Nepal

On December 8, 2020 Nepal submitted its second NDC to the UNFCCC. This NDC represents a step forward from its predecessor, as it now contains quantitative activity-based and policy targets in key sectors, and for the first time, some of the energy-related targets are listed as an unconditional commitment. Nepal’s unconditional target is described below.

Energy generation:

1. By 2030, expand clean energy generation from approximately 1,400 MW to 15,000 MW. Of this, 5,000 MW will be built using national resources. The cost of achieving this unconditional target is estimated to be USD 3.4 billion.

The CAT usually rates a country’s unconditional target but given that Nepal’s second NDC does not have an economy-wide target that aggregates the impacts of the listed sectoral targets, we were unable to quantify its emissions impacts and therefore to rate it. Our analysis and rating for Nepal is based on its conditional targets.

We have estimated an emissions range for the conditional NDC based on the information available in the NDC submission. The sectoral targets, conditional on international support for financing, technology transfer and/or capacity building, are listed below:

Energy generation:

1. By 2030, expand clean energy generation from approximately 1,400 MW to 15,000 MW, of which 5-10% will be generated from mini and micro-hydro power, solar, wind and bioenergy.
2. By 2030, ensure 15% of the total energy demand is supplied from clean energy sources.

Transport:

1. By 2030, increase sales of e-vehicles to cover 90% of all private passenger vehicle sales, including two-wheelers and 60% of all four-wheeler public passenger vehicle sales.
2. By 2030, develop 200 km of the electric rail network to support public commuting and mass transportation of goods.

Residential sector:

1. By 2030, ensure 25% of households use electric stoves as their primary mode of cooking.
2. By 2025, install 500,000 improved cookstoves, specifically in rural areas.
3. By 2025, install an additional 200,000 household biogas plants and 500 large scale biogas plants.

Agriculture, Forestry and Other Land Use (AFOLU)

1. By 2030, maintain 45% of the total area of the country under forest cover (including other wooded land limited to less than 4%).
2. By 2030, manage 50% of Tarai and Inner Tarai forests and 25% of middle hills and mountain forests sustainably.

Waste:

1. By 2025, 380 million litres/day of wastewater will be treated before being discharged, and 60,000 cubic meters/year of faecal sludge will be managed.

According to our calculations, the new conditional NDC would reduce 1.9 – 5.6 MtCO₂e, leading to emissions levels between 69 - 76 MtCO₂e in 2030 depending on the interpretation of the sectoral targets and the overlaps with the energy sector targets (see assumptions below for more details). The sectoral targets were often presented as a reduction below BAU, but there was not enough data provided to allow us to calculate an economy wide BAU. The BAU projections reported in the NDC were not far from our own calculations for the “current policy” scenario -as described in our November assessment. We therefore used our “current policy” scenario as BAU for the calculations.

The NDC provided limited details on some of the sectoral target, so it was not possible to estimate the impact of all of them. In particular, the first ‘energy generation’ target (expand clean energy generation from 1,400 MW to 15,000 MW) and the second target for the transport sector (develop 200 km of the electric rail network) were not quantified. This means the total reduction under the conditional NDC could potentially be higher than our estimates (see assumptions below for details).

The emissions range we estimate for Nepal’s conditional target lands on the “1.5°C Paris Agreement compatible” rating; however, we have given Nepal a rating of "2°C compatible" given the conditionality of its targets. The “2°C compatible” rating indicates that Nepal’s climate commitment is within the range of what is considered to be a fair share of global effort but is not consistent with the Paris Agreement goal of limiting warming to 1.5°C. The first NDC did not provide enough information for us to quantify the emissions reduction impact of their sectoral targets, which is why we had not previously given Nepal a CAT rating.

The new NDC includes additional supporting targets, specifically for tourism and urban settlements which are identified as relevant sectors in the national context. Compared to the previous NDC, the second one clearly states its emissions coverage (CO₂, CH₄ and N₂O), sectoral coverage (all sectors) and its intention to further explore mitigation actions in sectors where no targets have been defined yet due to lack of data (e.g. electric railroads, solid waste management and industries), with the aim to later establish an economy-wide emissions target. The new NDC states that Nepal is in the process of formulating a long-term low greenhouse gas (GHG) emission development strategy to be ready this year and aiming to achieve net-zero GHG emissions by 2050.

Given that not enough data was provided in the NDC to allow us to calculate an economy wide BAU, we assumed the ‘BAU scenario’ as referred to in the NDC submission, to be the same as the ‘pre COVID-19 current policy projection’ that we estimated in our previous assessments of Nepal (in November 2020) which harmonises the last available estimates for the energy sector (input for the 3rd National Communication) to the projected growth rates published in the 2nd National Communication). The NDC provides emissions reduction estimates for some of the targets but given the limited information available on the assumptions behind those calculations, we estimated a range for the conditional NDC as follows:

• Upper end of the range: Taking into account only the emission reduction estimated for actions in the transport, residential and waste sectors. The assumption is that the reductions reported in the NDC for electrification in the transport and residential sectors already reflect the change in the energy mix (target of 15% energy demand from clean sources) and therefore the associated emissions reduction. Thus, the NDC could reduce emissions by 1.9 MtCO₂e in 2030, compared to BAU.
• Lower end of the range: Taking into account only the emission reduction from the second target for the ‘energy generation’ sector (15% of the total energy demand to be supplied with clean energy) and the reductions from the waste sector. The assumption is that the emissions reduction reported for transport and residential sector in the NDC represent only a part of the impact of this target and are included in the overall reduction calculated for the 15% target. We also assume that all clean energy would have an emission factor of zero MtCO₂e. Under these assumptions, we estimate that the NDC could reduce emissions by between 5 and 5.6 MtCO₂e in 2030. Given the limited data available, it was not possible to estimate the impact of the first target listed for the ‘energy generation’ (expand clean energy generation from 1,400 MW to 15,000 MW).

It was not possible to estimate the impact of all of the listed mitigation actions, which means the total reduction under the conditional NDC could potentially be higher than our estimates. The second NDC also includes separate targets for the forestry sector but these are not included in our calculations as the CAT assesses NDCs without emissions from the forestry sector.

Global Warming Potential (GWP) values

We assume Nepal is applying GWP values from the Second Assessment Report (SAR), in line with its previous National Communications and NDC submission. We have converted these values into those from the Fourth Assessment Report – as those are the values used across all CAT assessments.