Nepal has taken a decisive step in its formal journey toward carbon trading with the Cabinet’s approval of the Carbon Trading Regulation 2082 BS—a landmark move that links the country’s climate commitments with economic opportunity. The regulation, endorsed after four years, opens avenues for revenue-generating projects that reduce greenhouse gas emissions in sectors such as forestry, energy, waste management, transport and land use. Nepal has already earned around NPR 5.5 billion through clean energy and REDD+ initiatives, but those efforts were centralized and limited in scope. The new framework brings in the private sector, local governments, communities and professional bodies, paving the way for innovation, investment and technology transfer while laying the groundwork for an organised national carbon market. Key provisions—such as establishing a National Carbon Registry, third-party verification and transparency aligned with international standards—aim to make Nepal’s carbon credits credible globally.
Nepal opens commercial pathway to facilitate carbon trading
Yet the real test lies in implementation. Effective facilitation by the government could attract numerous projects and generate significant income, supporting Nepal’s green development goals. Neighbouring South Asian countries have already moved aggressively in this space, underscoring that success requires stable policies, technical expertise, transparent administration and strong community participation. Nepal holds unique potential: rich forests, a mountainous landscape, hydropower capacity, and decades of experience with community forest management. These strengths can help convert carbon absorption into economic value, create rural jobs and enhance environmental awareness. Hydropower developers, in particular, stand to benefit by selling carbon credits and drawing further investment. However, risks such as weak monitoring, political interference, policy ambiguity and unequal benefit-sharing could undermine progress. Safeguards are needed to prevent carbon trading from becoming a form of “green colonialism.” Nepal’s REDD+ programme, initiated in 2008, and its REDD Implementation Centre provide early foundations, but carbon trading demands rigorous reporting and international certification.
The coming decade could be decisive for Nepal’s transition to a green economy. Linking hydropower, electric mobility, green tourism and sustainable agriculture with the carbon market could position Nepal as a leader in climate solutions. The country has already aligned with global initiatives such as the Tropical Forest Forever Facility and the LEAF Coalition, offering opportunities for finance, technology and capacity-building. Moving forward, three priorities stand out: strict and impartial implementation of the regulation, partnership models centred on local governments and communities, and a transparent, accountable carbon market structure. Ultimately, the Carbon Trading Regulation 2082 represents a historic opportunity. Whether Nepal seizes it with foresight—or lets it stagnate—will shape both its climate response and its economic and environmental future.
