Bosnia and Herzegovina have significant physical potential regarding to renewable energy sources. Hydro, biomass, geothermal, wind, and solar potential can play important role in the whole state economy. Bosnia and Herzegovina is Non-Annex I country according to UNFCCC and according to that it is obligated to participate in the global efforts in order to reduce green house gases emission. This paper gives some analysis of the physical, technological, economic, and market potential of renewable energy sources in Bosnia and Herzegovina and their potential role in mitigation of climate changes. Paper also gives the analysis of the potential connections between renewable energy sources and sustainable development of the economy, taking in to consideration specific political structure of the state. Bosnia and Herzegovina is consisting from two entities: Republic of Srpska and Federation of Bosnia and Herzegovina, and Brcko District; energy sector and climate changes mitigation measures are under their jurisdiction. According to that some of this paper results can be useful for the improvement of entity and state strategies with the final aim to place renewable energy sources on the right position, as some of the major economy drivers, not only in Bosnia and Herzegovina, but in whole region.