat|onwou|dbereduced
by22.8%|n2020andby74.9%|n2030.S|m||ar|y,o||-basedandhydropowere|ectr|c|ty
generat|on|n2030wou|dbereducedbyaround28.5%and1.8%,respect|ve|y,under
the carbon tax. ln contrast, natura| gas-based e|ectr|c|ty generat|on wou|d |ncrease
to 85.7 terawatt-hours (TWh} |n 2030 from 29.9 TWh |n the base case. (There wou|d
a|so be generat|on of 14.4 TWh of e|ectr|c|ty from nuc|ear power p|ants |n 2030 |n
Bang|adeshunderthecarbontax.}E|ectr|c|tygenerat|onbasedonb|omassandother
renewab|es (w|nd, so|ar, and mun|c|pa| so||d waste} wou|d |ncrease by 5.7 TWh and
3.4 TWh |n 2020, respect|ve|y, and by 17.5 TWh and 3.6 TWh |n 2030, respect|ve|y.
Tab|e19presentstheest|matedshare|ne|ectr|c|tygenerat|onbyfue|source|nSouth
As|aunderthecarbontax.
Figure 13 Electricity Generation under Base Case and Carbon Tax
in South Asia (Excluding India)
TWh=terawatt-hour.
Source:REOOSA1countrystud|es(unpub||shed}.
OtherRenewab|es
B|omass
Nuc|ear
Gas
Ooa|
O||
Hydropower
0
40
80
120
160
200
Base Base OarbonTax Base OarbonTax
2005 2020 2030
T
W
h
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 57
Final Energy Consumption
The base case tota| fna| energy consumpt|on |n South As|a (exc|ud|ng lnd|a} wou|d be
reduced by 0.3% |n 2020 and 1.0% |n 2030 under the carbon tax (F|gure 14}. Energy
consumpt|on|nthecommerc|a|sectorwou|d|ncreaseby12.7%by2030fromthebase
case, ma|n|y |nfuenced by Bang|adesh`s rep|acement of coa| by b|omass |n cook|ng,
wh|ch |s |ess energy effc|ent. S|m||ar|y, energy consumpt|on |n the |ndustr|a| sector |s
est|mated to |ncrease by 2.1% by 2030 due to |ncreased use of b|omass bo||ers and
dryersrep|ac|ngcoa|,fue|o||,and|PGbo||ersanddryers.lncontrast,therewou|dbea
decrease|ntheenergyconsumpt|onoftheres|dent|a|andtransportsectorsby6.7%and
0.4%,respect|ve|y,by2030.
The reduct|on |n the res|dent|a| sector |s part|y due to the use of more effc|ent a|r coo||ng
dev|cesandrefr|geratorsandpart|yduetofue|sw|tch|ng,|.e.,fromagr|cu|tura|res|dues
to b|ogas as we|| as from fue|wood to |PG. The marg|na| decrease |n the transport
sectorenergyconsumpt|on|spart|yduetotheuseofb|od|ese|vesse|s(us|ngb|od|ese|
B5, conta|n|ng 5% b|od|ese| and 95% d|ese|} rep|ac|ng |neffc|ent d|ese| vesse|s |n the
Ma|d|ves; and a|so due to part|a| rep|acements of ||ght-duty gaso||ne and d|ese| veh|c|es
by||ght-dutyhybr|dveh|c|es,useofe|ectr|cm|crobuses,andpart|a|sw|tch|ngfromd|ese|
to gaso||ne veh|c|es |n Nepa|. The reg|on’s agr|cu|ture sector |s est|mated to have no
s|gn|fcant change |n energy consumpt|on under the carbon tax. Tab|e 21 above shows
the est|mated sector shares |n tota| fna| energy consumpt|on by country |n South As|a
underthecarbontax.
Figure 14 Final Energy Consumption under Base Case and Carbon Tax, South
Asia (Excluding India)
PJ=petajou|e.
Source:REOOSA1countrystud|es(unpub||shed}.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Base Base OarbonTax Base OarbonTax
2005 2020 2030
P
J
Transport
Res|dent|a|
lndustr|a|
Oommerc|a|
Agr|cu|tura|
58 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Energy-Related GHG Emissions
Tab|e22aboveshowstheest|matedtota|GHGem|ss|onsofenergy-us|ngact|v|t|esunder
thecarbontax|nSouthAs|a.Thereg|on’stota|annua|GHGem|ss|onswou|ddecreaseby
6.1%(8.4m||||ontOO
2
e}by2020andby22.0%(53.8m||||ontOO
2
e}by2030(F|gure15}.
Therewou|dbeacumu|at|vereduct|on|nGHGem|ss|onbyaround971m||||ontOO
2
e
dur|ng 2005–2030 from South As|a (exc|ud|ng lnd|a} as compared to the cumu|at|ve
em|ss|onof4,011m||||ontOO
2
e|nthesameper|od|nthebasecase.
At the country |eve|, |ntroduc|ng a carbon tax wou|d reduce Bang|adesh’s cumu|at|ve
GHG em|ss|ons dur|ng 2005–2030 by 9.4% from the base case |eve|, w|th reduct|ons
h|gher|n|ateryears(e.g.,20.3%reduct|on|n2030}.lnSr||anka,acarbontaxcou|dcut
cumu|at|ve em|ss|ons |n the same per|od by 21.8% (186 m||||on t OO
2
e} from the base
case|eve|.
As stated ear||er, some of the energy-effc|ent opt|ons that wou|d be attract|ve under the
carbon tax are a|ready seen as cost-effect|ve under the base case. Penetrat|on rates
app||ed|nthestudy’sana|yt|ca|mode||mposeupper||m|tsontheuseofc|eantechno|ogy
opt|ons |n both scenar|os. Thus, |n the mode|, c|ean and energy-effc|ent opt|ons that are
a|ready cost-effect|ve |n the base case do not offer potent|a| for further OO
2
reduct|on
underthecarbontax.
Power generat|on offers the |argest potent|a| for GHG em|ss|on reduct|on from South
As|a (exc|ud|ng lnd|a} under the carbon tax, of 14.6% (8.3 m||||on t OO
2
e} |n 2020 and
Figure 15 Sector GHG Emissions under Base Case and Carbon Tax, South Asia
(Excluding India)
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:REOOSA1countrystud|es(unpub||shed}.
0
50
100
150
200
250
Base Base OarbonTax OarbonTax Base
2005 2020 2030
m
i
l
l
i
o
n

t
o
n
s

C
O
2
e
Agr|cu|ture
Oommerc|a|
Res|dent|a|
lndustry
PowerGenerat|on
Transport
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 59
39.9%(45.5m||||ontOO
2
e}|n2030.Theres|dent|a|sectorcomessecond,account|ng
for0.2%ofthetota|GHGreduct|ons|n2020and27.4%|n2030.Th|s|sfo||owedbythe
commerc|a|sector,w|thshares|nGHGreduct|onest|matedataround0.2%|n2020and
a|most22%|n2030.Meanwh||e,the|ndustryandtransportsectorem|ss|onswou|dbe
reduced by around 2.4% and 0.8%, respect|ve|y. No s|gn|fcant reduct|on |n GHG has
emergedfromtheagr|cu|tura|sectorunderthecarbontax.
Emission of Local/Regional Pollutants
There wou|d be a s|gn|fcant reduct|on |n su|fur d|ox|de (SO
2
}em|ss|onfromSouthAs|a
(exc|ud|ng lnd|a} under the carbon tax: 5.4% |ower |n 2020 and 37.1% |ower |n 2030
than the correspond|ng |eve|s |n the base case (Tab|e 23}. Wh||e n|trogen ox|des (NO
x
}
em|ss|onsfromSouthAs|a(exc|ud|nglnd|a}wou|dbes||ght|y|ower(0.3%}|n2020under
thecarbontax,theywou|dbeh|gherby3.0%by2030fromthebasecase|eve|.
Cost Implications
The present study fnds that under the carbon tax, the tota| d|scounted energy system
cost
21
of South As|a (exc|ud|ng lnd|a} wou|d |ncrease on|y by 0.4% ($1,408 m||||on at
constant 2005 pr|ces} dur|ng 2005–2030, whereas the d|scounted tota| |nvestment
costwou|d|ncreaseon|yby0.3%($895m||||on}fromthebasecase|eve|.However,the
proport|on of fxed and var|ab|e operat|on and ma|ntenance costs |n the tota| energy
systemcostwou|d|ncreasefrom28.9%|nthebasecasetoabout32.2%|nthecarbon
tax.W|thacarbontax,thetota||nvestmentrequ|redforpowergenerat|on|nSouthAs|a
(exc|ud|ng lnd|a} dur|ng 2005–2030 |s est|mated at $105 b||||on (|n nom|na| terms} as
comparedto$103b||||on|nthebasecase.
lt shou|d be noted that |n th|s ana|ys|s, the |ncrease |n the tota| energy system cost
|nc|udesthe“carbontaxrevenue”of$19,453m||||ongeneratedunderthecarbontax,
22

and that the carbon tax revenue |s not “recyc|ed” (|.e., not used to subs|d|ze c|eaner
techno|ogyopt|ons}.
21
The tota| d|scounted energy system cost |nc|udes the cost of techno|ogy |nvestment, and fxed and var|ab|e
operat|onandma|ntenancecost.
22
Moreaccurate|y,the“carbonrevenue”|nthepresentmode||ngcontextreferstothecarbontaxrevenue.
Oarbontax|susedasaproxyforcarbonpr|cehere.lt|sa|soassumedthatthecarbonpr|cesasassumed
|nthestudyunderthecarbon-taxscenar|ow|||bepreva|ent|nthe|nternat|ona|carbonmarket.
Table 23 Local Pollutant Emission Reduction under the Base Case and Carbon
Tax, South Asia (Excluding India), 2020 and 2030 (’000 tons)
Local
Pollutants
2020 2030
Base Case Carbon Tax
% Change
in 2020* Base Case Carbon Tax
% Change
in 2030
NO× 1,209 1,205 0.3 1,950 2,010 (3.0}
SO2 374 353 5.4 678 426 37.1
(}=negat|ve,NO×=n|trogenox|des,SO2=su|furd|ox|de.
Note:Apos|t|ve%changemeansareduct|on|nem|ss|on,wh||eanegat|ve%changemeansan|ncrease|n
em|ss|on.
Source:REOOSA1countrystud|es(unpub||shed}.
60 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
GHG Abatement Potential and Costs
Th|sstudyconductedtheGHGabatementcostana|ys|sw|tha||m|tednumberofnat|ona|
abatementopt|onsforBang|adesh,Bhutan,theMa|d|ves,Nepa|,andSr||ankafor2020.
The ana|ys|s shows a s|gn|fcant potent|a| for GHG m|t|gat|on (or em|ss|on reduct|on} at
negat|ve and |ow abatement costs (Tab|e 24}. More spec|fca||y, tota| GHG em|ss|ons
decrease and percentage reduct|ons from the base case em|ss|on |eve| |ncrease, w|th
|ncreas|ngper-un|t|ncrementa|abatementcost(lAO}.
Across the fve countr|es, there |s a potent|a| em|ss|on reduct|on of about 13.3 m||||on t
OO
2
e(about9.6%ofthebasecaseem|ss|ons}|n2020atnoadd|t|ona|costbydep|oy|ng
severa| 'no-regret" types of c|ean and energy-effc|ent opt|ons. An lAO of $10 and $50 per
tonofOO
2
ecou|dreduceem|ss|onsbyabout20.1%and21.9%|n2020,respect|ve|y.
Üs|ngthe“no-regret”opt|ons,theres|dent|a|sectorofferstheh|ghestpotent|a|(49.8%}for
m|t|gat|ngenergy-re|atedGHGem|ss|ons,fo||owedbythetransportand|ndustrysectors
(Tab|e25}.Acrossthed|fferent(|ncreas|ng}|eve|soflAOs,thepowersectoraccountsfor
the|argestshare|ntota|GHGreduct|on,fo||owedbytheres|dent|a|,|ndustry,transport,
commerc|a|,andagr|cu|turesectors(|nth|sorder}.However,perhapsduetothe||m|ted
number of GHG abatement opt|ons cons|dered |n th|s study, there |s no s|gn|fcant
|ncrease|ntota|abatementpotent|a|atlAOsabove$50pertonofOO
2
e.Assuch,the
GHGabatementpotent|a|satd|fferentlAOsaremost||ke|ytobeunderest|mated|nthe
presentana|ys|s.
The matr|x summar|zes the 'no-regret" opt|ons |dent|fed for each country from among
the||m|tedc|eantechno|og|esandresourcescons|dered|nthestudy.
Wh||esomeofthec|eantechno|ogyandresourceopt|onsarecost-effect|ve|nthebase
case, the|r adopt|on |eve|s were restr|cted through penetrat|on rates (wh|ch have been
Table 24 Total GHG Emissions at Selected Incremental Abatement Costs in 2020,
South Asia (Excluding India)
Incremental
Abatement
Cost
($ per ton CO2e)
Total GHG
Emissions
(’000 ton CO2e)
% GHG
Emissions
Reduction
from Base
Case Level
Incremental
Abatement
Cost
($ per ton CO2e)
Total GHG
Emissions
(’000 ton CO2e)
% GHG
Emissions
Reduction
from Base
Case Level
<0(“No-regret”
opt|ons}
125,676 9.58 100 107,282 22.82
10 111,126 20.06 200 107,015 23.02
30 108,559 21.90 300 107,009 23.02
50 107,676 22.54 400 106,313 23.52
75 107,587 22.60 ~500 106,245 23.57
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Note:Basecasetota|GHGem|ss|on|eve|=138.999m||||ontOO2e.lnth|stab|e,tota|GHGem|ss|onatapart|cu|arva|ueof
|ncrementa|abatementcost(lAO}representsthe|eve|ofGHGem|ss|onthatwou|dtakep|acewhena||theopt|onsw|thlAO
|essthanorequa|tothepart|cu|arva|uearedep|oyed.
Source:Authors’ca|cu|at|ons.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 61
|mposed on the ana|yt|ca| mode|s} to refect poss|b|e barr|ers, user preferences, and
otherconstra|nts.The||m|tsonadopt|on|eve|ofthecost-effect|vec|eaneropt|onshave
been re|axed to some extent; hence, the opt|ons appear as 'no-regret" opt|ons |n the
abatementcostana|ys|s.
lnthecaseoflnd|a,astudyofabatementopt|ons|nthe10|argestenergyconsum|ng
and em|tt|ng sectors |n 2030 shows that acce|erat|on of d|fferent programs for energy
effc|ency and c|ean power |nfrastructure wou|d substant|a||y reduce carbon em|ss|ons |n
thecountry(McK|nseyandOompany2009}.Theprograms|nc|ude|nvestments|nnew
Country Potential “No-regret” Options
Bang|adesh Effc|ent |amps, |.e., compact fuorescent |amps (OF|s} |n the res|dent|a| sector; energy
effc|ent bo||ers, br|ck k||ns, r|ce parbo|||ng and m||||ng |n the |ndustry sector; effc|ent
|rr|gat|on pumps |n the agr|cu|ture sector; fue| sw|tch|ng of car transport demand to
compressed natura| gas (ONG} (95%} and gasoho| (5%}, effc|ent passenger and fre|ght
watertransportsystem,part|a|moda|sh|ft|ntheroadfre|ghtdemandtora||ways|nthe
transportsector
Bhutan Üseofe|ectr|ccook|ngtorep|ace|PGandkerosenebasedcook|ng|ntheres|dent|a|
and commerc|a| sectors; |ncreas|ng the share of e|ectr|c buses, and rep|ac|ng ||ght d|ese|
veh|c|esby||ghte|ectr|cveh|c|es
TheMa|d|ves So|arcook|ngstovestorep|ace10%ofkerosenecook|ngstoves|ntheres|dent|a|
sector; use of mun|c|pa| so||d waste to rep|ace 50% of d|ese|-based power generat|on |n
Th||afush|ls|and
Nepa| lmprovedfue|woodcook|ngstoves,e|ectr|ccookers,ande|ectr|cwaterheaters|nthe
res|dent|a| and commerc|a| sectors; use of effc|ent d|ese| bo||ers rep|ac|ng convent|ona|
bo||ers|nthe|ndustr|a|sector
Sr||anka Effc|ent refr|gerators and OF|s |n the res|dent|a| sector; effc|ent a|r cond|t|oners |n the
res|dent|a| and commerc|a| sectors; energy-effc|ent e|ectr|c motors and advanced fue|
o|| bo||ers |n the |ndustr|a| sector; effc|ent d|ese| tractors and b|od|ese| fsh|ng boats |n
the agr|cu|ture sector; adopt|on of effc|ent heavy d|ese| trucks and d|ese| buses |n the
transportsector
Table 25 Sector Shares in Total GHG Emission Abatement at Selected Incremental
Abatement Costs, South Asia (Excluding India) (%)
Sector
Incremental Abatement Cost ($ per ton CO2e)
s 0 (“No-regret”
Options) 10 30 50 75 100 200 300 400 ~500
Res|dent|a| 49.8 24.0 25.3 24.6 24.8 24.6 24.5 24.5 25.9 25.9
Oommerc|a| 1.5 2.2 2.2 2.1 2.1 2.1 2.4 2.7 2.6 2.6
Transport 25.0 12.2 11.2 13.0 13.0 13.0 13.1 13.1 13.0 13.0
lndustry 22.4 24.5 22.4 22.5 22.4 22.3 22.1 22.0 21.6 21.7
Agr|cu|ture 1.3 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.5 0.5
Power(e|ectr|c|ty}
generat|on
0.0 36.5 38.3 37.2 37.1 37.5 37.3 37.2 36.4 36.3
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Authors’ca|cu|at|ons.
62 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
techno|og|es,suchas|EDtechno|ogy,supercr|t|ca|andu|trasupercr|t|ca|
23
powerp|ants,
effc|ent transport |nfrastructure, and a w|despread |mprovement |n agr|cu|tura| pract|ces.
The study shows that energy-effc|ent equ|pment and app||ances and m||eage standards
wou|djo|nt|yabatearound120m||||ontOO
2
e|n2030atnegat|vecosts(|.e.,<0euro/ton}.
|ED ||ght|ng wou|d reduce around 35 m||||on t, and effc|ent cook|ng stoves 20 m||||on t, of
OO
2
e|n2030atnegat|veabatementcost.S|m||ar|y,an|ntroduct|onofsupercr|t|ca|coa|
techno|ogywou|d,atamodestcostofupto$25perton,abatearound200m||||ontOO
2
e
|n2030.Wh||e|arge-sca|eadopt|onofnuc|earenergy|scha||eng|ng,thestudya|soshows
thatanadd|t|onof30–60GWofnuc|earpowerwou|dabatearound250m||||ontOO
2
e
|n2030,atanabatementcostofupto$25perton.Aboveth|sabatementcost,pub||c
bus-based transport systems wou|d be attract|ve and wou|d abate around 20 m||||on t
OO
2
e|n2030.
Activities Not Using Energy
24
Th|s sect|on presents the ana|yses of GHG em|ss|ons generated dur|ng 2005–2030
fromact|v|t|esnotus|ngenergy(hereafterca||ed“thenon-energysector”}|nBang|adesh,
Bhutan,Nepa|,andSr||anka,aswe||asthoseoflnd|a,wh|chwereest|matedfo||ow|ng
the M|tra and Bhattacharya (2002} approach.
25
The ana|ys|s cons|ders OO
2
, methane
(OH
4
},andn|trousox|de(N
2
O},andcoversfoursubsectors(agr|cu|ture,
26
forestry,waste
generat|on,and|ndustr|a|processes}.ThecostsandGHGabatementpotent|a|ofmajor
opt|ons|n2020area|sod|scussed.
G|venthe|argedegreeofs|m||ar|tyacrosscountr|es|nmethodo|og|ca|approachandthe
natureofabatementopt|onsexam|ned|neachsector,th|ssect|onh|gh||ghtstheresu|ts
by sector; country resu|ts are presented under each sector assessment. lt |s |mportant
tonotehoweverthatnoneoftheopt|onsexam|nedtoabateGHGem|ss|ons|nthenon-
energysectorareofa“no-regret”nature.
GHGem|ss|onsfromagr|cu|tureand|ndustr|a|processesunt||2030wereest|matedus|ng
the average annua| growth rates of act|v|ty (subsector} data (e.g., ||vestock popu|at|on,
areaunderr|cecu|t|vat|on,cropproduct|on,fert|||zerconsumpt|on,ammon|aproduct|on,
cementproduct|on,meta|product|on,etc.}.Em|ss|onfactorsbasedonthe1996lPOO
23
Supercr|t|ca|andu|trasupercr|t|ca|powerp|antsoperateattemperaturesandpressuresabovethecr|t|ca|
po|ntofwater,|.e.,abovethetemperatureandpressureatwh|chthe||qu|dandgasphasesofwaterco-ex|st
|nequ|||br|um,atwh|chpo|ntthere|snod|fferencebetweenwatergasand||qu|dwater.Th|sresu|ts|nh|gher
effc|enc|es-above 45%. Supercr|t|ca| and u|trasupercr|t|ca| power p|ants requ|re |ess coa| per megawatt-
hour, |ead|ng to |ower em|ss|ons (|nc|ud|ng carbon d|ox|de and mercury}, h|gher effc|ency, and |ower fue|
costs per megawatt (Source: http://www.greenfacts.org/g|ossary/pqrs/supercr|t|ca|-u|tra-supercr|t|ca|-
techno|ogy.htm}.
24
Th|s sect|on |s based on four country |eve| mode||ng stud|es and reports co-authored and |ed by Rode|
|asco.Thesenat|ona|reportsconta|ncons|derab|ymoredeta||edandtechn|ca||nformat|onthanpresented
|nth|sreg|ona|synthes|sreport.Thenat|ona|reportsareava||ab|eonrequest.
25
The Ma|d|ves has no s|gn|fcant 'non-energy sector" and hence was not |nc|uded |n th|s aspect of the
reg|ona|study.
26
The agr|cu|ture sector |s further subd|v|ded |nto ||vestock ra|s|ng and crop product|on (r|ce cu|t|vat|on, fe|d
burn|ng of agr|cu|tura| res|due, and agr|cu|tura| so||s}. The GHG em|ss|ons from ||vestock ra|s|ng can be
categor|zed |nto two major act|v|t|es, enter|c fermentat|on and manure management. The ||vestock types
cons|deredhere|nc|udecatt|e,buffa|o,goat,sheep,sw|ne,andpou|try.Yaksandhorseswerea|so|nc|uded
|ntheana|ys|sforBhutan.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 63
gu|de||neswereapp||edtotheact|v|ty|eve|s(actua|andprojected}toder|vetheem|ss|on
project|ons per subsector. GHG em|ss|ons are expressed |n terms of OO
2
e us|ng the
g|oba|warm|ngpotent|a|va|uesbasedona100-yeart|mehor|zon,asg|ven|nthe2007
lPOO Fourth Assessment Report. lt |s aga|nst these project|ons that the |mpacts and
costsofGHGem|ss|onsreduct|onopt|onsareassessed.
|and use, |and-use change, and forestry act|v|t|es, ma|n|y trop|ca| deforestat|on,
are s|gn|fcant net sources of OO
2
, account|ng for 1.6 g|gatons carbon per year of
anthropogen|cem|ss|ons.However,trop|ca|forestsa|sohavethe|argestpotent|a|among
thewor|d’sforeststom|t|gatec||matechangethroughconservat|onofex|st|ngcarbon
poo|s (e.g., reduced |mpact |ogg|ng}, expans|on of carbon s|nks (e.g., reforestat|on,
agroforestry}, and subst|tut|on of wood products for foss|| fue|s (Brown et a|. 1996}.
Reduc|ng deforestat|on |s thus a h|gh-pr|or|ty abatement opt|on |n trop|ca| reg|ons,
wh|ch cou|d prov|de s|gn|fcant carbon ga|ns and substant|ve env|ronmenta| and other
benefts. For the forestry sector, data on type of forest, forest area, deforestat|on rate,
and reforestat|on/p|antat|on rate were used to est|mate GHG em|ss|ons/absorpt|on |n
thebasecase.
27

