Bhutan Forges Ahead into Carbon Market with Singapore Partnership

In a groundbreaking move toward sustainable development, Bhutan is poised to make its mark in the global carbon market through a strategic partnership with Singapore. Negotiations between Bhutan and Druk Holding and Investments (DHI) are nearing completion, as confirmed by Energy and Natural Resources Minister, Gem Tshering.

Bhutan’s unique advantage in clean energy, underscored by its abundant forest cover, sets the stage for a promising venture into the carbon market. Minister Tshering emphasized the immense potential this holds for the nation, highlighting Bhutan’s commitment to maintaining carbon neutrality and its status as the world’s first carbon-negative country.

Maintaining emissions below the carbon removal capacity of its forests, Bhutan boasts an impressive 69.5 percent forest cover. This natural asset forms the bedrock of Bhutan’s environmental stewardship and positions the country as a frontrunner in global efforts to combat climate change.

The launch of Bhutan’s National Carbon Registry on December 4, 2023, marked a significant milestone, providing the country with access to the World Bank climate warehouse and paving the way for collaboration with international carbon markets. This registry not only elevates Bhutan’s environmental ambitions but also strengthens its capacity to enhance climate resilience on a global scale.

Aligned with the Paris Agreement, which it ratified in 2017, Bhutan’s commitment to carbon neutrality is further bolstered by its integration with the Climate Action Data Trust (CAD Trust) meta-data layer—a decentralized blockchain platform developed by the World Bank, International Emissions Trading Association, and Singapore in December 2022.

This integration ensures accurate tracking, accounting, and reporting of emission reduction units, thereby advancing Bhutan’s climate mitigation strategies and objectives through the harnessing of carbon finance.

The Carbon Markets Rules for the Kingdom of Bhutan 2023 delineate the procedures for entities seeking participation in carbon markets. Entities must obtain authorization from the Department of Environment and Climate Change (DECC) for mitigation activities validated or verified according to procedures established by the National Environment Commission Secretariat.

In strict adherence to national laws and international agreements, including the National Environment Protection Act 2007, Climate Change Policy 2020, and the Paris Agreement, Bhutan’s carbon registry operates within robust legislative and policy frameworks aimed at environmental protection and climate action.

As Bhutan takes strides towards a greener, more sustainable future, its partnership with Singapore in the carbon market heralds a new era of collaboration in the global fight against climate change. With its unwavering commitment to environmental conservation and innovative approaches to carbon neutrality, Bhutan stands poised to inspire the world in the transition towards a low-carbon future.

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