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and helps to suppress invasive species. Technical and financial assist-

ance has been received from the Governments of Australia, Denmark,

Switzerland, Netherlands, Finland, USA and UK, as well as from

multilateral agencies like UNDP, FAO and The World Bank in imple-

menting the CF programme.

Improvements in carbon sequestration potentiality

Improved forest management initiatives have also contributed to

enhancing the carbon sink and sequestration potential of forests.

REDD+ pilot projects, supported by Norwegian Assistance for

Development (NORAD), indicate that the annual average forest

carbon increment in CF from the project area was estimated at

2.6 tC.

This demonstrates the potential of community forests to

support climate change mitigation by reducing carbon emissions and

enhancing carbon removal capacity. Local involvement in carbon

stock estimation shows the scope of capacity-building for knowl-

edge sharing and technology adoption from the REDD+ mechanism.

GoN received support from the Governments of UK, Switzerland

and Norway and the World Bank/Forest Carbon Partnership Facility

in the national REDD+ readiness process.

Restoration of functional corridors in critical landscapes

Conservation initiatives of local CF networks have been instrumen-

tal in protecting focal species like tiger, one-horned rhinoceros, wild

elephant, red panda and snow leopard at landscape level. The estab-

lishment of functional corridors and bottlenecks to facilitate free

movement of wildlife between Protected Areas are unique examples

of success in biodiversity conservation of a transboundary nature.

One such corridor was successfully restored within five years and

the forest has been functioning as an important corridor for wildlife

in Terai Arc Landscape (TAL) with technical and financial support

from UNDP and WWF Nepal

Improvement in environmental restoration and food security

Since the contribution of CF to household income has not been

properly valued and quantified at national level, to what extent the

regrowth of biomass has contributed to uplifting the livelihoods of

the rural ultra-poor is not clearly understood. However, pro-poor

leasehold forests implemented by the Government with financial

and technical support from International Fund for Agricultural

Development and the Food and Agriculture Organization (FAO)

demonstrates that after implementation of this programme, vegeta-

tive cover had increased up to 90 per cent after seven years.

An effectiveness study commissioned by the Department of

Forests/FAO in 2009 shows that livestock units have increased due

to improved forage production that has directly contributed to food

security. It has also been observed that about 11 per cent of target

households now have year-round food security and average house-

hold income has increased by 70 per cent.

Issues and challenges ahead

Product-focused CBFM now has new windows of opportunity from

the emerging market of environmental services, including biodiver-

sity, carbon sequestration and hydrological services. In the absence

of clear tenure rights on these services, local communities are

finding it difficult to participate in the Payments for Environmental

Services (PES) market. If tenure rights are well defined, then there

is potential for sustainable financing of CBFM from PES so that

local people can be made more responsible for forest conservation

in future. There is still a need for a robust technical

MRV system and a lucrative carbon market may lead to

recentralization of forest governance.

Due to limited access to information and technol-

ogy, there is a potential risk of elite domination in the

entire PES value chain to capture prospective benefits.

Therefore, it is important to secure the rights of poor,

marginalized and women’s groups in the decision-

making process. In many places communities have been

protecting their forests at the cost of adjoining state

forests; in sub-national REDD+ projects it is difficult to

take account of such leakages in net emission reduction.

Key challenges for CBFM in capturing the benefits of

environmental services include:

• Developing an appropriate structure to satisfy local

as well as market expectation

• Developing local capacity to amalgamate the local

fragmented production supply chain to global

market networks

• Satisfying market expectations for a robust MRV

system and other national and international criteria

• Providing technical support to local communities from

the existing institutional capacity of the State agency

• Developing a PES mechanism responsive to poor

and marginalized people.

Potential futures

A one-size-fits-all approach does not work and different

modalities of CBFM are attainable, provided that local

communities have clear tenure rights on the forest products.

Prevailing policies and institutions need to be reformed to

cater to emerging public demand for PES. To capture this

opportunity, small fragmented production units need to

bundle all environmental services to reduce transaction

costs and increase bargaining power in price negotiations.

There is agreement that large sections of the popula-

tion have benefited fromCF, either in terms of consumer

goods or ecosystem services. However, benefit-sharing

mechanisms must be further improved to assure equity

and social justice for poor and marginalized households

through appropriate institutional arrangements and

capacity-building schemes.

Institutional reform may be necessary to improve

transparency and accountability in the value chain

process for CF-produced goods and services. The

current practice of mandatory representation of poor

and marginalized groups on executive committees and

allocation of CF funds for pro-poor activities are good

initiatives from Government which need strong moni-

toring and regulation to achieve the desired change.

It is also crystal clear from three decades of experience

with the CF development process in Nepal and elsewhere

that if stewardship is given to local communities, forests

can be better managed for sustainable biomass produc-

tion, biodiversity conservation, livelihood improvement

and sustainable supply of ecosystem services.

With thanks to Anuj Sharma, Narendra Chand and Nirmala

Bhandary for their generous support in preparing this paper