G|oba||y, |andf||s and open dumps are the dom|nant waste management and d|sposa|
methods,wh|ch|eadtoanaerob|cdegradat|onoforgan|cmater|a|andOH
4
em|ss|ons.
lPOO bus|ness-as-usua| project|ons for 2005-2020 |nd|cate that |andf||s w||| rema|n the
|argestsourceofOH
4
at55%–60%ofthetota|.lnth|sstudy,theGHGem|ss|onsfromthe
wastegenerat|onsectordur|ng2005–2030wereca|cu|atedbasedonurbanpopu|at|on
data, mun|c|pa| so||d waste (MSW} generated per cap|ta per day, fract|on of MSW
d|sposed to so||d waste d|sposa| s|tes, and fract|on of degradab|e organ|c component
|nMSW.
For the |ndustr|a| processes sector, cement product|on has as end-products ||me or
ca|c|umox|deandOO
2
.Th|sstudyfocusedonthecement|ndustry|nSouthAs|a,g|ven
that |t |s the most |mportant source of |ndustr|a| GHG em|ss|ons and |s common to
Bang|adesh,Bhutan,Nepa|,andSr||anka.
Base Case GHG Emissions in 2005–2030
ThenetGHGem|ss|onsfromthenon-energysectorsofthefourSouthAs|ancountr|es
comb|nedhavebeenest|matedto|ncreaseataOAGRof2.5%from40.5m||||ontOO
2
e
|n2005to76m||||ontOO
2
e|n2030(F|gure16}.ln2005,thetota|GHGem|ss|onfromthe
non-energysectorsacrossthefourcountr|eswas69.8m||||ontOO
2
e,wh||etheforestry
sector had sequestered 29.3 m||||on t OO
2
e. Most of the tota| GHG em|ss|ons came
from crop product|on, fo||owed by ||vestock ra|s|ng, |ndustr|a| processes, and waste
(F|gure 17}. By 2030, the tota| GHG em|ss|on from the non-energy sectors wou|d be
about101m||||ontOO
2
e,wh||etheforestrysectorwou|dsequesteraround24.9m||||on
tOO
2
e.Tab|e26showstheest|matedbasecaseGHGem|ss|ons|n2005and2030by
act|v|t|esnotus|ngenergy|nSouthAs|a.
27
Forth|sstudy,|oca|experts|nBhutanhavedeterm|nedthatbecauseof|tssteepterra|nandtopography,
forestregenerat|onmaynotbeasu|tab|eopt|on|nBhutan(ormaybeproh|b|t|ve|ycost|y}.Forth|sreason,
theforestrysectorwasnot|nc|uded|ntheana|ys|sforBhutan.
64 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Figure 16 Total GHG Emissions from Activities Not Using Energy, South Asia
(Excluding India and the Maldives), 2005–2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:REOOSA1countrystud|es(unpub||shed}.
lndustr|a|Process
Waste
Forestry
OropProduct|on
||vestockRa|s|ng
–40,000
–20,000
0
20,000
40,000
60,000
80,000
100,000
120,000
t
h
o
u
s
a
n
d

t
o
n
s

C
O
2
e
2005 2020 2030
Figure 17 Sector Share in Total GHG Emissions from Activities Not Using Energy
(Except Forestry), South Asia (Excluding India and the Maldives), 2005 and 2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:REOOSA1countrystud|es(unpub||shed}.
Waste
6%
||vestock
Ra|s|ng
42%
Orop
Product|on
49%
Waste
4%
lndustr|a|
Processes
5%
2005
Tota|GHG:
70m||||ontonsOO
2
e
||vestock
Ra|s|ng
37%
Orop
Product|on
43%
lndustr|a|
Processes
14%
2030
Tota|GHG:
101m||||ontonsOO
2
e
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 65
Table 26 Base Case Total GHG Emissions from Activities Not Using Energy, South Asia,
2005 and 2030 (million tons CO
2
e)
Crop
Production
Livestock
Raising Forestry
Industrial
Processes
Waste
Generation Total
Bangladesh
2005 25.86 19.19 (1.34} 2.33 2.04 48.08
2020 29.25 21.05 (1.25} 5.27 3.64 57.96
2030 32.00 22.62 (1.19} 5.53 5.07 64.03
Bhutan
2005 0.08 0.29 (12.68} 0.28 0.06 (11.97}
2020 0.11 0.54 (13.77} 1.38 0.08 (11.66}
2030 0.15 0.83 (15.44} 2.36 0.09 (12.02}
India
2005 314.9 213.8 – – 103.1 631.8
2020* 517.7 242.6 – – 296.7 1,057.0
2030 730.7 264.0 – – 600.2 1,594.9
Nepal
2005 4.72 8.84 (18.78} 0.17 0.09 (4.95}
2020 5.68 10.94 (16.61} 0.86 0.13 1.00
2030 6.43 12.83 (15.81} 1.14 0.15 4.74
Sri Lanka
2005 3.49 1.34 3.50 0.47 0.57 9.37
2020 4.19 1.45 6.02 2.05 0.59 14.3
2030 4.74 1.54 7.51 4.89 0.59 19.27
South Asia
(including India)
2005 349.05 243.46 (29.30} 3.25 105.86 672.33
2020 556.96 276.56 (25.60} 9.56 301.14 1,118.62
2030 774.02 301.82 (24.93} 13.92 606.10 1,671.02
South Asia
(excluding India)
2005 34.15 29.66 (29.30} 3.25 2.76 40.53
2020 39.24 33.98 25.60 9.56 4.43 61.60
2030 43.32 37.82 (24.93} 13.92 5.90 76.02
–=noana|ys|s,(}=negat|ve,OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
* For lnd|a, tota| fgure |n 2020 came from M|tra and Battacharya (2002}.
Notes:
1. GHG em|ss|on from crop product|on refers to those from r|ce cu|t|vat|on, fe|d burn|ng of agr|cu|tura| res|dues, and
agr|cu|tura|so||s.
2.||vestockra|s|ngreferstothatofcatt|e,buffa|o,goat,sheep,sw|ne,andpou|try.GHGem|ss|onsfromth|ssectorarethose
fromenter|cfermentat|onandmanuremanagement.
Source:REOOSA1countrystud|es(unpub||shed}.
66 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
For lnd|a, the GHG em|ss|ons from ||vestock ra|s|ng, crop product|on, and waste
d|sposa|wereest|matedtogrowfrom632m||||ont|n2005to1,057m||||ont|n2020and
1,595 m||||on t |n 2030 (M|tra and Bhattacharya 2002; Gol MoEF 2009; F|gure 18}.
28
Accord|ngtolnd|a’sF|rstNat|ona|Oommun|cat|ontoÜNFOOO,theforestrysector’sOO
2

em|ss|on|n1994was37.7m||||ontwh||e|tsOO
2
remova|(sequestrat|on}was23.4m||||ont
(GolMoEF2004}.TheSecondNat|ona|Oommun|cat|onoflnd|astatesthattherewasa
OO
2
remova| of 236.3 m||||on t |n 2000 (Gol MoEF 2012}. These two offc|a| documents
a|so stated that lnd|a’s |ndustr|a| processes sector em|tted around 99.9 m||||on t OO
2

|n1994and72.6m||||ontOO
2
|n2000.F|gure19presentsthesectorshares|nlnd|a’s
tota| GHG em|ss|ons from the ||vestock, crop product|on, and waste subsectors; crop
product|onhasthe|argestcontr|but|ontotota|GHGem|ss|ons.
28
From M|tra and Bhattacharya (2002}, the 1994–2000 OAGRs used for these project|ons are as fo||ows:
OH4 em|ss|ons from ||vestock enter|c fermentat|on, 0.9%; manure management, 0.4%; r|ce cu|t|vat|on,
3.0%; and fe|d burn|ng of agr|cu|tura| res|dues, 6.8%. OO2em|ss|onsfromcementproduct|on,16.4%,and
forestry sector, 52.0%. N2O em|ss|ons from n|tr|c ac|d product|on, 50.2%, so||s, 2.4%; and crop res|due
burn|ng, 4.9%. The 2005–2020 project|ons came from M|tra and Bhattacharya (2002}, and the current
studyder|vedthe2030project|ons.lnadd|t|on,M|traandBhattacharya(2002}usedthe1994–2000OAGR
of4.4%toest|matewastegenerat|onunt||2025,wh||ethecurrentstudyuseda1994–2007OAGRof7.3%
(GolMoEF2009}toest|matelnd|a’swaste-re|atedem|ss|onsupto2030.
Figure 18 Total GHG Emissions from Activities Not Using Energy
(Excluding Forestry and Industrial Processes), India, 2005–2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Sources:
M|tra, A.P. and S. Bhattacharya. 2002. O||mate Ohange and Greenhouse Gas lnventor|es: Project|ons,
lmpactsandM|t|gat|onStrateg|es.lnP.R.Shuk|aeta|.,eds.Climate Change and India: Issues, Concerns
and Opportunities.TataMcGraw-H|||Pub||sh|ngOompany||m|ted.NewDe|h|.
Gol MoEF (Government of lnd|a, M|n|stry of Env|ronment and Forest}. 2009. India’s GHG Emissions
Profile, Results of Five Climate Modeling Studies.NewDe|h|.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2005 2020 2030
m
i
l
l
i
o
n

t
o
n
s

C
O
2
e
Waste
OropProduct|on
||vestockRa|s|ng
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 67
Thenon-energyre|atedGHGem|ss|onsfromagr|cu|ture,forestry,waste,and|ndustr|a|
processesared|scussedonthefo||ow|ngpages.
Agriculture
The comb|ned tota| non-energy re|ated GHG em|ss|ons from the agr|cu|ture sector of
SouthAs|a(exc|ud|nglnd|aandtheMa|d|ves}were64m||||ontOO
2
e|n2005andwou|d
reach81m||||ontOO
2
e |n 2030 at about 1.0% OAGR. The correspond|ng fgures for lnd|a
areest|matedtobe529m||||ont|n2005and995m||||ont|n2030.Oropproduct|onand
||vestockra|s|ngaccountedforabout54%and46%,respect|ve|y,ofthetota|agr|cu|ture-
re|atedem|ss|ons|nthereg|on|n2005(F|gure20}.Amongtheseact|v|t|es,r|cecu|t|vat|on
|s est|mated to contr|bute the most (37.4%} to GHG em|ss|ons |n 2030, fo||owed by
enter|c fermentat|on, agr|cu|tura| so||s, manure management, and fe|d burn|ng of
agr|cu|tura|res|dues(|nth|sorder}.lnc|ud|nglnd|aw|ththefourcountr|esabove,||vestock
ra|s|ng contr|buted the most (41.1%} to the agr|cu|ture sector`s GHG em|ss|ons |n 2005;
|tsshare|sest|matedtodecreaseto28.1%|n2030(F|gure21}.ln2030,r|cecu|t|vat|on
wou|d have the |argest share |n the sector`s GHG em|ss|on from these fve South
As|ancountr|es.
Enter|c fermentat|on accounts for about 90% of tota| GHG em|ss|ons from ||vestock |n
SouthAs|a(exc|ud|nglnd|aandtheMa|d|ves}dur|ng2005–2030,w|ththerestcom|ng
from manure management (F|gure 22}. Th|s |s a|so the case when ||vestock em|ss|ons
fromlnd|aare|nc|udedw|ththoseofthefourcountr|es(F|gure23}.
Across South As|a (exc|ud|ng lnd|a and the Ma|d|ves}, methane em|ss|ons from r|ce
cu|t|vat|on are predom|nant |n the tota| GHG em|ss|ons from crop product|on-re|ated
Figure 19 Sector Share in Total GHG Emissions from Activities Not Using
Energy (Excluding Forestry and Industrial Processes), India, 2005 and 2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source: M|tra, A.P. and S. Bhattacharya. 2002. O||mate Ohange and Greenhouse Gas lnventor|es:
Project|ons, lmpacts and M|t|gat|on Strateg|es. ln P.R. Shuk|a et a|., eds. Climate Change and India:
Issues, Concerns and Opportunities.TataMcGraw-H|||Pub||sh|ngOompany||m|ted.NewDe|h|.
||vestock
Ra|s|ng
34%
Orop
Product|on
50%
Waste
16%
2005
Tota|Em|ss|ons:
632m||||ontons
OO
2
e
Orop
Product|on
45.8%
Waste
37.6%
2030
Tota|Em|ss|ons:
1,595m||||ontons
OO
2
e
||vestock
Ra|s|ng
16.6%
68 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Figure 20 Share in Total GHG Emissions of Agricultural Activities, South Asia
(Excluding India and the Maldives), 2005 and 2030
AS = agr|cu|tura| so||s, OH4 = methane, OO2e = carbon d|ox|de equ|va|ent, EF = enter|c fermentat|on,
FBAR = fe|d burn|ng of agr|cu|tura| res|due, GHG = greenhouse gas, MM = manure management,
N2O=n|trousox|de,RO=r|cecu|t|vat|on.
Source:REOOSA1countrystud|es(unpub||shed}.
2%
42%
5%
41%
1%
<1%
11%
2005
Tota|GHGem|ss|ons:
64m||||ontonsOO
2
e
EF(OH
4
}
MM(OH
4
}
RO(OH
4
}
FBAR(OH
4
}
FBAR(N
2
O}
AS(N
2
O}
42%
5%
37%
14%
2030
Tota|GHGem|ss|ons:
81m||||ontonsOO
2
e
1%
Figure 21 Shares in Total GHG Emissions of Agricultural Activities, South Asia
(Excluding the Maldives), 2005 and 2030
AS = agr|cu|tura| so||s, OH4 = methane, OO2e = carbon d|ox|de equ|va|ent, EF = enter|c fermentat|on,
FBAR = fe|d burn|ng of agr|cu|tura| res|due, GHG = greenhouse gas, MM = manure management,
N2O=n|trousox|de,RO=r|cecu|t|vat|on.
Source:REOOSA1countrystud|es(unpub||shed}.
2005
Tota|GHGEm|ss|ons:
593m||||ontonsOO
2
e
EF(OH
4
}
MM(OH
4
}
RO(OH
4
}
FBAR(OH
4
}
FBAR(N
2
O}
AS(N
2
O}
2030
Tota|GHGEm|ss|ons:
1,076m||||ontonsOO
2
e
37%
4%
27%
<1%
13%
18%
25%
3%
29%
1%
23%
18%
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 69
Figure 22 GHG Emissions from Livestock Raising, South Asia
(Excluding India and the Maldives), 2005–2030
OH4

=

methane, OO2e = carbon d|ox|de equ|va|ent, EF= enter|c fermentat|on, GHG = greenhouse gas,
MM=manuremanagement.
Source:REOOSA1countrystud|es(unpub||shed}.
MM(OH
4
} EF(OH
4
}
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2005 2020 2030
'
0
0
0

t
o
n
s

C
O
2
e
Figure 23 GHG Emissions from Livestock Raising, South Asia
(Excluding the Maldives), 2005–2030
OH4

=

methane, OO2e = carbon d|ox|de equ|va|ent, EF= enter|c fermentat|on, GHG = greenhouse gas,
MM=manuremanagement.
Source:REOOSA1countrystud|es(unpub||shed}.
MM(OH
4
} EF(OH
4
}
0
50
100
150
200
250
300
350
2005 2020 2030
m
i
l
l
i
o
n

t
o
n
s

C
O
2
e
act|v|t|es,a|thoughthe|rshare|sest|matedtodecreasefrom76.8%|n2005to70.1%|n
2030 (F|gure 24}. N
2
O-em|tt|ng agr|cu|tura| so|| |s the second |argest contr|butor w|th a
shareest|matedto|ncreasefromaround20.7%|n2005to25.7%|n2030.Theshareof
fe|d burn|ng of agr|cu|tura| res|dues |n the tota| GHG em|ss|ons from crop product|on |s
est|matedto|ncreasefromabout2.5%|n2005to4.3%|n2030.
70 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Figure 24 GHG Emissions from Crop Production-Related Activities, South Asia
(Excluding India and the Maldives), 2005–2030
AS = agr|cu|tura| so||s, OH4 = methane, OO2e = carbon d|ox|de equ|va|ent, FBAR = fe|d burn|ng of
agr|cu|tura|res|due,N2O=n|trousox|de,RO=r|cecu|t|vat|on.
Source:REOOSA1countrystud|es(unpub||shed}.
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2005 2020 2030
'
0
0
0

t
o
n
s

C
O
2
e
AS(N
2
O}
FBAR(N
2
O}
FBAR(OH
4
}
RO(OH
4
}
lnc|ud|nglnd|aw|ththefourcountr|es,methaneem|ss|onsfromr|cecu|t|vat|onhavethe
|argestshare|ntota|GHGem|ss|onsfromcropproduct|ondur|ng2005–2030(F|gure25}.
lt |s fo||owed by agr|cu|tura| so||s as the second |argest em|tter |n 2005, wh||e fe|d burn|ng
ofagr|cu|tura|res|duesoccup|esth|sp|ace|n2030.
Forestry
Thebase||neproject|onofGHGem|ss|onsfromtheforestrysectorusedthe2000–2005
h|stor|ca|deforestat|onandp|antat|onratesofBang|adesh,Bhutan,Nepa|,andSr||anka.
Thetota|areaunderforestcover|nthesecountr|eswasaround10.0%,72.5%,40.0%,
and 31.0%, respect|ve|y (FAO 2001; FAO 2005; GPRB BBS 2010}.
The|rtota|GHGremova|capac|tywas29m||||ontOO
2
e|n2005,butest|matedtodec||ne
to26m||||ontOO
2
e|n2020and25m||||ontOO
2
e|n2030(F|gure26}.Th|sprojectedtrend
|sduetothe|ncreas|ngdeforestat|onrates|nNepa|andBang|adesh,reportedtobeat
27,000hectares/year
29
and3,000hectares/year,
30
respect|ve|y,dur|ng2005–2010.
Waste Disposal
The rap|d urban|zat|on w|de|y tak|ng p|ace |n South As|a presents a grow|ng prob|em
assoc|ated w|th so||d waste d|sposa|. Tota| GHG em|ss|on from waste generat|on |n
thefourcountr|es|sest|matedtobe2.7m||||ontOO
2
e|n2005andprojectedtoreach
5.9m||||ontOO
2
e|n2030(F|gure27}.lnc|ud|nglnd|a,thetota|GHGem|ss|onfromwaste
generat|on|sest|matedtobe106m||||ontOO
2
e|n2005and606m||||ontOO
2
e|n2030
31

(F|gure28}.
29
Source:http://ra|nforests.mongabay.com/deforestat|on/2000/Nepa|.htm
30
Source:http://ra|nforests.mongabay.com/deforestat|on/2000/Bang|adesh.htm
31
Forlnd|a,the2005est|matedva|ue|sbasedonGolMoEF(2009},wh||ethatfor2030wasest|matedus|ng
the1994–2007OAGRg|vena|so|nGolMoEF(2009}.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 71
Figure 25 GHG Emissions from Crop Production-Related Activities,
South Asia (Excluding the Maldives), 2005–2030
AS = agr|cu|tura| so||s, OH4 = methane, OO2e = carbon d|ox|de equ|va|ent, FBAR = fe|d burn|ng of
agr|cu|tura|res|due,GHG=greenhousegas,N2O=n|trousox|de,RO=r|cecu|t|vat|on.
Source:REOOSA1countrystud|es(unpub||shed}.
AS(N
2
O}
FBAR(N
2
O}
FBAR(OH
4
}
RO(OH
4
}
0
100
200
300
400
500
600
700
800
900
2005 2020 2030
m
|
|
|
|
o
n

t
o
n
s

O
O
2
e
Figure 26 Greenhouse Gas Sink Capacity of the Forestry Sector, South Asia
(Excluding India and the Maldives), 2005–2030
OO2e=carbond|ox|deequ|va|ent.
Source:REOOSA1countrystud|es(unpub||shed}.
29,298
25,600
24,936
0
5,000
10,000
15,000
20,000
25,000
30,000
2005 2020 2030
'
0
0
0

t
o
n
s

C
O
2
e
72 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Figure 27 Greenhouse Gas Emissions from the Waste Disposal Sector,
South Asia (Excluding India and the Maldives), 2005–2030
OO2e=carbond|ox|deequ|va|ent.
Source:REOOSA1countrystud|es(unpub||shed}.
2,768
4,432
5,894
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2005 2020 2030
'
0
0
0

t
o
n
s

C
O
2
e
Figure 28 Greenhouse Gas Emissions from the Waste Disposal Sector,
South Asia (Excluding the Maldives), 2005–2030
OO2e=carbond|ox|deequ|va|ent.
Source:REOOSA1countrystud|es(unpub||shed}.
106
301
606
0
100
200
300
400
500
600
700
2005 2020 2030
m
i
l
l
i
o
n

t
o
n
s

C
O
2
e
Industrial Processes
Thema|nsourcesofGHGem|ss|onsfrom|ndustr|a|processes|nSouthAs|aare|ndustr|es
produc|ngammon|a,cement/c||nker,|ronandstee|,||mestoneanddo|om|te,sodaash,
ca|c|um carb|de, and ferros|||con. W|th|n th|s group, cement/c||nker product|on and
ammon|aproduct|onarethemost|mportantsourcesofOO
2
em|ss|ons|nthereg|on.
Exc|ud|ng lnd|a and the Ma|d|ves, the tota| OO
2
em|ss|on from |ndustr|a| processes |n
SouthAs|awasest|matedtobe3.2m||||ont|n2005,|ncreas|ngto9.6m||||ont|n2020
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 73
Figure 29 Greenhouse Gas Emissions from Industrial Processes,
South Asia (Excluding India and the Maldives), 2005–2030
OO2e=carbond|ox|deequ|va|ent.
Source:REOOSA1countrystud|es(unpub||shed}.
Ferros|||conproduct|on
Oa|c|umcarb|de
product|on
lronandstee|product|on
Ammon|aproduct|on
||mestoneuseand
product|on
Oement/c||nker
product|on
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2005 2020 2030
'
0
0
0


