Bhutan is a landlocked country located at the eastern end of the Himalayas in South Asia. This relatively small country is characterized by mountainous terrain and low population density. Its main economic activity is hydropower, which has a potential capacity of 30,000 MW and accounts for 45 percent of national revenue, as well as 19 percent of GDP. Nearly 70 percent of Bhutan’s population lives in rural areas and relies on agriculture for livelihood. In recent years, Bhutan has taken significant steps toward poverty reduction through economic development. However, a 2012 poverty rate of 12 percent is indicative of the country’s need for continued economic development.
Because of its geography and economic base, Bhutan is particularly vulnerable to climate change. Long-term climate models predict that average annual temperature will increase up to 1° C by 2039. In the same period, average annual precipitation will increase by up to 6 percent, with more rains during the monsoon season and drier winters. Changing temperature and precipitation patterns are likely to impact Bhutan’s agricultural sector, which supports the majority of its inhabitants. However, the greatest threat posed by climate change is potential Glacier Lake Outburst Flood (GLOF). Bhutan has nearly 2700 glacier lakes, and more are developing as a result of glacier retreat. At least 25 of these glacier lakes are dangerous and may burst at any time. Damage to downstream settlements and hydropower plants central to the country’s development is an ever-present threat.
Bhutan’s Constitution mandates that 60%of its landmass must be maintained under forest cover to conserve the country’s natural resources and carbon sinks.
Bhutan’s government places a high priority on maintaining the natural character of the country to such an extent that environmental protections are mandated by its Constitution. In keeping with its environmentally focused policy approach, Bhutan has approached CIF to leverage PPCR funding for continuing a strategy of sustainable development. PPCR funding will be used for projects based on promoting climate resilient villages, mitigating the risk associated with GLOF, and mainstreaming climate change into policy planning.