Nepal earns through Carbon Credits

What is Carbon Credit?

In 1992, the United Nations Framework Convention on Climate Change (UNFCCC) fixed a certain parameter beyond which developed countries cannot emit greenhouse gas (GHG). Later, in 1996, the Kyoto Protocol, which is linked to the UNFCCC, set a binding target for the developed countries to reduce GHG emissions within a certain timeframe.

However, irrespective of how environment-friendly they make their industries, the developed countries cannot significantly reduce GHG emissions. In this context, by way of compensation, the developed countries need to pay money to the developing countries for reducing carbon emission. In short, if a project avoids emitting one ton of carbon through clean-energy projects, we are entitled to US$7 (Although the price of one ton of carbon credits is $20 in the international market, we are ended up with a low price). There are several clean-energy projects running in Nepal which fetch us money for reducing GHG emissions. This is how Nepal is making money through carbon trading.


Communities Earning through Carbon Credit Sales:

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 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.




Some Maths on Carbon Credits:

(1 US $ = NRs. 80 )

For Biogas plant

1 biogas plant (on an average) = 7 CER (annually)

This implies, 1 biogas plant's revenue = 7 * 10$ per ton

= 70 Dollars

= 70 * 80 =  Nrs. 5600.

Forest Calculation:

1 Hector = 10 ton = 10 * 10 * 80 = Nrs. 7000 

Thus, 10,000 m2 = Nrs. 7000

Talking from the viewpoint of private/individual applicant:  Since, AEPC got the consent for all biogas households regarding getting the amount generated through the sales of CER, individual households can not claim for it and even if they claim, mathematically, they are subject to huge loss. And in the case of forest credit, mathematics shows the trade is not profitable enough  even to pay the credit certifying consultant.