Carbon Trading | CO2 Emissions | Ex-situ | Chure Conservation Program | Indigenous

Designed by Umanga Maharjan
Designed by Umanga Maharjan

Environment

Carbon trading plan, ex-situ forest conservation in fiscal plan 2024/25

The country is set to receive payment of $11 million in carbon trading this year while its fiscal plan hints on carbon trading through the private sector, speaks of ex-situ conservation for plant species at risk, and specifies allocation for the Chure Conservation Program.

By Vivek Baranwal |

Nepal is set to bag $11 million for trading carbon in the global market for the first time. It’s just a matter of due process as when the Ministry of Forests and Environment’s REDD Implementation Centre receives the amount in its forest development fund to be paid by the World Bank.  

In 2021, Nepal signed an agreement with the World Bank’s Forest Carbon Partnership Facility (FCPF), which unlocked up to $45 million to help reduce carbon emissions from deforestation and forest degradation through 2025 under the REDD+ mechanism. With this Emission Reductions Payment Agreement (ERPA), Nepal aims to cut nine million tons of carbon dioxide emissions in 13 districts of the Terai Arc Landscape (TAL).

The FCPF is a global partnership of governments, businesses, civil society, and indigenous people’s organisations focused on reducing emissions from deforestation and forest degradation, forest carbon stock conservation, the sustainable management of forests, and the enhancement of forest carbon stocks in developing countries, activities commonly referred to as REDD+ (Reducing Emissions from Deforestation and Forest Degradation).

The REDD+ is a global initiative designed to mitigate climate change by curbing greenhouse gas emissions from deforestation and promoting sustainable forest management.

Carbon trading, on the other hand, means buying and selling carbon credits. These credits are generated through projects that facilitate emissions avoidance and permit a company or other entity (buyers of carbon credits) to emit a certain amount of carbon dioxide or other greenhouse gases in exchange for the credit transacted. 

What’s under Nepal’s carbon trade deal?

Under the Emission Reductions Payment Agreement (ERPA) of the FCPF program, Nepal is set to cut nine million tons of carbon dioxide emissions in the Terai Arc Landscape, home to around 20% of Nepal’s forest cover. The country will earn $5 for each ton reduced until 2025 which will go to its Forest Development Fund.  

This translates into a potential payment of up to $45 million [a maximum earning that Nepal can generate] for carbon emission reductions generated under the program. Meanwhile, the program aims to achieve a total emission reduction of around 34.2 million tons of CO2 in 10 years starting from 2018 to 2028. 

About 23% (7.9 million tons) of the total reduction will be held as a buffer against potential carbon releases from forest fires and loss of stored carbon.

From the remaining 26 million tons of potential reduction, only 10 million tons are available for trading before the agreement concludes in 2025, where the government is specifically targeting nine million tons of carbon dioxide emissions.

Furthermore, the government has earmarked significant funds for sustainable forest management and environmental protection in this fiscal budget 2024/25, highlighting the importance of the carbon trading program.

The budget mandated the government to make arrangements for carbon trading in both national and international markets, through the public and private sectors. Proceeds from these trades will be invested in building adaptive capacity for communities vulnerable to climate change.

The budget simultaneously focuses on controlling forest encroachment and launching afforestation and public awareness programs to curb forest destruction and degradation. It has earmarked a certain budget for the procurement of equipment and gears in light of increasing wildfires which are resulting in significant loss of forests and ecosystems across the country.

According to the DRR Nepal portal, as many as 250 people have lost lives to animal incidents with one missing, 1,272 injured, and 2,972 families affected since May 2018. To reduce the human-wildlife conflict, the government has allocated a budget for the protection of biological pathways and the development of infrastructure considering wildlife migration patterns.

Launching national campaigns on community-based tree plantations alongside major highways, river banks, and canal sides, in collaboration with provincial and local governments is also part of this year’s budget.

It further mentions protection of indigenous, rare, endangered, and vulnerable species of plants by developing all 11 botanical gardens across the country as ex-situ conservation centres.

While the amount allocated for the aforementioned programs is not specified yet, the government has earmarked Rs 1.05 billion for the President Chure Conservation Program. The amount is supposed to cover the protection of upper river banks, damaged lands, and lands at risk of rising riverbeds in the Chure region.

Vivek Baranwal is sub-editor at the_farsight.

Read More Stories

Environment

Kathmandu’s decay: From glorious past to ominous future

Kathmandu: The legend and the legacy Legend about Kathmandus evolution holds that the...

by Sabin Jung Pande

Environment

Kathmandu - A crumbling valley!

Valleys and cities should be young, vibrant, inspiring and full of hopes with...

by Sabin Jung Pande

News

WHO launches plan for free child cancer medicines

The World Health Organization launched on Tuesday a new platform providing cost-free cancer...

by AFP/RSS

×