After extensive debate and discussion, Nepal has finally approved Carbon Regulations, opening up opportunities for Nepal's private sector and others to engage in global carbon trade in accordance with the Paris Agreement.

Mohandas Manandhar, the chairperson of Sustainable Prosperity Initiative Nepal (SPI-Nepal), stated that the implementation of the new regulations will enable Nepal's private sector to access the global carbon market. In a time when global funding for climate change is decreasing, countries like Nepal can benefit from participating in global carbon trade to bridge the funding gap.

Under the leadership of Mohan, SPI-Nepal has advocated for the past five years for separate regulations to allow the private sector to participate in global carbon trade. The government has now enacted the Carbon Trade Regulations, 2082, which include provisions for the private sector to engage in carbon trading. These regulations came into effect upon their publication in the Nepal Gazette on Tuesday.

Previously, only projects of the Alternative Energy Promotion Centre were eligible for carbon trading, but now projects from all sectors can be included in carbon trade.

During the Cabinet meeting on Mangsir 15, the regulations related to carbon trading were approved. This approval means that projects undertaken by the private sector and non-governmental organizations that contribute to carbon sequestration can now be included in carbon trading.

With the introduction of these new regulations, Nepal can now engage in carbon trading with other countries by signing agreements as per Article 6 of the Paris Agreement, as well as through open competition or non-market mechanisms. Carbon trading can be conducted not only by the federal government but also by provincial and local governments.

Carbon trading involves transforming carbon-emitting activities into environmentally friendly practices, reducing emissions, and allowing emitting countries to count the quantity of reduced emissions. The Kyoto Protocol of 2005 enables industrialized nations to purchase emission reductions achieved by countries like Nepal, which have significant potential for emission reduction.

Under the approved regulations, carbon trading can also be conducted through the Government of Nepal if suitable projects are available. The price of carbon will be determined based on the agreed rate with the purchasing country and bilateral understanding.

Dr. Maheshwar Dhakal, Chief of the Climate Change Management Division at the Ministry of Forests and Environment, emphasized that the new regulations open up opportunities for sectors such as hydropower, forestry, alternative energy, and agriculture to participate in carbon trading.

"We have introduced regulations that allow carbon trading to become a source of foreign currency earnings for the first time," he stated. "We will collaborate with stakeholders, including the private sector, energy producers, and NGOs, to ensure effective implementation." Dr. Dhakal also stressed the importance of informing international buyers and creating a conducive environment.

For organizations like SPI-Nepal and other NGOs in the private sector, the new regulation presents a significant opportunity to engage in the global carbon market. However, given the competitive nature and price fluctuations, participation is not as straightforward as it may seem.