Nepal | August 07, 2020

Carbon credit earnings under cloud

Nepal may lose Rs 231.4 bn worth of absorbed carbon for building Nijgadh airport

Rewati Sapkota
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File – Tractors being used for mining in the Lalbakaiya River, in Nijgadh, Bara, on Monday, July 13, 2015. Photo: THT

Kathmandu, September 24

The prospects of Nepal earning Rs 5.5 billion in revenue in the next seven years by selling carbon stored in the trees may hit a snag if the country fails to restore forests that are cut down to build massive physical infrastructure, according to experts.

Nepal, in June, struck a deal with the World Bank to sell 10 million tonnes of carbon that has not been emitted into the atmosphere at $5 per tonne. This carbon credit produced by forests located in 13 districts from Kanchanpur to Rautahat will be sold between 2017 and 2024, generating Rs 5.5 billion in revenue, as per the Emissions Reduction Programme Document approved by Washington-based multilateral lending institution.

But there is a catch.

“The carbon trading programme is result-oriented, meaning Nepal’s inability to plant equal number of trees that are felled may hit revenue that the country is likely to generate from the sale of carbon credit,” Sindhu Prasad Dhungana, spokesperson for the Ministry of Forest and Environment, told THT.

His statement comes at a time when the government is planning to cut 2.4 million trees planted on 8,045 hectares to build the international airport in Nijgadh.

The government does not have data on how much of carbon credit will be lost if trees planted on the proposed airport site are felled. But a study conducted in Madhya Pradesh of India showed trees planted on one hectare can absorb one tonne of carbon. This implies trees planted on one hectare of land can generate $5 in carbon credit.

“It is therefore important that Nepal restores the forests that are cut down if it wants to continue benefiting from the carbon trading scheme,” said Dhungana.

Carbon trading scheme entitles countries that release more greenhouse gases into the atmosphere to purchase the right to release more carbon dioxide from countries that have lower carbon emissions like Nepal. In other words, carbon credit sold by countries like Nepal will enable high carbon-emitting countries that are contributing to climate change to counterbalance their emissions under the United Nations mechanism called Reducing Emissions through Deforestation and Degradation.

Nepal stands to reap huge benefits from this trading mechanism as it has expanded its forest coverage from 29 per cent of land in the early 1990s to 45 per cent in 2015, thanks to contributions made by community forest groups. These forests can store over 500 million tonnes of carbon, according to the government.

But if the environment impact assessment report of Nijgadh airport is anything to go by, Nepal will lose Rs 231.4 billion worth of absorbed carbon and other benefits endowed by nature if 2.4 million trees are cut down.

One tree, for example, releases 104 litres of oxygen per year, and each litre of oxygen generates Rs 3,781 in revenue, according to forest expert Suraj Shrestha. “If we cut down trees, this oxygen will not be released into the atmosphere,” said Shrestha. “Besides, trees capture and store nitrogen, phosphorous and potassium, which can damage the environment. Also, non-timber forest products, like herbs, will be affected when trees are cut down, which will inflict more losses.”

Considering these negative effects, Shrestha suggests that new trees be planted once the forest in Nijgadh is flattened.

The government has said it will plant 25 new trees for every tree that is felled at the proposed airport site in Nijgadh.

A version of this article appears in print on September 25, 2018 of The Himalayan Times.

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