YK Poudel
At the Bhutan Innovation Forum yesterday, economist and House of Lords member in the United Kingdom, Nicholas H. Stern underscored the urgent need for climate action intertwined with sustainable economic development and sustainability.
In his opening session titled ‘Managing Climate Risks and Promoting Sustainability’, Nicholas H Stern warned that the global community has underestimated the risks of climate change. Without prompt action, he cautioned, the world could face catastrophic consequences.
Climate financing, he said, from rich countries to poor countries should reach a trillion USD annually by 2030. “The current climate financing stands between 150 and 200 billion USD annually, which is inadequate.”
“Bhutan is the only country that has balanced and integrated physical, natural, human and socio-cultural capital in its concept of sustainable development,” he said.
He explained that physical capital refers to infrastructure and assets; human capital encompasses education and health; natural capital pertains to biodiversity; and socio-cultural capital includes societal values and cohesion.
“Current generations have a responsibility to provide future generations with a similar quality of life, which necessitates wise investment,” he said, urging the need for clarity in defining value to ensure mindful, integrated development in Bhutan.
While praising Bhutan’s inspirational approach to development, asserting that it showcases a sustainable model for the world, he cautioned that climate action and biodiversity efforts should not conflict with economic and social development. “The world must prioritise both reducing emissions and adapting to economic development.”
For Bhutan, he suggested that environmental conservation and hydropower production should drive development, not hinder it.
He pointed out that technological advancements have made clean energy solutions cheaper than their fossil fuel counterparts, projecting that within the next decade, two-thirds of emissions reductions will come from the transport sector alone.
Moreover, he highlighted the critical role of climate financing in building resilience and promoting investment in cleaner urban environments.
“Currently, the financing landscape is mixed,” he said, emphasising Bhutan’s potential to exemplify a balanced approach to economic growth and environmental stewardship amid global climate challenges.
Expressing concern over the slow response of some leaders to alarming climate science data, Nicholas H. Stern stressed that wealthier nations must support smaller economies. “We should aim to build robust cities where residents can enjoy clean air,” he said, referencing Bhutan’s Gelephu Mindfulness City.
Nicholas reiterated the pressing need for global action against climate and biodiversity crises, warning that inaction disproportionately impacts vulnerable communities in developing countries.
He argued that swift and large-scale action could redefine global development pathways.
“By embracing sustainable growth models, nations can avoid the destructive practices of the past, fostering a future marked by prosperity, equity, and environmental resilience,” Nicholas said.
Investment in the green transition is vital, particularly through energy transformation, climate adaptation, and natural capital protection, according to Nicholas.
“Bhutan’s commitment to environmental conservation makes the green transition particularly relevant for the country,” he said.
However, he acknowledged the significant challenges of financing and scaling green investments, especially for a developing nation like Bhutan.
The Bhutan Innovation Forum ended yesterday, bringing in over 1,500 international and Bhutanese participants including school students on the final day.