Nepal

Overall rating
Almost Sufficient
Policies & action
1.5°C Paris Agreement compatible
< 1.5°C World
Internationally supported target
Critically insufficient
4°C+ World
Fair share target
1.5°C Paris Agreement compatible
< 1.5°C World
Cimate finance
Not applicable
Net zero target

year

N/A

Comprehensiveness not evaluated as

Assessment in progress
Land use & forestry

impact on overall emissions is

Relevant

Historical emissions

The historical dataset between 1990 and 2000 is based on Nepal’s Second National Communication (Government of Nepal, 2014). Emissions levels for 2011 were taken from Nepal’s GHG inventory for the Third National Communication (Tribhuvan University, 2019). Values between 2000 and 2011 were interpolated. Finally, an independent study carried out to estimate Nepal’s energy-related emission inventory (NEEMI) for the period 2011–2016 was used to complement the data series until 2016. For non-energy related emissions, we extended the trend of development of emissions in the past five years, based on the National Communication scenarios (Sadavarte, P., 2019).

We took the 1994 and 2000 LULUCF values from the GHG emissions profiles for Non-Annex I countries (UNFCCC, 2015); and the 2011 LULUCF value from Nepal’s GHG inventory for the Third National Communication (Tribhuvan University, 2019).

NDC and other targets

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.

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.

Current policy projections

The current policy scenario is based on projections from Nepal’s Second National Communication for energy, industry, agriculture and waste sectors (Government of Nepal, 2014). The National Communication sketches three scenarios (Business-As-Usual (BAU); medium growth (MG); high growth (HG)) of which two –BAU and medium growth– were used to form a range. The high growth scenario was disregarded since it assumes an annual GDP growth rate of 10% which is not in line with projections from the International Monetary Fund (IMF) for Nepal and seems unrealistic given an average GDP growth rate of approximately 4% in the period between 2006 and 2015 GDP (IMF, 2018). The National Communication’s BAU scenario assumes 4.63% GDP growth per year, and the medium growth scenario assumes 5% per year. Both scenarios’ projections (BAU and medium growth) for 2030 were harmonised to the latest available historical data point (2016). Given that the NEEMI study used to extend the historical data series until 2016 reports higher emission levels between 2011-2016, our emissions level for 2030 is higher than the one reported in Nepal’s Second National Communication.

COVID-19 impact

We applied a novel method to estimate the COVID-19 related dip in greenhouse gas emissions in 2020 and its impact until 2030. The uncertainty surrounding the severity and length of the pandemic creates a new level of uncertainty for current and future emissions. We first updated the current policy projections as described in the section above and distilled the emission intensity (GHG emissions/GDP) from this pre-pandemic scenario taking the GDP growth rates until 2030 as reported in Nepal’s Second National Communication. We then replaced those GDP growth rates with the most recent GDP projections that take into account the effect of the pandemic in the economy.

We took into account projections from the World Bank, which expect a 1.8% GDP growth in 2020 and 2.1% in 2021; the most recent GDP projections from the IMF, expecting no GDP growth during 2020 and a 2.5% growth rate in 2021; and projections from the Asian Development Bank (ADB), based on Central Bureau of Statistics, which expect a 2.3% GDP growth in 2020 and 1.5% in 2021. We used all these to create the emissions range of current policy projections (ADB, 2020; IIASA, 2018; IMF, 2018; World Bank, 2020a). To complete the time series for GDP projections until 2030, we use the pre-COVID-19 growth rates as reported in the Second National Communication for the two scenarios we initially looked at (BAU and medium growth). While the ADB reported its GDP projections in fiscal years, emissions are normally reported on calendar years. Given the limited data available, we assumed the GDP projections would apply to the corresponding calendar year.

Global warming potentials

The CAT uses Global Warming Potential (GWP) values from the IPCC's Fourth Assessment Report (AR4) for all its figures and time series. Assessments completed prior to December 2018 (COP24) used GWP values from the Second Assessment Report (SAR).

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