Project title Sector SCP practice
GPP Bhutan Cross cutting issues Creating Demand for Better Products
SEID - Sustainable and Efficient Industrial Development Cross cutting issues Creating Demand for Better Products, Product design for sustainability
Tourism in Bhutan Cross cutting issues, Service industry Product design for sustainability, Environmental Management Systems

Focal point

Mr Karma Tshering

Head-Policy Division, National Environment Commission


Under SWITCH-Asia’s Regional Policy Support Component, UNEP’s main partner in Bhutan is the National Environment Commission (NEC). In 2014, a policy support agreement was developed for technical cooperation with Bhutan’s Gross National Happiness Commission (GNHC) in areas of mainstreaming SCP policies in national governance, ensuring SCP in national tourism, support the development of green office guidelines and more. The partnership is the first for policy support in Bhutan under SWITCH-Asia and will continue until 2016. The activities implemented under this agreement are the following:

Mainstreaming SCP into national policymaking

  • Bhutan’s main policy making framework is the 11th five year plan, which is overseen by the Gross National Happiness Commission.  A key inter-ministerial body is the Mainstreaming Reference Group, or MRG, which was set up by the GNHC with support from UNDP and the UNEP-UNDP Poverty Environment Initiative.   The MRG consists of representatives from various ministries, academia and other key stakeholders, and they are tasked with reviewing policies together to ensure application of the 9 domains of GNH through a GNH ‘policy screening tool’.   Through this activity, UNEP and the NEC will assess how to integrate SCP into the policy screening tool.
  • The current National Environment Strategy (NES) is the overarching policy document that specifically addresses the environment.  In 2014-2015, the NES was reviewed, with the support of UNDP.  Under this activity, UNEP and the NEC will integrate SCP into the NES.    
  • In order to support the mainstreaming process, and to provide a foundation for this SCP program, a report on SCP in the Bhutanese context will be produced.  

Sustainable Tourism

  • Guidelines for greening hotels.  While hotels are expected to offer sustainable and high quality services, this sector lacks guidelines and certification systems to allow tour operators, tourists and the Tourism Council of Bhutan (TCB) to know to what extent hotels are practicing sustainable operations.  Using existing international guidelines, UNEP and the NEC will prepare draft green hotel guidelines and work with the TCB to conduct training to relevant stakeholders.  
  • Provide recommendations for inclusion of sustainable tourism in the 5 year Tourism Strategy and Tourism Policy.

SCP Learning in Technical and Vocational Education and Training (TVET) and national education curricula

  • Tertiary education.  The NEC will work with the College of Science and Technology to conduct a Training of Trainers on SCP, and to develop a national text book for tertiary schools on SCP, based on the SCP handbook for policy makers and the report on SCP from a Bhutanese perspective. 
  • Vocational training.  NEC will work with Bhutan’s national Vocational Training institute to conduct a ToT and to develop course materials on SCP, with a special module for Sustainable Tourism.
  • Civil servant training.  NEC will conduct a ToT with Bhutan’s civil servant training institute, the Royal Institute of Management, using the SCP Handbook for policy makers.  This will support the integration into the existing curricula for pre-service training.  
  • Non-formal education (or continuing education).  NEC will develop learning materials for continuing education in English and Dzongkha) based on the SCP in Bhutan report. This will target rural populations.

On top of these areas SWITCH-Asia RPSC is also supporting Bhutan on Green Public Procurement and on Paperless Office Operations.

Status of SCP policy framework

Bhutan places a strong emphasis on cultural and environmental preservation, and SCP is very much embedded in its use of Gross National Happiness as a guiding framework for development and its 11th Five Year Plan. The country’s strategy is explained in the Middle Path: National Environmental Strategy for Bhutan (Royal Government of Bhutan, 1998), which now to also be revised with inclusion of SCP priority areas. 

