<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/63720a149c7e80680e0b557fjpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Photo: AMIT MACHAMASI</figcaption></figure>There is intense international diplomatic pressure for and against a <a href="https://www.nepalitimes.com/latest/missing-links-in-nepals-mcc-debate/" target="_blank" rel="noopener noreferrer">$500 million American project</a>, as Nepal’s main political players try to<a href="https://www.nepalitimes.com/here-now/maoists-backpedal-on-mcc-letter/" target="_blank" rel="noopener noreferrer"> strike backroom deals</a> ahead of the 28 February deadline for ratification of the compact by Parliament.This being Nepal, lawmakers will be expected to go late into the night to vote. And if they still need more time at the stroke of the midnight hour on Monday, 28 February, they might argue that there is another 12 hours before it is midnight in Washington DC.Whatever happens in the coming days, by playing political ping-pong with the MCC Nepal’s leaders have damaged <a href="https://www.nepalitimes.com/latest/nepal-in-political-and-geopolitical-jam/" target="_blank" rel="noopener noreferrer">Nepal’s international reputation</a> and have come across to both the Americans and the Chinese as being untrustworthy, prone to playing petty party politics to undermine the country’s own national interest.The MCC is a bilateral United States foreign aid agency established by Congress in 2004 to help improve the economies of under-developed countries that have democratic safeguards. Nepal was the only other South Asian country besides Sri Lanka to be offered the grant to ‘maintain road quality, increase the availability and reliability of electricity, and facilitate cross-border electricity trade between Nepal and India’.All agree that those things are needed. The problem has been that rivals of former prime minister K P Oli used his support for the MCC to bring him down, accusing him of selling out the country. It is no secret that <a href="https://www.nepalitimes.com/here-now/china-lobbying-against-mcc/" target="_blank" rel="noopener noreferrer">Beijing overtly opposed the American project </a>in Nepal, and has used the two Communist parties in the coalition government to reject it.The history of US aid to Nepal begins in the 1950s, and since then it has poured hundreds of millions of dollars into development projects, infrastructure and training. The MCC grant is a continuation of this involvement, and the reason it has become a <a href="https://www.nepalitimes.com/latest/the-deal-breaker/" target="_blank" rel="noopener noreferrer">political hot potato</a> now is because the compact needs Parliament ratification. Ironically, that clause was added because of chronic political instability in Nepal.With growing Sino-US polarity on the global stage, the MCC grant has brought Washington and Beijing on a collision course in Nepal. China is a geopolitical influencer in Kathmandu, and has always been wary of Western support for Tibetan nationalism. The Communist Party of China (CPC) has maintained fraternal relations with Nepal’s Communist parties, and wants them united to reject the MCC.Read also: <a href="https://www.nepalitimes.com/banner/high-tension-in-nepal/" target="_blank" rel="noopener noreferrer">High tension in Nepal</a>, Rabin GiriA fierce power struggle since the 2017 election resulted in a three-way split last year in the once-powerful Nepal Communist Party. Oli’s UML is now in the opposition, while the Maoist Centre led by Pushpa Kamal Dahal and Madhav Kumar Nepal’s Unified Socialists are members of a five-party governing coalition led by Prime Minister Sher Bahadur Deuba of the centre-right Nepali Congress (NC).Deuba has been a vocal supporter of the MCC. So was his predecessor Oli who now sees the project as a wedge to <a href="https://www.nepalitimes.com/latest/mcc-risks-split-in-nepals-ruling-coalition/" target="_blank" rel="noopener noreferrer">split the coalition</a> ahead of polls. It is an indication of just how high the stakes are that American Ambassador to Nepal Randy Berry met Oli on Tuesday, just weeks after the Chinese Ambassador Hou Yanqi also met him. The UML’s stance will be key to having the MCC passed, although the NC and