t
o
n
s

C
O
2
e
and to 13.9 m||||on t |n 2030 (F|gure 29}. Ammon|a product|on contr|buted the |argest
share(68%}|n2005.By2030,cement/c||nkerproduct|on|sest|matedtohavethe|argest
share(37%}(F|gure30}.
Cleaner Energy Options, GHG Abatement Potential,
and Costs in 2020
Basedonthebus|ness-as-usua|em|ss|onproject|ons,thepr|or|tyabatementopt|onsfor
each of the act|v|t|es not us|ng energy were |dent|fed and exam|ned for Bang|adesh,
Bhutan,Nepa|,andSr||anka.Tab|e27summar|zestheseabatementopt|ons,andthe|r
respect|veest|matedGHGem|ss|onabatementpotent|a|andper-tonOO
2
e|ncrementa|
abatement cost (lAO} |n 2020 for these four countr|es.
32
The country-spec|fc GHG
abatementpotent|a|sandlAOsarepresented|nAppend|xes1and2.
Across the four subsectors not us|ng energy cons|dered |n th|s study, forestry ranks
frst |n terms of GHG abatement potent|a| for the year 2020, at about 23.56 m||||on t
32
Nota||GHGem|ss|onsabatementtechno|og|eshavebeenassessed|neachcountrystudy.Forexamp|e,
|mprovement of graz|ng management comb|ned w|th supp|ement b|ocks may offer s|gn|fcant opportun|ty
forGHGabatementthroughso||carbonsequestrat|on(underpasture|ands}andreducedem|ss|onsfrom
||vestock through |mproved ||vestock product|v|ty, d|gest|on, and reduced stock numbers. ln add|t|on,
reducedorm|n|mumt|||ageagr|cu|turereducesem|ss|onsdur|ng|andpreparat|onand|mprovesso||carbon
capture. ||vestock manure |s a|so a s|gn|fcant source of methane, wh|ch can be captured for energy
product|on.Theadopt|onofureabr|quettetechno|ogya||owsreducedureafert|||zerratesand/or|mproved
fert|||zeruptake,thusreduc|ngGHGem|ss|ons.
74 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
OO
2
e, fo||owed by |ndustr|a| processes, waste d|sposa|/management, and agr|cu|ture
(|nth|sorder}.However,thewastemanagementsubsectorpostedthe|owestmarg|na|
abatementcostspertonOO
2
eabated(w|threcyc||ngandcompost|ng},wh||e|ndustr|a|
processespostedtheh|ghestper-tonlAOs.Theresu|tsbysectorared|scussedbe|ow.
Agriculture
lncreas|ng ||vestock product|v|ty |owers em|ss|ons per an|ma| and per un|t product
(De Haan, Ste|nfe|d, and B|ackburn 1996}. Add|ng urea to the d|et of rum|nants, and
ureatreatmentofcropres|duespr|ortofeed|ngto|oca|da|rycatt|e,bothhe|p|mprove
the d|gest|ve effc|ency of ||vestock and reduce the|r GHG em|ss|ons. Supp|ement|ng
rum|nant d|ets w|th urea-mo|asses mu|t|-treatment b|ocks (ÜMMB} has been done |n
Bang|adesh,lnd|a,andPak|stan,andshowedGHGem|ss|onreduct|onsbyasmuchas
35%. As|de from th|s beneft, ÜMMB and urea-treated straw (ÜTS} feed|ng were found to
|ncreasem||kproduct|onbyasmuchas25%and30%,respect|ve|y.Forcropproduct|on,
m|dseason dra|nage and |nterm|ttent |rr|gat|on can reduce methane em|ss|ons |n fooded
r|cefe|ds by more than 40% (Wassman, Hosen, and Sumfeth 2009}.
Across these four agr|cu|ture-re|ated techno|og|es, the tota| GHG abatement potent|a|
|n 2020 comes to around 1.37 m||||on t OO
2
e |n South As|a (exc|ud|ng lnd|a and the
Ma|d|ves},wh||ethecumu|at|vetota|dur|ng2005–2030|sabout33.1m||||ontOO
2
e.The
sector’stota|GHGabatementpotent|a||n2020cou|drangefrom60,258tOO
2
e(us|ng
urea-treatedstraw}to933,120tOO
2
e(w|thmu|t|p|eaeratedr|ceproduct|on}.Therange
oflAOpertonOO
2
ewou|dbe$3.01–$25.03(formu|t|p|eaeratedr|ceproduct|on}and
$43.66–$45.99(forurea-treatedstraw}(Tab|e27}.
Figure 30 Subsector Shares in Industrial Process-Related Greenhouse
Gas Emissions, South Asia (Excluding India and the Maldives), 2005 and 2030
Source:REOOSA1countrystud|es(unpub||shed}.
21%
5%
68%
3%
2% 1%
2005
Total CO2 Emission:
3.2 million tons
37%
26%
32%
1%
3% 2%
2030
Total CO2 Emission:
13.9 million tons
Ferros|||conproduct|on
Oa|c|umcarb|de
product|on
lronandstee|
product|on
Ammon|aproduct|on
||mestoneuseand
product|on
Oement/c||nker
product|on
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 75
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.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 77
lnbothBang|adeshandBhutan,ÜTSfeed|nghastheh|ghestlAObya|argemarg|n.ln
Bang|adesh,the|argestGHGabatementpotent|a||n2020comesfromdra|n|ngra|nfed
food-prone r|ce |ands tw|ce, w|th a reasonab|e lAO of $15.72 per ton OO
2
e abated.
For r|ce cu|t|vat|on, the |owest lAO per ton OO
2
e abated |s ach|eved through mu|t|p|e
aerat|ons,wh||eÜMMBsupp|ementat|onhasthe|owerlAObetweenthetwoabatement
opt|ons for ||vestock product|on. Mu|t|p|e aerat|ons of r|ce fe|ds appear to be the best
opt|on|nreduc|ngGHGem|ss|ons|nNepa|andSr||anka,w|thanlAOcons|derab|y|arger
(|nSr||anka}than|ntheotherthreecountr|es.
Forestry
Across the forestry sectors of Bang|adesh, Nepa|, and Sr| |anka, the GHG abatement
potent|a||n2020ofconserv|ngex|st|ngforestscou|dbetw|ce(about15.44m||||ontOO
2
e}
thatfromexpand|ngcarbonstocks(8.12m||||ontOO
2
e}.lna||threecountr|es,thelAOper
tonOO
2
eabatedbyconserv|ngex|st|ngcarbons|nksappearstobecons|derab|ysma||er
thanthatach|evedbyexpand|ngcarbonstocks.Atthecountry|eve|,theconservat|onof
ex|st|ngcarbons|nks|nNepa|andexpand|ngcarbonstocks|nBang|adeshpostedthe
h|ghestGHGabatementpotent|a||n2020ata|most9m||||ontOO
2
eandabout4.6m||||on
t OO
2
e, respect|ve|y. ln terms of lAO, conserv|ng ex|st|ng carbon s|nks |n Bang|adesh
appearstobemostreasonab|eat$0.58pertonOO
2
e,wh||etheexpans|onofcarbon
stocks|nNepa|,themostexpens|veat$38.62pertonOO
2
e.
Theconservat|onofex|st|ngcarbons|nks|nc|udesprotect|ngforestreserves,adopt|on
of appropr|ate s||v|cu|tura| pract|ces, and contro|||ng deforestat|on. G|oba||y, severa|
sectors are advocat|ng payments for avo|d|ng deforestat|on |n deve|op|ng countr|es
undertheso-ca||ed“reduc|ngem|ss|onsfromdeforestat|onanddegradat|on”,perhaps
|n the post-2012 Kyoto Protoco|. Th|s |s |n recogn|t|on that deforestat|on ma|n|y |n the
trop|cs account for 20% of a|| GHG em|ss|ons (Denman et a|. 2007}. However, “the
des|gnand|mp|ementat|onofREDDpo||c|esw|||bene|thers|mp|enorstra|ghtforward,
g|ven the comp|ex|ty of the soc|a|, econom|c, env|ronmenta|, and po||t|ca| d|mens|ons
ofdeforestat|on.Manyoftheunder|y|ngcausesofdeforestat|onaregeneratedouts|de
the forestry sector and a|ternat|ve |and uses tend to be more proftab|e than conserv|ng
forests”(Kann|neneta|.2007}.
Meanwh||e,thes|mp|estwaytoexpandcarbonstocks|stop|anttrees,preferab|ythefast-
grow|ngspec|esthatw|||accumu|atemoreb|omassandcarbon|nag|venper|odoft|me.
Ünder the O|ean Deve|opment Mechan|sm (ODM}, on|y reforestat|on and afforestat|on
projectsarea||owed.
Waste Disposal
Forth|sstudy,twoGHGabatementopt|onsunderwastemanagementwerecons|dered:
recyc||ngandcompost|ngofso||dwaste.Recyc||ngherereferstoanyact|v|ty(exceptfor
compost|ng} resu|t|ng |n the reduct|on of |andf||ed so||d waste. The study assumed that
mun|c|pa| so||d waste d|sposed decreased at 1% per year because of recyc||ng. Th|s
trans|atestoanaverageannua|recyc||ngthatrangefrom34,464tonsofwasteperyear
|nNepa|to132,320tonsperyear|nBang|adeshdur|ng2005–2030.
Betweenthecompost|ngandrecyc||ngopt|onstomanageGHGem|ss|onsfromwaste
d|sposa|, compost|ng so||d wastes cons|stent|y posted the h|gher abatement potent|a|
78 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
and |ower lAO per ton OO
2
e |n Bang|adesh, Bhutan, Nepa|, and Sr| |anka. W|th
compost|ng so||d wastes, GHG reduct|on |n 2020 ranged from 16,156 tons |n Bhutan
to about 737,500 tons |n Bang|adesh. Marg|na| abatement cost appears to be |owest
(aga|n}|nBhutanat$0.42pertonOO
2
eandh|ghest|nSr||ankaat$1.98pertonOO
2
e.
Neverthe|ess,theadaptat|onofbothwastemanagementtechno|og|eshasacomb|ned
tota|GHGabatementpotent|a|ofabout1.52m||||ontOO
2
e|n2020.
Industrial Processes
lnthelPOOFourthAssessmentReport,carboncaptureandstorage(OOS}featuredas
apotent|a|too|forreduc|ngGHGem|ss|ons,part|cu|ar|ythosefrom|ndustr|a|processes
(Bernste|neta|.2007}.Wh||ethetechno|ogy|scurrent|ynotyetbe|ngfu||y|mp|emented
at the commerc|a| |eve|, OOS |s projected to be |n |ts demonstrat|on phase by 2015
(McK|nseyandOompany2009}.Hendr|kseta|.(2004}stateds|xgenera|waystoreduce
OO
2
em|ss|ons and d|scussed two process-re|ated abatement strateg|es/opt|ons, |.e.,
app|y|nga|owerc||nker/cementrat|oby|ncreas|ngtherat|oofadd|t|vestocement,and
remova|ofOO
2
from fue gas.
Th|sstudycons|deredthe|ndustr|a|process-re|atedm|t|gat|onopt|onson|y|nthecase
of cement/c||nker product|on: (|} post-combust|on OOS, and (||} oxy-combust|on OOS,
|n Bang|adesh, Bhutan, Nepa|, and Sr| |anka. Tab|e 27 shows that, across the four
countr|es, post-combust|on OOS has a s|gn|fcant|y |arger GHG abatement potent|a| of
about1.56m||||ontOO
2
e|n2020,butatas||ght|yh|gherlAOthantheoxy-combust|on
OOS opt|on; |t ranged from $139.05 per ton OO
2
e abated |n Bhutan to $155.78 per
tonOO
2
eabated|nbothBang|adeshandSr||anka.Together,thetwoGHGem|ss|on
m|t|gat|on opt|ons have an abatement potent|a| reach|ng about 2.61 m||||on t OO
2
e
|n2020.
Summary
Be|owarekeyresu|tsfromthereg|ona|synthes|sandcountrystud|espresented|nth|s
chapter.
ln the base case, South As|a (exc|ud|ng lnd|a} |s projected to become more foss|| fue|
dependent dur|ng 2005-2030. Ooa|`s share |n the energy m|x w||| |ncrease s|gn|fcant|y,
espec|a||y |n Bang|adesh. O|| w||| rema|n a s|gn|fcant source of energy, a|though |ts share
|n the energy m|x |s expected to dec||ne. For power (e|ectr|c|ty} generat|on, the shares
ofpetro|eumproducts,hydropower,andnatura|gasareexpectedtodec||ne,wh||ethat
ofcoa|,nuc|earresources,b|omass,andotherrenewab|eresourceswou|d|ncrease.ln
nom|na| terms, the |ndustr|a|, transport, and res|dent|a| sectors are the major energy-
consum|ng sectors |n South As|a (exc|ud|ng lnd|a}, and the commerc|a| and |ndustr|a|
sectors are the fastest grow|ng. The tota| energy-re|ated GHG em|ss|ons from the
reg|on(exc|ud|nglnd|a}wou|d|ncreaseataOAGRof5.9%dur|ng2005–2030,reach|ng
about 244.7 m||||on t by 2030. The power generat|on sector wou|d rema|n the s|ng|e
|argestenergy-re|atedGHG-em|tt|ngact|v|ty.Thecontr|but|onstoGHGem|ss|onsofthe
transportandres|dent|a|sectorswou|ddecreasew|ththe|ncreas|ngadopt|onofc|eaner
and effc|ent veh|c|es and cook|ng stoves.
Opt|onsandOoststoReduceGHGEm|ss|ons|n2005–2030 79
Ünder the carbon tax, the tota| pr|mary energy supp|y of South As|a (exc|ud|ng lnd|a}
wou|dbes||ght|y|owerthan|nthebasecase,w|ththeenergym|xmov|ngtowardnatura|
gas, hydropower, b|omass, and other renewab|e resources. The reg|on’s tota| power
generat|oncapac|ty|n2030wou|dbe3.26%h|gher,a|thoughthepowergeneratedwou|d
be0.8%|ower.Ooa|-ando||-basede|ectr|c|tygenerat|onwou|dbesubstant|a||yreduced,
wh||ethatfromnatura|gas(andnuc|earpowerp|ants,part|cu|ar|y|nBang|adeshandlnd|a}
wou|d |ncrease. Oarbon tax wou|d reduce the 2030 tota| sector energy consumpt|on
|n South As|a (exc|ud|ng lnd|a}, a|be|t on|y by 1.0% from the base case |eve|. Energy
consumpt|on|nthecommerc|a|and|ndustr|a|sectors|sest|matedto|ncrease|n2030,
but these wou|d be offset by the |ower energy use from the res|dent|a| and transport
sectors. These reduct|ons |n energy consumpt|on are due to the use of more effc|ent a|r
coo||ngandrefr|gerators,fue|sw|tch|ng,anduseofb|od|ese|,espec|a||y|nveh|c|es.
W|ththecarbontax,therewou|dbeacumu|at|vereduct|on|nGHGem|ss|ons|nSouth
As|a(exc|ud|nglnd|a}ofaround971m||||ontofOO
2
edur|ng2005–2030,w|thtota|annua|
em|ss|on decreas|ng by 22% |n 2030. Power generat|on offers the |argest potent|a| for
reduc|ngGHGem|ss|ons,fo||owedbytheres|dent|a|andcommerc|a|sectors.However,
the |mpos|t|on of a carbon tax wou|d s||ght|y |ncrease the tota| d|scounted energy
systemcostfromthebasecase|eve|,aswe||asthenom|na|tota||nvestmentsforpower
generat|on.
For South As|a (exc|ud|ng lnd|a}, a GHG abatement cost ana|ys|s showed s|gn|fcant
potent|a| for GHG m|t|gat|on (or em|ss|ons reduct|on} at negat|ve or |ow abatement
costs.Tota|GHGem|ss|onswou|ddecrease,andpercentagereduct|onsfromthebase
caseem|ss|on|eve|wou|d|ncrease,w|th|ncreas|ngper-un|tOO
2
elAO.BasecaseGHG
em|ss|onscou|dpotent|a||ybereducedbyabout9.7%|n2020,bydep|oy|ngsevera|“no-
regret" c|ean and energy-effc|ent opt|ons. The res|dent|a|, transport, and |ndustry sectors
havetheh|ghestpotent|a|form|t|gat|ngenergy-re|atedGHGem|ss|ons.
Theana|ys|sofem|ss|onsfromact|v|t|esnotus|ngenergyshowedthatfor2020theuse
ofurea-mo|assesmu|t|-treatmentb|ocks|n||vestockproduct|on,mu|t|p|eaerat|on|nr|ce
cu|t|vat|on, conservat|on of ex|st|ng carbon stocks |n the forestry sector, compost|ng
mun|c|pa| so||d wastes, and post-combust|on carbon capture and storage |n cement
product|onhaveh|ghGHGabatementpotent|a|sat|owper-un|tlAO.
Severa| of the energy-effc|ent GHG em|ss|on abatement opt|ons ana|yzed |n th|s study
are a|ready found cost-effect|ve under the base case. However, wh||e they are cost-
effect|vefromaneconom|csperspect|ve,mostoftheabatementopt|onsareyettobe
w|de|ypromotedandadopted.lt|sthus|mperat|veto|ntroducepo||c|esandmeasures
toovercomethevar|ousconstra|ntsandbarr|ersthath|nderthew|de-sca|euseofsuch
c|ean techno|og|es and resource opt|ons. These po||c|es and measures wou|d great|y
he|pthecountr|es|nSouthAs|amoveto|ow-carbonandgreengrowthdeve|opment.
5 Challenges and Enabling
Conditions
M
ostSouthAs|ancountr|esarest|||deve|op|ngandcanpursuesusta|nab|eand
|ow-carbon deve|opment strateg|es that support h|gh econom|c growth and
reduce GHG em|ss|ons at |ow or even negat|ve costs (benefts}. A|ready, the
|ncreas|ng app||cat|on of cost-effect|ve and energy-effc|ent techno|og|es across the
reg|on|sev|dentfromdec||n|ngenergy-re|atedGHGem|ss|onsperun|tofGDPprojected
forthenexttwodecades.
There rema|n however numerous techn|ca|, |nformat|on, fnanc|a|, and |nst|tut|ona| barr|ers
for c|ean techno|ogy deve|opment (F|gure 31}. Effect|ve po||c|es and measures wou|d
be necessary to overcome these barr|ers and constra|nts and to create an enab||ng
env|ronmentforthe|arger-sca|epromot|onandw|deradopt|onofc|eanertechno|og|es
andresources|nSouthAs|a.
Challenges to Clean Technology Development
Technology-Related Constraints
Techno|ogy-re|atedconstra|nts|nc|udepoorand||m|tedresourcesupp|yorava||ab|||ty,|n
part|cu|ar|y the |ack of combust|on-effc|ent qua||ty raw mater|a|s for dendrotherma| power
deve|opment. ln Sr| |anka, for examp|e, the deve|opment of renewab|e energy-based
systems (e.g., w|nd and wood fue|-fred p|ants [dendrotherma| power|} |s h|ndered by |ack
ofsu|tab|emater|a|s.
Asecondtechno|ogyconstra|nt|s|nadequateabsorpt|vecapac|tyofthepowersystem
(nat|ona| gr|d} to accommodate renewab|e energy sources, wh|ch |s a|so true |n Sr|
|anka (Senanayake 2009}. ln lnd|a, the unava||ab|||ty of transm|ss|on |nfrastructure and
gr|d|ntegrat|onrestr|ctsthedeve|opmentofsma||hydropowerandw|ndenergyprojects,
espec|a||y |n remote |ocat|ons. Wh||e the states ought to prov|de the transm|ss|on
|nfrastructure of renewab|e energy projects, the project deve|opers, |n rea||ty, end up
hav|ng to estab||sh them and |ncur add|t|ona| costs. The add|t|ona| fnanc|a| burden can
d|scourageproponentsfromdeve|op|ngandpursu|ngc|eanertechno|ogyprojects.For
examp|e,a20-MWproject|nToos,Ku||u(H|macha|Pradesh,lnd|a}wassca|eddownto
10MWduetotheabsenceofadequatetransm|ss|on|nfrastructure(lDFO2010}.
Renewab|e energy techno|og|es, part|cu|ar|y those for e|ectr|c power generat|on, are
re|at|ve|ynewandsoph|st|catedformostcountr|es|nSouthAs|a.Thecountr|esarest|||
Oha||engesandEnab||ngOond|t|ons 81
Figure 31 Barriers to Clean Technology Development in South Asia
Source: Adapted from WEO (Wor|d Energy Oounc||}. 2000. Renewable Energy in South Asia—Status and Prospects.
November. |ondon. http://www.wor|denergy.org/documents/saarc.pdf and Sarkar, A. and J. S|ngh. 2010. F|nanc|ng
energy effc|ency |n deve|op|ng countr|es-|essons |earned and rema|n|ng cha||enges. Energy Policy.38(2010}:5560–5571.
º lnadequate pub||c
educat|on, |nformat|on, and
awareness programs
º |ack of awareness of c|ean
techno|og|es and h|gh
d|scount rates
º H|gh project deve|opment
and up-front costs
º |ack of f|nanc|ng or proper
f|nanc|ng mechan|sm
º Ab|||ty and w||||ngness to
pay for |ncrementa| cost
º |ow benef|ts/returns
re|at|ve to costs
º Perce|ved r|sks of the new
techno|ogy/system
º M|xed |ncent|ves
º Behav|ora| b|ases
º |ack of cred|b|e data
Policy / Regulatory
Technology / Service
Providers
End Users Financiers
º º º
Barriers to Clean Technology
Development
º |ack of m|cro-|eve| (s|te
spec|f|c, tempora|} data to
def|ne potent|a| resources
º Non-monet|zed nature of
resource opt|ons
º Need to ma|nstream |nto
nat|ona| and reg|ona|
p|ann|ng
º |ack of coord|nat|on among
concerned m|n|str|es/
agenc|es for po||cy
formu|at|on and p|ann|ng
º |ack of m|n|mum
performance standards
º Energy pr|c|ng, subs|d|es,
and other measures do not
support c|ean techno|og|es
º F|sca| barr|ers (e.g., customs
duty and va|ue-added taxes}
º Env|ronmenta| damages not
ref|ected |n pr|c|ng of
convent|ona| opt|ons
º H|gh project deve|opment
costs
º Poor or ||m|ted (renewab|e
energy} resource supp|y
º lnadequate absorpt|ve
capac|ty of the nat|ona|
power system to
accommodate c|ean
techno|ogy
º ||m|ted demand
º D|ffuse/d|verse markets
º New or unfam|||ar contractua|
mechan|sms
º ||m|ted techn|ca|, bus|ness,
and r|sk management sk|||s
º ||m|ted f|nanc|ng or equ|ty
º Need for bas|c research and
deve|opment for techno|ogy
deve|opment and
d|ssem|nat|on
º Need for |nternat|ona|/
reg|ona|/subreg|ona|
cooperat|on
º New techno|og|es and
contractua| mechan|sms
º Sma|| s|zes/w|de|y
d|spersed, |ead|ng to h|gh
transact|on costs
º Perce|ved h|gh r|sks for
nontrad|t|ona| projects
º Other h|gher-return,
|ow-r|sk projects are
more attract|ve
º Behav|ora| b|ases
º M|n|ma| pr|vate sector
|nvestment
º lnvestors` |ack of
conf|dence on the
techno|og|es
º Need for a|ternat|ve and
d|vers|f|ed sources of
f|nanc|ng
|earn|ngthetechno|og|esanddeve|op|ngthe|rtechn|ca|expert|seandfac|||t|esrequ|red
for the successfu| |mp|ementat|on of appropr|ate renewab|e energy projects. As such,
there |s a ||m|ted number of know|edgeab|e and capab|e personne| for the des|gn and
estab||shment, operat|on and ma|ntenance, as we|| as promot|on and d|ssem|nat|on of
c|ean techno|ogy projects. Th|s |s further compounded by |nadequate |nformat|on and
awarenessprogramsfortechno|ogyd|ssem|nat|on|nthere|evanteconom|csectors.ln
Bang|adesh and lnd|a, unava||ab|e data and |nformat|on, |ack of proper expert|se, and
||m|tedgovernmentresearchanddeve|opmentsupportarec|tedasthema|nbarr|ersto
c|ean techno|ogy deve|opment (lDFO 2010; Rahman et a|. 2012}.
Financial and Economic Constraints
Manyrenewab|eenergytechno|og|esareatanear|ydeve|opmentstageandthe|rr|sks
are not yet c|ear or fu||y understood. The |arge-sca|e commerc|a||zat|on of some c|ean
techno|og|es |s a|so hampered by the |ack of m|n|mum standards for performance,
durab|||ty,re||ab|||ty,andre|atedparameters,aswe||asbyh|gh|n|t|a|cap|ta||nvestment
requ|rements (lDFO 2010}. ln lnd|a, for examp|e, the expected performance of so|ar
therma|techno|ogy—yettobedeve|oped|nthecountry—hasnotbeenascerta|ned.The
h|gh |n|t|a| costs of estab||sh|ng so|ar photovo|ta|cs and therma| manufactur|ng p|ants
restr|ctthew|deradopt|onofso|arenergy-basedc|eantechno|og|es.
82 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
There a|so |s a genera| |ack of fnanc|ng and absence of proper fnanc|ng mechan|sms
for c|ean techno|ogy deve|opment |n the reg|on. ln add|t|on, the ma|nstream fnanc|a|
|nst|tut|ons |n South As|a have ||m|ted understand|ng of and expert|se on renewab|e
energy and energy effc|ency projects and are not yet prepared to fnance them. Such
factors are detr|menta| to potent|a| fnanc|ng for |nd|v|dua| |oans to purchase or |nsta||
c|eanenergydev|ces,ortomak|ng|nvestments|nc|eanenergyprogramsandprojects.
The fnanc|ng prob|em seems to be more severe for sma||-sca|e c|ean energy projects
acrossthereg|on,|nc|ud|ng|nlnd|a(Box1}.
ln Sr| |anka, for examp|e, the |ack of a consumer fnance scheme |s a major constra|nt
tocont|nuedgrowthofso|arhomesystems.Thepresent|oanschemesof|oca|banks
and other fnanc|a| |nst|tut|ons |n the country do not accommodate sma||-sca|e renewab|e
energy projects, un|ess these are |ntegrated w|th an |ncome-generat|ng act|v|ty (such
as a rura| |ndustry}, and/or prov|d|ng fue| for domest|c energy app||cat|ons. These
requ|rementscameaboutfromthebanks’pastexper|encesofpoor|oanrecovery|nrura|
areas(Senanayake2009}.Renewab|eresource-basede|ectr|c|tygenerat|onprojectsare
a|so confronted by |oan |nterest rates h|gher than those for convent|ona| power p|ants;
andh|ghtransact|oncostsduetoh|ghcostsofresourceassessment,projectp|ann|ng,
des|gn, and approva|, and fnanc|ng and power-purchase contract negot|at|ons.
ln Bhutan, mob|||z|ng fnanc|ng |s a major cha||enge to deve|op|ng a $12 b||||on-
$15 b||||on 10,000-MW hydropower program, wh|ch |s |ntended to generate power for
export to lnd|a. A|though b||atera| |oans from the Government of lnd|a fnance most of
the projects under the program, severa| jo|nt ventures between the Druk Green Power
Oorporat|on and lnd|an pub||c sector ent|t|es requ|re commerc|a| fnanc|ng to supp|ement
the offc|a| b||atera| fnanc|ng (ADB 2010a}. ln part|cu|ar, Bhutan needs support |n pursu|ng
Box 1 Financing Barriers to Renewable Energy Projects in India
R
enewab|e energy projects are reported to be fac|ng fnanc|ng d|ffcu|t|es |n lnd|a. ln
genera|,the|rdeve|opment|sconfrontedw|thcha||enges|nobta|n|ngcompet|t|veformsof
fnance due to |ack of fam|||ar|ty and awareness of techno|og|es, percept|on of h|gh r|sk, and
uncerta|nt|es regard|ng resource assessment. Spec|fca||y, the r|sk of nonprov|s|on of subs|d|es
due to ||m|ted or nonava||ab|||ty of resources w|th the government |s a|so s|gn|fcant because
thesesubs|d|esmaybethe||fe||neoftheproject.
Deve|opers of renewab|e energy projects |n lnd|a are often sma||, |ndependent, and new|y
estab||shed entrepreneurs. They |ack the |nst|tut|ona| track record and fnanc|a| |nputs
necessary to secure non-recourse project fnanc|ng. |enders perce|ve them as h|gh r|sk and
are re|uctant to prov|de such project fnance.
ln add|t|on, the paperwork and costs assoc|ated w|th |dent|fy|ng and obta|n|ng access to
fnanc|ng for sma||- and med|um-sca|e renewab|e energy projects |s h|gh re|at|ve to the fnanc|ng
needs. The fnanc|a| |nst|tut|ons` ||m|ted understand|ng or expert|se |n th|s area ||kew|se |s a
barr|er to projects` access to fnanc|ng.
Source: lDFO (lnfrastructure Deve|opment F|nance Oompany |td.}. 2010. Barriers to Development of
Renewable Energy in India and Proposed Recommendations. http://www.|dfc.com/pdf/pub||cat|ons/
D|scuss|on-paper-on-Renewab|e-Energy.pdf
Oha||engesandEnab||ngOond|t|ons 83
gr|d-connectedrenewab|eenergyprojects,|nc|ud|ngsma||hydro-powerprojectsbe|ow25
megawatts; deve|op|ng fo||ow-up pub||c-pr|vate partnersh|p transact|ons at the Dagachhu
hydropower project; and |ncreas|ng the focus on the env|ronmenta| susta|nab|||ty of |arge
hydropowerdeve|opment.
ln Nepa|, pr|vate sector |nvestment on renewab|e energy |s m|n|ma|, ma|n|y because
of h|gh r|sks perce|ved w|th, and |nvestors` |ack of confdence |n, the techno|og|es. To
date, no commerc|a| bank prov|des |oans to promote renewab|e energy techno|ogy |n
the country, and ava||ab|e externa|/|nternat|ona| donor funds are a|so ||m|ted (APOTT-
ÜNESOAPundated}.
ln recent years, governments |n South As|a have set up |nst|tut|ons for fnanc|ng c|eaner
energytechno|og|es.Examp|es|nc|udethelnd|anRenewab|eEnergyDeve|opmentAgency
(lREDA}, Nepa|’s A|ternat|ve Energy Promot|on Oentre (AEPO}, and the lnfrastructure
Deve|opmentOompany||m|ted(lDOO|}|nBang|adesh.These|nst|tut|onsp|ay|mportant
ro|es|nthec|eanenergymarket,buthave||m|tedfund|ngcapac|ty.Asmanyc|eanenergy
projectstendtodependonoftenuncerta|norde|ayednat|ona|budgets,a|ternat|veand
d|vers|fed sources of potent|a| fund|ng shou|d be |dent|fed and deve|oped.
One opt|on wou|d have been pr|vate fnanc|ng. However, cr|t|ca| fnanc|ng gaps ||m|t pr|vate
|nvestments|nc|eantechno|ogy.lncompar|sontoopt|ons|nothersectors,|nvestment
|n ear|y-stage c|ean techno|ogy |nnovat|on |s h|ndered by |onger |nvestment per|ods
before ex|t, more cap|ta|-|ntens|ve deve|opment that requ|res |arge fo||ow-on fnanc|ng,
sma||er|nvestments|zescoup|edw|ths|m||ardued|||gencecostsandmanagementfees,
and h|gher execut|on r|sks than |ater-stage fnanc|ng. Even after commerc|a||zat|on, |ack
of access to r|sk cap|ta|, project sca|e, and gaps |n bus|ness sk|||s rema|n s|gn|fcant
barr|ers to |nvestment for w|despread dep|oyment of c|ean techno|og|es (Nass|ry and
Whee|er2011}.
Policy and Regulatory Barriers
Energy Pricing and Subsidies
D|rect and |nd|rect subs|d|es on foss|| fue|s and e|ectr|c|ty are not conduc|ve to the
promot|onofc|eanerenergytechno|og|es|nmanySouthAs|ancountr|es.Forexamp|e,
|n lnd|a, power tar|ffs are underpr|ced and subs|d|zed, espec|a||y |n the rura| areas and
some not|fed
33
|ndustr|a| areas (lnd|a So|ar 2012}. S|m||ar|y |n lnd|a’s power sector,
subs|d|es are effect|ve|y be|ng prov|ded to convent|ona| foss|| fue| resources, creat|ng
the fa|se |mpress|on that renewab|e energy-based power |s much more expens|ve
than convent|ona| power supp|y opt|ons (lDFO 2010}. ln Nepa|, the government-
regu|ated tar|ff on reta|| e|ectr|c|ty |s a d|s|ncent|ve to |ndependent power producers.
The nat|ona| e|ectr|c ut|||ty has |ncurred a huge fnanc|a| defc|t due to the unsusta|nab|e,
|ow reta|| tar|ff and re|at|ve|y h|gh buy-back rates at wh|ch |t purchases power from
|ndependentproducers.
33
ln urban p|ann|ng, a 'not|fed area" |s any |and area earmarked by |ega| prov|s|on for future deve|opment. The
terma|sodescr|besav|||ageorsett|ementw|thapopu|at|onbetween10,000and20,000.Acommun|tyof
over 20,000 |s cons|dered a town under lnd|an |aw. Each not|fed area e|ects a not|fed area comm|ttee for
|ts adm|n|strat|on, wh|ch funct|ons ||ke mun|c|pa||ty (http://en.w|k|ped|a.org/w|k|/Not|fed_area}.
84 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
Fiscal and Regulatory Barriers
Oustoms duty and va|ue-added tax (vAT} are add|t|ona| barr|ers to the deve|opment of
c|eantechno|og|es.Forexamp|e,theGovernmentofNepa|,hav|ngnopo||cytopromote
c|ean veh|c|es, charged the e|ectr|c car REvA more than 240% custom duty the frst t|me
|t came to the country |n the year 2000. Wh||e the government subsequent|y mod|fed
the po||cy, e|ectr|c veh|c|es st||| face 40% custom duty and 13% vAT (K2D 2010}. ln
Bang|adesh, the h|gh |mport duty and vAT on a|| raw mater|a|s (except so|ar pane|s}
|ncreasethecostof|oca|manufactur|ngofso|araccessor|es,therebya|soofso|arhome
systems(GrameenShakt|2011}.
Regu|atory barr|ers to c|ean techno|ogy deve|opment ex|st |n var|ous forms |n South
As|a.Forone,severa|countr|es|ack|ega|prov|s|onsrequ|r|ngut|||t|estoprov|denetwork
access to renewab|e energy projects. Transm|ss|on or d|str|but|on access |s necessary
for d|rect th|rd-party sa|es between renewab|e energy producers and the fna| consumers,
espec|a||ywhentherenewab|eenergyresourcesare|ocatedfarfrompopu|at|oncenters.
ln the absence of regu|at|on, ut|||t|es may not a||ow favorab|e transm|ss|on access to
renewab|eenergyproducers,and/ormaychargeh|ghpr|cesfortransm|ss|onaccess.
ln Bang|adesh, a second form of regu|atory barr|er |s the |ack of standard|zed power
purchaseagreementsforpowergenerat|onfromrenewab|eenergytechno|og|es(REEEP
2012}.lnadd|t|on,thegovernmentapprova|processforrenewab|eenergyprojectstends
to be |engthy and d|ffcu|t w|th the var|ous m|n|str|es, agenc|es, and |nst|tut|ons |nvo|ved.
Most states |n lnd|a have no defned zon|ng po||cy to gu|de and regu|ate the appropr|ate
phys|ca||ocat|onofb|omassprojects.lthasbeenreportedthatb|omassp|antshavecome
up|nprox|m|tytoeachother,negat|ve|yaffect|ngtheava||ab|||tyoffue|s,andeventua||y
render|ngtheprojectsunv|ab|e(lDFO2010}.
Untapped Cross-Border Energy Cooperation
Amajorstumb||ngb|ocktodeve|op|ngreg|ona|energyprojects|nSouthAs|a|sthe|ackof
agreementsbetweenoramongcountr|esfor|arge-sca|eprojectdeve|opmentandcross-
border power trade and transm|ss|on. So far on|y Bhutan has a cross-border energy
cooperat|onw|thlnd|atodeve|opah|gh-vo|tage(400k||ovo|t[kv|/220kv}transm|ss|on
networkforpowertransfertolnd|aandsupp|yofthe|oadcenters|nBhutan,para||e|w|th
|mp|ement|nga10,000-MWhydropowerprogram(ADB2010a}.
34

