Nepal Signs First International Carbon Credit Sales Agreement

For the first time, Nepal is set to sign an agreement to sell carbon credits in the international market. The agreement, between the Nepalese government and the U.S.-based nonprofit organization "Emergent Forest Finance Accelerator Incorporated," will allow Nepal to sell carbon credits in exchange for its forest conservation efforts, providing the country with a new source of revenue in the international market.

Agreement Signing:
According to sources from the Ministry of Forests, the agreement will be signed on Friday between the two parties. Emergent is a nonprofit organization established through collaboration between the United States, the United Kingdom, Norway, and South Korea. The organization manages funds for the purchase of carbon credits from countries that engage in forest conservation. Major private companies like Amazon, Google, and Unilever are also involved in the organization.

Through this agreement, Nepal will initially sell 1 million carbon credits, with an option to sell an additional 3 million credits in the future. This will allow Nepal to sell a total of 4 million tons of carbon emission reductions.

Revenue and Pricing:
The agreement is expected to generate an estimated $55 million (approximately NPR 7.97 billion) from the sale of 4 million carbon credits. Nepal will sell 3 million credits under Pathways 1 to 3 at a price of $10 per credit, and 1 million credits under Pathway 4 at a price of $25 per credit. This will result in Nepal earning $30 million from the first three pathways and an additional $25 million from the fourth pathway.

Carbon Credit Sale Process:
The pricing of carbon credits in this agreement will be determined based on different "pathways." Pathways 1, 2, and 3 will sell carbon credits at a price of $10 each, while credits under Pathway 4 will be priced at $25 each. Credits sold under Pathway 4 will be classified as “Internationally Transferred Mitigation Outcomes” (ITMOs), which is why they are priced higher. This pathway will allow Nepal to sell credits at a significantly higher rate compared to the first three pathways.

Quality and Standards of Carbon Credits:
The carbon credits from this agreement will be based on high-quality, certified emission reductions. For this, Nepal will need to register with the "Architecture for REDD+ Transactions" (ART) international mechanism.

Nepal’s Sustainable Development and Climate Goals:
Nepal has set a target to achieve "net-zero" greenhouse gas emissions by 2050 and to maintain 45% of its land area as forest by 2030. This agreement is expected to provide significant economic and technical support to help Nepal meet these ambitious goals.

Nepal has signed its first international agreement to sell carbon credits, a major step forward for forest conservation and sustainable development. This agreement will not only help Nepal fight climate change but also provide financial support to protect its forests, contributing significantly to its long-term climate goals.