Bhutan Country Environmental Analysis [DRAFT] Asian Development Bank November 2004 Country Environmental Analysis RSC No.C40700-BHU Prepared for Asian Development Bank Prepared by Maunsell Limited 47 George Street, Newmarket PO Box 4241 Auckland New Zealand Tel +64 9 379 1200 Fax +64 9 379 1201 [email protected] November 2004 104667121U © Maunsell Limited 2004 The information contained in this document produced by Maunsell Limited is solely for the use of the Client identified on the cover sheet for the purpose for which it has been prepared and Maunsell Limited undertakes no duty to or accepts any responsibility to any third party who may rely upon this document. All rights reserved. No section or element of this document may be removed from this document, reproduced, electronically stored or transmitted in any form without the written permission of Maunsell Limited. Draft Country Environmental Analysis Revision 0 November 2004 Quality Information Document Country Environmental Analysis Ref 104667121U Date November 2004 Prepared by Alan Sewell Reviewed by Alistair Tait Revision History Authorised Revision Revision Date Details Name/Position Signature Alistair Tait Technical O - Draft0 29/09/2004 Issued for review / comment Director – International Generation Draft Country Environmental Analysis Revision 0 November 2004 Table of Contents Executive Summary i 1.0 Introduction 1 1.1 Background to Country Environmental Analysis 1 1.2 Bhutan – Brief Description 1 1.3 Structure of the Country Environmental Analysis 3 2.0 Role of Environment and Natural Resources in the Economy 4 2.1 Introduction 4 2.2 Renewable Natural Resources 4 2.2.1 Overview 4 2.2.2 Agro-ecological Zones 5 2.2.3 Food Security 6 2.2.4 Forestry 7 2.2.5 Opportunities for Sustainable Development 8 2.3 Biodiversity Conservation 9 2.3.1 Overview 9 2.3.2 Opportunities for Biodiversity Conservation 10 2.4 Water Resources and Hydropower 12 2.5 Mineral Resources 13 2.6 Culture, Environment and Tourism 13 3.0 Key Environmental Issues 15 3.1 Introduction 15 3.2 Preservation of Land and Agriculture Resources 15 3.2.1 Land Use Changes 15 3.2.2 Threats to Agricultural Production 17 3.2.3 Land Degradation 18 3.3 Preservation of Forests and Biodiversity 19 3.3.1 Forests and Flora 19 3.3.2 Fauna 20 3.3.3 Threats to Biodiversity 21 3.3.4 Trans-Boundary Issues 22 3.4 Preservation of Water Resources 23 3.4.1 Water Availability 23 3.4.2 Water Quality 23 3.4.3 Access to Safe Drinking Water 24 3.4.4 Sanitation Coverage 24 3.4.5 Threats to Water Resources 26 3.5 Industrial Development 26 3.6 Urbanisation 27 3.6.1 Introduction 27 3.6.2 Air Pollution 28 Draft Country Environmental Analysis Revision 0 November 2004 3.6.3 Water Pollution 29 3.6.4 Solid Waste Management 30 3.6.5 Loss of Agricultural Land 32 3.6.6 Urban Poverty 32 4.0 Potential Contribution of Environmental Improvements 33 4.1 Introduction 33 4.2 Agriculture 33 4.3 Forestry 34 4.4 Water Resources 35 4.5 Energy 35 4.6 Transportation 36 4.7 Urban Development 37 5.0 Regulatory and Institutional Framework 39 5.1 Overview 39 5.2 Environmental Legislation 40 5.3 Institutional Setting 41 5.4 Multilateral Environmental Agreements 43 5.5 Assessment of Policies and Strategies 44 5.6 Performance of Environmental Regulatory Framework 46 5.7 Public Consultation in Decision-Making 47 5.8 Lessons Learned from Donors’ Activities 47 6.0 Past Environmental Record 50 7.0 Environmental Information Needs 52 8.0 Review of Country Strategy and Program 55 8.1 Introduction 55 8.2 Sectoral Strategies and Work Programs 55 8.3 Impact of Country Strategy and Program on Key Environmental Issues 57 9.0 Recommendations 60 References and Bibliography Appendices Appendix 1 Terms of Reference for the Assignment Appendix 2 List of Persons Met during the Assignment Appendix 3 Stakeholder Consultation Presentation Including List of Invitees and Attendees Appendix 4 Examples of Payment for Environmental Services Appendix 5 List of Protected Areas and Biological Corridors and Their Areas Appendix 6 Characteristic Flora and Fauna of Bhutan’s Ecological Sub-zones Appendix 7 List of Totally Protected Species in Bhutan Draft Country Environmental Analysis Revision 0 November 2004 Appendix 8 Drinking Water Quality of Sampled Water Supply Schemes in Bhutan Appendix 9 Summary Results of NEC Environmental Data Availability Survey 2003 Appendix 10 Preliminary List of Environmental Indicators Proposed for Inclusion in Environmental Information Management System Abbreviations AM Aide memoire asl above sea level BAP Biodiversity Action Plan BCCL Bhutan Carbide and Chemicals Ltd BOD Biological Oxygen Demand COD Chemical Oxygen Demand COS Country Operational Strategy Danida Danish Development Organisation DEC Dzongkhag Environment Committee DOR Department of