The first Forest Carbon Trust Fund in Nepal helps communities benefit from forest conservation and sustainable use

Under the first-ever pilot Forest Carbon Trust Fund in Nepal, representatives from three watersheds in Dolakha, Gorkha, and Chitwan districts received a total sum of US$ 95,000  on behalf of community forest user groups at a ceremony organised at the International Centre for Integrated Mountain Development (ICIMOD) on 15 June 2011.

The Forest Carbon Trust Fund being piloted in the three watersheds has been created and implemented within a project on Reducing Emissions from Deforestation and Forest Degradation Plus (REDD+). The project focuses on sequestering carbon through community-based forest management. Financed by the Norwegian Agency for Development Cooperation (Norad) under the Climate and Forest Initiative, the project covers over 10,000 hectares of community-managed forest and has an outreach to over 16,000 households with over 89,000 forest-dependent people. It is one of the world’s first carbon offset projects involving local communities in monitoring the carbon in their forests and providing the necessary training for them to do so. Now, the Forest Carbon Trust Fund gives the communities in the pilot area the opportunity to claim reward for their enhancement of carbon. Norad provided a seed grant of US$ 100,000 to initiate the fund.

This landmark performance-based initiative is being implemented by the Asia Network for Sustainable Agriculture and Bioresources (ANSAB) and its partners, the International Centre for Integrated Mountain Development (ICIMOD) and the Federation of Community Forestry Users, Nepal (FECOFUN).

As the three pilot sites are heterogeneous in terms of forest area, population density, ethnic composition, and livelihood conditions, the pilot fund addresses equity issues by combining performance criteria with social and economic criteria. Thus REDD payments are allocated to local communities based on four basic elements: 1) the quantity of forest carbon saved above the baseline, 2) the number of households of indigenous peoples and minority  groups, 3) the ratio of men and women, and 4) the number of poor households within the project area.

The 5,996 hectare Charnawati watershed in Dolakha sequestered a total of almost 4.6 million tonnes of carbon dioxide in 2011, an increase of 51,483 tonnes of carbon dioxide compared to 2010. Based on the above criteria, this watershed received an amount of US$45,535.

The 1,888 hectare Ludikhola watershed in Gorkha sequestered slightly less than 1.5 million tonnes of carbon dioxide in 2011, an increase of 36,680 tonnes over 2010. This watershed received an amount of US$ 27, 560.

The 2,382 hectare Kayarkhola Watershed in Chitwan sequestered slightly more than 2.5 million tonnes in 2011. This represented an increase of 12,087 tonnes over 2010. The lower increase in carbon sequestration in this watershed does not indicate lesser efforts by the communities to enhance the carbon stock – but rather, the high existing forest stock and the maturity of the forest, which means slower tree growth. The payment was adjusted to take this circumstance into account and the watershed received an amount of US$ 21,905.

On average, the increase in carbon sequestration between 2010 and 2011 was 8.6, 19.4 and 5.1 tonnes of carbon dioxide per hectare in the community forests of Dolakha, Gorkha, and Chitwan, respectively.

Carbon trading is a new concept globally and there is a need to build the capacity of local people who manage forest so that they can evaluate for themselves whether they can benefit from it. This pilot project is testing a governance system for REDD+, including payment mechanism and compliance process. It will also help demonstrate whether REDD payments to local forest user groups will provide sufficient incentive for them to conserve and manage their forest resources better. The lessons learned from this pilot can help policy makers and planners develop pro-poor and inclusive national-level policies for REDD+ payments in the future.

Please follow the link for an information sheet prepared by our partner ICIMOD on “Pilot Forest Carbon Trust Fund – Rewarding local communities for forest conservation’.

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