Costs and benefits of reducing deforestation and forest degradation in Nepal

Costs and benefits of reducing deforestation and forest degradation in Nepal

The purpose of this study was to estimate the benefits and costs of reducing deforestation and forest degradation in different landscapes and management regimes in Nepal, and to provide associated opportunity costs of carbon that can be used as inputs for planning the implementation of REDD+ in Nepal.


The annual cost of reducing deforestation in Nepal is between USD 654/ha and USD 3,663/ha, and the associated opportunity cost of carbon sequestration ranges from USD 1.11 to USD 3.56 per tCO2.


Certain forest management regimes, such as collaborative forest management and community forestry in the Terai, follow an intensive forest management approach that emphasizes timber production. This approach falls under the framework of scientific forest management. Regimes that follow this approach involve a far lower cost of reducing deforestation compared to other forest management regimes.

The cost of reducing deforestation in a degraded area is less than the cost of reducing deforestation in a forest area in an average condition (both degraded and non-degraded). The cost is between USD 557/ha and USD 2,984/ha. But the opportunity cost of carbon sequestration, which is between USD 1.30/tCO2 and USD 3.64/t CO2, is higher in a degraded area.

Between 2002 and 2012 the community forests of the Siwaliks and the mid-hills did not undergo degradation. The annual accumulation in the two areas was 5.5 and 4.6 tCO2/ha respectively. The forests in the Terai, which are under community and collaborative forest management, did undergo degradation, but the introduction of scientific forest management is expected to reverse the process.

The opportunity cost of carbon sequestration through reduction of forest degradation ranges from USD 0.72 to USD 7.09 per tCO2.

The findings can be used by the REDD Implementation Center (REDD-IC), government agencies and non-state actors to develop strategies for implementing REDD+ in different regions.

The report was co-funded by the Royal Norwegian Embassy in Nepal.

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