Deve|op|ng the huge untapped c|ean energy resources |n South As|a for |ntrareg|ona|
trade w||| he|p meet the reg|on`s energy demand and prov|de mu|t|p|e benefts to the
countr|es. Such trade wou|d a||ow the countr|es to fu||y exp|o|t econom|es of sca|e |n
energyresourcedeve|opmentandsupp|yandwou|d|mprovethe|rtradeba|ances.Nepa|
has a huge trade defc|t w|th lnd|a and |ts tota| export revenue |s not enough to pay for
the|mportofpetro|eumproducts.Forsma||deve|op|ngcountr|es||keBhutanandNepa|,
reg|ona| power trade wou|d he|p deve|op the |nd|genous c|ean energy resources |n a
susta|nab|emannerandprov|deadd|t|ona|revenuestosupportnat|ona|deve|opment.
34
Bang|adesh and lnd|a have s|gned on 11 January 2010 a memorandum of understand|ng to deve|op a
transm|ss|on||neforcross-borderpowertradeandforlnd|atosupp|y500MWofpowertoBang|adesh.
lnd|aandNepa|havea|soagreedtobu||dacross-bordertransm|ss|on||nefor||m|tedpowertrade(GPRB
MPEMR2012c}.
Oha||engesandEnab||ngOond|t|ons 85
Enabling Conditions and Policies
for Promoting Low-Carbon Development
Wh||enos|ng|epo||cy|nstrumentcanensurethetrans|t|ontoa|ow-carboneconomy,key
enab||ngcond|t|onsnecessarytoach|evesuchtrans|t|on|nc|ude(|}promot|ngresearch
and deve|opment (R&D} on green and |ow-carbon techno|og|es; (||} |nvest|ng |n necessary
capac|ty bu||d|ng, educat|on, and tra|n|ng; (|||} estab||sh|ng a sound regu|atory framework
to create |ncent|ves for |nvestment |n |ow-carbon techno|og|es; and (|v} pursu|ng stronger
reg|ona|cooperat|on|nenergydeve|opmentandtrade.
Promoting Research and Development
Basic Technology Development
Bas|cR&Dfortechno|ogydeve|opmentandtechno|ogytransfereffortsw|||be|mportant|n
promot|ngtheuseofc|eanenergy|nSouthAs|a.Researchers,eng|neers,entrepreneurs,
and fund|ng agenc|es have to work together to deve|op techno|og|es that |mp|ement
and|ntegraterenewab|eenergyresources|naddress|ngthereg|on’senergyneedsand
c||mate change concerns. South As|a has been strengthen|ng |ts R&D |n c|ean energy
techno|og|esandeffect|ve|ypromot|ngtheovera||deve|opmentoftheenergysector,but
needstodomore.
Becausemany(butnota||}c|eanenergyresourcesandtechno|og|esarequ|te|mmature,
and/or re|at|ve|y cost|y, |nvestments for |n|t|at|ves support|ng bas|c R&D up to fe|d
demonstrat|on fac|||t|es w||| be needed for users to |nvest w|th confdence. Areas for
techno|ogydeve|opment|nc|udethedes|gn,manufactur|ng,|nsta||at|on,operat|on,and
ma|ntenance of these c|ean energy systems, comp|emented w|th more focus on the|r
effc|ency of convers|on, use and d|str|but|on, and re||ab|||ty. R&D efforts, current|y be|ng
made|natheoret|ca|env|ronment,oughttobemademorere|evantto|oca|needs.More
s|te-spec|fc techno|ogy packages shou|d be deve|oped and the|r demonstrat|on areas
estab||shed.
Neverthe|ess, some act|v|t|es re|at|ng to c|ean energy techno|ogy deve|opment have
a|ready been started |n these countr|es. ln Bang|adesh, research and demonstrat|on
act|v|t|eshave|edto|arge-sca|euseofso|arphotovo|ta|cbyvar|ousorgan|zat|onsand
NGOs||keGrameenShakt|.A|so,around10,000b|ogasp|antshavebeen|nsta||edaround
the country by the Bang|adesh Oounc|| of Sc|ent|fc and lndustr|a| Research, lnst|tute
ofFue|ResearchandDeve|opment,|oca|GovernmentEng|neer|ngDepartment,anda
fewotherorgan|zat|ons,andact|v|t|espromot|ngb|ogastechno|og|esares|m||ar|ybe|ng
undertaken. ln lnd|a, the W|nd Resource Assessment Programme, one of the |argest
programs of |ts k|nd, has been carr|ed out to reassess the country’s w|nd potent|a|,
cover|ng around 900 w|nd mon|tor|ng and mapp|ng stat|ons |n 24 states and un|on
terr|tor|es. lnd|a |s the ffth |argest w|nd-power producer |n the wor|d after Germany, ÜSA,
Denmark,andÜK,w|thaw|ndpowercapac|tyof1,870MW(StatusofRenewab|eEnergy
and Energy Effc|ency (REEE} |n South As|a, as c|ted |n Jaswa| and Das Gupta 2006}.
Anana|ys|sofresearchpub||cat|ons|nrenewab|eenergyacrossAs|adur|ng2000–2008
showssubstant|a||mpactofR&D|nrecentyears.lnvestment|nsusta|nab|eenergyhas
a|readysoared,w|thresearchbreakthroughscontr|but|ngnoton|ytoso|v|ngtheenergy
86 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
cr|s|s,buta|sosupport|ngthecountry’seconomyandc||matechangem|t|gat|ontargets.
Dur|ng2008–2012,lnd|a|nvested$21b||||onforrenewab|eenergydeve|opment,ma|n|y
onw|nd,so|ar,b|ofue|s,andhydropower(ÜSgovernmentdata,asc|ted|nThavas|and
Ramakr|shna2009}.
%NERGY%FlCIENCYAND#ONSERVATION
W|thr|s|ng|nternat|ona|o||pr|ces,|thasbecomemorecr|t|ca|forcountr|es|nSouthAs|a
to more act|ve|y pursue R&D |n the areas of energy effc|ency and energy conservat|on
for susta|nab|e energy management. Oountr|es have begun to focus on |mprov|ng the
effc|ency of the energy convers|on, transm|ss|on, and d|str|but|on systems to he|p br|dge
thegapbetweendemandandava||ab|||ty,reducethecostofgenerat|on|ntheshortrun,
and reduce the |nvestment needs for e|ectr|c|ty product|on |n the |ong run (Sr|vastava
and M|sra 2007; Thavas| and Ramakr|shna 2009}. For examp|e, the effc|ency of ex|st|ng
powergenerat|onstat|onscou|dbe|mprovedthroughadopt|onofbetterma|ntenanceand
operat|ng pract|ces, and that of new p|ants can be |mproved w|th effc|ent techno|og|es.
Ev|dence around the wor|d from the past 3-4 decades |nd|cates that energy-effc|ency
programs genera||y enta|| pos|t|ve and mu|t|p|e benefts for government, energy consumers,
and the env|ronment.
35
Such programs can conserve natura| resources; reduce the
env|ronmenta| po||ut|on and carbon footpr|nt of the energy sector; reduce dependence on
foss|| fue|s, thus enhanc|ng energy secur|ty; ease |nfrastructure bott|enecks and |mpacts
of temporary power shortfa||s; and |mprove |ndustr|a| and commerc|a| compet|t|veness
throughreducedoperat|ngcosts.
A comb|nat|on of renewab|e energy sources and energy effc|ency cou|d prov|de a safer
andcost-effect|vewaytom|t|gateGHGem|ss|onsandcombatc||matechange,enhance
energysecur|ty,andestab||sh|ong-termsusta|nab|eenergydeve|opment|nSouthAs|a.
W|th|n the menu of feas|b|e techn|ca| opt|ons current|y ava||ab|e to he|p reduce GHG
em|ss|ons from the energy sector, energy-effc|ent techno|og|es stand apart as the most
cost-effect|ve. W|nd power has been v|ewed as the cheapest and |owest-r|sk opt|on
among the renewab|es that cou|d make |t a major source of e|ectr|c|ty |n the future,
and|spred|ctedtocontr|buteupto29%ofg|oba|powergenerat|onby2030.W|ththe
|argehydropowerenergy|nlnd|a,thetota|shareofrenewab|eenergysources|npower
generat|onhasbeenexpectedto|ncreaseto40%by2030(Thavas|andRamakr|shna
2009}. ln add|t|on, the |mp|ementat|on of energy-effc|ency po||c|es cou|d resu|t |n near|y
36%ofavo|dedGHGem|ss|onsby2050.
36
Morethantwoth|rdsoftheseGHGreduct|ons
cou|d come from demand-s|de (end-use} energy-effc|ency |ntervent|ons across d|fferent
sectors|ndeve|op|ngcountr|es(SarkarandS|ngh2010}.
ln South As|a, cons|derab|e scope for energy conservat|on, through demand-s|de
management and end-use energy-effc|ent measures, ex|sts |n a|| countr|es. ln lnd|a, 23%
35
W|thout energy-effc|ency measures adopted from 1973 onward, energy use |n 11 of the major Organ|sat|on
for Econom|c Oo-operat|on and Deve|opment countr|es (36 of g|oba| pr|mary energy use} wou|d a|ready
havebeen56%h|gher|n2004.Th|srepresentsfue|costsav|ngsofover$500b||||on.Asthewor|d’senergy
use cont|nues to grow, there |s a huge energy-effc|ency |mprovement potent|a| across many sectors that
rema|nstobetapped(SarkarandS|ngh2010}.
36
Thelnternat|ona|EnergyAgencydeve|opedasetof25po||cyrecommendat|onsthat,|f|mp|emented,cou|d
reduceg|oba|carbond|ox|deem|ss|onsby20%peryearby2020(lEA2009}.
Oha||engesandEnab||ngOond|t|ons 87
reduct|onofe|ectr|c|tyconsumpt|onfromthepresent|eve||sposs|b|e|nd|fferentsectors,
w|thout forego|ng any end-use benefts of energy. Th|s wou|d enta|| sav|ngs of about
30% |n the agr|cu|tura| sector, 25% |n the |ndustr|a| sector, 20% |n transportat|on, and
20%|nthedomest|csector(Power||ne2004,asc|ted|nSr|vastavaandM|sra2007}.The
Peop|e’sRepub||cofOh|na(PRO}hasa|readybeensuccessfu||nth|sregard.
37
lngenera|
however, |ncreas|ng energy effc|ency |n South As|a w||| be successfu| on|y |f sound |ega|
frameworks and techn|ca| standards are |n p|ace, short-term and |ong-term fnanc|ng
are suffc|ent, and pub||c awareness and program part|c|pat|on |s strong (Sr|vastava and
M|sra2007}.
Carbon Sinks
Anotherpotent|a|R&Dareare|atedtoc|eanenergytechno|ogy|scarbons|nks.Theforest
ecosystem p|ays a s|gn|fcant ro|e |n the carbon cyc||ng process; forests are cons|dered
themost|mportantcarbons|nksand|nvo|ved|nm|t|gat|ngc||matechangeat|owcost.
Hence, the Kyoto Protoco| a||ows count|ng certa|n carbon s|nks as part of a nat|on’s
em|ss|onsreduct|oncomm|tment,w|th|nsome||m|ts,andeventrad|ngofcarbons|nks
between nat|ons (Thavas| and Ramakr|shna 2009}. lnd|a, together w|th Assoc|at|on of
Southeast As|an Nat|ons (ASEAN} countr|es and Austra||a, PRO, Japan, Repub||c of
Korea,andNewZea|and,comm|tteddur|ngtheTh|rdEastAs|aSumm|tto|ncreasethe
cumu|at|veforestcover|nEastAs|aby15m||||onhaby2020.Therateofafforestat|on|n
lnd|a|soneoftheh|ghestamongthetrop|ca|countr|es(|a|andS|ngh2000,asc|ted|n
Thavas|andRamakr|shna2009},current|yest|matedtobe2m||||onhaperannum.lnd|a
hasp|annedto|ncrease|tscarbonstocksfromforeststo9.75b||||ontby2030fromthe
2009|eve|of8.79b||||ont.
Investing in Capacity Building
Re|atedtopromot|ngR&D|nc|eanenergytechno|ogy|sthe|mportanceof|nvest|ng|n
re|evantcapac|tybu||d|ng,educat|on,andtra|n|ng.Th|sw|||enab|egovernmentsto(|}have
abetterunderstand|ngofenergyuseand|mpactsastheyre|atetoGHGem|ss|ons,and
of the ro|e that the regu|atory framework can p|ay |n gu|d|ng energy consumpt|on and
product|on behav|or; (||} |dent|fy opportun|t|es for GHG em|ss|on reduct|ons, to pr|or|t|ze
po||cy as we|| as |nvestment |ntervent|ons, and to mob|||ze pr|vate sector resources; and
(|||} mon|tor and assess progress toward nat|ona| GHG em|ss|on reduct|on targets. A
number of |so|ated projects on c|ean energy are prov|ng to be successfu|, and can be
systemat|ca||y stud|ed and ana|yzed for the|r strengths and success factors. Re|evant
capac|ty-bu||d|ng|n|t|at|vesandtra|n|ngprogramscanthenbedeve|opedforstakeho|ders
(WEO2000}.
37
ThePeop|e’sRepub||cofOh|na(PRO}hasfocusedmostof|tsenergyconservat|onpo||c|es|nthe|ndustr|a|
sector. One of the un|que features of the PRO`s dr|ve for energy effc|ency was the sca|e of |nst|tut|ona|
capac|ty deve|oped (S|nton, |ev|ne, and Q|ngy| 1998}. Over 200 energy conservat|on techno|ogy serv|ce
centerswerecreatedandattachedtovar|ousm|n|str|esandmun|c|pa|governments.Theseserv|cecenters
worked most c|ose|y w|th the end users. ln May 1994, a nat|ona| center, The Da||an Oh|nese Energy
Oonservat|onEducat|onOentre,wasestab||shedand|sapparent|ythePRO’s|argestandmostadvanced
effc|ency tra|n|ng fac|||ty. ln 1998, the Nat|ona| Energy Oonservat|on |aw came |nto force, cod|fy|ng the
country`s approach for promot|ng energy effc|ency under a more market-or|ented econom|c system (Jaswa|
andDasGupta2006}.
88 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
lnternat|ona| and reg|ona| organ|zat|ons shou|d cont|nue to enhance the|r cata|yt|c
ro|e, part|cu|ar|y |n terms of capac|ty bu||d|ng and promot|ng reg|ona| and subreg|ona|
cooperat|on. lnternat|ona| cooperat|on for capac|ty bu||d|ng through tra|n|ng programs,
study tours, and exchange v|s|ts |n c|ean energy techno|ogy deve|opment w||| be
|mportant—both |n the form of techno|ogy transfer from deve|oped to deve|op|ng
countr|es and between deve|op|ng countr|es (WEO 2000}. ln South As|a, exper|ences
ga|nedfromw|th|nthereg|on|ntechno|ogydeve|opmentandmarketmechan|smscan
bemoreva|uab|ethanthosefrombeyondthereg|onbecausetheformerhavematured
|ns|m||arcond|t|ons.lnadd|t|on,thecountr|es’accessto|nformat|ononemerg|ngc|ean
energytechno|og|esneedstobe|mproved,espec|a||yforend-userstobetterunderstand
energysystemsandapp|ythatknow|edge|nmak|ngda||ydec|s|ons.
Sound Regulatory Framework and Incentive Mechanisms
and Schemes
ltw|||be|mportantforgovernments|nSouthAs|atoremovethe|rsubs|d|esforcommerc|a|
energyproducts,suchasfoss||fue|s,|PG,ande|ectr|c|tythatcompetew|thc|eanenergy
techno|og|esandresources.Subs|d|esforcommerc|a|energyproducts(|}d|stortmarket
pr|ce s|gna|s, consumpt|on, product|on, and |nvestment dec|s|ons; (||} typ|ca||y we|gh
heav||y on government budgets; and (|||} encourage h|gher and even wastefu| energy
consumpt|on,resu|t|ng|nh|gher|eve|sofGHGem|ss|onsand|oca|a|rpo||ut|on,andfaster
resource dep|et|on. Remov|ng such subs|d|es w||| prov|de c|ean energy techno|og|es a
|eve| p|ay|ng fe|d |n the energy market and encourage |nvestments a|med at reduc|ng
consumpt|on.
Green and |ow-carbon techno|og|es and pract|ces are sources of pos|t|ve externa||t|es
throughthereduct|onofGHGem|ss|ons.Suchapproachesaspr|cesupportmeasures,
tax|ncent|ves,d|rectgrants,andsubs|d|zed|oansw|||st|mu|ate|nnovat|onandadopt|on
of green techno|og|es. F|sca| proceeds from the remova| of subs|d|es on convent|ona|
energy sources and/or from the app||cat|on of a carbon-tax po||cy can be used to
subs|d|ze|ow-carbontechno|og|esandfac|||tatethesh|fttowarda|ow-carboneconomy,
|n a fsca||y neutra| manner.
Sett|ng nat|ona| goa|s/targets and deve|op|ng an enab||ng po||cy env|ronment and
regu|atory framework are |mportant frst steps |n promot|ng c|eaner techno|og|es/
opt|onsandach|ev|ng|ow-carbondeve|opment.Mostcountr|es|nSouthAs|ahaveset
suchnat|ona|targets(Tab|e28},anddrawnnat|ona|act|onp|anstosupportthem.For
examp|e, lnd|a’s Nat|ona| Act|on P|an on O||mate Ohange (2008} |nc|udes the Nat|ona|
So|ar M|ss|on, Nat|ona| M|ss|on on Enhanced Energy Effc|ency, and Nat|ona| M|ss|on
onSusta|nab|eHab|tat,eachofwh|chstatespo||c|esandprogramstopromotec|eaner
techno|ogyopt|ons|nthecountry(Gol2008}.S|m||ar|y,theBang|adeshO||mateOhange
StrategyandAct|onP|an2009andRenewab|eEnergyPo||cy2009promoterenewab|e
energy and energy effc|ency as part of the country`s c||mate change adaptat|on and
m|t|gat|onstrategy(GPRB2009}.
S|ncetheear|y1990s,thepowersector|nlnd|ahasbeengo|ngthroughaprocessof
reformsandrestructur|ng,oneofwh|chwastheEnergyOonservat|onAct2001.Theact
prov|desforthe|ega|framework,|nst|tut|ona|arrangements,andregu|atorycomm|ss|ons
Oha||engesandEnab||ngOond|t|ons 89
at the centra| and state |eve|s to embark on an energy-effc|ency dr|ve |n the country.
The regu|ator’s mandate |s to determ|ne the tar|ff for bu|k and reta|| supp|y. Subs|d|es
|n tar|ffs are to be e||m|nated gradua||y and tar|ffs are to move toward cost of supp|y.
A tota| of 24 states |n the country have e|ther const|tuted or not|fed the const|tut|on of
regu|atorycomm|ss|ons.Thecentra|governmentforma||yappo|ntedaBureauofEnergy
Effc|ency to |mp|ement the act, w|th the pr|mary object|ve of reduc|ng energy |ntens|ty |n
thed|fferentsectorsofthelnd|aneconomy(Jaswa|andDasGupta2006}.
Po||c|es and measures for |ow-carbon deve|opment |nc|ude market-based |nstruments
(e.g., carbon pr|ces}, command-and-contro| mechan|sms (e.g., by creat|ng m|n|mum
standards or proh|b|t|ng certa|n act|v|t|es}, and |ndustry se|f-regu|at|on and vo|untary
agreements between government and bus|nesses. Some can be pure|y domest|c
measures, wh||e others have s|gn|fcant potent|a| at the reg|ona| |eve|.
Market-Based Instruments
Subsidies and favorable tax policies. Subs|d|es/tax|ncent|vesare||ke|ytobeneeded
tohe|preducethe|n|t|a|costsofc|eanertechno|og|esandpromotethe|rmovefrom|n|t|a|
phasesofcommerc|a||zat|ontoacce|eratedgrowthandw|deradopt|on.lnd|aprov|des
power p|ants us|ng b|omass and agr|cu|tura| waste w|th a subs|dy of Rs0.80 m||||on–
Rs1.0 m||||on (about $17,500–$21,900} per MW generated, and those based on
bagasse w|th Rs3 m||||on–Rs5 m||||on (about $65,800–$109,700} per MW generated.
Sma|| hydropower p|ants are ent|t|ed to a subs|dy of 10%–20% of the project cost
(GolMNRE2011}.
Subs|d|esorsomeotherfavorab|etaxpo||c|esarea|soapp||edtoencouragetheuseof
e|ectr|cveh|c|es.Forexamp|e,e|ectr|cveh|c|esaretaxfree|nBhutan(RGoBDoE2011},
wh||elnd|aprov|dedasubs|dyofRs75,000–Rs93,000($1,645–$2,040}perun|tthrough
Table 28 Targets for Cleaner Technologies and Options in South Asia
Country National Targets
Bang|adesh Todeve|opat|east500megawatts(MW}ofpowerfromrenewab|eenergyby2015
(GPRBMPEMR2012a}
Bhutan Togenerate20MWby2020througham|xofrenewab|eenergytechno|og|es–so|ar:
5 MW; w|nd: 5 MW; b|omass: 5 MW; others: 5 MW (RGoB DoE 2011}
lnd|a Togenerate15%of|tsenergyrequ|rementsthroughrenewab|esourcesby2020
(ABPS2009}.TheNat|ona|So|arM|ss|on,amajor|n|t|at|veoftheGovernmentoflnd|a
andstategovernments|nlnd|a,hassetatargettodep|oy20,000MWofso|arpower
by2022(GolMNRE2011}.Thecountryhasa|somadeavo|untaryp|edgetoreduce
carbond|ox|deem|ss|ons|ntens|tyby20%–25%of2005|eve|sby2020.
TheMa|d|ves Tobecomecarbonneutra||ntheenergysectorby2020,ensure50%ofthee|ectr|c|ty
|s supp||ed from renewab|e sources by 2015, and reach a sav|ng of 7.5% on fna|
energy consumpt|on over 10 years unt|| 2020 through effc|ency |mprovements.
Nepa| To|ncreasetheshareofrenewab|eenergyfrom|essthan1%to10%ofthetota|
energysupp|y,andto|ncreasetheaccesstoe|ectr|c|tyfroma|ternat|veenergysources
from10%to30%(GoN2011}.
Sr||anka Tohave20%ofe|ectr|c|tysupp|ygenerat|onby2020fromnonconvent|ona|renewab|e
sources(generat|onunder10MW}(DSRS|MFP2010}.
MW=megawatt.
90 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
aprogramconductedfrom2010toMarch2012.
38
Thesubs|dywas|aterw|thdrawnto
makewayforanewpo||cyca||edNat|ona|M|ss|onforE|ectr|cMob|||ty2020,wh|chcame
|nto force by Ju|y 2012. The subs|dy’s w|thdrawa| reported|y |ed to a 50% drop |n the
sa|es of REvA, the domest|ca||y produced e|ectr|c veh|c|e |n lnd|a (TET 2012a}, c|ear|y
show|ngthe|rsens|t|v|tytopr|cesandhencetotaxesorsubs|d|es.
lnBang|adesh,theNat|ona|Renewab|eEnergyPo||cyexemptsa||equ|pmentandre|ated
rawmater|a|sused|nproduc|ngrenewab|eenergyfromthe15%vAT.lnadd|t|on,pub||c
and pr|vate sector |nvestors |n renewab|e energy projects are exempted from pay|ng
corporate|ncometaxfor5years.Thegovernmentp|anstoextendtheprogramper|od|ca||y
fo||ow|ngan|mpactassessment(GPRBMoEF2008}.
S|m||ar|y,Bhutanexempts|nvestors|nrenewab|eenergyprojectsfrompay|ngcorporateor
bus|ness|ncometaxesforaper|odof10yearsfromthedateoftheproject’scommerc|a|
operat|on, app||cab|e unt|| 2025. The po||cy prov|des an add|t|ona| 5-year tax ho||day
to projects estab||shed |n the remote areas of the country, and exempts the project
deve|opers, manufacturers, and system |ntegrators from a|| |mport dut|es and Bhutan
sa|estaxonp|antsandequ|pmentthatared|rect|nputstotherenewab|eenergyprojects
dur|ngtheconstruct|onper|od.lnvestors|nmanufactur|ngand|ntegrat|onofrenewab|e
energyproducts|nBhutanarea|soexemptedfrompay|ng|ncometaxforaper|odof10
yearsunt||2019(RGoBDoE2011}.
lnd|aa|soadoptedapo||cytoa||owacce|erateddeprec|at|on(at80%ofequ|pmentcost}
and generat|on-based |ncent|ves (subs|dy per un|t of e|ectr|c|ty generated fed |nto the
powergr|d}forthedeve|opmentofw|ndpowerasmutua||yexc|us|veschemes(Box2}.