The National Environment Protection Act, 2007

The National Environment Protection Act of 2007 (NEPA) sets the overarching legal framework for environmental protection and management in Bhutan. It outlines the following: (i) principles of application to environmental protection; (ii) the Constitution, functions, and powers of authority under the National Environment Commission (NEC); (iii) protection of environmental quality by managing hazardous substances, environmental pollutants, and managing waste; (iv) protection of forests, biodiversity, and ecosystem integrity; (v) the rights to environmental information and citizen participation; and (vi) procedures for environmental inspections, verification, enforcement, and penalties. (source:

Gross National Happiness

Perhaps uniquely among countries, Bhutan’s development path has for decades been officially directed by the goal of realizing Gross National Happiness (GNH) – to maximize the happiness of its people, enabling them to achieve beyond the conventional income-based measures of development and to see development as a means to an end. GNH is being pursued through a set of four key strategies, known as the four pillars. These are:

  • Sustainable and equitable socio-economic development,
  • Conservation of environment,
  • Preservation and promotion of culture, and
  • Promotion of good governance.

Bhutan Vision 2020

Starting from 2000, Bhutan laid out its 20-year national perspective and development goals in ‘Bhutan 2020: A vision for Peace, Prosperity and Happiness’. The Vision draws upon the philosophy of Gross National Happiness, it places Bhutan as a peace-loving member of the international community, modernized, its traditional identity maintained, with a society of harmonious people and a sense of purpose.

The Vision aims to preserve the natural environment of the country, and to sustainably utilize its natural resource endowments for socio-economic development. 60% of the country should be forested, the rich biodiversity should be preserved and sizeable tracts of national parks and reserve should be protected. 

Green Growth in Bhutan

The new Economic Development Policy (EDP) of Bhutan, launched in 2010, has been formulated with the vision “to promote a green and self-reliant economy sustained by an IT-enabled knowledge society guided by the GNH philosophy.” Its key strategies include: diversifying the economic base with minimal ecological footprint; harnessing and adding value to natural resources in a sustainable manner; promoting Bhutan as an organic brand; and reducing dependency on fossil fuel especially in respect of transportation. The EDP 2010, in many respects, is a green economy policy and reflects national consensus for pursuing a green economy.

(Sources: National report for the United Nations Conference on Sustainable Development 2012)

11th Five-Year Plan 2013-2018

The 11th FYP states that in order to ensure that socio-economic development is aligned with the overall development philosophy of GNH, all sectors and local governments shall ensure that conservation and sustainable management and utilization of environment, preservation and promotion of culture and traditions and strengthening good governance are mainstreamed in the programmes and projects.

The FYP recalls that, as per Article 5 of the Constitution, the Royal Government shall secure ecologically balanced sustainable development while promoting justifiable economic and social development through integrating ECP into all policies and plans at both sectoral and local government levels. Mainstreaming replaces the “development versus environment” debate with one of “development that utilizes resources sustainably”, placing particular emphasis on the opportunities the environment provides for development that is sustainable. The 11th FYP supports SCP through its objectives across all sectors of government, such as transport, agriculture, urban development and land use, finance, manufacturing and more. (Source: )

INDC of Bhutan

Bhutan submitted its Intended Nationally Determined Contribution (INDC) towards the Paris climate change agreement in September 2015. In the INDC, Bhutan communicated its resolve to remain carbon neutral by ensuring that their emission of green house gas (GHG) does not exceed the sink capacity of forests. As a land-locked country located in a fragile mountain environment, Bhutan is highly vulnerable to the impacts of climate change. Bhutan’s INDC elaborates two broad action plans: one to remain carbon neutral and another to adapt to the adverse impacts of climate change. For the mitigation of GHG emissions, nine areas of strategies, plans and actions were elaborated. For the adaptation to the adverse impacts of climate change, ten priority areas were identified.

