Sustainable Asset Valuation of the Million Trees Initiative, Bhutan

Sustainable Asset Valuation of the Million Trees Initiative, Bhutan

This report presents a Sustainable Asset Valuation (SAVi) of tree planting in rural Bhutan. The assessment uses outputs from a spatially explicit analysis, a system dynamics model, and an agent-based model to quantify the social and environmental externalities of establishing fruit and timber plantations across Bhutan. The report focuses on the climate adaptation benefits of tree planting and the ability for plantations to support rural livelihoods and landscapes. The impacts of this nature-based infrastructure are compiled into an integrated cost-benefit analysis to assess the financial performance of tree planting over a 20-year time horizon.

This assessment was conducted in collaboration with the Bhutan Ecological Society, which, through the Million Trees Initiative, aims to plant 1,000,000 high-value plantation trees to regenerate fallow land and restore degraded forest. The objective is for these trees to support rural livelihoods and landscapes by:

  • Providing income from fruit, timber, and fodder
  • Creating jobs in nurseries
  • Sequestering carbon
  • Reducing landslides and erosion
  • Mitigating flooding

By the end of the planned 5-year project, the Million Trees Initiative will have planted trees on 809 hectares of fallow land and restored 1,214 hectares of degraded forest. The project will support over 5,000 smallholder farmers, including at least 2,500 men and 2,500 women. It is also possible that the project could be scaled up to restore more land.

To understand the potential impact of the project, the Bhutan Ecological Society has engaged in a formal valuation of the potential costs and benefits of planting high-value trees. This SAVi assessment supports those efforts by quantifying the direct economic benefit to farmers, as well as multiple social and environmental benefits. Results indicate that plantations can boost rural income, reduce the area of fallow land, and slow rural population decline in Bhutan. Furthermore, planting trees contributes to climate adaptation by mitigating flooding and landslides. Specifically, the benefits of tree planting may be greater in locations that are vulnerable and exposed to flooding or landslides. Finally, plantations are, financially, a better way to support rural livelihoods than grey infrastructure alternatives.