Economic and policy analysis of cleaner technologies for brick production in Nepal

Nepal has suffered heavily from local and transboundary air pollution, particularly PM2.5. Coal-fired brick production is one of the main sources of air pollution. The government has prioritized the agenda of reducing the air pollution from the brick industry, for which an economic analysis of adopting cleaner production technologies is imperative. This study analyzes the economics of various options to adopt cleaner technologies and reduce coal consumption to lower emissions from Nepal's brick industry. The results show that private costs of brick production vary from NRs 15.6 (US$ 0.12) per brick to NRs. 44.2 (US$ 0.34) per brick, depending on production technologies. If costs of externalities of major local air pollutant, PM2.5, and global emission, CO2, are accounted for, social costs or the sum of private and externality costs, of brick production would be 18 %–131 % higher than the private costs depending upon the production technologies. A 50 % hike in coal prices would increase brick prices from 11 % to 35 %. Similarly, brick production costs would increase by 2 %–6 % at a US$10/tCO2 carbon tax and 12 %–36 % at a US$100/tCO2 carbon tax. Brick production costs would drop if wood pellets were mixed with coal, partially replacing it. At current prices, an equal mixing of coal and wood pellets would reduce production costs by 13 % in zigzag kilns. Findings of the study imply that increased coal pricing either through increased import duty or introduction of a carbon tax, and substitution of coal with pellets or co-firing provisions, and increased use of non-fired or alternative bricks would be desired policy options to reduce coal consumption in the brick industry in Nepal. However, implementation of these policies requires the availability of lower-cost clean alternatives by altering existing policies in the supply chain, particularly forest policies. Additional promotional policies, such as pricing and mandatory use in selected applications, would help promote non-fired alternative bricks.