These schemes are |arge|y respons|b|e for the country’s rap|d growth |n w|nd power
capac|ty from 7,000 MW |n 2007
39
to 17,600 MW by 2012. A|though, the po||cy was
recent|yro||edbackaspartofthecountry’staxrestructur|ngprocess,apo||cya||ow|nga
10-yeartaxho||dayandexc|sedutyexempt|onforthemanufactureofw|ndpowerp|ants
andthe|rparts|snow|np|ace(GolMNRE2011}.
To promote the use of energy-effc|ent ||ght|ng, the Government of lnd|a |aunched a
program |n 2009 d|str|but|ng h|gh|y subs|d|zed compact fuorescent |amps (OF|s} to
househo|ds |n exchange for |ncandescent |amps. The program has been successfu||y
|mp|emented |n Kera|a and Karnataka states. lt |s est|mated that a s|gn|fcant amount of
powergenerat|oncapac|tywou|dbeavo|dedthroughtherep|acementoftheconvent|ona|
|ampsw|ththeOF|s|nlnd|a(Box3}.
However |t shou|d be noted that cont|nuous prov|s|on of subs|d|es can br|ng about
otherprob|ems.var|ousstud|eshaveshownthatonceasubs|dypo||cy|sannounced,
thepr|cesofthesetechno|og|es|ncrease|mmed|ate|yby10%–20%.Thequa||tyofthe
de||veredtechno|ogy|sanotherquest|on.Forexamp|e,w|thoutqua||tycontro|,consumers
wou|d pay more for a un|t of b|ogas and so|ar energy due to the requ|red cont|nuous
ma|ntenance. A |ong-term po||cy on subs|dy (what, how much, and unt|| when} shou|d
38
Source: http://art|c|es.t|mesofnd|a.|nd|at|mes.com/2012-09-03/|nd|a/33562836_1_e|ectr|c-mob|||ty-e|ectr|c
-veh|c|es-m|n|sters
39
Source:http://www.|nwea.org/|nsta||edcapac|ty.htm
Oha||engesandEnab||ngOond|t|ons 91
Box 2 Generation-Based Incentives for Wind and Solar Power in India
G
enerat|on-based |ncent|ve (GBl} for renewab|e energy |s a subs|dy prov|ded per un|t of
renewab|eenergy-basede|ectr|c|tygenerat|onthat|sfed|ntothegr|d.Ünt||recent|yth|s
po||cy was |mp|emented |n lnd|a, where w|nd farms are e||g|b|e for a subs|dy of Rs500 per
megawatt-hourofe|ectr|c|tyfedtothegr|dforaper|odof4–10yearsw|thacapofRs6.2m||||on
permegawatt.
As|m||arscheme|sa|so|mp|emented|na||m|tedsca|e|nthecaseofso|arenergy|nlnd|a.
The GBl |s prov|ded to support a number of sma|| so|ar power projects that are connected
tothed|str|but|ongr|d(be|ow33k||ovo|t}tothestateut|||t|es.Atpresent,thetota|amountof
subs|dy |n the form of GBl for the scheme |s kept fxed as the d|fference of the so|ar power tar|ff
determ|nedbytheOentra|E|ectr|c|tyRegu|atoryOomm|ss|onfor2010–2011andareference
tar|ff.
Source:GolMNRE(Governmentoflnd|a,M|n|stryofNewandRenewab|eEnergy}.2011.Strategic Plan
for New and Renewable Energy Sector for the Period 2011–17.NewDe|h|.
Box 3 Bachat Lamp Yojana in India
T
he Bureau of Energy Effc|ency, a statutory body under the Ün|on Power M|n|stry, |aunched
a project |n February 2009 to rep|ace 400 m||||on |ncandescent |amps w|th compact
fuorescent |amps (OF|s} across the country. lt |s est|mated that, once ach|eved, th|s w||| save
thecountry6,000MWofpower,oraroundRs250b||||on.Oa||edtheBachat|ampYojana,the
schemeenv|sagesprov|d|ngtwoOF|sof14or16watts,wh|chcostaroundRs70eachwhen
bought |n bu|k, to every e|ectr|fed househo|d, at the h|gh|y subs|d|zed pr|ce of Rs15 per |amp,
|nexchangefortwo|ncandescent|amps.
Th|s scheme encourages pr|vate |nvestment |n effc|ent ||ght|ng, by |everag|ng carbon fnance
undertheO|eanDeve|opmentMechan|smoftheKyotoProtoco|.
ln three years, more than 25 m||||on OF|s have been d|str|buted. Kera|a was the frst state
to recogn|ze the potent|a| |n reduc|ng peak demand and prov|ded 1,270 m||||on OF|s to
the househo|d sector |n 2010. The Energy Management Oentre, Kera|a, and Kera|a State
E|ectr|c|ty Board, d|str|buted OF|s to a|| the househo|ds as rep|acement to |ncandescent
bu|bs. The scheme has benefted the consumers by reduc|ng the|r e|ectr|c|ty b|||s and has had
amoderat|ngeffectonthedemand-supp|ys|tuat|on|nKera|a.
Accord|ngtostat|st|csre|easedbytheOentra|E|ectr|c|tyAuthor|ty,thegapbetweendemand
andsupp|yforKera|adec||nedfrom2.4%|n2009–10to1.4%|n2010–11,wh||ethegapatthe
nat|ona||eve|rema|nedat12%.
Source:Bus|nessToday.2012.Flickering Hope. http://bus|nesstoday.|ntoday.|n/story/fuorescent-|amps-
demand-fuorescent-|amps/1/21982.htm|
be announced and fo||owed |n tota||ty. Such po||cy shou|d be or|ented to ||ft|ng d|rect
subs|d|esafteracerta|nper|od.Themechan|smoft|meva|ueofmoneycanbe|ntroduced
toshowdecreas|ngsubs|d|esovert|me(WEO2000}.
Feed-in tariffs/tariff incentives. W|th a feed-|n tar|ff (FlT}, the producers of e|ectr|c|ty
us|ng renewab|e energy resources wou|d be ab|e to se|| the|r surp|us e|ectr|c|ty to the
power d|str|but|on gr|d at pr|ces h|gher than that of e|ectr|c|ty produced from non-
92 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
renewab|eenergysources.Assoc|atedw|thFlTs|sthepo||cytoprov|derenewab|eenergy
producers access to the e|ectr|c|ty d|str|but|on system. As such, a proper|y des|gned
FlTsystemwou|dhe|prenewab|eenergydeve|opersovercometheh|ghcostsofpower
generat|onandd|str|but|on,and||m|tedaccesstothee|ectr|c|tymarket.Bothlnd|aand
Sr||ankaapp||esFlTstow|nd-andso|ar-basede|ectr|c|ty.TheFlTscheme|mp|emented
|nGujaratstate,lnd|ahasbeenw|de|yreportedfor|tsremarkab|each|evement|nso|ar
powerdeve|opment(Box4}.lnBang|adesh,e|ectr|c|tygeneratedfromrenewab|eenergy
sources rece|ves |ncent|ve tar|ffs, wh|ch may be up to 10% h|gher than the h|ghest
purchasepr|ceofe|ectr|c|tybytheut|||tyfrompr|vategenerators(GPRBMoEF2008}.
1DMDV@AKDØ DMDQFXØ BDQSHÚB@SDRØ Renewab|e energy cert|fcates (REOs} are cert|fcates
|ssued to producers of renewab|e energy-based e|ectr|c|ty generated and |njected |nto
the d|str|but|on gr|d. A market-based |nstrument, |t enab|es compan|es that |ntend to
purchase c|ean power or are requ|red to meet renewab|e purchase ob||gat|ons, to do
so by buy|ng REOs from se||ers |n the market. lnd|a |ntroduced the REO scheme |n
2011 to k|ck-start |ts renewab|e energy market. lt a|so |ntroduced the so|ar-spec|fc REO
mechan|sm,wh|cha||owsso|arpowergenerat|oncompan|estose||REOstout|||t|es,for
the|attertomeetthe|rso|arpowerpurchaseob||gat|ons(GolMNRE2011}.
40
Fornow,
so|arREOs|nlnd|aaretradedbetweentwopowertrad|ngexchanges,thelnd|aEnergy
Exchanges(lE×}andthePowerExchangelnd|a|td.(P×l|}.TheREOmechan|sm|syetto
be|ntroduced|nothercountr|es|nSouthAs|a.
$MDQFXR@UHMFØ BDQSHÚB@SDRØ Energy-sav|ng cert|fcates are des|gned to promote
the effc|ent use of energy. Ünder the scheme, enterpr|ses us|ng energy effc|ent|y are
40
lnlnd|a,aun|tofREO|sequ|va|entto1megawatt-hourofe|ectr|c|ty|njected|ntothegr|dfromrenewab|e
energysources.
Box 4 Solar Success in Gujarat, India
T
he State of Gujarat |n lnd|a saw the s|gn|ng of 961.5 megawatt (MW} power purchase
agreements by 87 nat|ona| and |nternat|ona| deve|opers w|th the announcement of the
So|arPowerGenerat|onPo||cy|n2009.
The|ncent|vesprov|dedunderthepo||cya||ow(GEDA2012}:
º So|ar power generat|on for projects up to of 500 MW;
º Purchasepr|ceofe|ectr|c|tyfromso|arphotovo|ta|catRs15.00perk||owatt-hour(kWh}
for the frst 12 years and Rs5.00 per kWh for the next 13 years;
º Purchase pr|ce of e|ectr|c|ty from so|ar therma| at Rs11.00 per kWh for the frst 12 years
and Rs4.00 per kWh |n the 13th year; and
º 10%renewab|epowerpurchaseob||gat|on.
The feed-|n tar|ff of Rs15 per un|t for the frst 12 years and Rs5 per un|t for the subsequent
13yearspromptedthecorporatesectortosetupso|arpowergenerat|onp|ants|nthestate.
Thestatehas605MW|nsta||at|oncapac|tyofso|arPvcomparedto200-oddMWbytherest
oflnd|a.Gujarathasa|readymet|tstargetof500MWfor2014.
Source: lFO (lnternat|ona| F|nance Oorporat|on}. 2012. India: Gujarat Solar. Success Stor|es—Pub||c–
Pr|vatePartnersh|ps.lFOAdv|soryServ|ces|nPub||c–Pr|vatePartnersh|ps.Wash|ngton,D.O.
Oha||engesandEnab||ngOond|t|ons 93
rewardedforenergysav|ngsaga|nst(be|ow}thestandardenergyconsumpt|on|eve|set
for them. Oert|fcates are |ssued to the enterpr|ses for the amount of sav|ngs ach|eved. The
cert|fcates can be purchased by frms that fnd |t d|ffcu|t to operate w|th|n the|r st|pu|ated
energyconsumpt|on||m|tsorstandards.Theschemeor|g|nated|nEurope(ca||edtheEÜ
Wh|te Oert|fcate Program} and was |ntroduced |n Apr|| 2012 |n lnd|a (Gol MNRE 2011}.
Regulatory or Command-and-Control Mechanisms
Purchase obligation.Ündertherenewab|eenergypurchaseob||gat|on(REPO}|nlnd|a,
the State E|ectr|c|ty Regu|atory Oomm|ss|ons requ|re power d|str|but|on ||censees to
purchaseam|n|mum|eve|ofrenewab|eenergyoutofthe|rareas’tota|e|ectr|c|tysa|es.
For examp|e, lnd|a’s Nat|ona| So|ar M|ss|on |s target|ng to dep|oy 20,000 MW of so|ar
powerby2022.Toach|eveth|sgoa|,theStateE|ectr|c|tyRegu|atoryOomm|ss|onsare
requ|red to fx a percentage of energy purchase from so|ar power under the REPO (a|so
ca||edtheso|arpowerpurchaseob||gat|on}.Theso|arREPOmaystartdur|ngPhaselby
2013w|th0.25%ofthetota|e|ectr|c|tysa|es,and|ncreaseto3%by2022.
Power access and evacuation infrastructure.Renewab|eenergyprojectsoftenhave
pooror||m|tednetworkaccessfromut|||t|esbecausethe|rresourcesaregenera||y|ocated
farfromthedemandcenters,andsomeofthem(so|arandw|nd}operate|nterm|ttent|y.
Üt|||t|es have been requ|red to g|ve producers of renewab|e energy access to the|r
transm|ss|on/d|str|but|onnetwork,forwh|chthetwopart|esenter|ntoas|mp|eandcerta|n
standard power purchase agreement. Th|s |s current|y pract|ced |n Sr| |anka (DSRS|
MFP2010}.
Bu||d|ngadequatecapac|tytoevacuatepower|san|mportantfactorforpromot|ngand
deve|op|ngrenewab|eenergyfor|arge-sca|epowergenerat|on|nSouthAs|a.lnfrastructure
to transm|t power generated from s|tes of renewab|e energy sources (||ke w|nd, so|ar,
b|omass,andsma||hydropower}tothedemandcentersw|||berequ|redforSouthAs|a
tofu||yut|||zethesa|dpowergenerat|oncapac|ty.Thedeve|opmentandprov|s|onofsuch
|nfrastructurew|||provetobeeconom|ca||yfeas|b|eandenv|ronmenta||ysusta|nab|e|nthe
|ong term. At present however, countr|es |n the reg|on |ack suffc|ent capac|ty to transfer
powergeneratedfromrenewab|eenergysources.
Industry Self-Regulation and Voluntary Agreements
$MDQFXØDEÚBHDMBXBNMRDQU@SHNMØBNCDØENQØATHKCHMFRØln South As|a, s|gn|fcant energy |s
used|ncommerc|a|(andres|dent|a|}bu||d|ngsduetotherap|d|ygrow|ngserv|cessector.
Toaddressth|sconcern,lnd|a|aunchedanEnergyOonservat|onBu||d|ngOode|n2007,
to ach|eve opt|ma| energy use |n bu||d|ngs |n d|fferent c||mat|c areas, and to gu|de the
des|gnofnewand|argecommerc|a|bu||d|ngsaroundthecountry(GolMNRE2011}.lt
has been est|mated that an energy sav|ng of 30%–40% from the commerc|a| bu||d|ng
sectorcou|dbeach|eved|fa||commerc|a|bu||d|ngsfo||owtheOode(GOl2008}.However,
thecodehasbeenmademandatory|non|ye|ghtofthe28statesoflnd|atodate.Most
countr|es|nSouthAs|a|ackas|m||arbu||d|ngcode.
Developing sustainable transport. Rap|durban|zat|onandthesubsequent|ncreas|ng
numberofpr|vatetransportveh|c|eshave|edtoh|gherenergyconsumpt|onacrossthe
reg|on. On|y a few c|t|es (lnd|a’s Banga|ore, Ko|kata, Mumba|, and New De|h|} have a
mass rap|d transport system, and the deve|opment of ra||ways, wh|ch are cons|dered
94 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
more energy effc|ent, has been |agg|ng beh|nd the growth |n demand for |ong-
d|stance transport serv|ces. Promot|on of c|eaner veh|c|es and moda| sh|ft to mass
pub||c transport (e.g., urban metro ra||way, bus rap|d transport system, and |nter-c|ty
ra||way} are some major opt|ons for energy-effc|ent |ow-carbon transport deve|opment
|n South As|a. Bhutan and Nepa|, both w|th abundant hydropower resources, cou|d
opt for e|ectr|c transport systems and enjoy severa| co-benefts of the techno|ogy
(Box5}.
Box 5Ÿ 0OTENTIALŸ"ENEÚTSŸOFŸ4RANSPORTŸ3ECTORŸ%LECTRIÚCATIONŸINŸ.EPAL
N
epa| |s endowed w|th huge hydropower resources w|th a techn|ca| potent|a| est|mated
at83,000megawatts(MW},ofwh|ch42,000MW|sreportedtobeeconom|ca||yv|ab|e.
Nepa|hasa|mosthasno|nd|genousfoss||energyresources.
On|y1.5%oftheeconom|chydropowerpotent|a|hasbeenharnessedande|ectr|c|tyuseper
cap|ta |s one of the |owest |n the wor|d. O|| |mports are rap|d|y grow|ng, ma|n|y due to h|gh
growth|nenergyconsumpt|on|nthetransportsector.Thecountry’stota|exportrevenue|sno
|onger enough to pay for o|| |mports. The transport sector a|one accounted for 5.2% of the
country’stota|o||demand|n2008andgrewattherateof8.9%perannumdur|ng2005–2009
(GoNWEOS2010}.
A recent study (Shakya and Shrestha 2011} est|mated that, w|thout c|eaner transport and
c||matepo||c|es,transportsectorenergyconsumpt|onby2050wou|dbe12t|mesthat|n2005.
Thesectorwou|drepresentabout43%oftota||mportedenergyuseandovertwoth|rdsof
tota|petro|eumproductconsumpt|onby2050.Ash|ftof20%oftheroadtransportdemand
toe|ectr|cmasstransportsystemandsh|ftofanother10%ofthedemandtoe|ectr|cveh|c|es
|n2015,w|ththeshareofe|ectr|cveh|c|esgradua||y|ncreas|ngto15%by2050,wou|dreduce
by14.7%thecumu|at|veconsumpt|onofpetro|eumproductsdur|ng2005–2050.Th|swou|d
a|sohe|ppromotehydropowerdeve|opmentbycreat|ngdemandforanadd|t|ona|hydropower
capac|tyof456MWby2050.
Oo-benefts |nc|ude a reduct|on |n cumu|at|ve greenhouse gas em|ss|on by 17.6% dur|ng
2005-2050; decrease |n cumu|at|ve em|ss|ons of |oca| and reg|ona| po||utants-carbon d|ox|de,
n|trogen ox|des, su|fur d|ox|de, sma|| part|cu|ate matter, and non-methane vo|at||e organ|c
compounds—by9.9%,10.9%,7.2%,6.7%,and7.1%,respect|ve|y.Potent|a|revenuefrom
the sa|e of cert|fed em|ss|on reduct|ons generated by transport sector e|ectr|fcat|on, at $20
pertonofcarbond|ox|deequ|va|ent,wou|dcoverabout4.9%ofthetota||nvestment|nthe
sector`s e|ectr|fcat|on.
Clean Development Mechanism. A|though not a fnanc|ng mechan|sm per se, the
O|eanDeve|opmentMechan|sm(ODM}offersanopportun|tytodeve|opc||matefr|end|y
projects|ndeve|op|ngcountr|ese|therthroughfu||fund|ngfromdomest|csources(ca||ed
a “un||atera| ODM”} or through part|a| or fu|| fund|ng from |nvestors |n |ndustr|a||zed
countr|es (||sted |n Annex l of the Kyoto Protoco|, 'Annex l countr|es"}. Oert|fed em|ss|on
cred|ts (OEOs} are |ssued to project deve|opers for GHG em|ss|ons avo|ded through
ODMprojects|nhostdeve|op|ngcountr|es.|owGHG|ntens|vetechno|ogyandresource
opt|ons-e.g., energy-effc|ent techno|og|es, renewab|e energy, c|eaner transport
opt|ons,techno|og|esw|thcarboncaptureandstorage(OOS},captureofmethanefrom
|andf||s etc.-are a|| e||g|b|e to be a ODM project, prov|ded they meet certa|n cr|ter|a. The
Oha||engesandEnab||ngOond|t|ons 95
OEOscanbeso|dtopart|es|nAnnexlcountr|esthatcou|dusethemtomeetthe|rGHG
reduct|onob||gat|on.
By June 2012, about 8,971 projects around the wor|d were |n the ODM app||cat|on
p|pe||ne,|nc|ud|ng4,546reg|steredprojects,164projects|nthereg|strat|onprocess,and
4,261projectsattheva||dat|onstage.Ofthereg|steredODMprojects,1,717(about38%}
havebeen|ssuedOEOs.
Thes|xSouthAs|aDMOs|nth|sreporthosts2,342projects,orabout26%oftheg|oba|
tota|,asofJune2012(Tab|e29}.lnd|aa|onehosts2,290projects,wh|ch|s98%ofthe
reg|on’stota|anda|most30%ofa||projects|nAs|athatare|ntheODMp|pe||ne.lnd|aa|so
has18.4%share|nthetota|vo|umeofOEOs|ssued|nAs|a.Thenumbersfromtheother
South As|a DMOs are much |ower. These |nd|cate var|ous barr|ers to the more act|ve
pursu|tofODM|n|t|at|ves|nthe|attercountr|es,rang|ngfrom|ackoftechn|ca|capac|ty
to |nst|tut|ona| or po||cy constra|nts. More spec|fca||y, the h|gh transact|on costs, |ong
and t|me-consum|ng process |n gett|ng ODM projects approved or reg|stered, |ack of
domest|c fnance to deve|op ODM projects, and recent dec||ne |n the pr|ces of cert|fcate
ofem|ss|onreduct|on(OER}|nthe|nternat|ona|carbonmarketposecha||engestoSouth
As|ancountr|es|nthe|rexp|o|tofODMopportun|t|es(ÜRO2012}.
Table 29 Pipeline CDM projects in South Asia as of June 2012
Type of Project Bangladesh Bhutan India The Maldives Nepal Sri Lanka Total
Energy effc|ency 5 388 4 397
Renewab|eenergy 1,659 9 1,668
Hydropower 3 240 2 20 265
|andf|| 2 40 1 43
Fue|sw|tch 57 57
Transport 16 16
Reforestat|on 15 15
Others 4 2 6
Total 7 3 2,290 0 10 32 8,971
ODM=O|eanDeve|opmentMechan|sm.
Source:ÜRO(ÜNEPR|soeOenter}.2012. CDM Project Distribution within Host Countries by Region and Type.Oapac|ty
Deve|opmentforO|eanDeve|opmentMechan|sm.Denmark.http://cdmp|pe||ne.org/cdm-projects-reg|on.htm
Desp|teex|st|ngcha||enges,SouthAs|a—part|cu|ar|ylnd|a,Bhutan,andNepa|—cont|nues
to have s|gn|fcant potent|a| for deve|op|ng hydropower under ODM to he|p sat|sfy domest|c
powerdemandandforcross-bordertrade|nthereg|on.lnfact,the114-MWDagachhu
hydropowerproject|nBhutan,focusedatsupp|y|ngpowertolnd|a,hasbeenreg|stered
|n 2010 as the frst cross-border hydropower project under ODM |n the wor|d (see Box 6}.
Regional Cooperation in Energy Development and Trade
Reg|ona|cooperat|onprov|desamajoropportun|tyforSouthAs|ancountr|estoach|eve
energysecur|tythrough|arge-sca|edeve|opmentofc|eanenergyresources.Successfu|
cooperat|on|npursu|ngsoundenergypo||c|escanbefoundacrossthewor|d,part|cu|ar|y
96 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
|n shar|ng e|ectr|c|ty generat|on through cross-border transm|ss|on |nterconnect|ons.
ln Europe, e|ectr|c|ty system |nterconnect|on has resu|ted |n a 7%–10% reduct|on |n
generat|oncapac|tycosts.S|m||arcooperat|onw|th|ntheGreaterMekongSubreg|on|n
SoutheastAs|ahasbeenest|matedtopotent|a||yreduceenergycostsbynear|y20%,for
asav|ngof$200b||||ondur|ng2005–2025(ADB2012}.
lnSouthAs|a,theex|st|ng|ntrareg|ona|energytrade|s||m|tedtoe|ectr|c|tytradebetween
lnd|aandBhutan,andlnd|aandNepa|,
41
andtrade|npetro|eumproductsbetweenlnd|a
andBang|adesh,Bhutan,Nepa|,andSr||anka.Wh||ethee|ectr|c|tytraded|sbasedon
|nd|genoushydropowerresources,thepetro|eumtrade|sbasedonlnd|a|mport|ngand
refn|ng crude o|| and export|ng petro|eum products to the other countr|es. lnd|a a|so
exportsd|ese|fue|toBang|adesh(ADB2012}.
Desp|tetheabundanceofc|eanresources|nsomeofthecountr|es,the|rdeve|opment
andut|||zat|onarecurrent|y|ow.For|nstance,on|y28%(about43,078MW}ofthereg|on’s
41
lnd|aandNepa|haveanact|veagreementtoexchangepowerupto50MW.Dueto|ackoftransm|ss|on
capac|ty, however, |t has not been poss|b|e to |ncrease th|s power trade s|gn|fcant|y. W|th the targeted
comp|et|onofanewtransm|ss|on||neby2015,Nepa|hasagreedtopurchase150MWofpowerfromlnd|a
(Wor|dBank2011}.
Box 6 Bhutan’s Dagachhu Hydropower Project—The First Cross-Border
Clean Development Mechanism Project in the World
T
he 114-MW Dagachhu hydropower project |n Bhutan, supported by the As|an
Deve|opmentBank(ADB}andthegovernmentsofAustr|aandJapan,breaksnewground
as the frst cross-border project |n the wor|d under the O|ean Deve|opment Mechan|sm (ODM},
reg|stered |n 2010. Apart from enab||ng Bhutan to export c|ean energy to lnd|a, the project
w||| a|so encourage cross-border power trade |n South As|a by beneft|ng from |nternat|ona|
mechan|sms||keODM.
Theproject|sexpectedtoreduceGHGsbyabout500,000tonsperyearma|n|ythroughpower
exports to lnd|a, whose e|ectr|c|ty generat|on depends heav||y on coa|-fred power p|ants. The
project w||| beneft lnd|a |n reduc|ng GHG em|ss|on, and beneft Bhutan by generat|ng add|t|ona|
revenuefromODMtomaketheprojectv|ab|e|nthecountry.
A notab|e feature of the Dagachhu hydropower project |s the part|c|pat|on of mu|t|p|e
