Economy-wide implications of low carbon transport in Nepal

What is it about?

The study develops and uses a multi-sector, single region, recursive dynamic computable general equilibrium model of Nepal (Nepal-TRNSCGE) with technology level disaggregation in the transport and electricity sectors. The study indicates that under transport electrification scenarios consisting of 10% to 30% electrification of the transport sector as compared to the base case by 2050, the country would benefit economically with the value of cumulative undiscounted GDP increasing in the range of 2.6% to 3.1% and the value of cumulative undiscounted equivalent variation in income (household welfare) increasing in the range of 25.3% to 147.9% during 2005 to 2050. The policy would promote energy efficiency improvement and cleaner economic development with significant reduction in the energy intensity of GDP in the range of 3.1% to 4.1% and greenhouse gas intensity of GDP in the range of 4.7% to 7.1%. This highlights the potential role of low carbon electricity based transport in achieving the LCD path in the country. Introducing foreign direct investment would further increase GDP but reduce household welfare.

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Why is it important?

This highlights the potential role of low carbon electricity based transport in achieving the LCD path in the country. Introducing foreign direct investment would further increase GDP but reduce household welfare.