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Nepal seeks best ways to access forest finance to boost conservation, climate drive

Blog | Wed, 09 Apr, 2025 · 6 min read
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Improving sustainable forest management, bolstering national climate action and accessing climate finance were among topics discussed during a high-level event in Nepal in late February. 

Held in Kathmandu on 18 February and organized by the Ministry of Forests and Environment and the UN-REDD Programme, the ‘Nepal National Dialogue on Forest Carbon and Climate Change’ looked at the South Asian country’s Paris Agreement targets, progress to date, and plans for forest carbon initiates, including REDD+ (Reducing Emissions from Deforestation and Forest Degradation).  

Participants included Nepal’s Minister of Forests and Environment Ain Bahadur Sahi Thakuri, State Minister Rupa B.K., and representatives from the United Kingdom of Great Britain and Northern Ireland and Norway, the Nepal Federation of Indigenous Nationalities (NEFIN), the Federation of Community Forest Users Nepal, the Himalayan Grassroots Women’s Natural Resource Management Association and the Regional Community Forestry Training Centre for Asia and the Pacific. 

Nepal’s forests are a vital part of many local industries, but unsustainable land use practices have led to deforestation, forest fires and soil erosion that has reduced soil fertility and hurt water supplies. This poses a threat to local and indigenous communities that depend on ecosystem goods and services for their livelihoods.     

Although Nepal has successfully curbed deforestation trends in recent years – helped by its community-based forest management approach - pockets of deforestation still persist, often driven by population growth, haphazard infrastructure development, encroachment and mining.  

Clarifying carbon rights and improving benefit-sharing mechanisms are essential for future success.  Nepal’s experiences were shared at the UN-REDD global exchange on REDD+ benefit sharing in Nairobi last month, which included Representatives from both from NEFIN and Nepal’s REDD Implementation Centre. 

Nepal, through its Nationally Determined Contributions (NDC), has pledged to ramp up efforts to tackle these challenges, and has targeted maintaining its 45 per cent forest cover by 2030, managing 50 per cent of Terai and inner Terai Forest and 25 per cent of middle hill and mountain forests through REDD+ initiatives, and achieving net zero emissions by 2050. 

The country is also developing robust Monitoring, Reporting, and Verification systems aided by the creation of a National Timber Resource Database, which will enable the transparent tracking of forest carbon stocks. 


Nepal is also close to accessing its first REDD+ results-based payments - from the Forest Carbon Partnership Facility’s Carbon Fund - and is also likely to soon enter into a new Emissions Reduction Payment Agreement with the LEAF Coalition for a jurisdictional REDD+ program covering Gandaki, Lumbini and Bagmati provinces. 


In addition, the country’s Environmental Protection Regulation is under revision, which will accommodate emerging financial mechanisms for cooperation in the climate challenge under the Paris Agreement Article 6, including opportunities through the voluntary carbon market.   

The February event also discussed the finance and partnership opportunities available to Nepal in the shifting landscape of forest carbon, the country’s current conservation and climate priorities, and what risks must be avoided to ensure high carbon integrity.