smaller parties will have enough members for a simple majority if the Communist parties stay away.Democratic disarray in the US since 2016 and the rise of China have made Beijing more assertive in Nepal. China has been the largest source of foreign investment in Nepal for six consecutive years, it has provided large loans for Pokhara airport, and is negotiating another one for the Budi Gandaki dam. The Tibet Railway will arrive at Nepal’s northern border in Kerung by 2025, offering easier overland connectivity to the mainland.The MCC is seen by the Chinese as a direct challenge to its own <a href="https://www.nepalitimes.com/latest/china-builds-digital-and-medical-silk-roads/" target="_blank" rel="noopener noreferrer">Belt and Road Initiative</a> of which Nepal is a signatory. But many have warned that Nepal might fall into a ‘Chinese debt trap’ similar to the one that has now bankrupted Sri Lanka after it rejected the MCC in 2019.Nepal’s two Communist parties in the coalition contend that the compact is anti-national, allows American law to prevail over Nepal’s law, and lawmakers will have insufficient oversight over the MCC board. They have successfully mobilised the social web to spread fear among Nepalis of American imperialist ambitions to counter China. Following the chaotic withdrawal from Afghanistan and past American misadventures in the Gulf, many on Nepal’s cybersphere say the country could face similar instability with greater American engagement.If Parliament fails to ratify the MCC by the deadline, it could impact not just US-Nepal relations, but also undermine the country’s international credibility, dependence on multilateral agencies, and even Nepal’s peacekeeping operations for which the Americans pick up the tabs.US Assistant Secretary Donald Lu is said to have pointedly warned Nepali politicians in a call this month that Washington would "review its ties with Nepal" if an agreement is not reached, although the US Embassy later clarified that it was up to Nepal to take the grant or not.Read also: <a href="https://www.nepalitimes.com/opinion/to-be-or-not-to-be-on-the-mcc/" target="_blank" rel="noopener noreferrer">To be or not to be on the MCC</a>, Anil ShahThe most direct consequence of the project being cancelled will be in building a crucial 400kVa transmission line along the Kathmandu-Butwal corridor to evacuate the estimated 3,500MW of electricity that the country will be generating by 2025. Nepal will have to build the transmission line possibly with Chinese loans, which will mean greater cost and further delays.The elephant in the room in all this is India, which has kept out of the debate so far. But it is watching warily since New Delhi and Washington are allies, and yet Nepal's prevarication is a signal of bending towards Beijing. India is Nepal’s biggest trading partner by far, and it will be watching out for Chinese inroads into Nepal’s infrastructure if the MCC is rejected.On the other hand, if the MCC goes ahead it risks China's ire. On 23 February, Chinese Foreign Ministry spokesperson Hua Chunying said Beijing opposes "coercive diplomacy" by the United States in Nepal.Hua added: "How can a gift be sent by an ultimatum? Is it a gift or a Pandora's Box?"In MCC-related posts on the Sina Weibo platform's comments call the MCC a ‘US trap’ and ‘a form of occupation’. Some comments go even further, calling the US a ‘colonist power’. Another post said: ‘Nepal is close to China, that's why the US wants to come here."With geopolitics heating up, Nepal now finds itself caught between two powers like Vietnam vis-à-vis the East China Sea, or the Ukraine crisis. However, Mongolia is an example of a country that has successfully negotiated the MCC despite being squeezed between Washington, Beijing and Moscow. Mongolia is using its $350 million MCC grant for a water supply project in Ulaanbaatar.Whichever way it goes, the MCC will be a tipping point in Nepal’s domestic politics and will have a direct impact on three levels of elections this year.Read also: <a href="https://www.nepalitimes.com/editorial/the-message-is-the-medium-2/" target="_blank" rel="noopener noreferrer">The message is the medium</a>, EditorialHoang Chu is a student at Pitzer in Nepal in Claremont, the United States.