Sectoral Policies 

Organic Agriculture - Bhutan for Organic: Living in Harmony with Nature

The National Organic Programme (NOP) supports the development of the organic sector in Bhutan to enable the growth of a clean and safe lifestyle for every Bhutanese. NOP strives to develop and promote an organic way of life among Bhutanese in line with the Gross National Happiness (GHN) philosophy and enhance environmental conservation and nation’s health through household food and nutrition security and improved income. The NOP under the Department of Agriculture (DOA), Ministry of Agriculture and Forests (MOAF) is the focal agency for coordinating and implementing activities for promotion of organic agriculture (OA) in Bhutan in consultation with relevant stakeholders. The program was initiated as a component of Rural Enterprise Development Program (REDP) in 2003 under Horticulture Division, DOA, the then Ministry of Agriculture. It got its program status in the year 2006. (Source:

To realize the aspiration of Bhutan as a country with environmentally clean food production systems and products as inscribed in Bhutan 2020, the country’s vision document, the Ministry of Agriculture and Forests launched the 2006 National Framework for Organic Farming – laying down the country’s policy for organic farming. Bhutan’s vision is to develop organic farming as a way of life and become fully organic by 2020. It is based on the premise that: 1) the country is free of any significant environmental pollution due to low usage of agro-chemicals and limited industrialization and, therefore, has a competitive advantage over most other countries in the region when it comes to organic farming; 2) the current farming system is still largely supported by indigenous practices involving use of forest litter and farmyard manure; 3) there is a great potential of increasing and sustaining production through organic farming which combines scientific knowledge and methods to produce safe food; 4) organic farming is profoundly connected to sustainable development in terms of poverty reduction, gender equality, ensuring better health and nutrition, and sustaining the biological productivity and diversity of the natural environment; 5) organic farming is well suited for small farmers of developing countries like Bhutan; 6) the global movement for clean environment and natural products is increasingly creating a niche market for organic products.

Bhutan’s agricultural policy is intricately linked with strategies for rural development and poverty reduction. In 2013, Bhutan passed model legislation to switch the country’s agricultural sector towards organic farming and produce by phasing out chemicals such as harmful pesticides in agriculture.

Consumer Information

In 2010, the government of Bhutan adopted a regulatory instrument to foment governance on consumer protection. The ‘Consumer Protection Bill’ in Chapter XIII explicitly mentions the environmental impact of consumer choices, and impacts of products on the environment. The Bill also call for consumers to promote ‘responsibility to consider the impact of consumption patterns on the environment to maintain the ecological balance; and Safe environment for consumption of goods and services by providing information on the supply of goods and services which are harmful and not safe for consumption’. 


The Water Act of Bhutan 2011 : The Water Act of Bhutan was enacted in 2011. The plan calls for an integrated water resource management plan to be developed and for a community-based management approach. It requires environmental clearance before any potentially harmful use of water resources by individuals or companies. The Act sets the following priority order for water use: drinking and sanitation, agriculture, energy, industry, tourism and recreation, before any other uses.

(a)  Coordinate national IWRM
(b)  Issue directives that are binding on all persons and Competent Authorities for following purposes pertaining to water and water resources:

1.    Restorative, corrective or mitigating measures
2.    Planning, protection and management within certain areas, zones, regions or nationwide;
3.    Promotion of water education, research or studies;
4.    Promotion of water friendly and water efficient technologies;
5.    Mainstream water into national policy, plan and program.

(c)  Adopt strategies, plans and programmes for achieving the purpose of the Water Act.
(d)  Designate any Ministry, Organization, Agency or Committee as a CA to effectively enforce and implement the provision under the Water Act.
(e)  Set Water quality standards and guidelines;
(f)   Set effluent discharge standards for discharge of certain substances into water resources;
(g)  Set minimum environmental flows of water courses required to support and conserve the riverine habitats and its flora and fauna;
(h)  Establish procedures for monitoring of water quality standards and discharge standards;
(i)    Develop criteria for waste water charges, abstraction charges and other fees;
(j)    Review, revise and advice the Government on water policy, regulations, standards, guidelines and other matters related to emerging water issues;
(k)  Declare any lake, river or waterway for water abstraction and use in consultation with relevant stakeholders;
(l)    Monitor overall compliance by the CAs;
(m)Prepare and submit reports to the Cabinet and the Parliament periodically. 

A Water Regulation was enacted in 2014 to implement the Water Act (see Water Regulation 2014). In addition, the National Environmental Protection Act of 2007 (Chapter IV: Protection of Environmental Quality) stipulates the obligation to ensure that reasonable amounts of water for environmental flows to protect the freshwater biodiversity and maintain ecosystem functions.


