Bhutan’s celebrated record of carbon-negative growth has won fresh praise from the World Bank, even as the institution warns that a narrow economic base and mounting climate risks could erode the Himalayan kingdom’s hard-won gains. The Bank’s new Country Climate and Development Report (CCDR) commends decades of forest conservation and low-emission policies, yet urges the government to pair those achievements with broader, climate-resilient development.
Released yesterday in the capital, the CCDR is part of a global series that knits climate science into economic planning. Its authors caution that relying almost exclusively on hydropower for exports and public revenue leaves Bhutan exposed to shifting rainfall and glacial melt. They recommend parallel investment in “climate-smart” agriculture, sustainable forestry and ecotourism to spread risk and create new income streams.
“Heavier rain, landslides and rising temperatures are no longer distant threats; they are already shaving growth potential,” said Rangeet Ghosh, the report’s lead author and a senior World Bank economist. Ghosh called for integrated climate-risk management across all new infrastructure, coupled with reforms that let the private sector co-finance green projects.
The study projects that, without swift adaptation, climate shocks could slice a significant share off Bhutan’s GDP by mid-century. Early action—stronger dams, climate-resilient roads, diversified crops and nature-based tourism—could trim those losses by at least 40 percent, it estimates.
Beyond the physical safeguards, the CCDR spotlights an overlooked jobs dividend. “Civil engineers, geologists, climate advisers—these skills already exist in Bhutan but remain under-employed,” Ghosh noted. Expanding green financing and tapping carbon markets could unlock thousands of new “blue-and-green-collar” positions, the report argues.
Acting Country Director Cecile Fruman framed the document as both a risk map and a growth blueprint: “By marrying climate analytics with development trajectories, Bhutan can lengthen its tourism season, raise farm productivity and build a buffer against future shocks.”
The report’s findings will steer forthcoming World Bank lending and, officials hope, attract additional climate funds to Thimphu. For a nation that already captures global imagination as the world’s only carbon-negative state, the CCDR adds a clear message: environmental leadership must now be matched by an equally resilient, diversified economy.