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It’s decision time

<img width="1050" height="700" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208f89c7e80680e0b5517jpeg.jpg" alt=""/>A civil society group has urged Nepal’s political parties to take action against <a href="https://www.nepalitimes.com/latest/nepal-speakers-ipu-trip-slammed/" target="_blank" rel="noopener noreferrer">House Speaker Agni Sapkota</a>, who they say has continuously violated the responsibilities and expectations vested in him as Speaker.A day after the statement, and right on cue, Sapkota for the second time postponed by a week a scheduled session of Parliament that for Wednesday, 9 February. The suspicion is that the speaker is trying to block the ratification by the House of the controversial American-supported <a href="https://www.nepalitimes.com/editorial/just-do-it/" target="_blank" rel="noopener noreferrer">Millennium Challenge Corporation</a> (MCC) project.The row has <a href="https://www.nepalitimes.com/latest/mcc-risks-split-in-nepals-ruling-coalition/">threatened to split the five-member ruling coalition</a>, with Prime Minister Sher Bahadur Deuba of the Nepali Congress and the Janata Samajbadi Party (JSP) supporting it while two Communist party members of the governing alliance opposing it.The Maoist Centre and the Unified Socialists fear that Deuba may team up with the opposition UML to pass the MCC automatically leading to a collapse of the coalition. The alliance is important to the two communist parties because they broke away last year from the NCP, and are not fully ready for <a href="https://www.nepalitimes.com/editorial/think-nationally-vote-locally/" target="_blank" rel="noopener noreferrer">elections</a> this year. Read also: <a href="https://www.nepalitimes.com/here-now/maoists-backpedal-on-mcc-letter/">Maoists backpedal on MCC letter</a>, Nepali Times <figure><img width="960" height="639" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208fb9c7e80680e0b5518jpeg.jpg" alt=""><figcaption>Anti-MCC protests at Maitighar Mandala and Parliament on Wednesday. Photos: MAIT MACHAMASI</figcaption></figure><img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208fd9c7e80680e0b5519jpeg.jpg" alt="">‘It is the institutional and legal duty of the Speaker to facilitate the placement of all bills presented by the government before the House,’ the civil society statement reads,  accusing Sapkota of holding up ratification for two years. Sapkota, a close confidante of Maoist Centre Chairman Pushpa Kamal Dahal,  has used the UML’s obstruction of Parliament as an excuse to postpone house sessions, effectively blocking parliamentary discussion of the $500 million American-supported project to<a href="https://www.nepalitimes.com/banner/own-goal/" target="_blank" rel="noopener noreferrer"> upgrade transmission lines and highways in Nepal</a>. Supporters of the Maoist Centre and the Unified Socialists on Wednesday staged a street rally outside Parliament in support of the speaker and against the MCC.  Disagreement within the governing coalition prompted Sapkota to postpone Wednesday’s parliament meeting, hours before it was set to begin, to 14 February. The US has said that the project needs to be ratified by parliament by 28 February, and the Chinese have been <a href="https://www.nepalitimes.com/here-now/china-lobbying-against-mcc/" target="_blank" rel="noopener noreferrer">lobbying actively against it</a> – adding a geopolitical element to the row.While Prime Minister Deuba backs the project, his alliance partners Pushpa Kamal Dahal of the Moaist Centre and Madhav Kumar Nepal of the Communist Party of Nepal (United Socialist) have been fiercely opposed to it.Read also: <a href="https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/" target="_blank" rel="noopener noreferrer">MCC row damages Nepal’s credibility</a>, Ramesh Kumar <img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637209009c7e80680e0b551ajpeg.jpg" alt=""><img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637209039c7e80680e0b551bjpeg.jpg" alt=""><img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637209059c7e80680e0b551cjpeg.jpg" alt="">The open letter from civil society notes that the Speaker has sought to evade the Constitution and relevant laws in order to exercise executive powers since the day of his appointment, even though Nepal’s parliamentary system does not grant such powers to the Speaker.“The main political parties must immediately take action on Agni Sapkota in order to protect the values and principles of the parliamentary system,” the statement reads.  