With advancement of Socio Economic activities, it has brought change in the consumption pattern across the population.  This has resulted increase in waste generation, composition and its types.  This increase in waste generation is not commensurate with adequate infrastructures, facilities and services ensuring sound waste management.  This could have adverse impact on human health and the environment and country’s image as clean and green country. Recognizing this fact, the government has put in place regulatory framework by enacting Waste Prevention and Management Act 2009 and Waste Prevention and Management Regulation 2012. The National Environment Commission Secretariat (NECS) is the overall regulatory authority responsible for overseeing and implementing the provisions in the Act and Regulation.

The Waste Prevention and Management Act of Bhutan came into force in 2009 (RGOB, 2009b). It promotes the 3Rs approach of reduce, reuse and recycle for non-hazardous waste, and supports a segregation mechanism and collection facilities. It calls for prevention of manufacture of hazardous waste and, where available, for social and environmentally sound treatment and disposal. Importing hazardous waste into Bhutan is banned. Waste electrical and electronic equipment, pharmaceutical and other biologically hazardous waste must be managed in an environmentally sound manner. Similar to the Water Act, the National Environment Commission shall ensure enforcement of the act; one of its instruments is the use of environmental clearances for companies and projects dealing with potentially dangerous wastes. 

The implementation of Waste Regulation began from 18 April 2012.  The Regulation clearly identifies the roles and responsibilities of different implementing agencies to ensure sound waste management. Prior to its implementation, the NECS has coordinated sensitizing program in Bhutan Broadcasting Service for two months ensuring better understating of the Regulation. As per the Regulation, all the implementing agencies have to report annually on the status of implementation to NECS.

Currently, the NECS is the process of developing National Strategy for Integrated Solid Waste Management which would most probably be ready by December 2012. For this, the NEC has formed working group representing relevant stakeholders to discuss on the strategy development. Detailed baseline waste survey for five Dzongkhags has been completed and compilation of data is under process.  For the remaining Dzongkhag, the Dzongkhag Environment officers are collected the information based on the set questionnaires.

In the meantime, the NEC is exploring possibility of establishing waste management facilities in the country.

Resource consumption and production

Main Resource Consumption and Resource Efficiency Indicators (2010)

Population (millions) 0.717 (2011)
GDP (billion USD) 1.288 (2011)
GDP is in USD exchange rate based on year 2005 and deflated.
Source: UNSD database.
Subject Area Total Per person Per USD$ of GDP
Domestic Material Consumption, DMC
(tonnes, tonnes per capita, kgr per 1USD$)
5,756,754 8.03 4.47
GHG emissions
(kilotonnes,tonnes per capita, kgr per 1USD$) )
3,220 4.49 2.50
Total Primary Energy Supply, TPES
(Petajoules, Gigajoules per capita, Megajoules per 1USD$)
58.64 81.79 45.52
Water Use
(Trillion litres, Kilolitres per capita, Litres per 1USD$)
0.34 471.41 262.38
Subject Area Indicator
Population density 2015
(UNESA 2012 revision), population per
GDP per capita (USD), 2013 WB 2,362
HDI Rank (2013) UNDP 0.584
Arable land (hectares per person) WB 2012 0.13
Forest cover in % (2010), UNSTATS 69
Material intensity (2010)UNEP 4.47
Per-capita energy use (kg of oil equivalent per capita) 2011, WB NA
Energy intensity
(total primary energy consumption per USD of GDP) 2011, EIA
GHG intensity (2010) UNEP 2.5
CO2 emissions (metric tone per capita), 2010, WB 0.7
Number of Middle Class consumers % (2010), ADB 50
Number of people with income < 2USD/day (PPP, USD, %), 2010, ADB 49

Trends in Resource Consumption and Resource Efficiency Indicators (1970-2010)

DE: Domestic Extraction;
MI: Material Intensity of the economy;
MF: Material Footprint.
All other abbreviations explained in the table above

