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Abstract:
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"Clean Development Mechanism (CDM) has been glorified as a win-win strategy for mitigating green house gases at global level and reducing poverty in developing countries. In forestry sector, the afforestation and reforestation scheme has been approved for CDM for the first commitment period. Despite substantial plantation activities, no forestry-based CDM has been initiated in Nepal yet. Although the projects can be established anywhere meeting eligibility criteria of CDM, community- based leasehold forestry is one of the most potential areas. It aims at poverty reduction and reforestation of degraded hills providing access for the groups of poor households to the resources with exclusive user rights. However, studies show that poverty reduction impact has not been significant despite significant improvement in environmental restoration (reforestation). As the leasehold forest can be handed over only in the area where the crown cover is less than 20 percent, the area below 10 percent crown cover could be used for CDM plantations. This paper examines if the existing forage-based practices of leasehold forestry can be switched to carbon sequestration practices for better livelihood opportunity to the lessee households. While so doing, the opportunities and constraints of establishing CDM projects in leasehold forestry have been explored. A preliminary estimation of plantation areas shows that there is enormous potential in claiming for carbon dollars from leasehold forestry. Taking only 50 percent of potential leasehold forest for carbon trading, gross annual income ranging from US$ 1. 2 million to 2.4 million can be earned, which is substantially higher than the overall income they are reaping from existing practices. However, high transaction costs, lack of enabling policies, lack of carbon-related technical capacity and global scope of forestry-based CDM are the restraining factors. The paper concludes to advocate for bringing leasehold forestry and avoided deforestation as well under carbon trading for poverty reduction."
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