Gross Ecosystem Product (GEP) Accounting & Application (Bhutan)

NatCap is working with the government of Bhutan to develop the first officially-adopted national Gross Ecosystem Product (GEP) metric in the world and supporting them in developing a system to regularly update and use the metric to shape and finance sustainable economic growth. NatCap Lead: Stanford NatCap. Collaborators: Bhutan National Statistics Bureau. Funder: Enlight Foundation. 

The Challenge

Bhutan is endowed with extraordinary natural wealth and has long been guided by a philosophy that harmonizes cultural integrity with economic progress and environmental stewardship. Its global leadership in sustainability is visibly demonstrated through its constitutional mandate to maintain at least 60% forest cover, as well as its status as the world’s first carbon-negative country. However, it faces many developmental challenges, and is looking for additional ways to develop its economy sustainably and in keeping with its nature-related values. 

The Solution

Natural capital accounting in general, and Gross Ecosystem Product (GEP) in particular, can open new pathways toward harmonious and sustainable development. GEP is a measure that summarizes the value of nature’s contributions to economic activity. In March 2021, it was officially approved by the UN Statistical Commission as an indicator of sustainable development, paving the way for widespread adoption across the globe (Fig. 1). In practice, GEP provides a benchmark for land use planning, a standard for evaluating management and performance, and a framework within which to develop payments for ecosystem services and green finance mechanisms.

Bhutan is poised to become the first country to officially adopt GEP at the national level, although China has led extensive GEP innovation and applications.  The ecosystem services to be included in the first estimate of national GEP for Bhutan fall into three categories: material services (e.g., crop production, non-timber forest products, water supply), regulating services (e.g., carbon storage, sediment retention, flood mitigation) and non-material/cultural services (e.g., domestic and international visitations for cultural and nature experiences).

Recognizing the importance of developing strong national capacity to ensure the long-term deployment and application of natural capital and GEP accounting in Bhutan, NatCap is working closely with the Bhutan National Statistics Bureau to enable government team members to effectively collect, manage, and analyze data and, ultimately, to link to potential policy and finance applications.