In panel a) we can see that Bhutan’s GDP grew much faster than the three other overview indicators (no TPES value was available for 1970 therefore no indexed value possible). Growth in DMC appears to have been quite slow, taking 40 years to double, however this slow growth in DMC is not echoed by the trajectory of DE per capita in panel b). DE first decreased then recovered gradually over the same period, indicating that the rapid economic growth required no gross increase in DE. The recovery in DE was, however, totally dominated by extraction in non-metallic minerals. Panel c) also indicates that rapid economic growth has not been accompanied by anything like a proportional increase in MF per capita, although the shares of different materials has changed markedly, with an increase in non-metallic minerals again prominent. As increases in population over the corresponding period (1990 to 2010) were also modest, this restrained growth in MF per capita implies major decreases in MI and adjusted MI, which is confirmed in panel d). Panel e) shows a strong and consistent improvement in adjusted EI for 1990 to 2010, with panel f) showing an improvement in Green House Gas intensity (GHGI) and a very strong improvement in adjusted GHGI.

(Source: UNEP CSIRO Indicators for a Resource Efficient and Green Asia and the Pacific, 2015).

Key references relevant to SCP

UNEP's relevant activities

The information in the country profiles herein have been obtained through research with firsthand and secondhand sources. The information presented herein cannot be considered as official policy of governments or other official bodies. The SWITCH-Asia Programme cannot be held responsible for the content of the sites to which it provides links or for the availability of servers or links. Information is being continuously updated in order to maintain an up to date country profile. If you would like to contribute information for this profile or have any further comments, please send an email to:



Micro, Small and Medium Enterprises (MSMEs) make up approximately 98% of all enterprises in Bhutan. In 2012, the Cottage, Small and Medium Industry (CSMI) Policy of the Royal Government of Bhutan (RGoB) was established to encourage development of the private sector, which is considered critical to the achievement of sustainable economic growth and is seen as a way to achieve poverty reduction. However due to the fact that there has not been a single agency responsible for SME development and lack of comprehensive policies, government agencies and development partners’ efforts to support SME development were isolated events.[1]

 A survey of SMEs found that 61% claimed that limited access to finance was a constraint on their development (37% ranked it as a minor constraint, a further 37% ranked it a moderate constraint, and 26% saw it as a major constraint.[2]

“The RGoB policy is to facilitate access to finance through the development of a range of financial tools and intermediaries, making good use of Bhutanese examples where these exist, as well as international good practice, customized to the local specificities. By improving access and outreach to finance, the cost of finance will also be reduced over time.[3]”  

[1] Kezang, Tshering, G., Lham, U., & Rai, D. (2016). TRADE WINDS OF CHANGE - WOMEN ENTREPRENEURS ON THE RISE IN SOUTH ASIA Background country study – Bhutan. United Nations Development Programme Regional Bureau for Asia and the Pacific Bangkok Regional Hub.Retrieved from:

[2] Royal Government of Bhutan. (2012). Micro, Small, and Medium Enterprise (MSME) Policy (2012-2020) of the Kingdom of Bhutan. Retrieved from

[3] Ibid.

Currently very little green financing for SMEs exists in Bhutan

Currently there is low level of green financing for SMEs in Bhutan. Most green financing comes from the Bhutanese government, India, who is a strategic partner, or institutions like ADB and the World Bank. Commercial banks need capacity building on alternative credit appraisal methodologies, to introduce advanced lending practices and innovative green financial products.

Focus on clean energy financing: 

The Bhutan government is investing in wind and solar energy and other alternative energies like bio-gas, to reduce dependence on hydropower, which is highly climate sensitive. Under the Global Climate Change Alliance program, many biogas plants have been built, to enhance the resilience of Bhutan’s rural households to climate change.[1]

 One of the objectives of the Rural Monetary Authority of Bhutan is to promote alternative renewal energies and reduce Glacier Lake Outburst Flood (GLOF) risks and geo-hazards.[2]

[1] Climate change adaptation in Bhutan's renewable natural resources sector | Global Climate Change Alliance+. (2012). Retrieved 1 August 2017, from

