Bhutan has ratified the Paris Agreement on the 19th September 2017. In its Nationally Determined Contribution (NDC), Bhutan aims to remain carbon neutral, building upon a commitment already made in 2010 (Royal Government of Bhutan, 2010). This means that Bhutan aims to maintain GHG emissions below the country’s total carbon sink from land use, land use change and forestry (LULUCF).
The government called for international support for remaining carbon neutral without specifying actual needs, but has not made its target conditional on it. The NDC does not present any additional conditional emissions reduction target or possible actions that could potentially support its achievement, as many other developing countries did. Such mitigation actions would be necessary to reinforce Bhutan’s intentions to reduce its energy and industry related emissions, beyond maintaining its forests carbon sink.
While Bhutan aims to remain carbon neutral due to its carbon sinks, we note a concern that projected increasing energy and industry emissions could bring Bhutan into a difficult position for its long-term low-carbon transition, risking a breakdown of its carbon neutrality. Without assessing the LULUCF sector, the CAT rating of Bhutan’s NDC would be “Insufficient.” But, as it has already reached a target that the Paris Agreement requires (globally) only for the second half of the century, we decided to upgrade Bhutan to “2°C compatible,” despite its NDC technically falling into the “Insufficient” rating.
In its NDC, Bhutan reaffirmed its goal to remain carbon neutral, by ensuring that GHG emissions will not exceed the sink capacity of its forests. The government also called on the international community to support its effort to achieve this target. However, it hasn’t specified a concrete financial or technical support requirement.
The forestry sector is pivotal for the Bhutanese carbon neutrality pledge, as its sequestration capacity currently exceeds GHG emissions from other sectors and thus leads to carbon neutrality. Forests currently cover 70% of Bhutan’s land, and it has a constitutional mandate to maintain this share above 60%. In its NDC, the Government of Bhutan pledges to maintain current levels of forest cover (Royal Government of Bhutan, 2015). Government estimates found that the forestry sector in Bhutan provides ecosystem services worth USD 14 billion per year (Royal Government of Bhutan, 2012).
The Paris Agreement requires global GHG emissions to peak as soon as possible “and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of [GHGs] in the second half of this century” (Paris Agreement, Article 4). It is mainly for this reason that the Climate Action Tracker rates mitigation pledges excluding LULUCF (Land Use Land Use Change and Forestry). Moreover, LULUCF is currently a source of global emissions, and mitigation measures in this sector are subject to uncertainty and difficult to assess.
In this context, Bhutan sits in the unusual position of being carbon neutral today, with carbon sinks balancing for sources of emissions. In other words, Bhutan has already reached a target that the Paris Agreement requires (globally) only for the second half of the century.
For this reason, we decided to upgrade Bhutan to “2°C compatible,” despite its NDC technically falling into the “insufficient” rating. At the same time, we note a concern that projected increasing energy and industry emissions could bring Bhutan into a difficult position for the long-term low-carbon transition, risking a breakdown of its carbon neutrality. Indeed, there is room for enhancing Bhutan’s level of ambition, which should be the “highest possible” in light of “different national circumstances” (Paris Agreement, Article 4.3).
Under the CAT’s current policy scenario for Bhutan, absolute emission levels excluding LULUCF will reach 5.12 MtCO2e by 2025 and 6.28 MtCO2e by 2030, increases of 280% and 366% relative to 1990 levels (1.35 MtCO2e), respectively. Compared to 2010 (2.01 MtCO2e excl. LULUCF), emissions in 2025 and 2030 will be 154% and 212% higher, respectively. Future emissions will also be reduced compared to BAU due to a number of measures adopted by the government, which include the National Environment Protection Act (Royal Government of Bhutan, 2007), the National Strategy and Action Plan for Low Carbon Development (Ea Energy Analyses & COWI, 2012), Bhutan Transport 2040 (ADB, 2013a), and the 2010 Economic Development Policy (Royal Government of Bhutan (RGoB), 2010). These plans include targets for improving sustainable waste management practices, promoting low-carbon transport and supporting clear energy generation through CDM.
Bhutan’s projected increase in emissions results to a large degree from increasing consumption of energy per capita. In 2005 Bhutan’s government adopted ‘Rural Electrification Master Plan,’ which aimed at achieving a 100% electrification rate in 2013 (IMF, 2010). Bhutan already reached this goal in 2014 (The World Bank, 2017). The impact on the emissions was negligible, as almost all of the electricity generated in Bhutan currently comes from hydro power plants. In 2016 the combined installed capacity in those power plants amounted to 1614 MW. Over 99% of this capacity are large hydropower plants with installed capacity above 10 MW (IRENA, 2017). A significant share of this capacity—1542 MW—is used for electricity exports to India (IndiaTimes, 2016). According to the NDC by 2025 Bhutan can offset 22 MtCO2e per year through export of clean electricity from hydropower projects. The high costs of grid extension (roughly $14.000 per km) has hindered energy access domestically (Dorji et al. 2012).
Emissions from the electricity sector are projected to reach 2.2 MtCO2 in 2020 (Second National Communication, 2011). Further extension of the existing capacity using fossil fuel based plants will lead to higher GHG emissions. These emissions will decline compared to business-as-usual scenario (BAU) if the target of additional 20 MW of renewable energy capacity, including solar, wind and bioenergy, by 2025 is implemented (IRENA, 2017).
The cement industry is another important driver of GHG emissions, and its sectoral emissions could reach 1.4 MtCO2 in 2020, if no additional policies are put in place in this sector (Second National Communication, 2011).
Pledge and historical emissions
Historical emissions from the Second National Communication (Royal Government of Bhutan, 2011) are available for 1994 and 2000. We assumed linear interpolation for the missing years between 1994 and 2000. We have extended the data series up to 2012 using growth rates from EIA (CO2 emissions from fuel combustions) (Energy Information Administration, 2017) and US-EPA (non-CO2 emissions) (US Environmental Protection Agency, 2012).
Current policy projections
Current policies projections are based on the ADB report (ADB, 2013b). We have applied the growth rates from the ADB “reference” scenario to the historical emissions up to 2030.
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ADB. (2013b). Economics of Reducing Greenhouse Gas Emissions in South Asia Options and Costs. Retrieved from https://www.adb.org/sites/default/files/publication/30186/economics-reducing-ghg-emissions-south-asia.pdf
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IndiaTimes. (2016). India imports 1,542 MW power from Bhutan.
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Royal Government of Bhutan. (2007). National Environmental Protection Act.
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