Climate change has been integrated into our development planning with “Climate Neutrality, Climate and Disaster Resilience” identified as the sixth National Key Result Area (NKRA) of the 12th Five Year Plan (2018-2023). With the five-year plan’s objective as “Just, Harmonious and Sustainable Society through enhanced Decentralisation”, the priority areas for mitigation and adaptation in the NDC were developed into programs primarily under this NKRA and other NKRAs for implementation across different sectors at the national and local levels4.
Following the Economic Development Policy 2016, fiscal incentives were provided in the form of direct and indirect tax incentives under the Fiscal Incentives Act of Bhutan 2017 to stimulate economic growth, foster private sector development, and generate employment. Incentives included tax rebates to industries adopting modern environmentally friendly technologies, tax exemptions to hydroelectric projects, solar, wind, biogas and other renewable energy plants and machineries. Energy efficient and environment friendly equipment were also exempted from import duties for targeted sectors such as hotels. Waste management and recycling industries were provided income tax holidays and exemption of sales tax and custom duties on plant and machinery.
The Climate Change Policy of the Kingdom of Bhutan 2020 was adopted with a vision for “a prosperous, resilient and carbon neutral Bhutan where the pursuit of gross national happiness for the present and future generations is secure under a changing climate.” The policy aims to (i) provide strategic guidance to ensure that Bhutan remains carbon neutral and protect the wellbeing of the people of Bhutan by adapting to climate change in an efficient and effective manner (ii) ensure meaningful participation of all relevant stakeholders in climate change action in a coordinated and coherent manner with clear roles and responsibilities and (iii) ensure that the challenges and opportunities of climate change are addressed at all appropriate levels, through adequate means of implementation (finance, technology, capacity building and awareness) and integration into relevant plans and policies.
The national institutions for coordination of climate change actions across key agencies and stakeholder groups have been revitalised with the Climate Change Coordination Committee (C4) from the erstwhile Multisectoral Technical Committee on Climate Change. In addition, a climate change ‘one stop platform’ is being set up to help coordinate multi-stakeholder dialogue to develop and implement climate related work in Bhutan, with the aim to improve coordination between the different climate-sensitive sectors, enhance knowledge management and improve reporting and monitoring of all climate actions in Bhutan.
Bhutan ratified the Kigali Amendments to the Montreal Protocol on Ozone Depleting Substances in 2019 and has put in place the system for licensing the import and export of HFCs. The regulations for Regulation on Control of ODS 2008 are being amended.4 Gross National Happiness Commission (2019): Twelfth Five Year plan 2018-2023, Royal Government of Bhutan, Thimphu.
The National Energy Efficiency & Conservation Policy, and the Energy Efficiency Roadmap 2030 covering the sectors of buildings, transport and industry were launched in 2019. The policy and roadmap aim to facilitate improvements in productivity and energy efficiency while contributing to Bhutan’s efforts to remain carbon neutral. Few of the measures are now being implemented while support is required for full implementation. In addition, the Renewables Readiness Assessment (RRA) has been developed in cooperation with International Renewable Energy Agency with a view to complement the country’s efforts in enabling the wider penetration of various renewable energy technologies.
The Renewable Energy Master Plan (2017-2032) was adopted as a strategy for the long-term implementation of renewable energy technologies. This master plan identified 39,462 MW of technically feasible small hydropower, solar and wind projects across the country. These renewable energy technologies provide a basis for both clean energy generation for mitigation and as adaptation to changing water flows and the impacts on hydropower in Bhutan.
The Sustainable Hydropower Development Policy (SHDP) 2021 enhances the previous hydropower policy by integrating climate resilience and mitigation among other updates. As current run-of-river hydropower schemes in Bhutan have become increasingly vulnerable to decreasing water flows in the dry season the SHDP emphasises adaptation measures such as reservoir/pumped storage schemes. In addition, the new policy mandates hydropower value chain through ventures in energy storage technologies such as hydrogen fuel, green ammonia, and other emerging technologies. These energy storage and diversification measures for adaptation also contribute directly to Bhutan’s carbon neutral efforts by providing clean energy for zero carbon transport and mobility.
Bhutan’s National Environment Strategy 1998, which charted “the middle path” to development and guided the nation’s pursuit of balanced sustainable development over the past two decades and precipitated most of Bhutan’s environmental policies and measures was updated in 2020. The NES 2020 now integrates new and emerging national environmental challenges and the critical global challenge of climate change. The strategic measures to managing land, air, water, and biodiversity now include climate change as a cross-cutting issue for more holistic integration into relevant policies and programs.
Bhutan implemented the REDD+ readiness programme and produced Bhutan’s National REDD+ Strategy and implementation framework including the National Forest Monitoring System, Forest Reference (Emission) Level, a Monitoring, Reporting and Verification (MRV) Mechanism, and Safeguard Information System (SIS) for REDD+5. With the establishment of the National REDD+ Framework, Bhutan is awaiting support to proceed to implementation of the strategy which include policies and measures that will contribute to continued conservation and sustainable management of forest.
To implement the priority programs in the NDC, several Low Emission Development Strategies (LEDS) were developed to prioritise mitigation actions in key sectors of Agriculture, Human Settlement, Industry and Transport. These LEDS will serve as the basis for the sector to integrate low carbon measures into development priorities. Further support for implementation is required to realise the identified priority programs and actions in the various LEDS.
A study on Gender and Climate Change in Bhutan with a focus on three NDC sectors of Agriculture, Energy and Waste was undertaken to unpack the gender climate nexus, gender roles and gender differentiated impacts of climate change. The study has been instrumental in informing gender mainstreaming opportunities in the preparation of the LEDS and the 2nd NDC.