[2] Royal Monetary Authority of Bhutan. (2015). Royal Monetary Authority of Bhutan Annual Report 2014-2015. Royal Monetary Authority of Bhutan. Retrieved from


Challenges include: [1]

• Limited access to credit

• High interest rates

• Banks lack of diversified sources of funding

• Inadequate laws, and regulatory frameworks

• Lack of business development services 

• Low levels of capacity and knowledge 

• Very high collateral requirements for loans

• Low access to equity finance (venture capital) 

[1] Bhutan: Micro, Small, and Medium-Sized Enterprise Sector Development Program. (2014). Asian Development Bank. Retrieved 1 August 2017, from

Main institutions providing Green Finance

  • United Nations Capital Development Fund (UNCDF)
  • World Bank (WB)
  • International Finance Corporation (IFC)
  •  International Development Association (IDA)
  • Asian Development Bank (ADB)
  • Government of India
  • Bank of Bhutan
  • Druk PNB Bank Limited
  • Bhutan Development Bank Limited
  • Royal Monetary Authority of Bhutan


Bhutan Development Bank Limited

Agriculture Loan:

  1. For purchase of tractors, power tillers or any other farm machinery from authorized dealers.
  2. For orchard plantation and development /maintenance. Cardamom plantation, bee keeping, mushroom plantation, fertilizer, fresh veg, bio gas, etc.

Loan term: maximum 5 years

Druk PNB Bank Limited

1. Term Loan (need based)
2. Working Capital Loan liberally sanctioned at 20% of projected annual turnover basis.
3. Composite Loan Limit has been raised to Nu. 10.00 Million (for Term Loan Working Capital).

New financing for SMEs

Bhutan Green Power Development Project by the ADB:[1] 126 MW hydropower plant at the Dagachhu River, which will help support rural electrification. Investment amount EUR 259.75 million. The project is a joint-venture public–private partnership between the Bhutanese Druk Green Power and Tata Power of India. It is expected to reduce emissions of about 500,000 tons of CO2e yearly on average. 

Green Public Procurement Bhutan: a SWITCH-Asia project funded by the EU Commission, which establishes a strategic approach to scale-up public demand for environmentally and socially preferable goods, services and infrastructure to drive green growth. It provides incentives for SMEs to engage in sustainable production among suppliers.  

[1] Asian Development Bank. (2014). Green Power for Bhutan Clean Energy Crosses Borders to Reach Poor Households. Retrieved from

Status and policies

GHG emissions data

2015 total territorial GHG emissions[1]* (excluding land use change and forestry): 0.9 MtCO2

2015 territorial GHG emissions per capita: 1.2 tCO2/per person 

*GHG territorial emissions are Carbon dioxide emissions from the use of coal, oil and gas (combustion and industrial processes), the process of gas flaring and the manufacture of cement. 

[1] CO2 Emissions | Global Carbon Atlas. (2016). Retrieved from;

[2] Carbon dioxide emissions occurring anywhere in the world attributed to the country in which goods and services are consumed. For more information see: Section 2.1.2, The global carbon budget 1959-2015, Le Quéré et al. 2016.


2016 GDP (official exchange rate): EUR 1.89 billion

2016 GDP (purchasing power parity) EUR 5.92 billion[1]

GDP composition by sector:[2]

  • Agriculture: 16.4%
  • Industry: 42.1%
  • Services: 41.5%

Agricultural products[3]: rice, corn, root crops, citrus; dairy products, eggs

Industry subsectors: cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism

[1] The World Factbook — Central Intelligence Agency. (2017). Retrieved August 1, 2017 from

[2] Ibid

[3] Ibid

Industries’ contribution to climate change

During the period 2000‐2013, emissions from the energy sector increased by 191.6% from 0.270 million tons of CO2e in 2000 to 0.79 million tons of CO2e in 2013. During the same period, emissions from industrial processes increased by 154.3% from 0.24 million tons of CO2e to 0.6 million tons of CO2e. Emission from waste management also increased by 247.54% from 0.047 million tons of CO2e to 0.16 million tons CO2e.[1]

[1] National Environment Commission, Royal Government of Bhutan. (2015). Kingdom of Bhutan Intended Nationally Determined Contribution (pp. 1-8). Thimphu, Bhutan. Retrieved from

Climate change policies

National policies:

  1. National Environment Protection Act (2007)
  2.  National Forest Policy (2011)
  3. National Strategy and Action Plan for Low Carbon Development (2012)
  4. The 11th Five Year Plan (2013- 2018) of Bhutan prioritizes environment management, carbon neutral development, and the reduction of greenhouse gas emissions (GHG) and pollution.

