Strengthening the financial and institutional sustainability of technological solutions for a circular economy in Bhutan



Guided by Gross National Happiness, a sustainable and holistic approach to development, Bhutan is making rigorous conservation efforts and remains the only carbon-negative country in the world. According to the GHG emission time series data from 1994 – 2015, Bhutan continues to sequester more carbon than it emits with net national emission of -5,572.500 Gg of CO2eq in 2015. Further, the nation aspires to remain carbon-neutral for all times. However, Bhutan’s GHG emission (excluding removal by sink) has been increasing and has almost doubled in 2015 compared to 1994 figures.

As for the waste management and related sector, while emissions is relatively low, it has still increased by 126.79% compared to the 1994 – 2015 period (Final Draft TNC, 2020). Such increased emissions is due to the increased waste generation is triggered by population growth, rapid urbanization and rural urban migration which poses a significant threat to the environment due to minimal treatment, recovery and recycling of wastes.

An innovative financial mechanism is essential to the holistic waste management practice as without it, addressing waste management in Bhutan is likely to remain difficult. In fact, the lack of suitable and dependable financial support for the waste sector has been a key barrier to proper waste management in the country as shortage of funds have resulted in inadequate capacity, technology, tools, equipment and workforce in the sector. Thus, a sustainable and innovative financial mechanism is the most important tool that underpins the successful implementation of the key interventions in the sector. It has also been emphasized as a key strategy in the National Waste Management Strategy of 2019.

CTCN Support

To develop waste management payment and sustainable operation strategies.

Expected Impact

Achieved sustainable waste management towards establishing a circular economy in Bhutan. Sustainable waste management has the potential to bring about economic, environmental, social and gender-sensitive development impacts. Economic co-benefits will arise from the creation of over 2000 job opportunities primarily through private sector involvement. Economic benefits can also be accrued through the production of energy using waste as raw materials. The environmental co-benefits of curtailing GHG emissions and reducing contamination of land, air and water extend well beyond Bhutan’s geographical boundaries. With regards to the social co-benefits, substituting the import of chemical fertilizers through the production of organic compost using organic waste would help Bhutan reduce budget deficit while also contributing to the national food security. Further, improved waste management will not only have a positive impact on the tourism sector (the second highest revenue generating sector for Bhutan), but also lead to healthier citizens which would in turn reduce the public health cost of the government.


Date of submission
Geographical scope
Waste management

Project details

Cross-sectoral enabler
Capacity building and training
Endogenous technologies
Final type of assistance
Financing facilitation
Request NDE
National Environment Commission Secretariat

Key documents