stakeho|ders (Bhutanese and |nternat|ona|}, mak|ng |t the frst pub||c-pr|vate partnersh|p
for |nvestment |n |nfrastructure |n Bhutan. The project |s managed by Druk Green Power
Oorporat|on(DGPO},Bhutan’sstate-ownedut|||ty,andTataPowerOompany,a|ead|ngenergy
company|nlnd|a.
Thetota|costoftheproject|saround$200m||||on,ofwh|ch$80m||||on|s|oancomm|ttedby
ADB.TheNat|ona|Pens|onandProv|dentFundofBhutanandRa|ffe|senZentra|bankOsterre|ch
AG (RZB} of Austr|a prov|ded co-fnanc|ng to the project. The Austr|an government prov|ded
eng|neer|ngsupportthroughtheAustr|anDeve|opmentAgency,wh||eprojectstructur|ngwas
promotedw|thass|stancefromtheJapanSpec|a|Fundthat|sestab||shedbythegovernment
ofJapanandadm|n|steredbyADB.
Source: ADB. 2010b. Bhutan Hydropower Project World’s First Cross-Border Clean Development
Mechanism Initiative, ADB (http://www.adb.org/news/bhutan-hydropower-project-wor|d-frst-cross-
border-c|ean-deve|opment-mechan|sm-|n|t|at|ve; down|oaded from on 06.09.2012}.
Oha||engesandEnab||ngOond|t|ons 97
est|mated152,580-MWtota|econom|chydropowerpotent|a|havebeen|nsta||ed(Young
and v||hauer 2003; GPRB 2011; GoN NEA 2011; RGoB NEO 2011; GoN WEOS 2011;
Go| MPOEA 2012; Gol MoEF 2012}. Nepa|, Bhutan, and lnd|a have so far |nsta||ed
and exp|o|ted on|y 1.5%, 5%, and 46% of the|r respect|ve tota| econom|c hydropower
potent|a|s(Thapa2011
42
; TET 2012b}. The countr|es` ab|||ty to fu||y harness and better
ut|||zethesec|eanerresourcescanbe|mprovedw|ththenecessarytechno|ogy,|nc|ud|ng
moderncontro|systems,commerc|a||ncent|ves,support|ng|nfrastructure,andadequate
fnanc|a| resources (ADB 2012}.
Reg|ona|cooperat|on|nenergydeve|opmentandtradecana|sobev|ewedfromanother
perspect|ve. For one, the grow|ng re||ance of South As|a (part|cu|ar|y Bang|adesh and
lnd|a}oncoa|canbedetr|menta|toboth|oca|andreg|ona|env|ronment.Th|s|sbecause
combust|onofcoa|,b|omass,andheavyfue|o|||nthereg|onaremajorsourcesofb|ack
carbon em|ss|on, a short-||ved c||mate forcer. B|ack carbon em|ss|ons from act|v|t|es
||keb|omassorcoa|based|ndooruse|ncook|nghave|mmed|atehea|thhazards.Such
em|ss|onscou|da|soacce|erateme|t|ngofsnow|ntheH|ma|ayas,and|nturnthreatenthe
watersecur|tystatusofmuchofSouthAs|a(ÜSEPA2012}.Promot|ngtheut|||zat|onand
tradeofc|eanerenergyresources|nthereg|onw|||thereforebe|mportanttoo|stowards
|ow-carbonandgreendeve|opment.
G|ven the above |ssues, areas |n wh|ch reg|ona| cooperat|on cou|d be strengthened
to overcome the prob|ems faced by c|ean energy techno|ogy deve|opment |n South
As|a|nc|ude(|}shar|ngofmanpowerandtechno|ogyknow-how,(||}techno|ogytra|n|ng
programs, (|||} shar|ng of env|ronmenta| mon|tor|ng and |nformat|on (espec|a||y those
re|at|ngtorenewab|eenergyresources},(|v}shar|ngrenewab|eenergyresources(trade},
and(v}areg|ona|renewab|efund(WEO2000}.
Sharing Human Resources and Technology Know-How
The||bera||zat|onandpr|vat|zat|onprocessthathasbeen|ntroduced|nsomecountr|es|n
SouthAs|ahasenhancedpr|vatesector|nvo|vement,therebyopen|ngupnewposs|b|||t|es
foraccesstotechn|ca|know-howthroughmarketmechan|sms.Maturetechno|og|escan
beshared|nthereg|onandadaptedfor|oca|cond|t|ons.The“termsandcond|t|ons”for
such know|edge-shar|ng must be backed by governments and supported by market
forces.A|ongth|s||ne,|tmaya|sobeposs|b|eforlnd|atoencourage|tscompan|esto
fac|||tatethetransferofc|eanenergytechno|ogytoothercountr|es|nthereg|onthrough
jo|ntventures(|ftheothercountr|esexpress|nterest|nsuchventures}.
The human resources needed for po||cy mak|ng, p|ann|ng, project |mp|ementat|on,
management,andoperat|onofenergysystemscou|da|sobeshared.Effect|veshar|ng,
however, necess|tates deve|opment of a new mechan|sm. For examp|e, a reg|ona|
energy center for South As|a cou|d be set up supported by the governments |n the
reg|on. ln add|t|on, a number of profess|ona| |nst|tut|ons and sc|ent|fc and eng|neer|ng
organ|zat|ons (e.g., academ|es of sc|ence, eng|neer|ng |nst|tut|ons, and consu|tancy
organ|zat|ons} can be effect|ve|y ut|||zed for reg|ona| exper|ence shar|ng. Exchange
42
http://www.ekant|pur.com/2012/08/11/bus|ness/harness|ng-of-hydropower-potent|a|-nepa|-nowhere-at
-the-top-of-south-as|an-countr|es-||st/358586.htm|
98 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
of |nformat|on on renewab|e energy R&D can a|so be arranged through sem|nars,
workshops,studyv|s|ts,etc.
Training Programs in Renewable Energy
Some progress has been made |n cooperat|on |n tra|n|ng |n South As|a. lnd|a, for
examp|e, has been support|ng techno|ogy-spec|fc tra|n|ng courses, |n wh|ch sc|ent|sts
andtechno|og|stsfromBang|adesh,Nepa|,andSr||ankahavepart|c|pated.Twosuch
tra|n|ngcourses|nsma||hydropowerwereorgan|zeddur|ng1998–1999and1999–2000
through the A|ternate Hydro Energy Oentre at the Ün|vers|ty of Roorkee. A tra|n|ng
program |n b|ogas techno|ogy was he|d at the Oo||ege of Techno|ogy and Agr|cu|tura|
Eng|neer|ng, Üda|pur. S|x 2-week tra|n|ng programs |n the areas of sma|| hydropower,
b|ogas, b|omass gas|fcat|on, so|ar therma|, so|ar photovo|ta|cs, and |mproved cook|ng
stovesweresubsequent|yproposedbytheGovernmentoflnd|a.
Oooperat|on cou|d a|so |nc|ude exchange of offc|a|s/techno|og|sts to part|c|pate |n
tra|n|ngprogramsond|fferentaspectsofrenewab|eenergy,wh|chcou|dbeorgan|zedat
|nst|tutesofrecogn|zedtechno|og|ca|exce||ence.
Sharing Environmental Information and Investment
Examp|esofshar|ng|nformat|onand|nvestments|nc|ude
º Sharing information from environmental monitoring institutions. Sett|ng up
an |nst|tut|on for env|ronmenta| mon|tor|ng and contro| |s a t|me-consum|ng and
cost|y propos|t|on. Some of the ex|st|ng |nst|tut|ons |n the reg|on can deve|op
packagesthatw|||he|p|nmon|tor|ngandcontro|||ngthequa||tyofa|randwater,
wh|ch are d|rect|y affected by energy use. Such an approach w||| fu|f|| ob||gat|ons
undertheKyotoProtoco|andensuresusta|nab|||tyofenergysupp|yandsystems
|nanenv|ronmentfr|end|yfash|on.
º Setting up environmental monitoring stations.Aconstantv|g||onenv|ronmenta|
cond|t|onsw|||benecessarytopromotetheuseofappropr|ateenergysystems.
Th|s w||| ca|| for |ow-cost env|ronment mon|tor|ng equ|pment and processes at
manypo|nts|nacountry.Areg|ona|networkofenv|ronmenta|mon|tor|ngstat|ons
wou|dbeofgreathe|p.
º
Sharing investments in plants and machinery.Suchshar|ngcou|dbemutua||y
benefc|a| for the countr|es concerned and wou|d bu||d |nvestor confdence. ln
v|ewof|owoff-take|nsomecountr|es,thebankab|||tyof|nvestmentproposa|sfor
a s|ng|e country operat|on cou|d rema|n d|ffcu|t to just|fy.
ADB (2012} prov|des a succ|nct descr|pt|on of fve benefts of reg|ona| cooperat|on and
trade |n (c|ean} energy |n South As|a. Oooperat|on a||ows countr|es to ba|ance the|r
energydemandandsupp|y,exp|o|t|ngthe|run|quecomparat|veadvantagewh||emeet|ng
|ncreas|ng|yd|verseenergyrequ|rementsandcombat|ngenergyshortages.ltsupports
thecountr|es’econom|cgrowth—export|ngresources|nwh|chtheyhaveacomparat|ve
advantage,and|mport|ngaw|derangeofothergoodsandserv|ces.Whenbasedon
cross-border project fnanc|ng, th|s a||ows for a w|n-w|n rat|ona||zat|on of resource
costs and project benefts. Oross-border co||aborat|ve |nfrastructure deve|opment can
ease the huge burden of energy |nfrastructure |nvestment requ|red. The opportun|ty
to share project costs and benefts can reduce |mmed|ate fnanc|ng burdens, smooth
Oha||engesandEnab||ngOond|t|ons 99
cash fows, and |ower project r|sks for |nd|v|dua| countr|es. Oooperat|on |n energy po||cy
caneasesupp|yconstra|nts,|owerenergysupp|ycosts,andprov|desomeprotect|on
aga|nst wor|d o|| pr|ce shocks. |ast|y, reg|ona| projects offer the countr|es un|que
opportun|t|esforc||matechangem|t|gat|onandrece|v|ngO|eanDeve|opmentMechan|sm
(ODM} benefts.
6 Conclusion and Way Forward
W
|thenergydemand|nSouthAs|aprojectedtomorethandoub|eby2030,th|s
studyrevea|sexce||entopportun|t|es|n|ow-carbongreengrowthbypursu|ng
a w|de and var|ed range of resource- and energy-effc|ent techno|og|es that
wou|d |ower GHG em|ss|ons at |ow cost or even cost sav|ng (benefts}. Add|t|ona|
|ntroduct|on of a c||mate po||cy—through, for examp|e, a carbon tax—wou|d further
|owerem|ss|ons.
Basedontheconstra|ntsandopportun|t|esd|scussed|nth|srev|ew,theareasofsupport
to deve|op the d|verse yet |arge potent|a|s of South As|an countr|es for c|ean energy
resources and techno|og|es fa|| under three genera| head|ngs—techno|ogy, po||cy, and
fnance-each of wh|ch may p|ay a ro|e |n, and be |nfuenced by, reg|ona| or subreg|ona|
cooperat|on.lnadd|t|on,po||t|ca|w|||onthebas|sofagreedstrateg|es|sv|ta|forc|oser
co||aborat|onbetweengovernmentsanda||otherconcernedstakeho|ders.
Technology
S|gn|fcant carbon |ntens|ty and GHG em|ss|ons reduct|on can be ach|eved by South
As|ancountr|esbypr|or|t|z|ng|nvestments|ntechno|og|esacrosssectorsw|th|owlAOs
and other co-benefts, such as reduc|ng em|ss|ons of other |oca||y-damag|ng po||utants
andprov|d|ngeconom|copportun|t|esforcommun|t|es.Thescopeofthese|nvestments
can cover (|} promot|on of energy effc|ency and deve|opment of renewab|e energy; (||} |ow
carbon transport |nfrastructure; (|||} urban serv|ces, |nc|ud|ng emp|oy|ng cost-effect|ve
and |ncome-generat|ng waste management mechan|sms; (|v} energy-effc|ent bu||d|ngs
and other |nfrastructure; and (v} energy-effc|ent |rr|gat|on pumps, |nc|ud|ng use of so|ar
energy. Some spec|fc examp|es are energy-effc|ent |amps, a|r cond|t|oners, and so|ar
and e|ectr|ca| cook|ng stoves |n res|dent|a| and commerc|a| sectors; energy-effc|ent
e|ectr|c motors and d|ese| bo||ers |n |ndustr|a| sector; effc|ent d|ese| tractors |n agr|cu|ture
sector; part|a| moda| sh|fts |n the road fre|ght to ra||ways |n the transport sector; and sh|ft
to renewab|e sources for power generat|on. North-south and south-south cooperat|on
shou|d be encouraged |n deve|op|ng, demonstrat|ng, and sca||ng-up potent|a| c|ean
energytechno|og|es.
Policy
As|nanyotherdeve|opment|n|t|at|ve,anappropr|atepo||cyenv|ronment|sprerequ|s|te
foraparad|gmsh|fttowardasusta|nab|eenergyfuture.Thecountr|es|nSouthAs|ahave
d|fferentexper|ences|npo||c|es,regu|at|ons,anddeve|opmentanddep|oymentofvar|ous
Oonc|us|onandWayForward 101
c|ean energy resources and techno|og|es, and each can beneft from an |nst|tut|ona||zed
mu|t|-pronged c|ean energy program. These country-spec|fc programs can |nc|ude
|n|t|at|ves |ncreas|ng energy effc|ency |n re|evant sectors; promot|ng the adopt|on of
renewab|e energy resources; and |mprov|ng energy access, espec|a||y of poor and remote
reg|ons. The c|ean energy programs and the|r e|ementa| resources and techno|og|es
must be |ntegrated |nto nat|ona| deve|opment efforts and refected |n |ong-term energy
po||c|es and deve|opment p|ann|ng processes. These |n turn shou|d be supported by
var|ouspo||cyopt|onsthatmay|nc|ude,amongothers,strateg|cdeve|opmentp|ann|ng
and management of energy and energy-re|ated sectors; appropr|ate market and
structura| reforms, |nc|ud|ng c|ean energy pr|c|ng and subs|dy po||c|es; mechan|sms for
transboundary or reg|ona| energy cooperat|on and trade; and favorab|e fnanc|a| support
and |nnovat|ve fnanc|ng mechan|sms for c|ean energy techno|og|es.
Finance
TheurgentneedtoaddressGHGem|ss|onsandc||matechangeconcerns|nSouthAs|a
requ|res s|gn|fcant new |nvestment |n the deve|opment and dep|oyment of c|ean energy
techno|og|es. Sources of fnanc|ng for c|ean energy techno|ogy opt|ons may |nc|ude
ma|nstream fnanc|ng |nst|tut|ons (|.e., commerc|a| banks}, government |nst|tut|ons
estab||shed for the promot|on of such techno|og|es, NGOs/pr|vate organ|zat|ons, and
|nternat|ona| fnanc|a| mechan|sms. ln most South As|an countr|es however, ma|nstream
fnanc|ng |nst|tut|ons are not prepared to support renewab|e energy projects or prov|de
|oans to purchase c|eaner techno|ogy dev|ces. Some |nnovat|ve mechan|sms and
po||c|es are needed to reduce r|sks perce|ved by ma|nstream |end|ng |nst|tut|ons |n
c|eaner techno|ogy |nvestments and to enhance the|r capac|ty for fnanc|ng |ow-carbon
techno|og|esandresourceopt|ons.
A recent deve|opment |n th|s area |s the O||mate lnvestment Read|ness lndex from the
lnternat|ona| Bank for Reconstruct|on and Deve|opment/The Wor|d Bank (2012}. The
|ndex scores the presence of |mportant enab||ng po||c|es, regu|at|ons, |ncent|ves, and
|nst|tut|ons re|ated to renewab|e energy and energy effc|ency |n South As|a, thereby
contr|but|ng to better eva|uat|on and understand|ng of the |ssues by governments and
donor agenc|es, and to better target|ng of externa| ass|stance based on |dent|fed key
|nvestment-re|ated barr|ers. The |ndex a|so fosters transparency, |dent|fcat|on of weak
spots |n a country’s c||mate |nvestment s|tuat|on, and consequent reform to enab|e
greater|nvestment|nc|eanenergytechno|og|es.
Some examp|es of pub||c agenc|es |n South As|a that can prov|de fnanc|ng for renewab|e
energy projects are the lnd|an Renewab|e Energy Deve|opment Agency |td., Nepa|’s
A|ternat|ve Energy Promot|on Oenter, and Bang|adesh’s lnfrastructure Deve|opment
Oompany ||m|ted. They however have ||m|ted resources and depend e|ther on donor
agenc|esorgovernmentforfunds.lnsomecases,NGOsp|ayanact|vero|e|npromot|ng
c|ean energy techno|og|es us|ng |nnovat|ve fnanc|ng and other schemes (Box 7}. B||atera|
fund|ng sources, pr|vate fnanc|ng, and many other |nternat|ona| c||mate funds and
fund|ngmechan|smsare||kew|seava||ab|efor|arger-sca|ec|eanenergydeve|opment|n
deve|op|ngcountr|es,|nc|ud|ngSouthAs|a.
102 Econom|csofReduc|ngGreenhouseGasEm|ss|ons|nSouthAs|a
One fnanc|ng source that can be exam|ned and app||ed |n South As|a |s the use of carbon
tax revenues to fund research and deve|opment on c|ean techno|og|es and resources,
|nc|ud|ng the promot|on and d|ssem|nat|on of matured ones. Such 'recyc||ng" of fnanc|a|
resources w||| make the sh|ft to a |ow-carbon energy system and green economy
cost-neutra|.
Techno|ogy, po||cy, and fnanc|ng |ssues w||| cont|nue to |nfuence the deve|opment of
c|eanenergytechno|og|esandformu|at|onofenergypo||c|es|nthe21stcentury.Wh||e
therespons|b|||ty||esw|ththenat|ona|governmentsandotherstakeho|derstoformu|ate
and |mp|ement strateg|es toward a susta|nab|e energy future, reg|ona| and subreg|ona|
cooperat|on may he|p address some of the |ssues co||ect|ve|y and |n a cost-effect|ve
manner. Examp|es of reg|ona| cooperat|on |n energy |n South As|a are the South As|a
Reg|ona| ln|t|at|ve for Energy (SARl-Energy} program, wh|ch he|ps |mprove access to
econom|c and soc|a| |nfrastructure |n the energy sector, and the South As|a Reg|ona|
EnergyOoa||t|on,wh|ch|sanetwork|ngmechan|smthroughwh|chsectorstakeho|ders
can |nfuence reg|ona| energy po||cy and reform (Jaswa| and Das Gupta 2006}. Transfer
ofbest|mp|ementat|onpract|ces,po||c|es,andtechno|og|esfromdeve|opedcountr|es,
and a|so south–south |nteract|ons w|th|n and among deve|op|ng countr|es w||| be the
cornerstonesofcooperat|on.
Box 7 Success of the Grameen Shakti Solar Home System in Bangladesh
G
rameen Shakt|, a renewab|e energy serv|ce company, |s |nsta|||ng 1,000 so|ar home
systemsaday|ntherura|areasofBang|adesh,where80%ofthecountry’spopu|at|on
||ves.Bytheendof2012,|tw|||have|nsta||edatota|of1m||||onso|arhomesystemsandhas
expans|onp|ansto|nsta||5m||||onsystemsby2015.
GrameenShakt|meetsthecha||engeofserv|ngtherura|marketandreach|ngpoorv|||agersby
creat|ngrura|supp|ycha|nsandafter-sa|esserv|ce.Theeng|neersandtechn|c|ans||ve,work,
andaretra|nedonthejob|nthev|||ages.Theyrema|n|nc|osecontactw|ththecustomersand
ensurethattheso|arhomesystemsareoperat|ng.lfthere|saprob|em,GrameenShakt|staff
areon-s|tetoass|st.
The success of Grameen Shakt| |s ma|n|y attr|buted to |ts |nnovat|ve and affordab|e fnanc|ng
mode|sasfo||ows:
(|} Theuserpays15%ofthetota|costasdownpayment.Therema|n|ng85%|stobe
repa|d w|th|n 36 months w|th 6% (fat rate} serv|ce charges.
(||} Thecustomerpays25%ofthetota|pr|ceasdownpayment.Therema|n|ng75%|sto
be repa|d w|th|n 24 months w|th 4% (fat rate} serv|ce charge.
(|||} M|cro-ut|||ty: The customer pays 10% of the tota| pr|ce as down payment. The
rema|n|ng90%|stoberepa|dby42checks.There|snoserv|cecharge.
(|v} A4%d|scount|sa||owedonpr|ntedpr|ce|ncaseofcashpurchase.
Sources:
Grameen Shakt|. 2011. Renewable Energy: The Key to Achieving Sustainable Development of Rural
Bangladesh.
W|mmer, N. 2012. Clean Energy Access For All—Grameen’s Solar Success. http://s|errac|ub.typepad
.com/compass/2012/07/grameen-so|ar-success.htm|
Oonc|us|onandWayForward 103
|arge-sca|edeve|opmentofc|eanenergyresources|scruc|a|forSouthAs|ancountr|esto
reduceenergy-re|atedGHGem|ss|onsperun|tofGDPoverthenexttwodecades.Wh||e
anumberof|n|t|at|vescou|dbe|aunchedtohe|pSouthAs|ameetconcretec|eanenergy
targets |n 2030 and beyond, |t shou|d be emphas|zed that the|r success w||| re|y on
effect|vecooperat|onamongthevar|ousactors|nenergyandre|atedsectors,bothw|th|n
and across the countr|es. South As|an countr|es need to have stronger comm|tment
to ach|ev|ng susta|nab|e energy secur|ty, and frm understand|ng of |ts factors and
requ|rements, for them to reap the benefts from |nternat|ona| and reg|ona| cooperat|on for
c|ean energy resource and techno|ogy deve|opment. Reg|ona| energy cooperat|on and
tradeaswe||assouth-southandnorth-southcooperat|onontechno|ogyandknow|edge
shar|ng w||| pave the way for a move towards |ow-carbon and green deve|opment |n
SouthAs|a.
Appendix 1
&RXQWU\6XPPDULHVv*+*(PLVVLRQ
Abatement Options and Costs
in Energy-Using Activities and Key Sectors
Bangladesh
º Ünder the base case, tota| greenhouse gas (GHG} em|ss|ons are est|mated to
|ncreaseat5.8%cumu|at|veannua|growthrate(OAGR}toreach168.3m||||ontons
ofcarbond|ox|deequ|va|ent(tOO
2
e}by2030,w|ththepowersectorcontr|but|ng
about50%(F|gureA1.1}.
º W|thcarbontax,cumu|at|veGHGem|ss|onsdur|ng2005–2030wou|dbereduced
by 9.4% from the base case |eve|, w|th reduct|ons h|gher |n |ater years (e.g.,
20.3%reduct|on|n2030}.Thecumu|at|veGHGem|ss|onsfromthepowersector
wou|ddecreaseby18.4%dur|ng2005–2030,w|thadd|t|ona|nuc|ear,w|nd,and
mun|c|pa|so||dwaste-basedpowergenerat|onp|ants.Oumu|at|veGHGem|ss|ons
fromtheres|dent|a|andcommerc|a|sectorswou|da|sodec||ne.Therewou|dbe
no s|gn|fcant reduct|ons from the transport and |ndustry sectors.
º Approx|mate|y 10.5 m||||on t OO
2
e of GHG em|ss|ons, or about 10.7% of the
basecase,cou|dbeavo|ded|n2020atnoadd|t|ona|cost(negat|ve|ncrementa|
abatement cost} by dep|oy|ng n|ne 'no-regret" c|eaner and energy effc|ent opt|ons
|nBang|adesh(Tab|eA1.1}.
º Among 23 c|eaner techno|ogy opt|ons, rep|ac|ng a|| convent|ona| |amps |n the
res|dent|a| sector w|th effc|ent compact fuorescent |amps (OF|s} has the h|ghest
annua|GHGabatementpotent|a|ofabout4.7m||||ontOO
2
e|n2020,andatno
add|t|ona|cost(Tab|eA1.2andF|gureA1.2}.
OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 105
Figure A1.1 Sectoral GHG Emissions under the Base Case
and Carbon-Tax Scenario, Bangladesh
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofBang|adesh(unpub||shedcountryreport}.
0
40
80
120
160
200
Base Oarbon
Tax
Base Oarbon
Tax
Base
2005 2020 2030
m
i
l
l
i
o
n