Priority mitigation and adaptation actions within the 2015 INDC will be considered and integrated in the preparation of the 12th Five Year Development Plan (2018‐2023)

International mitigation targets

Ratified UNFCCC in 1995
Ratified Kyoto Protocol in 2002
Ratified Paris Agreement in 2016

Bhutan’s INDC to the United Nations Framework Convention on Climate Change (UNFCCC):[1]

  • Bhutan declared to be carbon neutral, whereby greenhouse gas emissions will not exceed carbon sequestration of Bhutan’s forests, which is estimated at 6.3 million tons of CO2
  • In addition, Bhutan can offset up to 22.4 million tons of CO2e per year by 2025 in the region through the export of electricity from clean hydropower projects.
  • Bhutan will maintain a minimum of 60% of total land under forest cover for all time and efforts will be made to maintain current levels of forest cover, which stands at 70.46%.


Government financing for climate change related initiatives:

The Bhutan Trust Fund for Environmental Conservation started in 1992 as a collaborate venture by the Government of Bhutan, United Nations Development Program, and World Wildlife Fund with an endowment of EUR 18.89 million.

 [1] INDCs - Intended Nationally Determined Contributions. 2017. Retrieved from

National Environment Commission, Royal Government of Bhutan. (2015). Kingdom of Bhutan Intended Nationally Determined Contribution. Thimphu, Bhutan. Retrieved from

Climate change adaptation efforts

Bhutan prepared its National Adaptation Program of Action (NAPA) in 2006 and updated it in 2012.

National Adaptation Programme of Action (NAPA) II Program is underway, from 2014-2018 

UNFCCC INDC includes an adaptation component. Its major focuses are: 

  •  Climate resilient agriculture
  •  Integrated Water Resource Management (IWRM) approaches
  • Sustainable forest management
  • Strengthen resilience to climate change induced hazards
  • Minimize climate-related health risks
  • Climate proof transport infrastructure
  • Promote clean renewable and climate resilient energy generation
  • Climate smart livestock farming practices 

Climate change impacts

Bhutan is a land-locked mountainous country with a population of 750,125[1]. Bhutan has many climate variations, located at the periphery of the tropical circulation in the north and periphery of the Asian monsoon circulation in the south.[2] Around 70% of Bhutan’s land is forest and around 7% of the land is used for agriculture.[3] Bhutan heavily relies on agriculture and hydropower production, both very sensitive to climate changes such as water and temperature variations. Bhutan has also a fast growing population that will increase demand for energy and infrastructure.

Main climate change impacts include:

  • Flash floods
  • Glacial lake outburst floods (GLOF)
  • Droughts
  • Windstorms
  • Forest fires
  • Landslides and erosion
  • Forest degradation
  • Deteriorating water quality
  • Pests and diseases
  • Biodiversity loss

[1]The World Factbook — Central Intelligence Agency. (2017). Retrieved 1 August 2017, from

[2] National Environment Commission Royal Government of Bhutan. (2006). Bhutan National Adaptation Programme of Action. Thimphu. Retrieved from

[2] Ibid.

