Bhutan is at present - and aims to remain - carbon neutral, building upon a commitment already made in 2010, a situation which led the CAT to rate Bhutan’s Paris Agreement pledge as “2°C compatible,” despite it technically falling into the “Insufficient” rating. 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. However, with an increasingly lenient outlook on vehicle imports, Bhutan’s transport sector is likely to become a major source of emissions, risking a breakdown of its present carbon neutrality.
In addition, as Bhutan prepares to graduate from Least Developed Country status, we anticipate two issues. The first surrounds the sustainability of Bhutan’s debt from hydropower projects, as it loses access to concessional financing. The second is increased emissions from the energy and industry sectors. Recognising the importance of energy efficiency in enhancing economic benefits, energy security and independence, Bhutan’s Draft Energy Efficiency Roadmap identified measures in building, appliance and industry sectors at national, household and industrial levels to further reduce emissions (See current policies section).
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). See pledge section.
The government called for international support for remaining carbon neutral without specifying actual needs, but has not made its target conditional on it. This is a departure from the approach adopted by many other developing countries. International support will become increasingly crucial as Bhutan graduates from its status as a Least Developed Country and loses access to concessional financing.
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.