Climate Action South Asia: Information Update No. 2: Economics of Reducing Greenhouse Gas Emissions in South Asia: Options and Costs

Abstract

The study Economics of Reducing Greenhouse Gas Emissions: Options and Costs in Bangladesh, Bhutan, the Maldives, Nepal, and Sri Lanka reveals excellent opportunities in low-carbon green growth by pursuing resource- and energy efficient technologies that would lower emissions of greenhouse gases at low cost (≤ $10 per ton) or even cost saving (benefits). These technologies range from solar cooking utensils to electric and more efficient diesel vehicles and use of solid waste for fuel. They could reduce greenhouse gas (GHG) emissions by a fifth by 2020, relative to base case for that year. Introduction of a climate policy based on stabilizing global GHG concentrations through a carbon tax would further lower emissions, for example, by more than 22% at a carbon price of $41 per ton by 2030. Policy and regulatory barriers, perverse subsidies on conventional fossil fuels, and uncertain future carbon price currently reduce incentives to invest in GHG emission-reducing technologies. However, these barriers can be overcomed through various enabling policies and measures, such as: promoting research and development; building capacity; establishing a sound regulatory framework for renewable energy (RE); providing incentives to clean technology and RE users and producers; promoting industry self-regulation and voluntary arrangements; and enhancing regional energy development and trade.