At this moment, our attentions are drawn towards COVID-19. But alongside COVID, the net zero transition in the context of climate change is gaining momentum in the policy circle, academia and businesses. Bhutan remained faithful to this transition since 2009 – almost 12 years ago – when it declared to remain carbon neutral (CN) in perpetuity. Yet agenda for green growth remained silent in Bhutan’s 2016 Economic Development Policy. It is plausible that Bhutan’s carbon neutral pledge will be broken well before 2050 if current economic structural pathway prevails (Bhutan: Can the 1.5 °C Agenda Be Integrated with Growth in Wealth and Happiness? | Yangka | Urban Planning (cogitatiopress.com)). But retaining CN should not be hard for Bhutan considering that essential policy frameworks are in place – albeit the integration. Moreover, Bhutan has the natural resources such as the forest cover and hydropower potential among others to foster green growth – the World Bank knows this very well. These resources remained resilient during the ongoing COVID-19 pandemic. Why not further capitalise on them perhaps in different ways? The issue for Bhutan is to retain its CN as it progresses economically from the current US$ 3400/capita to US$12000/capita and beyond as per the aggressive target in the 21st Economic Roadmap (draft version). 

Perhaps explore sustainable harvesting of the forest resource, which can significantly contribute to economic development as being raised by Dr. Phuntsho Namgyel. There are competing views on this (https://kuenselonline.com/timber-extraction-should-be-prudent-experts-say/)  but we could draw ‘net benefit’ from our forest resource. Else we simply cherish our 71% forest cover but import charcoal and woodchips for industrial use and furniture for our homes from India. Under this status quo, Bhutan is missing out on the potential for job creation. This is happening in the background of rising youth unemployment at 12% in 2019 (National Statistical Bureau, 2020). Youth unemployment is emerging as a social issue and may well become a crisis in the future. The Bhutanese culture of kinship and social benevolence is perhaps acting as a cushion from seeing youth unemployment as a crisis for now. But how elastic is this cushion? Dependency ratio in Bhutan is around 47% and rising youth unemployment will enlarge this ratio. Should not job creation be a priority? Without doing this, the Sustainable Development Goal (SDG) on ‘decent work for all’ will be a far-flung agenda for Bhutan.

There are avenues to explore economies of scope if not economies of scale. The presence of vast forest cover can provide a sustainable supply of bioenergy feedstock for biomass-based combined heat and power (CHP) plants that demonstrate economies of scope.  CHP plants are valuable in cold and temperate climatic zones such as where Bhutan is. CHP can be used for industrial heat and power, in commercial buildings such as hotels and restaurants, and in cluster of residential buildings/houses for district heating. There appears to be a business case for CHP plants in Bhutan. District heating through CHP is popular in Sweden and Finland. These countries are no different from Bhutan in terms of climatic conditions. The only difference is that Bhutan has higher biomass potential but no utilization for CHP. Shouldn’t we try it out? District heating through CHP plants can displace kerosene and Liquefied Petroleum Gas (LPG) heating contributing to import substitution whilst reducing emissions thereby contributing to carbon neutrality. CHP plants can also reduce indoor air pollution in households where firewoods are burned for heating and cooking purposes. Aren’t these multiple co-benefits? What is surprising is that 40% of the households do not have heating facility (Bhutan living standard survey-BLSS, 2017). Isn’t this pitiful in the 21st century? It is definite that the activities across the entire supply chain to install and operate CHP plants can create jobs.

We need to refurbish and/or construct small, mini and micro (SMM) hydropower system alongside our quest for mega hydropower plants (MHP). Bhutan started with SMM, but with greater focus on MHP over the past few decades, SMM fell onto the blind spot of export-driven hydropower vision to the extent that some of the SMM were decommissioned. SMM can meet the energy needs at dispersed demand centres, while the MHP continue their export venture. We can position them as complements not substitutes. How we frame can change our outlook! Capital requirement for SMM is obviously smaller compared to the massive amount required for MHP. Smaller capital requirement comes closer to the reach of domestic financing avenues in Bhutan. Furthermore, when things go wrong, what is at stake for SMM is significantly lower than MHP. SMM do not require long gestation period. Longer the gestation period, larger the risk – we all know this! For example, MHP such as Punatshangchu Project I is still under construction despite more than 12 years and we have no idea when it will come online considering the number of options being trialled one after the other (https://thebhutanese.bt/barrage-option-means-nu-4-85-bn-in-stabilization-works-and-chunk-of-nu-23-bn-in-dam-works-is-a-waste/). In 12 years, China commissioned its 1st indigenous state of the art nuclear submarine.

It may well be that we might have to wait for a technology that could concretise loose soils, hold a sliding hill, and create a bedrock at our desired position! What is at stake is huge relative to the Bhutanese economy if such mega hydropower project never come online. Under such circumstance the decision burden is too heavy for an individual or a team to shoulder – entire nation will have to stand to decide. Furthermore, in the event of natural disaster (whether climatic or non-climatic), dependence on MHP alone not only slashes export revenue but puts off domestic electricity as well. Whereas if we have a mix of SMM (catering to localised demand) and MHP (providing export revenue), the simultaneity of losing both to a disaster will be less – the essence of both energy and risk diversification. There appears to be a case to maintain both SMM and MHP. They both produce electricity but their nature of financial and environmental risks are significantly different. Isn’t this building resilience?

Finally, all along the way to a middle-income and carbon neutral economy, Bhutan needs basic infrastructure in place. As basic as providing high speed internet access – a core physical infrastructure for a digital society. As basic as providing 24×7 hours water supply. The situation of water shortage in a water rich country like Bhutan is insane – the latest one reported from Samdrup Jongkhar, eastern Bhutan (https://www.bbs.bt/news/?p=141293). Inadequate water supply is among the top five issues both in the rural and urban areas (see BLSS-2017). Here again a multipurpose dam for hydroelectricity and for irrigation and domestic needs can provide economies of scope. Tapping the freely flowing freshwater is supposedly less challenging – financially and technically – than desalinating the ocean that we see across the global coastal areas. Why we discard or shelf-off such plans remains an open question. Meanwhile our fresh water is flowing away bypassing would-be hydro turbines and would-be irrigation canals and our forest is just growing to sink the carbon from the air, while we sink into negative trade balance. Isn’t GNH about striking a balance and seeking a middle-path development rather than being skewed towards what can be easily pursued?

Contributed by 

Dorji Yangka

To be continued…