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Tuesday, November 29, 2011

green spending equals 2.9% of gdp

Bhutan’s spending on environment has increased in the last fiscal from that of the year before and is described to be relatively better than other countries
The finance ministry has described the government’s expenditure on programs related to the environment as “substantial.” It amounts to Nu 1,966mn in the 2009-10 fiscal.

The amount is 2.9% of the gross domestic product (GDP) and this ratio against the GDP is described to be “significantly higher than other countries.” It also equals 6.5% of the total public expenditure.

The finance ministry report entitled ‘Public Environmental Expenditure Review (PEER)’ for two fiscals 2008-09 and 2009-10 hopes to “evaluate the government’s environmental policies and priorities, as well as its environmental management as reflected in public expenditures.”

According to the Report, the Public Environmental Expenditure (PEE) in 2009-10 is higher than Nu 1,322mn the fiscal before which accounted for 2.3% of the GDP and 5.7% of the total public expenditure.

The Report states that the reason for the large increase in the latest fiscal compared to 2008-09 was that the latter was the first year of the 10th Five Year Plan (FYP) and many of the investment project and tenders had not been finalized then.

The expenditure on environmental programs includes nine clusters which include environmental protection; urban, rural and industrial environmental management; biodiversity conservation; and information and knowledge. The above four clusters are in line with international definition and are known are core PEE.

The other five clusters include natural resource management, soil conservation and land management, climate change, environmental mainstreaming, and other overheads.

The total external funding for PEE for both the two fiscals amounted to Nu 1.271mn. The government of India and Denmark provided 26.9% and 21% respectively which is almost the half of the external PEE funding.

About a quarter 27.2% was provided by multi-lateral organizations such as ADB (9.2%), GEF (9%), World Bank (4%) and the UN agencies (5.2%). Another quarter (24.7%) was provided by a number of other bilateral and multilateral development partners, international organizations and NGOs.

The 2009-10 review also recommends that in the next review environmental expenditures of the private sector including CSOs should also be prepared.

“This will provide a full account of the environmental expenditures in Bhutan and supplement the development of green national accounting system by the National Statistics bureau (NSB),” says the review.

In 2009-10, Bhutan’s core PEE amounted to Nu 756mn, which is equal to 2.5% of the total public expenditure and 1.1% of the GDP.

“The core PEE is slightly higher in Bhutan compared to estimates for some other countries and could be a reflection of Bhutan’s strong commitment to environmental preservation,” states the review.

The three ministries of agriculture and forests, external affairs, and works and human settlement accounted for over 60% of the total PEE while the National Environmental Commission accounted for a meager 3.4%. About 70% of the PEE was incurred by central agencies.

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