Decarbonizing the Economy and Energy Transition

Decarbonizing Nepal’s economy and transitioning to a low-carbon energy system is crucial for achieving sustainable development and addressing climate change. Unlike industrialized countries, most greenhouse gas emissions in Nepal come from households and end users rather than industries, which have a minimal global carbon footprint. In 2011, Nepal emitted 32 MtCO2e, with current figures expected to be significantly higher. Energy transition in Nepal involves shifting from fossil fuels—such as oil, natural gas, and coal—to renewable sources like hydropower, wind, and solar energy, with the goal of achieving net-zero emissions.

Currently, Nepal’s energy mix is heavily reliant on biomass (69%), with petroleum products (17%), coal (7%), electricity (4%), and renewables (3%) making up the rest. The majority of energy consumption is residential (75%), followed by industrial (10%), transportation (10%), commercial (4%), and agricultural (1%). Reducing household emissions is vital to meet targets of decreasing fossil fuel dependency by 9% and increasing clean energy use to 15%. Nepal’s commitment is reflected in its Nationally Determined Contributions (NDCs) under the Paris Agreement, which require ongoing efforts to reduce carbon emissions and transition to cleaner energy sources.

Investment is crucial for Nepal to achieve its decarbonization goals. Recent technological advancements have improved the efficiency of electric cooking stoves to over 80%, compared to 50-60% for LPG stoves and around 10% for traditional firewood stoves. The government’s long-term strategy includes significant investments in clean energy technologies, such as 100% electric cooking and widespread electrification across sectors. The first and second NDCs outlined goals of reducing carbon-based fuel use by 50% in the transport sector by 2050, with estimated investment needs of up to 23% of GDP by 2050. These measures are essential for transitioning to a low-carbon economy and meeting Nepal’s climate targets.

Note: This article is from Nepal Infrastructure Summit 2022, for more information visit our page: https://nepalinfrastructuresummit.com.np/blog/decarbonizing-the-economy-and-energy-transition