Bhutan
Page last updated: 2nd December 2015
Rating
Assessment
On 30th September 2015, Bhutan submitted its Intended Nationally Determined Contribution (INDC), including a target to remain carbon neutral. This means that Bhutan aims to maintain greenhouse gas (GHG) emissions below its total carbon sink from land use, land use change and forestry (LULUCF). We rate Bhutan’s INDC “sufficient.”
The CAT rates INDCs based on their emissions excluding LULUCF. For Bhutan, this means that we rate their INDC based on their rising energy and industry emissions. The “sufficient” rating is based on 2025 emissions levels and indicates that Bhutan’s emissions are in line with their “fair share” of global efforts to hold warming below 2°C.
While Bhutan’s emissions from energy, industry and agriculture are of the same magnitude as its carbon sink—removals—from LULUCF, they are projected to be on the border between “medium” and “sufficient.” If it doesn’t implement any policies to arrest this trend, Bhutan’s rating could change to “medium.”
The government called for international support to help it remain carbon neutral without specifying actual needs, but has not made its target conditional on this. Unlike many developing countries, Bhutan’s INDC does not present a conditional target or possible actions that could potentially support its achievement. This would be good to reinforce Bhutan’s intentions to reduce its energy and industry related emissions, beyond maintaining its forests carbon sink.
Pledges and post-2020 contribution
In its INDC, 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 this target. However, they are not specific on the outside support they need.
The forestry sector is pivotal for the Bhutanese carbon neutrality pledge, as its sequestration capacity currently exceeds GHG emissions. Forests currently cover 70% of the Bhutanese surface, and the country has a constitutional mandate to maintain this share above 60%. In its INDC, the government of Bhutan pledges to maintain current levels forest cover (Royal Government of Bhutan, 2015). Government estimates found that Bhutan’s forestry sector provides ecosystem services worth $14 Billion per year (Royal Government of Bhutan, 2012).
The CAT rates INDCs based on emissions excl. LULUCF. Although Bhutan’s target remains essentially the same as in previous years—that is, to remain a carbon sink - we assessed and rated the INDC based on their rising energy and industry emissions, which will not be compensated by the large natural carbon sink resulting from Bhutan’s forests.
Fair share
We rated Bhutan’s pledge “sufficient” for 2025. This rating is based on emissions excluding LULUCF and takes into consideration that, as a developing country with currently very low emissions per capita, Bhutan’s emissions are expected to grow over this time period. We note that gradual reductions will be needed afterwards.
Bhutan is one of the only countries the CAT has ever rated “Role Model”. The CAT now rates INDCs excluding LULUCF but, in the past, we included LULUCF in the assessment of the five countries presenting large share of their emissions coming from the LULUCF sector: Indonesia, Brazil, Peru, Costa Rica and Bhutan. The exclusion of the LULUCF sector did not result in a change in rating for any of the other countries, except for Bhutan: the change from “Role model” to “Sufficient” is due to this factor alone.
Current policy projections
Absolute emission levels in Bhutan (excl. LULUCF) resulting from a current policy trajectory 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. This increase results from industrial development and implementation of the “Rural Electrification Master Plan“ adopted in 2005, which aimed to achieve a 100% electrification rate in 2013. With a high reliance on hydroelectricity, the current power sector emissions are negligible. However, further extension of the existing capacity using fossil fuel-based power generation will lead to higher GHG emissions. These emissions will decline compared to business-as-usual scenario (BAU) if the target of 20 MW of renewable energy capacity by 2020 is implemented (ADP, 2013).
Emissions from the electricity sector are projected to reach 2.2 MtCO2 in 2020 (Second National Communication, 2011). The cement industry is another important driver of GHG emissions, and its share in emissions could reach 1.4 MtCO2 in 2020, if additional policies are put in place to address this (Second National Communication, 2011).
Future emissions will also be reduced compared to BAU (Business As Usual) due to a number of measures adopted by the government, which include the National Environment Protection Act, the National Strategy and Action Plan for Low Carbon Development (2012), Bhutan Transport 2040, and the 2010 Economic Development Policy. These plans include the goals of improving sustainable waste management practices, promoting low-carbon transport and supporting clear energy generation through CDM.
With an estimated capacity of 30 MW, hydropower is currently the mainstay of the power mix, and also the main source of revenues for the Government (accounting for 19% of the total GDP). Bhutan is a net exporter of electricity, even though 40% of the population does not have access to it (IRENA, Country profiles, 2009 data). In fact, the high cost of grid extension (roughly $14,000/km) has hindered energy access domestically. As a result, 75% of domestically-produced electricity is exported to India (Dorji et al. 2012). According to the INDC, Bhutan can offset 22 MtCO2e a year abroad by 2025 through the export of clean electricity from hydropower projects. This does, however, not play any role for our rating, because this does not impact domestic emissions.
Assumptions
Pledge and historical emissions
Historical emissions from the Second National Communication are available for 1994 and 2000. We assumed a linear interpolation for the missing years between 1994 and 2000. We have extended the data series up to 2012 using growth rates from IEA (CO2 emissions from fuel combustions) and US-EPA (non-CO2 emissions).
Current policy projections
Current policies projections are based on the ADB (2013) report. We have applied the growth rates from the ADB “reference” scenario to the historical emissions, up to 2030.
Sources
ADB (2013): Economics of Reducing Greenhouse Gas Emissions in South Asia: Options and Costs. ISBN 978-92-9092-143-1 (Print), 978-92-9092-383-1 (PDF).
Dorji, T., T. Urmee, P. Jennings (2012). "Options for off-grid electrification in the Royal Government of Bhutan". Renewable Energy Volume 45, September 2012, Pages 51–58.
Duncan, G. (2013). "Should Happiness-Maximization be the Goal of Government?". The Exploration of Happiness Happiness Studies Book Series 2013, pp 303-320.
EA Energy Analyses /COWI (2012): Bhutan: A national strategy and action plan for low carbon development, Final report - 31-01-2012.
EPA (2014): Non-CO2 Greenhouse Gases: International Emissions and Projections, Environmental Protection Agency, United States.
FAOSTAT (2014): Faostat Database, Food and Agriculture Organization of the United States of America. Accessed on 19th November 2014.
IRENA (2014): Renewable Energy Country Profile - Bhutan. Accessed on 19th November 2014.
Royal Government of Bhutan (2011): Second National Communication to the UNFCCC. National Environment Commission, Royal Government of Bhutan.
Royal Government of Bhutan (2015): Intended Nationally Determined Contribution. National Environment Commission, Royal Government of Bhutan, 30th September 2015.
Royal Government of Bhutan (2012): Bhutan in pursuit of Sustainable Development – National Report for the United Conference on Sustainable Development 2012 , May 2012
UNFCCC: GHG emissions profile - Bhutan, GHG emission profiles for non-Annex I Parties.
