Contribution of Forestry to Poverty Alleviation - APFNet

Payment for Environmental Services
Bhutan is well known for its pristine environment and conservation of its forests. With the national
policy of keeping 60% of the country’s land area under forest cover at all times, the Bhutanese population
can benefit from the forests’ environmental services. However, the identification, quantification, and
valuation of various ecosystem services need to be studied, which can greatly enhance the contribution
of forests to GDP.
Ecotourism
While tourism is increasingly being seen as a major opportunity for economic diversification (Norbu
2003), the country does not wish to compromise the fast economic return of tourism with erosion of
cultural heritage and biodiversity. Thus, the current policy of high return and low impact tourism targets
rich people and countries to limit the ill-effects of tourism on the physical and cultural environments.
Endowed with a bountiful nature as well as rich and unique culture and traditions, Bhutan has a huge
potential to benefit from this growing market.
According to the National Statistical Bureau (NSB 2009), the tourism industry in Bhutan began in 1974.
The erstwhile government agency, Bhutan Tourism Corp., controlled tourism until its privatization in
1991. In 2008, there were 475 licensed tour operators. The potential as far as foreign exchange earnings
are concerned is very high. The revenue generation from the tourism sector increased from over US$ 2
million in the late 1980s to over US$ 38 million in 2008. Culture and nature-based tourism are always
the selling points for the tourism industry of Bhutan. In 2008, major festivals in the country attracted
a significant number of visitors. There were 26,426 tourists who visited Bhutan for cultural exposure,
holiday, and recreation purposes. Tourism businesses centralized operations, mostly by urban dwellers.
In recent years, community-based tourism is being encouraged to make the benefits of tourism reach
the rural communities. Such initiatives are currently piloted in a few areas. The rural poor receive
minimal benefits through serving as porters and renting out their horses and mules for transporting
luggage. They get paid based on the daily wage rate. The bulk of the benefits go to tour operators and
tourism operation is centralized.
Bhutan’s Protected Area Networks is opening up to markets for nature recreation, capitalizing on
ecotourism, although the number of eco-tourists is less compared to tourists interested in Bhutanese
culture. Ecotourism pursues a policy of promoting conservation as well as development for local
communities in and around the protected areas.
Watershed management
With technical support from FAO, the Watershed Management Division of the DoFPS is experimenting
on PES initiatives for the forests’ support for the drinking water supply of the downstream communities
in Mongar, conservation of the black-necked crane in Phobjikha through ecotourism, and watershed
rehabilitation in Pachu-Wangchu. The initiatives focus on establishing relationships between the service
providers upstream and the buyers downstream with reference to a particular environmental service
of the forests, such as sustaining drinking water supply, conservation of biodiversity (specifically, the
black-necked crane), and watershed protection, for the benefit of rural communities and conservation
of environment. Currently, mechanisms are being worked out and implemented to compensate the
communities on an equitable basis.
Reducing emission from deforestation and forest degradation (REDD)
The DoFPS is aware of the emerging financial incentive in the form of the REDD mechanism, which
may accrue to rural communities. The development of policy initiatives is underway, which aims to
capitalize on carbon storage by Bhutan’s forests and to plough back funds for conservation, sustainable
management of forests, and enhancement of carbon stocks. The strategy, however, is unclear how
REDD+ can contribute to benefit rural communities and reduce poverty.
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