Keenly aware of the current and future importance of environmental conservation, and mindful of the potentially conflicting dynamics of conservation and development, the government and its development partners have introduced a set of environmental policies and programmes that aim to preserve Bhutan's rich biodiversity and guide the country on a sustainable development trajectory. These include the nationalization of forest land in 1969, the demarcation of 26% of total land as protected area, the ruling by the National Assembly in 1995 that no less than 60% of land must be retained under forest cover at all times, and the ongoing introduction of comprehensive environmental legislation. In 1998 the National Environment Commission released a National Environment Strategy for Bhutan, clarifying a development path to minimize potentially negative environmental impacts.

The National Environment Strategy outlines three main avenues for sustainable development - hydropower expansion, increased self-sufficiency in food production, and industrial development - all framed by concerns over environmental and cultural preservation. It is noted that environmental degradation may occur in conditions of extreme poverty, and in the exploitation of natural resources for the generation of significant wealth. Furthermore, the environment possesses economic, social, cultural and inherent values, which may differ between social groups. The strategy aims at pursuing a "Middle Path", understanding that accomplishing goals within different sectors will involve necessary compromises.

The state is to play a central role in the sustainable development of the nation and in the regulation of the behavior of different social groups. The cross-sectoral nature of environmental issues and the need for an integrated approach towards resource management is reflected in the responsibilities within individual ministries for the sustainability of their development initiatives. The majority of direct environmental policy aims at strengthening the capabilities of government institutions and state-society relations. Towards this end, five key cross-sectoral needs are identified: (1) Information systems and research; (2) Institutional development and popular participation; (3) Policies and legislation; (4) Training and education; and (5) Monitoring, evaluation and enforcement.

Past policies have placed an emphasis on top-down conservation measures. However, whilst recognizing that such national level policies and priorities are important in defining general directions and broad parameters, it is the interaction of humans with their respective environments at the grassroots level that some of the most important and tangible dynamics are in operation. As the margins narrow, with pressures from both traditional and modern sectors, it will be increasingly important to develop a participatory and representative style of governance, refine the systems of environmental information and analysis and promote continuing sustainability in resource management institutional arrangements. Informed decisions may then be effected which adequately represent popular environmental values and successfully resolve potential conflicts. Solutions will eventually depend on the form of future social pressures and the nature of popular sentiment.