t
o
n
s

C
O
2
e
Power
Transport
Res|dent|a|
lndustry
Oommerc|a|
Agr|cu|ture
Table A1.1 Total GHG Emission at Selected Incremental Abatement Costs, Bangladesh, 2020
Base
Case
Incremental Abatement Costs
($ per ton CO2e)
s 0
(“No-regret”
options) 10 30 50 75 100 200 350 500
Tota|GHGEm|ss|ons
(’000tonsOO2e}
97,237 86,786 75,702 73,287 72,409 72,409 72,399 72,399 71,755 71,704
GHGReduct|on(%} 10.7 22.1 24.6 25.5 25.5 25.5 25.5 26.2 26.3
Sectoral Shares in Total GHG Emission Abatement(%}
Res|dent|a| 45.1 21.9 23.4 22.6 22.6 22.6 22.6 24.5 24.5
Oommerc|a| 0.0 1.9 1.9 1.8 1.8 1.8 1.8 1.8 1.8
Transport 27.4 13.3 11.9 14.2 14.2 14.2 14.2 13.9 13.8
lndustry 25.8 30.1 27.0 26.9 26.9 26.9 26.9 26.3 26.4
Agr|cu|ture 1.7 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7
Power 0.0 32.1 35.0 33.8 33.8 33.7 33.7 32.9 32.8
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons} [REOOSA1|—The Oase of
Bang|adesh(unpub||shedcountryreport}.
106 Append|x1
Table A1.2 Estimated Incremental Abatement Cost (IAC) and GHG Abatement Potential of
Different Cleaner Technology Options in Bangladesh, 2020
Rank Cleaner Technology Options
Annual GHG
Abatement
Potential
(’000 tons CO2e)
Cumulative
Annual GHG
Abatement
Potential
a

(’000 tons CO2e)
Incremental
Abatement Cost
(2005 $ per ton
CO2e)
1 Effc|ent ONG (90%} and gasoho|
(10%}carsrep|ac|ng100%of
gaso||necars
44 44 (153.1}
2 Effc|ent d|ese| ra|| (20%} and effc|ent
d|ese|trucks(80%}rep|ac|ng100%of
roadfre|ghtdemand|nthetransport
sector
1,863 1,907 (150.1}
3 Effc|ent d|ese| water fre|ght vesse|s
rep|ac|ng100%oftheconvent|ona|
d|ese|fre|ghtvesse|s|nthetransport
sector
238 2,145 (21.8}
4 Effc|ent OF|s rep|ac|ng 100% of the
convent|ona||amps|ntheres|dent|a|
sector
4,718 6,863 (19.9}
5 Effc|ent d|ese| water passenger
vesse|srep|ac|ng100%ofthe
convent|ona|d|ese|passengervesse|s
|nthetransportsector
716 7,579 (19.8}
6 Effc|ent d|ese| pumps rep|ac|ng
100%ofconvent|ona|d|ese|pumps
|nagr|cu|tura|sector
175 7,754 (16.0}
7 Effc|ent paddy parbo|||ng & m||||ng
rep|ac|ng100%oftheconvent|ona|
paddyparbo|||ng&m||||ngtechno|ogy
|n|ndustrysector
329 8,083 (12.2}
8 Effc|ent bo||ers rep|ac|ng 100% of
convent|ona|bo||ers|nthepaper,
paddyparbo|||ng&m||||ngandtext||e
|ndustry
282 8,365 (6.4}
9 Effc|ent Hybr|d Hoffman k||n rep|ac|ng
100%oftheconvent|ona|k||ns|nthe
br|ck|ndustry
2,086 10,451 (2.6}
10 OF|srep|ac|ng100%ofconvent|ona|
|amps|nthecommerc|a|sector
401 10,852 1.0
11 Effc|ent techno|ogy rep|ac|ng 100%
ofconvent|ona|techno|ogy|nthe
fert|||zer|ndustry
3,716 14,568 3.6
12 Effc|ent cont|nuous techno|ogy
rep|ac|ng100%ofbatchprocess|n
thesugar|ndustry
60 14,628 6.7
13 Nuc|earpowergenerat|onrep|ac|ng
5%oftota|powergenerat|on
2,494 17,122 7.1
continued on next page
OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 107
Table A1.2 continued
Rank Cleaner Technology Options
Annual GHG
Abatement
Potential
(’000 tons CO2e)
Cumulative
Annual GHG
Abatement
Potential
a

(’000 tons CO2e)
Incremental
Abatement Cost
(2005 $ per ton
CO2e)
14 Renewab|epowerrep|ac|ng10%of
tota|powergenerat|on
b
4,413 21,535 7.9
15 Effc|ent fans and AOs rep|ac|ng
100% of the |neffc|ent fans and AOs
|ntheres|dent|a|sector
628 22,163 11.1
16 Gas fred power p|ants w|th carbon
capture&storagerep|ac|ng5%of
tota|powergenerat|on
1,475 23,638 20.1
17 Effc|ent refr|gerator rep|ac|ng 100%
oftheconvent|ona|refr|gerator|nthe
res|dent|a|sector
258 23,896 20.9
18 Effc|ent fans rep|ac|ng 100% of
|neffc|ent fans |n the commerc|a|
sector
54 23,950 26.1
19 Effc|ent furnace rep|ac|ng 50% of
convent|ona|furnace|n|ronandstee|
|ndustry
210 24,159 33.4
20 Effc|ent fue| ce|| bus (5%} and ONG
buses(95%}rep|ac|ngconvent|ona|
d|ese|bus|nthetransportsector
668 24,828 41.3
21 Effc|ent techno|ogy rep|ac|ng 50% of
convent|ona|techno|ogy|nthetext||e
|ndustry
11 24,838 92.6
22 |ODTvrep|ac|ng50%ofthe
convent|ona|Tv|ntheres|dent|a|
sector
644 25,482 324.3
23 Effc|ent process techno|ogy rep|ac|ng
100%ofwetprocess|nthecement
|ndustry
51 25,533 500.0
AO = a|r cond|t|oner, OF| = compact fuorescent |amp, ONG = compressed natura| gas, OO2e=carbond|ox|deequ|va|ent,
GHG=greenhousegas,|OD=||qu|dcrysta|d|sp|ay,PJ=petajou|e,TJ=terajou|e,Tv=te|ev|s|on.
a
Thecumu|at|vepotent|a|herereferstothetota|amountofGHGem|ss|onabatementthatcou|dbeatta|ned|fa||opt|ons
w|th the rank of the part|cu|ar opt|on or h|gher are dep|oyed. For examp|e, the cumu|at|ve potent|a| fgure correspond|ng to
techno|ogyopt|onsuptoranknumber2meansthesumoftheGHGabatementpotent|a|softechno|ogyopt|onsranked
1and2.
b
lt |nc|udes power generat|on from a comb|nat|on of d|fferent renewab|e energy resources and cons|sts of 11.3 PJ from
b|omass,6.6PJfrommun|c|pa|so||dwaste,1.4PJfromso|arphotovo|ta|c,and3.6TJfromw|nd.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofBang|adesh(unpub||shedcountryreport}.
108 Append|x1
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OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 109
Bhutan
º Ünderthebasecase,tota|GHGem|ss|onswou|d|ncreasea|mostsevenfo|dat9%
OAGRtoreach2.9m||||ontOO
2
eby2030,w|ththetransportsectorcontr|but|ng
57.5%and|ndustrycontr|but|ng39.4%(F|gureA1.3}.
º W|thcarbontax,cumu|at|veGHGem|ss|onsdur|ng2005–2030wou|ddec||neby
averym|n|ma|0.07%(about20,000t}fromthebasecase|eve|.Thepowersector
wou|dcontr|buteabout91%|nthetota|GHGem|ss|onreduct|on,fo||owedbythe
transportsector.Th|sreduct|onfrompowergenerat|on|sma|n|ydueto|ncreased
hydroe|ectr|c|typroduct|on|n2030.
º A number of c|eaner techno|og|es and energy effc|ent opt|ons are found a|ready
costeffect|ve|nthebasecase,andw|||be|mportantGHGm|t|gat|onstrateg|es
evenw|thoutacarbontaxpo||cy.
º Approx|mate|y 64,000 t OO
2
e em|ss|ons (about 5.54% of tota| GHG em|ss|on}
cou|d be avo|ded |n 2020 at no add|t|ona| cost by dep|oy|ng seven “no-regret”
c|eaner opt|ons |n Bhutan (Tab|e A1.4}. Among 14 c|eaner techno|ogy opt|ons
eva|uated |n th|s study, rep|ac|ng 80% of res|dent|a| kerosene stoves w|th effc|ent
e|ectr|c stoves offers the h|ghest GHG abatement potent|a| of 18,600 t OO
2
e
em|ss|ons|n2020,andatnoadd|t|ona|cost(Tab|eA1.4andF|gureA1.4}.
Figure A1.3 Sectoral GHG Emissions under the Base Case
and Carbon-Tax Scenario, Bhutan
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofBhutan(unpub||shedcountryreport}.
500
0
1,000
1,500
2,000
2,500
3,000
Base Oarbon
Tax
Base Oarbon
Tax
Base
2005 2020 2030
t
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Power
Transport
Res|dent|a|
lndustry
Oommerc|a|
Agr|cu|ture
110 Append|x1
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OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 111
Table A1.4 Estimated Incremental Abatement Cost (IAC) and GHG Abatement Potential
of Different Cleaner Technology Options in Bhutan, 2020
Rank Cleaner Technology Options
Annual GHG
Abatement
Potential
(’000 tons CO2e)
Cumulative
Annual GHG
Abatement
Potential
a

(’000 tons CO2e)
Incremental
Abatement Cost
($ per ton CO2e)
1 Rep|ac|ng50%of|PGstovesby
e|ectr|cstoves|nres|dent|a|cook|ng
15.1 15.1 (72.8}
2 Rep|ac|ng50%of|PGstoves
bye|ectr|cstoves|ncommerc|a|
cook|ng
6.4 21.5 (62.7}
3 lncreas|ngtheshareofe|ectr|c
busesfrom10%to20%|nH|||
10.8 32.3 (46.4}
4 lncreas|ngtheshareofe|ectr|c
busesfrom10%to20%|nP|a|n
2.6 34.9 (37.8}
5 Rep|ac|ng80%ofkerosenestoves
bye|ectr|cstoves|nres|dent|a|
cook|ng
10.3 45.2 (29.2}
6 Rep|ac|ng80%ofkerosenestoves
bye|ectr|cstoves|nres|dent|a|
cook|ng
18.6 63.7 (21.5}
7 Rep|ac|ng15%ofd|ese|||ghtveh|c|e
bye|ectr|c||ghtveh|c|e
b
|nP|a|n
0.3 64.0 0.0
8 Rep|ac|ng30%ofgaso||netax|sby
e|ectr|ctax|s|nH|||
15.3 79.3 6.5
9 Rep|ac|ng30%ofgaso||netax|sby
e|ectr|ctax|s|nP|a|n
3.7 83.0 11.2
10 Rep|ac|ng15%ofgaso||ne||ght
veh|c|esbye|ectr|c||ghtveh|c|es|n
H|||
9.4 92.5 63.6
11 Rep|ac|ng15%ofd|ese|||ght
veh|c|esbye|ectr|c||ghtveh|c|es|n
H|||
1.2 93.6 86.8
12 Rep|ac|ng 50% of |neffc|ent arc
furnaces by effc|ent arc furnaces |n
|ronandstee||ndustry
10.1 103.7 89.0
13 Rep|ac|ng15%ofgaso||ne||ght
veh|c|esbye|ectr|c||ghtveh|c|es|n
P|a|n
2.2 106.0 89.0
14 Rep|ac|ng30%ofgaso||ne
2-whee|ersbye|ectr|c2-whee|ers
|nthetransportsector
0.5 106.4 416.7
(}=negat|ve,OO2e = carbon d|ox|de equ|va|ent, GHG = greenhouse gas, |PG = ||quefed petro|eum gas.
a
Thecumu|at|vepotent|a|herereferstothetota|amountofGHGem|ss|onabatementthatcou|dbeatta|ned|fa||opt|ons
w|th the rank of the part|cu|ar opt|on or h|gher are dep|oyed. For examp|e, the cumu|at|ve potent|a| fgure correspond|ng to
techno|ogyopt|onsuptoranknumber2meansthesumoftheGHGabatementpotent|a|softechno|ogyopt|onsranked1
and2.
b
||ghtveh|c|es|nc|udecars,jeeps,andvans.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofBhutan(unpub||shedcountryreport}.
112 Append|x1
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OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 113
The Maldives
º Ünderthebasecase,tota|GHGem|ss|onsfromenergyusewou|d|ncreaseabout
three-fo|dfrom679,000tOO
2
e|n2005to2.98m||||ontOO
2
eby2030,w|thmajor
contr|but|ons sh|ft|ng from the power sector |n 2005 to the transport sector |n
2030(F|gureA1.5}.
º W|thcarbontax,cumu|at|veGHGem|ss|onsdur|ng2005–2030wou|ddec||neby
0.41% (about 195,100 t OO
2
e} from the base case |eve|. The |ow |eve| of GHG
m|t|gat|onunderacarbontaxreg|me|sma|n|yduetothecountry’sre|at|ve|y|ow
w|ndpowerpotent|a|,wh|chwou|da|readybefu||yexp|o|ted|nthebasecase.That
|s,theMa|d|veshasnoadd|t|ona|scopeforw|ndpowertoreduceGHGem|ss|ons
underacarbon-taxscenar|ow|th|tscurrentw|ndpowerpotent|a|.
43
º Approx|mate|y 810 t OO
2
e em|ss|ons (about 0.05% of base case |eve|} cou|d
be avo|ded |n 2020 at no add|t|ona| cost by dep|oy|ng two “no-regret” c|eaner
and energy effc|ent opt|ons (Tab|e A1.6}. Among 17 c|eaner techno|ogy opt|ons
eva|uated,rep|ac|ng60%ofgaso||ne||ghtveh|c|esw|thgasoho|(E85}||ghtveh|c|es
offerstheh|ghestGHGabatementpotent|a|of13,792tOO
2
eem|ss|ons|n2020,
ata|ow|ncrementa|abatementcostof2005$1.04pertonOO
2
e(Tab|eA1.6and
F|gureA1.6}.
43
Th|sresu|t|sbasedoncurrent|yassessedva|ueofthew|ndpowerpotent|a||ntheMa|d|ves(|ysen2004}.
Shou|dtherebeareassessmentofw|ndpowerpotent|a||ead|ngtoan|ncrease|nthetota|amountofthe
poss|b|ew|ndpowergenerat|on,thescopeforGHGem|ss|onreduct|onwou|d|ncrease|nthebasecase
anda|soposs|b|yunderthecarbontaxscenar|o.
Figure A1.5 Sectoral GHG Emissions under the Base Case
and Carbon-Tax Scenario in the Maldives
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseoftheMa|d|ves(unpub||shedcountryreport}.
500
0
1,000
1,500
2,000
2,500
3,000
Base Oarbon
Tax
Base Oarbon
Tax
Base
2005 2020 2030
t
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s

C
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2
e
Power
Oommerc|a|
Res|dent|a|
lndustr|a|
Transportat|on
114 Append|x1
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OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 115
Table A1.6 Estimated Incremental Abatement Cost (IAC) and GHG Abatement Potential
of Different Cleaner Technology Options in the Maldives, 2020
Rank Cleaner Technology Options
Annual GHG
Potential
(’000 tons CO2e)
Cumulative
Annual GHG
Potential
a

(’000 tons CO2e)
Incremental
Abatement
Cost
(2005 $ per
ton CO2e)
1 Res|dent|a|so|arcook|ngstovesrep|ac|ng10%
ofkerosenecook|ngstoves
0.45 0.45 0.0
2 MSW-basedpowerp|antrep|ac|ng50%of
d|ese|powerp|ant|nTh||afush||s|and
0.36 0.81 0.0
3 Gasoho|(E85}
b
||ghtveh|c|esrep|ac|ng60%of
gaso||ne||ghtveh|c|es
c
13.79 14.60 1.0
4 B|omass-basedpowerp|antrep|ac|ng10%
ofd|ese|-basede|ectr|c|tygenerat|on|nnon-
Ste|cooperatedato||s
2.29 16.89 4.5
5 B|od|ese|(B10}
d
fsh|ng vesse|s rep|ac|ng 80%
of d|ese| fsh|ng vesse|s |n the |ndustry sector
7.73 24.62 8.8
6 Gasoho|(E85}two-whee|ersrep|ac|ng80%of
gaso||netwo-whee|ers
5.77 30.39 8.9
7 So|arPvpowerp|antrep|ac|ng5%ofd|ese|-
basede|ectr|c|tygenerat|on|nMa|eandv|||ng|||
6.29 36.68 33.3
8 So|ar/d|ese|hybr|d
e
e|ectr|c|tygenerat|on
techno|ogyrep|ac|ng10%ofd|ese|-based
e|ectr|c|ty|ndesa||nat|on|ndustry
2.08 38.76 41.0
9 So|arpowerede|ectr|cbusesrep|ac|ng10%of
thed|ese|buses
1.48 40.25 41.9
10 Effc|ent |ED |amps rep|ac|ng 50% of |neffc|ent
|amps|ntheres|dent|a|sector
1.40 41.64 49.3
11 So|ar/d|ese|hybr|de|ectr|c|tygenerat|on
rep|ac|ng10%ofd|ese|-basede|ectr|c|ty
generat|on|nresorts
28.69 70.33 141.5
12 B|od|ese|(B10}busesrep|ac|ng80%ofd|ese|
buses
0.22 70.55 197.1
13 So|ar/d|ese|hybr|dvesse|rep|ac|ng5%of
d|ese| fsh|ng vesse|s |n the fsh|ng |ndustry
5.38 75.93 250.3
14 B|od|ese|(B10}vesse|srep|ac|ng50%ofd|ese|
vesse|s|nthetransportsector
16.56 92.49 444.9
15 So|ar/d|ese|hybr|dvesse|rep|ac|ng5%of
d|ese|vesse|s|nthetransportsector
18.16 110.65 546.3
16 So|arhomesystem-based||ght|ngrep|ac|ng
10%of||ght|ngdemand|ntheres|dent|a|sector
1.40 112.04 590.1
OO2e = carbon d|ox|de equ|va|ent, GHG = greenhouse gas, |ED = ||ght-em|tt|ng d|ode, MSW = mun|c|pa| so||d waste,
Pv=photovo|ta|c.
a
The cumu|at|ve potent|a| here refers to the tota| amount of GHG em|ss|on abatement that cou|d be atta|ned |f a|| opt|ons
w|th the rank of the part|cu|ar opt|on or h|gher are dep|oyed. For examp|e, the cumu|at|ve potent|a| fgure correspond|ng to
techno|ogyopt|onsuptorankno.2meansthesumoftheGHGabatementpotent|a|softechno|ogyopt|onsranked1and2.
b
E85meansafue|m|xturew|th85%ethano|and15%d|ese|.
c
||ghtveh|c|esrefertoambu|ance,van,jeep,car,andtax|.
d
B10meansafue|m|xturew|th10%b|ofue|and90%d|ese|.
e
The cost of hybr|d vesse| |s 150.44 m||||on $/1,000 un|ts, wh|ch |nc|udes battery cost of 69,444.4 m||||on $/PJ. The effc|ency
ofthevesse||s498,000numberofun|ts/PJ.(Source:EavesandEaves2004}.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseoftheMa|d|ves(unpub||shedcountryreport}.
116 Append|x1
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OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 117
Nepal
º Ünderthebasecase,tota|GHGem|ss|onsfromenergyusewou|d|ncreasefrom
about 5.4 m||||on t OO
2
e |n 2005 to 13.5 m||||on t OO
2
e |n 2030, refect|ng the
country’srap|dgrowth|nfoss||fue|consumpt|on.Theres|dent|a|,transport,and
|ndustr|a| sectors are the three |argest GHG em|tters, w|th the top rank sh|ft|ng
fromres|dent|a|sectortothetransportsector|n2030(F|gureA1.7}.
º W|thcarbontax,cumu|at|veGHGem|ss|onsdur|ng2005–2030wou|ddec||neby
1%(about2.0m||||ontOO
2
e}fromthebasecase|eve|,wh||etheGHGem|ss|ons
|n2030wou|dbereducedby2.8%(376,000tOO
2
e}.Thetransportsectorwou|d
contr|butethemajor|ty(63.1%}ofthecumu|at|vereduct|on|nGHGem|ss|ons.
º Approx|mate|y345,000tOO
2
eem|ss|ons(about0.05%ofbasecase|eve|}cou|d
beavo|ded|n2020atnoadd|t|ona|costbydep|oy|ngs|x“no-regret”c|eanerand
energy effc|ent opt|ons (Tab|e A1.8}. Among 13 opt|ons eva|uated, rep|ac|ng 50%
ofkerosene|ampsw|thso|arhomesystem-based||ght|ngofferstheh|ghestGHG
abatementpotent|a|of242,000tOO
2
eem|ss|ons|n2020,atthe|owestpos|t|ve
|ncrementa|abatementcostof2005$6.37pertonOO
2
eabated(Tab|eA1.8and
F|gureA1.8}.
Figure A1.7 Sectoral GHG Emissions under the Base Case
and Carbon-Tax Scenario in Nepal
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofNepa|(unpub||shedcountryreport}.
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OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 119
Table A1.8 Estimated Incremental Abatement Cost (IAC) and GHG Abatement Potential
of Different Cleaner Technology Options in Nepal, 2020
Rank Cleaner Technology Options
Annual GHG
Potential
(’000 tons CO2e)
Cumulative
Annual GHG
Potential
a

