Harnessing Carbon Market Potential: A Gateway to Sustainable Revenue

In a significant stride towards environmental stewardship and economic innovation, Bhutan has emerged as a key player in the global carbon market. The recent revelation by Gem Tshering, Minister for Energy and Natural Resources, during a session in the National Assembly, highlighted the success of the Dagachhu Hydropower Project in generating substantial carbon emission credits. From 2015 to 2023 alone, this initiative amassed over Nu 7.77 million from tradeable emissions credits—a testament to Bhutan’s commitment to sustainability amidst global climate challenges.

The query, posed by Naiten Wangchuk, MP for Mongar constituency, underscored Bhutan’s potential in carbon trading and the progress of registered hydropower projects under the Clean Development Mechanism (CDM). With Dagachhu being one of the three CDM-registered projects under the Kyoto Protocol, alongside Mangdechhu and Punatsangchhu, Bhutan has solidified its position in leveraging international climate agreements for economic benefit.

Bhutan’s dedication to environmental integrity dates back to its adoption of the Kyoto Protocol in 1997 and its enthusiastic participation in the Paris Agreement in 2015. These commitments reflect Bhutan’s proactive stance in reducing greenhouse gas emissions and fostering sustainable development through clean energy initiatives.

Naiten Wangchuk’s inquiry also touched upon future prospects, including the potential revenue from upcoming renewable energy projects under Article 6.4 of the Paris Agreement. This provision facilitates international cooperation in achieving emission reductions, positioning Bhutan to capitalize on its vast hydropower, solar, and wind energy potential.

Gem Tshering acknowledged the challenges in fully operationalizing carbon trading under international frameworks but expressed optimism about Bhutan’s upcoming ventures in this arena. Despite hurdles, efforts are underway, with the Druk Holding Investment (DHI) collaborating with Singapore to pave the way for Bhutan’s entry into the global carbon market.

Looking ahead, Bhutan’s ambitious plans encompass the construction of 5,413 megawatts of hydropower, alongside significant investments in solar and wind energy. These endeavors not only promise to bolster the nation’s energy security but also position Bhutan as a frontrunner in sustainable development practices globally.

As discussions continue to unfold in the National Assembly regarding the future of Bhutan’s renewable energy sector and its integration into international carbon markets, the nation stands poised to harness its natural advantages for the collective good. With each step forward, Bhutan reaffirms its role as a beacon of environmental responsibility and economic opportunity in the global fight against climate change.

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