A thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering

Thesis (M.Eng.) - Asian Institute of Technology

This study has examined least cost technology options to achieve specific em1ss1on mitigation target in 2020. Both supply and demand side options are considered in the study. The changes in supply side and demand side mixes at different C02 emission target are also considered in this study. The result shows that under different level emission target the effects of supply side options on reducing GHG emission is dominant. The total cost and marginal abatement cost increase with level of mitigation target. The results show that the highest marginal abatement cost would be US$ 1.2 per ton C02 reduction and the lowest one is estimated to be at around US$ 0.6 per ton C02 reduction. This study also analyzes changes in environment, fuel mix and technology mix at the selected carbon tax rates. The highest amount of avoided GHG emission can reach to 168 millions ton C02 equivalent at highest tax rate (US$ 200/tC). Change in pollutant emissions with introduction of carbon tax is decomposed into two effects: substitution in fuel consumption and efficiency improvement. The results show that the major effect is fuel substitution duiing the sub period 1995-2005. The rest of sub period the effect of efficiency improvement plays predominant role. However, this effect reduces over time of the planning horizon. The highest avoided capacity would be 0.32GW in 2020 at US$ 200/tC. The results show that as carbon tax rates increase from US$ 5/tC to US$ 200/tC, the capacity of coal based power plants reduce about 3% in 2015 and at the same rate in 2020.