(’000 tons CO2e)
Incremental
Abatement
Cost
(2005 $ per
ton CO2e)
1 Effc|ent stoves rep|ac|ng 50% of the
trad|t|ona|woodstoves|nres|dent|a|cook|ng
163 163 (137.17}
2 Oommerc|a|e|ectr|cstoves/ovensrep|ac|ng
50%ofkerosenestoves
77 239 (42.80}
3 Res|dent|a|e|ectr|ccook|ngrep|ac|ng50%of
kerosenecook|ng
48 288 (42.38}
4 Res|dent|a|e|ectr|cwaterheatersrep|ac|ng
40%ofkerosenewaterheaters
22 309 (42.32}
5 Oommerc|a|e|ectr|cwaterheatersrep|ac|ng
40%ofkerosenewaterheaters
24 333 (32.93}
6 Effc|ent d|ese| bo||ers rep|ac|ng 50% of
convent|ona|d|ese|bo||ers|nthe|ndustr|a|
sector
12 345 (29.41}
7 So|arhomesystem-based||ght|ngrep|ac|ng
50%ofkerosene|amps
b
242 587 6.37
8 M|crohydropower-based||ght|ngrep|ac|ng
25%ofkerosene|amps
b
72 660 68.07
9 Hybr|dcarsrep|ac|ng30%ofgaso||ne/d|ese|
cars|ntheKathmanduva||ey
c
39 699 89.33
10 Hybr|dtrucksrep|ac|ng30%ofd|ese|trucks
|ntheKathmanduva||ey
c
17 716 103.92
11 E|ectr|cbuses(batterystorage}rep|ac|ng
20%ofd|ese|busserv|ce|nKathmandu
6 722 118.39
12 Res|dent|a|e|ectr|cspaceheatersrep|ac|ng
50%ofkerosenespaceheaters
62 784 118.77
13 E|ectr|cra||waysmeet|ng25%ofbus
serv|cesdemand|ntherestofNepa|(|.e.,
exc|ud|ngtheKathmanduva||ey}
d
52 836 335.88
(}=negat|ve,OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
a
Thecumu|at|vepotent|a|herereferstothetota|amountofGHGem|ss|onabatementthatcou|dbeatta|ned|fa||opt|ons
w|th the rank of the part|cu|ar opt|on or h|gher are dep|oyed. For examp|e, the cumu|at|ve potent|a| fgure correspond|ng
totechno|ogyopt|onsuptorankno.2meansthesumoftheGHGabatementpotent|a|softechno|ogyopt|onsranked1
and2.
b
Kerosene |amp |s cons|dered to be subst|tuted by 13-W compact fuorescent |amp bu|bs for so|ar home system and 40-W
|ncandescentbu|bform|cro-hydro-based||ght|ng.
c
Hybr|dtrucksandcarscons|deredherearebasedon50%e|ectr|c|tyand50%d|ese|.
d
E|ectr|cpassengerra||way|sassumedtooperateatanaveragespeedof100km/h,seat|ngcapac|tyof525per|ocomot|ve
andoccupancyrateof60%.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofNepa|(unpub||shedcountryreport}.
120 Append|x1
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OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 121
Sri Lanka
º Ünderthebasecase,theest|matedannua|tota|GHGem|ss|onswou|d|ncrease
fve-fo|d from 10.5 m||||on t OO
2
e|n2005to57.1m||||ontOO
2
e |n 2030, refect|ng
the country’s rap|d growth |n foss|| fue| consumpt|on. The transport and power
sectorsaccountforthebu|koftheseem|ss|ons|nbothyears(F|gureA1.9}.
º W|th carbon tax, cumu|at|ve GHG em|ss|ons dur|ng 2005–2030 wou|d dec||ne
by 21.8% (186 m||||on t OO
2
e} from the base case |eve|. GHG em|ss|ons from
the|ndustr|a|andpowersectors|n2030wou|dbereducedby11.4%and46%
respect|ve|y. The power sector wou|d contr|bute 96% |n the reduct|on of GHG
em|ss|ons,wh||etheres|dent|a|,commerc|a|,andagr|cu|tura|sectorswou|dhave
neg||g|b|eshares.
º Approx|mate|y 2.46 m||||on t OO
2
e em|ss|ons cou|d be avo|ded |n 2020 at no
add|t|ona| cost by dep|oy|ng 10 'no-regret" c|eaner and energy effc|ent opt|ons
(Tab|e A1.10}. Among 19 opt|ons eva|uated, rep|ac|ng convent|ona| coa|-based
powergenerat|onw|tha300-MWcapac|tyofcarboncaptureandstorage(OOS},
lntegrated Gas|fcat|on Oomb|ned Oyc|e, at a |ow |ncrementa| abatement cost of
about2005$6.00pertonOO
2
eabated(Tab|eA1.10andF|gureA1.10}.
Figure A1.9 Sectoral GHG Emissions under the Base Case
and Carbon-Tax Scenario in Sri Lanka
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofSr||anka(unpub||shedcountryreport}.
10
0
20
30
50
40
60
Base Oarbon
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2005 2020 2030
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Agr|cu|ture
Oommerc|a|
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lndustry
PowerGenerat|on
Transport
122 Append|x1
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.
OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nEnergy-Üs|ngAct|v|t|esandKeySectors 123
Table A1.10 Estimated Incremental Abatement Cost (IAC) and GHG Abatement Potential
of Different Cleaner Technology Options in Sri Lanka, 2020
Rank Cleaner Technology Options
Annual GHG
Abatement
Potential
(’000 tons CO2e)
Cumulative
Annual GHG
Abatement
Potential
a

(’000 tons CO2e)
Incremental
Abatement
Cost
($ per ton
CO2e)
1 Effc|ent d|ese| trucks rep|ac|ng 10% of convent|ona|
d|ese|trucks
287.7 287.7 (65}
2 Effc|ent e|ectr|c motors rep|ac|ng 80% of
convent|ona|e|ectr|cmotors|n|ndustrysector
175.3 463.0 (64}
3 Effc|ent fue| o|| bo||ers rep|ac|ng 20% of convent|ona|
fue|o||bo||ers|n|ndustrysector
100.4 563.4 (42}
4 Effc|ent d|ese| buses rep|ac|ng 50% of convent|ona|
d|ese|buses
166.5 729.9 (38}
5 Effc|ent refr|gerator rep|ac|ng 80% of convent|ona|
refr|gerator|nres|dent|a|sector
1,143.9 1,873.8 (31}
6 Effc|ent AO rep|ac|ng 80% of convent|ona| AO |n
res|dent|a|sector
455.3 2,329.1 (25}
7 Effc|ent AO rep|ac|ng 80% of convent|ona| AO |n
commerc|a|sector
97.2 2,426.3 (21}
8 Effc|ent d|ese| tractor rep|ac|ng 80% of convent|ona|
d|ese|tractors|nagr|cu|tura|sector
0.8 2,427.1 0
9 Effc|ent OF|s rep|ac|ng 70% of convent|ona| |amps
(|ncandescent, fuorescent and kerosene |amps} |n
theres|dent|a|sector
35.4 2,462.5 0
10 B|od|ese| fsh|ng boats rep|ac|ng 20% of d|ese|
fsh|ng boats |n the agr|cu|tura| sector
0.01 2,462.5 0
11 A80-MWMSW-basedpowergenerat|onrep|ac|ng
3%offoss||fue|-basedconvent|ona|power
generat|on
1,126.6 3,589.1 5
12 A300-MWcapac|tyadd|t|onoflntegrated
Gas|fcat|on Oomb|ned Oyc|e w|th OOS rep|ac|ng
convent|ona|coa|-basedpowergenerat|on
2,052.2 5,641.3 6
13 Effc|ent fan rep|ac|ng 80% of convent|ona| fan |n
res|dent|a|sector
45.6 5,686.9 13
14 Effc|ent |PG stoves rep|ac|ng 10% of kerosene
stoves|ntheres|dent|a|sector
93.8 5,780.7 19
15 Effc|ent fan rep|ac|ng 80% of convent|ona| fan |n the
|ndustrysector
9.6 5,790.3 21
16 A100-MWso|artherma|capac|tyadd|t|onrep|ac|ng
9%ofpowergenerat|on
241.6 6,031.9 89
17 Hybr|dbusesrep|ac|ng20%ofd|ese|buses 60.9 6,092.8 184
18 |ED|ampsrep|ac|ng10%of|ncandescent|amps|n
theres|dent|a|sector
1.0 6,093.8 192
19 Effc|ent |PG water bo||ers rep|ac|ng 40% of
convent|ona|fue|o||bo||ers|ncommerc|a|sector
92.1 6,185.9 193
( } = negat|ve, AO = a|r cond|t|oner, OOS = carbon capture and storage, OF| = compact fuorescent |amp, OO2e=carbon
d|ox|de equ|va|ent, GHG = greenhouse gas, |ED = ||ght-em|tt|ng d|ode, |PG = ||quefed petro|eum gas, MSW = mun|c|pa|
so||dwaste,MW=megawatt.
a
Thecumu|at|vepotent|a|herereferstothetota|amountofGHGem|ss|onabatementthatcou|dbeatta|ned|fa||opt|ons
w|th the rank of the part|cu|ar opt|on or h|gher are dep|oyed. For examp|e, the cumu|at|ve potent|a| fgure correspond|ng
totechno|ogyopt|onsuptorankno.2meansthesumoftheGHGabatementpotent|a|softechno|ogyopt|onsranked1
and2.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofSr||anka(unpub||shedcountryreport}.
124 Append|x1
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Appendix 2
&RXQWU\6XPPDULHVv*+*(PLVVLRQ
Abatement Options and Costs
in Activities Not Using Energy
GHG Emissions in 2005–2030
Bangladesh
º Tota|greenhousegas(GHG}em|ss|onswou|d|ncreasebyaround33%from48
m||||ontonscarbond|ox|deequ|va|ent(tOO
2
e}|n2005toto64m||||ontOO
2
e|n
2030, of wh|ch 85.3% wou|d come from the agr|cu|ture sector. The shares of
the waste d|sposa| and |ndustr|a| processes sectors |n the country’s tota| GHG
em|ss|onswou|d|ncreasedur|ngtheper|od,wh||ecarbonsequestrat|onfromthe
forestrysectorwou|ddec||nebyabout11.2%.
º Among act|v|t|es w|th|n the agr|cu|tura| sector, methane em|ss|ons from r|ce
cu|t|vat|oncontr|butethemajorshare,a|thoughby2030theywou|dbesurpassed
byem|ss|onsfrom||vestockenter|cfermentat|on.
º GHGem|ss|onsfrom|ndustr|a|processeswou|dr|seby138%dur|ng2005–2030,
mostofwh|chwou|dcomefromammon|aproduct|on.
Figure A2.1 GHG Emissions by Sector, Bangladesh, 2005–2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofBang|adesh(unpub||shedcountryreport}.
10
-10
0
20
30
50
40
70
60
m
i
l
l
i
o
n

t
o
n
s

C
O
2
e
lndustr|a|
Processes
Waste
Forestry
Agr|cu|ture
2005 2010 2015 2020 2025 2030
126 Append|x2
Bhutan
º Tota|GHGem|ss|onsfromact|v|t|esnotus|ngenergy(exceptforestrysector}wou|d
|ncreaseby381%from712,000tOO
2
e|n2005to3.43m||||ontOO
2
e|n2030.
The share of |ndustr|a| processes wou|d s|gn|fcant|y |ncrease from 39% |n 2005 to
69%|n2030,wh||ethoseofagr|cu|tureandwasted|sposa|sectorswou|ddec||ne.
Oarbonsequestrat|onfromtheforestrysectorwou|d|ncreasebyabout21.8%.
º Dur|ngthebaseyear,the|argestGHGem|ss|onsfromtheagr|cu|tura|sectorare
seencom|ngfromenter|cfermentat|onandr|cecu|t|vat|on.
º From the |ndustr|a| processes sector, the |argest OO
2
em|ss|ons wou|d come
from cement product|on, w|th grow|ng contr|but|on from ca|c|um carb|de and
ferros|||conproduct|on.
Figure A2.2 GHG Emissions by Sector, Bhutan, 2005–2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofBhutan(unpub||shedcountryreport}.
-20,000
-15,000
-5,000
-10,000
5,000
0
t
h
o
u
s
a
n
d

t
o
n
s

C
O
2
e
lndustr|a|
Processes
Waste
Forestry
Agr|cu|ture
2005 2010 2015 2020 2025 2030
OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nAct|v|t|esNotÜs|ngEnergy 127
Nepal
º Tota|GHGem|ss|onsfromact|v|t|esnotus|ngenergy(exceptforestrysector}wou|d
|ncreaseby49%from13.8m||||ontOO
2
e|n2005to20.6m||||ontOO
2
e|n2030.
Theshareof|ndustr|a|processeswou|d|ncreasefrom1%|n2005to6%|n2030,
wh||e that of the agr|cu|ture sector wou|d dec||ne; contr|but|ons from the waste
d|sposa|sectorwou|drema|nre|at|ve|ystab|eataround1%.Oarbonsequestrat|on
fromtheforestrysectorwou|ddec||nebyabout15.8%dur|ngtheper|od.
º The |argest GHG em|ss|ons from the agr|cu|tura| sector are seen com|ng from
enter|cfermentat|onandr|cecu|t|vat|on,w|them|ss|onsfrommanuremanagement
andagr|cu|tura|so||sexpectedtogradua||y|ncreaseunt||2030.
º OO
2
em|ss|onsfromcementproduct|onareexpectedtogroww|ththeant|c|pated
growth |n gross domest|c product. lt |s est|mated to |ncrease by 583%, from
168,000tOO
2
e|n2005to1.14m||||ontOO
2
e|n2030.
Figure A2.3 GHG Emissions by Sector, Nepal, 2005–2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofNepa|(unpub||shedcountryreport}.
t
h
o
u
s
a
n
d

t
o
n
s

C
O
2
e
lndustr|a|
Processes
Waste
Forestry
Agr|cu|ture
20,000
15,000
10,000
5,000
0
5,000
10,000
15,000
20,000
25,000
2005 2010 2015 2020 2025 2030
128 Append|x2
Sri Lanka
º Tota| GHG em|ss|ons from act|v|t|es not us|ng energy wou|d |ncrease from
9.4 m||||on t OO
2
e |n 2005 to 19.3 m||||on t OO
2
e |n 2030 (or by around 106%}
dur|ng2005–2030.Theshareof|ndustr|a|processeswou|d|ncreasea|most10-
fo|d, prov|d|ng 25% of tota| GHG em|ss|ons |n 2030. GHG em|ss|ons from the
agr|cu|turesectorwou|ddec||ne,wh||ethosefromthewasted|sposa|sectorwou|d
rema|nre|at|ve|ystab|eataround600,000tOO
2
edur|ngtheper|od.Theshareof
theforestrysector|ntota|GHGem|ss|onswou|d|ncreasefrom37%|n2005to
39%|n2030.
º lntheagr|cu|tura|sector,r|cecu|t|vat|on,enter|cfermentat|on,andagr|cu|tura|so||s
wou|dbethe|argestGHGem|tters,w|them|ss|onsfrommanuremanagementand
fe|d burn|ng of agr|cu|tura| res|dues expected to gradua||y |ncrease unt|| 2030.
º Fromthe|ndustr|a|processessector,the|argestOO
2
em|ss|onswou|dcomefrom
c||nker and ||me product|on, fo||owed by stee| product|on. The contr|but|on of
c||nkerand||meproduct|ontothesector’stota|GHGem|ss|ons|nSr||ankawou|d
|ncreasefrom83%|n2005to99%|n2030.
Figure A2.4 GHG Emissions by Sector, Sri Lanka, 2005–2030
OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source:Reg|ona|Econom|csofO||mateOhange|nSouthAs|a(Partl:StudyofO|eanerTechno|og|esand
Opt|ons}[REOOSA1|—TheOaseofSr||anka(unpub||shedcountryreport}.
m
i
l
l
i
o
n

t
o
n
s

C
O
2
e
lndustr|a|
Processes
Waste
Forestry
Agr|cu|ture
0
4
8
12
16
20
2005 2010 2015 2020 2025 2030
OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nAct|v|t|esNotÜs|ngEnergy 129
GHG Emission Reduction Potential
and Abatement Costs in 2020
Bangladesh
Sector/Abatement Option
Total GHG
Abatement
Potential
2005–2030
(ton CO2e)
GHG
Abatement
Potential in
2020
(ton CO2e)
Incremental
Abatement
Cost
($ per ton CO2e)
Agriculture
1. Ürea-mo|assesmu|t|-nutr|entb|ocks(ÜMMB} 490,442 20,770 14.16
2. Ürea-treatedstraw(ÜTS}feed|ngfor|oca|
(|nd|genous}da|rycatt|e
1,374,723 58,219 45.99
3. F|oodregu|at|onthroughmu|t|p|eaerat|ons 729,837 30,740 13.26
4. Dra|n|ng fe|ds tw|ce |n ra|nfed, food-prone, and
deepwater(50–100cmwater|eve|}r|ce|and
6,493,586 275,042 15.72
Forestry
5. Oonserv|ngex|st|ngcarbonpoo|s/s|nks – 1,096,778 0.58
6. Expand|ngtheamountofcarbonstored(stocks} – 4,621,878 14.71
Waste Generation
7. Recyc||ng – 508,781 3.79
8. Oompost|ngofmun|c|pa|so||dwastes(MSW} – 737,473 1.20
Industrial Processes
9. Post-combust|oncarboncaptureandstorage
(OOS}|ncementproduct|on
– 390,467 155.78
10. Oxy-combust|onOOS|ncementproduct|on – 263,692 153.74
–=noana|ys|s,OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofBang|adesh(unpub||shedcountryreport}.
130 Append|x2
Bhutan
Sector/Abatement Option
Total GHG
Abatement
Potential
2005–2030
(ton CO2e)
GHG
Abatement
Potential in
2020
(ton CO2e)
Incremental
Abatement
Cost
($ per ton CO2e)
Agriculture
1. Ürea-mo|assesmu|t|-nutr|entb|ocks(ÜMMB} 12,175 1,624 13.50
2. Ürea-treatedstraw(ÜTS}feed|ngfor|oca|
(|nd|genous}da|rycatt|e
56,664 2,039 43.66
3. F|oodregu|at|onthroughmu|t|p|eaerat|ons 91,371 3,848 4.21
4. Dra|n|ng fe|ds tw|ce |n ra|nfed, food-prone, and
deepwater(50–100cmwater|eve|}r|ce|and
– – –
Forestry
5. Oonserv|ngex|st|ngcarbonpoo|s/s|nks – 464,446 194.79
6. Expand|ngtheamountofcarbonstored
(stocks}
– 31,210 642.96
Waste Generation
7. Recyc||ng – 11,146 1.18
8. Oompost|ngofmun|c|pa|so||dwastes(MSW} – 16,156 0.42
Industrial Processes
9. Post-combust|oncarboncaptureandstorage
(OOS}|ncementproduct|on
– 383,845 139.05
10. Oxy-combust|onOOS|ncementproduct|on – 259,220 137.24
–=noana|ys|s,OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofBhutan(unpub||shedcountryreport}.
OountrySummar|es—GHGEm|ss|onAbatementOpt|onsandOosts|nAct|v|t|esNotÜs|ngEnergy 131
Nepal
Sector/Abatement Option
Total GHG
Abatement
Potential
2005–2030
(ton CO2e)
GHG
Abatement
Potential in
2020
(ton CO2e)
Incremental
Abatement
Cost
($ per ton CO2e)
Agriculture
1. Ürea-mo|assesmu|t|-nutr|entb|ocks(ÜMMB} 1,219,911 48,941 13.67
2. Ürea-treatedstraw(ÜTS}feed|ngfor|oca|
(|nd|genous}da|rycatt|e
– – –
3. F|oodregu|at|onthroughmu|t|p|eaerat|ons 21,138,621 849,080 3.01
4. Dra|n|ng fe|ds tw|ce |n ra|nfed, food-prone, and
deepwater(50–100cmwater|eve|}r|ce|and
– – –
Forestry
5. Oonserv|ngex|st|ngcarbonpoo|s/s|nks – 8,913,098 1.17
6. Expand|ngtheamountofcarbonstored
(stocks}
– 30,133 38.62
Waste Generation
7. Recyc||ng – 18,027 3.32
8. Oompost|ngofmun|c|pa|so||dwastes(MSW} – 26,130 0.59
Industrial Processes
9. Post-combust|oncarboncaptureandstorage
(OOS}|ncementproduct|on
– 390,467 155.78
10. Oxy-combust|onOOS|ncementproduct|on – 263,692 153.74
–=noana|ys|s,OO2e=carbond|ox|deequ|va|ent,GHG=greenhousegas.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofNepa|(unpub||shedcountryreport}.
132 Append|x2
Sri Lanka
Sector/Abatement Option
Total GHG
Abatement
Potential
2005–2030
(ton CO2e)
GHG
Abatement
Potential in
2020
(ton CO2e)
Incremental
Abatement
Cost
($ per ton CO2e)
Agriculture
1. Ürea-mo|assesmu|t|-nutr|entb|ocks(ÜMMB} 273,038 29,810 14.66
2. Ürea-treatedstraw(ÜTS}feed|ngfor|oca|
(|nd|genous}da|rycatt|e
– – –
3. F|oodregu|at|onthroughmu|t|p|eaerat|ons 1,174,117 49,452 25.03
4. Dra|n|ng fe|ds tw|ce |n ra|nfed, food-prone, and
deepwater(50–100cmwater|eve|}r|ce|and
– – –
Forestry
5. Oonserv|ngex|st|ngcarbonpoo|s/s|nks – 4,966,190 4,81
6. Expand|ngtheamountofcarbonstored
(stocks}
– 3,438,966 20.65
Waste Generation
7. Recyc||ng – 82,309 5.48
8. Oompost|ngofmun|c|pa|so||dwastes(MSW} – 119,307 1.98
Industrial Processes
9. Post-combust|oncarboncaptureandstorage
(OOS}|ncementproduct|on
– 390,467 155.78
10. Oxy-combust|onOOS|ncementproduct|on – 263,692 153.74
–=noana|ys|s,OO2e = carbon d|ox|de equ|va|ent; GHG = greenhouse gas.
Source: Reg|ona| Econom|cs of O||mate Ohange |n South As|a (Part l: Study of O|eaner Techno|og|es and Opt|ons}
[REOOSA1|—TheOaseofSr||anka(unpub||shedcountryreport}.
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Economics of Reducing Greenhouse Gas Emissions in South Asia
Options and Costs
Against a backdrop of increasing emission of greenhouse gases (GHGs) that are responsible
for global climate change, the South Asia developing member countries (DMCs) of the Asian
Development Bank have been witnessing a steady rise in fossil fuels and energy consumption
and demand, keeping pace with their economic growth. The region’s major challenge is
how to achieve sustained and rapid economic growth for reducing poverty while reducing
the overall intensity of energy use, increasing energy efficiency, and substituting to cleaner
energy. This report synthesizes the results of national studies on options and costs of
reducing GHG emissions in five South Asia DMCs—Bangladesh, Bhutan, the Maldives, Nepal,
and Sri Lanka. It examines the economics of cleaner technologies that promote low-carbon
development and climate change mitigation, identifies constraints and barriers that reduce
incentives to invest in GHG emission-reducing technologies, and recommends actions and
enabling conditions to overcome the barriers.
About the Asian Development Bank
ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing
member countries reduce poverty and improve the quality of life of their people. Despite
the region’s many successes, it remains home to two-thirds of the world’s poor: 1.7 billion
people who live on less than $2 a day, with 828 million struggling on less than $1.25 a day.
ADB is committed to reducing poverty through inclusive economic growth, environmentally
sustainable growth, and regional integration.
Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main
instruments for helping its developing member countries are policy dialogue, loans, equity
investments, guarantees, grants, and technical assistance.
Asian Development Bank
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
www.adb.org
Printed on recycled paper. Printed in the Philippines

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