Three NAMAs were developed in 2016 for Road Transport, Housing (residential and institutional) and Municipal Solid Waste Management. However, securing support to implement the NAMAs has been challenging and the NAMAs have not yet been implemented.
The Bhutan Electric Vehicle (EV) Roadmap (2020-2025) has also been developed for a transition to zero emission mobility with targets for 2035, 2045 and 2050. The Bhutan Sustainable Low- emission Urban Transport System project is being implemented to initiate the transition to EV mobility by focussing on taxis as the primary target for eventual market transformation.
The National Waste Management Strategy was adopted in 2019, and the Waste Management and Stray Dog Population Control flagship program launched on January 23, 2020. The overall goal is to achieve Zero Waste Bhutan where the current trend of disposing over 80% of solid waste to the landfill is reversed to less than 20% by the year 2030 based on the principles of circular economy.
The Renewable Natural Resources (RNR) Strategy 2040, covering the forests, agriculture, and livestock sectors, was adopted in 2021 and covers the AFOLU sector under the IPCC emissions source category. The RNR Strategy integrates resilience to climate change and low emission development as one of the key strategies to actualise transformational change in this integrated sector by building on the REDD+ Strategy, LEDS for Food Security 2021, and the National Strategy for Sustainable Socio-economic Development through the Commercialization of Organic Farming 2019.
Adaptation planning and implementation are also progressing. The third NAPA project funded by the LDC Fund is being implemented for “Enhancing Sustainability and Climate Resilience of Forest and Agricultural Landscape and Community Livelihoods in Bhutan” (2017-2023). This follows the successful conclusion of the 2nd NAPA project “Addressing the Risks of Climate Induced Disasters through Enhanced National and Local Capacity for Effective Actions” (2014-2019).
Two GCF funded projects are also being implemented through the “Bhutan for Life” project for managing the network of Protected Areas as a key component of our carbon sink, and the project, “Supporting Climate Resilience and Transformational Change in the Agriculture Sector in Bhutan” addresses the adverse impacts of climate change on rural livelihood security and poverty, and the effects of sector-led development practices on the ecological integrity of biodiversity-rich forested landscapes.
Mainstreaming climate adaptation into local development investment has been piloted since 2011 and expanded in recent years under the Local Climate Adaptative Living Facility (LoCAL) program with support from UNCDF and the EU. The first two phases of the program covered 100 “gewogs”6 under performance-based climate resilience grants with support integrated through the 11th and 12th five-year development plans. The program is planned to be scaled up to all 205 gewogs in the country.
Through the Strategic Program for Climate Resilience with the World Bank, a program of climate risk management (and low carbon development) investments and activities was prepared. The priorities were fully integrated into the 12th Five Year Plan and complement NAP, NDC, and SDG priorities.
The formulation of a National Adaptation Plan (NAP) and the establishing and strengthening of the supporting elements for the NAP process is ongoing with financing from GCF’s NAP readiness support. The project will build national capacity for long term adaptation planning, and conduct in-depth sectoral assessments for water, forest and biodiversity, health, and agriculture.6 Gewog is a geographic administrative unit below a dzongkhag (district). There are 205 gewogs under 20 dzongkhags in Bhutan.
Bhutan has started work towards preparing the Long Term Low GHG Emission and Climate Resilient Development Strategy (LTS). The LTS will provide the overall direction and guidance for Bhutan in the long-term efforts for remaining carbon neutral. The development of the LTS has been hampered by the COVID-19 pandemic and is expected to be completed in 2022.
To facilitate the flow of financing for implementation of the NDC and adaptation priorities from the Green Climate Fund (GCF), Bhutan’s Country Work Program was prepared in 2020. Direct access modalities for climate finance are also being pursued with the accreditation of the Bhutan Trust Fund for Environmental Conservation (BTFEC) as National Implementing Entity to both the GCF and the Adaptation Fund. In addition, Bhutan is pursuing access for the private sector with three financial institutions (Bhutan Development Bank Ltd, Bank of Bhutan Ltd and the Bhutan National Bank Ltd) undergoing the accreditation process for access to the Private Sector Facility of the GCF.
Bhutan’s 21st Century Economic Roadmap is being drafted as a national initiative to chart out Bhutan’s long-term economic direction and to guide short and medium-term plans, programs, and policies7. The roadmap will articulate the main strategies in key economic priority areas for the country over the next ten years while maintaining Bhutan’s effective social and environmental safeguards and integrate climate resilience and mitigation. The roadmap builds on recovery from the COVID-19 pandemic, aims to leverage “brand Bhutan” and will feed into the upcoming LTS from Bhutan and transformative green financing measures.
The Green Finance Roadmap is being developed in line with the 21st Economic Century Roadmap and aims to mainstream and bring about transformative changes in financing economic investments and sustainable development in Bhutan for the 21st Century. The initiative aims to (i) make the financial system of Bhutan more robust and resilient to external vulnerabilities in the wake of the COVID-19 Pandemic, (ii) channel lending towards products and services that can deliver both investible returns and environmentally positive outcomes, (iii) ensure green investments are prioritised over business-as-usual investment and to mobilise additional investments in Bhutan’s green sectors, (iv) accelerate the financial sector’s contribution towards transitioning to a low carbon economy by leveraging on modern technology and innovations.As outlined above, Bhutan has made concerted efforts to integrate the priorities and programs identified in the first NDC by strengthening policies, programs, and institutional arrangements for integrating climate change measures as part of our development process. Bhutan has had measured success in implementing adaptation programs due to the early start and experience from the NAPA and the LDC Work Program. With regards to mitigation action, Bhutan has been relatively successful in developing strategies and plans in key sectors but faces challenges in raising adequate support for implementation of the LEDS, NAMAs and other mitigation programs