Economic, social, and environmental impacts of climate change

Small and Medium-sized Enterprises (SMEs):

  •  Extreme climatic events like floods and storms damage infrastructure and facilities
  •  Interruptions to business transactions
  •  Transport and logistics routes are damaged or disrupted
  •  Heightened price and market volatility
  •  Impacts on employees and consumers – lack of access to basic goods and services
  • Lack of water and energy availability affect operations and productions
  • Health issues from heat waves and increase of disease will cause decreases in labor and work production


  •  56.3% of the total population are engaged in agriculture, being the main source of income in rural Bhutan.[1]
  • Over half of Bhutan’s food exports are processed fruits and vegetables, and about a quarter are spices.[2] Bhutan plans to expand its agriculture’s export base.
  •  Soil erosion, soil nutrient loss, drought, crop pests and diseases contribute to crop failure
  •  Unpredictable rainfall disturbs planting and harvesting times
  • Changes in rainfall and water scarcity due to climate change will cause lower crop yields.

Biodiversity and ecosystem services:

  •  Forest fires are common in Bhutan (exacerbated by drought and loss of soil moisture)
  •  Soil erosion causing landslides can result in habitat loss and land degradation

Water resources:

  • Reduced water availability for drinking and sanitation
  • Reduced water for agriculture


  •  Vulnerable to extreme climate events; e.g. flash floods or landslides can damage crucial infrastructure such as roads 


  • Bhutan’s hydropower sector is a main driver of its economy: almost 100% electricity is generated through hydropower which comprises 14.13% of the country’s GDP in 2014.[3] Bhutan offsets carbon by exporting hydroelectricity to countries like India.
  • Drought and seasonal changes in freshwater availability can reduce hydropower production
  • Sedimentation and siltation of hydropower plants


  • People are at risk of flash floods and glacier lake outbursts
  • Infectious and vector-borne diseases such as malaria and dengue will increase
  • Temperature rise and more frequent heat waves will cause heat-related illnesses and death
  • If global mean temperature rises 4 degrees, about 12% of annual daily work hours are projected to be lost by workers carrying out heavy labor (agriculture, construction, etc).[4]


[1] National Environment Commission, Royal Government of Bhutan. (2015). Kingdom of Bhutan Intended Nationally Determined Contribution (pp. 1-8). Thimphu, Bhutan. Retrieved from 

[2] Asian Development Bank. (2015). Asian Development Outlook 2015: Financing Asia's Future Growth (pp.177-180). Retrieved from

[3] National Environment Commission Royal Government of Bhutan. (2016). Bhutan State of the Environment Report 2016. Thimphu, Bhutan: National Environment Commission Royal Government of Bhutan. Retrieved from:    

[4] World Health Organization. (2016). Climate and health country profile – 2015 Bhutan. Retrieved from:

International cooperation on climate change


Status: 2017. Inclusive of grants and loans; not an exhaustible list.



No. of Projects

Program / Areas of focus

Funding Amount


Funding Sources

Global Environment Facility



Biodiversity, climate change, land degradation





GEF Trust Fund, Least Developed Countries Fund,



Poverty Environment Initiative Phase II (JSP-PEI II)




World Bank



Preparation of Strategic Program for Climate Resilience

 €1.42 Million

Approved 2017


World Bank

Hydromet Services and Disaster Resilience Regional project

€3.59 Million


Sustainable Financing for Biodiversity Conservation and Natural Resources Management Project

€5.55 Million

2013- 2018

Asian Development Bank (ADB)



South Asia Subregional Economic Cooperation Green Power Investment Program

€1.42 Million

2016 -2018

Japan Fund for Poverty Reduction


Promoting Clean Energy Development in Bhutan




Norwegian Grant 


The Royal Government of Bhutan and the European Union (EU)


Rural Development and Climate Change Response Program

€ 21.5 Million


2017 -


Global Climate Change Alliance


Local Climate Adaptive Living Facility (LoCAL) (multi-country)

€35.58 Million


2013 - 2017

GCCA, EU, SIDA, Belgium, United Nations Capital Development Fund (UNCDF)


Climate change adaptation in Bhutan's renewable natural resources sector


€4.4 Million


2012- 2017

GCCA, Estonia

International Climate Initiative (IKI)



REDD, biodiversity financing, low emission capacity building



German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)

UN REDD Program


REDD+ Reducing Emissions from Deforestation and Forest Degradation




Forest Carbon Partnership Facility, World Bank