Roads DYT Dzongkhag Yargey Tshogchungs Dzongkhag District EA Act Environmental Assessment Act EC Environmental Clearance EEA European Environment Agency EFRC Environmental Friendly Road Construction ECP Environmental Codes of Practice EIA Environmental Impact Assessment EIMS Environmental Information Management System for Bhutan EMP Environmental Management Plan EU Environmental Units GDP Gross Domestic Product GEF Global Environment Fund Geog Block (group of villages) GLOF Glacial Outburst Floods GYT Geog Yargey Tshogchung ICD Integrating conservation and development ICDP Integrated Conservation and Development Programmes km kilometre km2 square kilometres m metres m3 cubic metres MEA Multilateral Environmental Agreement Draft Country Environmental Analysis Revision 0 November 2004 mm millimetres MOA Ministry of Agriculture MW megawatt MWHS Ministry of Works and Human Settlements NBWQS National Baseline Water Quality Survey (1997) NEC National Environment Commission NECS National Environment Commission Secretariat NES National Environment Strategy NTFP Non-Timber Forest Products NFYP Ninth Five-Year Plan NSB National Statistical Bureau Nu Ngultrum OECD Organisation for Economic Co-operation and Development PCP Penden Cement Plant PES Payment for Environmental Services % percent RGOB Royal Government of Bhutan RNR Renewable Natural Resources RSTA Road Safety Transport Authority SME Small and Medium Enterprises SNV Netherlands Development Organisation TCC Thimphu City Corporation TOR Terms of Reference TSP Total Suspended Particulates TVET Technical Vocational, Education and Training UNCSD United Nations Commission on Sustainable Development UNDP United Nations Development Programme UNEP United Nations Environment Programme USPS Urban Sector Programme Support (Danida funded) US$ United States dollars WHO World Health Organisation WRMP Water Resources Management Plan WWF Worldwide Fund for Nature Draft Country Environmental Analysis Revision 0 November 2004 Executive Summary Bhutan’s environment is characterised by rugged mountain terrain, extensive forest cover over a range of altitude zones and rich biodiversity. Within this environment the Bhutanese people have lived for centuries in widely dispersed isolated communities dependent on subsistence agriculture and pastoral farming and living in harmony with the natural environment. Since modern development began 43 years ago, Bhutan has made remarkable human development and economic progress without compromising the country’s socio-cultural and biological diversity. Its development has been guided by its “Middle Path” approach to sustainable development which balances economic development with environmental protection and cultural preservation. Such a strategy is integral to the fostering of Gross National Happiness. Bhutan’s economy is dependant on the environment and natural resources primarily through agricultural production and hydropower, both of which are also dependant upon forest and biodiversity conservation. Within this context, sustainable development requires management of the complex array of forces on the natural environment that have accompanied economic development in recent years. These forces include, population pressure, agricultural development, land use change, hydropower development, mineral development industrialisation, urbanisation, tourism, competition for available land, road construction and provision of other physical infrastructure associated with social and economic development. Such forces have given rise to a number of key environmental issues that Bhutan now faces. The key environmental issues include: the need to reduce land degradation, preserve biodiversity, protect water resources and manage / mitigate the environmental effects of urbanisation and industrial development (air and water pollution, solid waste management, loss of agricultural land). Addressing these issues to achieve sustainable development is a major challenge to the country. On the one hand the challenge involves taking advantage of all opportunities to maximise economic development through strategic environmental planning and integration of cross-sectoral considerations. On the other hand it involves establishing and implementing environmental regulations and controls on all development activities. In regard to the former, the country is moving toward a more strategic and cross-sectoral approach in dealing with environmental issues with increasing inter-agency co-ordination of development activities. In regard to the latter the Royal Government of Bhutan (RGOB), with assistance from donor partners, has established a comprehensive environmental policy and regulatory framework to guide development. Bhutan’s environmental regulatory framework is underpinned by the