Designing Effective Subsidies, A
case study of
Nepal's Biogas Support Program (BSP)
THE NETHERLANDS DEVELOPMENT
Organization, has been awarded Climate Technology
award for making outstanding contributions
in the protection of environment. About
60,000 biogas plants have been built and are
in operation in Nepal.
According to Biogas Support Program, a joint
venture between Nepal government, SNV and
GTZ, nearly 50 companies aim at installing
100,000 biogas plants within the next six
years. The biogas plants installed so far
have saved 142,500 tons of fuelwood and 25,000
tons of dried cow dung a year.
Nepalnews.com, February
2000
|
Nepal's Biogas Support Program (BSP) supports a subsidy
that varies in size according to the remoteness of the
region and size of the plant. "The subsidy has been
very effective at jump-starting the industry and leveraging
high quality installations and competition between many
suppliers. This resulted in the real price of biogas
dropping 20% between 1993 and 1998."
BSP is praised for its cost-effective program design;
US$103 for flat areas, $147 for hilly districts and
$176 for the remote hills (CRS). The financial incentives,
technical support provided to manufacturers and heightened
public demand helped increase the number of recognized
biogas companies from 1 in 1992 to about 46 today. Since
the policy's inception in 1992, these companies have
built more than 103,922 plants.
The success of BSP can be attributed to: the monitoring,
evaluation and quality control mechanism of the plants,
"active training of biogas technicians and skilled labor
" (UNESCAP), proper channeling of the subsidy and loan
money, and the manufacturers' use of a single quotation
to make the cost of a plant stable.
This program effectively enhanced the production and
use of a renewable resource. Biogas substituted energy
resources (i.e. firewood, dung, kerosene) that emitted
considerable carbon dioxide emissions and caused major
health problems. Replacing firewood use with biogas
also positively influenced social inequities by reducing
the time and hard labor women spend collecting firewood
for cooking and cleaning.
The BSP was implemented in 1992 by a joint effort between
the Nepalese government, Netherlands Development Organization
and Dutch Development Corporation, Agricultural Development
Bank of Nepal and the Gobar Gas Company (in Nepal).
Resources:
Center
for Resource Solutions
United Nations' analysis of BSP's success
Nepal's Biogas Program: Reason for Success in Nepal
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Updated: 2007/07/12
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