Agni Sapkota was appointed Speaker in January 2020 even though he has been accused of <a href="https://archive.nepalitimes.com/article/editorial/state-of-impunity,2976" target="_blank" rel="noopener noreferrer">summary execution</a> during the conflict, with cases against him pending in Nepal’s Supreme Court.Sapkota was a central committee member and leader of the underground Communist Party of Nepal-Maoist (CPN-M) in Sindhupalchok during the armed insurgency and said to be involved in the April 2005 abduction and subsequent killing of civic leader Arjun Bahadur Lama from Kavre district.  Arjun Lama’s wife Purnimaya Lama is one of the signatories of the appeal.The district police had initially refused to register an FIR on the case, until a 2018 directive from the Supreme Court to the Kavre police to investigate the case and submit monthly reports. Read also: <a href="https://www.nepalitimes.com/latest/speechless/" target="_blank" rel="noopener noreferrer">Speechless</a>, Sewa BhattaraiThe open letter says the fact that Sapkota has continuously occupied high political positions makes it clear that the police have been intimidated while conducting investigation. “Influencing the police administration by virtue of his position of power … and by remaining an absconder on the murder case of Arjun Lama, Agni Sapkota is responsible for obstructing justice in the particular case and contributing to the general weakening of the law and justice system in the country,” the statement reads.The signatories of the appeal include Purnimaya Lama, Badri Prasad Bhusal, Bhagiram Chowdhary,  Indra Prasad Aryal, Kanak Mani Dixit,   Kedar Narshing KC, Maina Karki, Manamunishwar Acharya,  Rajan Kuikel, Sabitri Shrestha, Suman Adhikari,  Surya Bahadur Adhikari,  Sushil Pyakurel, and Yagya Raj Thapa.Read also: <a href="https://www.nepalitimes.com/latest/14-years-after-conflict-no-closure-in-nepal/">14 years after conflict, no closure in Nepal</a>, Nepali Times

Nepal House speaker embroiled in MCC row

<img width="2211" height="1541" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161152/636d1ea99c7e80680e0af421jpeg.jpg" alt=""/>A <a href="https://www.nepalitimes.com/banner/mcc-ball-in-nepals-court/" target="_blank" rel="noopener noreferrer">$500 million American grant</a> to upgrade Nepal’s infrastructure appears at first glance to be delayed because of domestic politics. But the real reason seems to be Beijing’s opposition to the project, and its pressure on politicians not to implement the project.Sources say the Chinese government has been showing unusual interest in the Millennium Challenge Corporation (MCC) project as Prime Minister Sher Bahadur Deuba prepares to present it for approval by the winter session of Parliament, <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/" target="_blank" rel="noopener noreferrer">despite opposition from coalition partners</a>.On 22 December, Chinese Ambassador to Nepal Hou Yanqi made a hasty trip to the Balkot residence of former prime minister KP Oli of the opposition UML. <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" target="_blank" rel="noopener noreferrer">Oli and Deuba back the American project</a>, and some see this meeting of minds on the MCC even <a href="https://www.nepalitimes.com/editorial/just-do-it/" target="_blank" rel="noopener noreferrer">triggering a breakup of the governing coalition</a>.On 13 December, Vice Minister Chen Zhou of the International Department of the Communist Party of China (CPC) held a video conference with the newly-elected UML General Secretary Shankar Pokharel.Pokharel is said to have assured Zhou that his party would not allow activities that could damage Sino-Nepal relations. The UML’s Bishnu Rijal confirmed that Zhou’s call was about the MCC, but added ambiguously: “He must have had queries about development projects that China’s neighbouring country is undertaking.”<a href="https://www.nepalitimes.com/latest/missing-links-in-nepals-mcc-debate/">Missing links in Nepal’s MCC debate</a>, Jeevan R Sharma and David SeddonZhou had a similar chat with Madhav Kumar Nepal of the Unified Socialists who is also reported to have reiterated that he opposed anti-China activity in Nepal. Nepal has publicly stated he would reject the MCC if it could affect ties with neighbouring countries. CPC officials also held virtual meetings with Pushpa Kamal Dahal of the Maoist Centre, who has not hidden his opposition to the MCC.A government official, speaking on condition of anonymity, said: “There is no doubt that China does not want the MCC to go ahead, it has already conveyed as much to the top political leadership.”Speaker Agni Prasad Sapkota of the Maoist Centre, who is close to Beijing, has said the MCC would not move forward under his watch. His predecessor Krishna Bahadur Mahara publicly admitted to stopping MCC ratification because it was anti-Chinese.“China has already sent the message that it will not sit idly if the development activities in Nepal undermine its interests here,” Nepal’s former ambassador in Beijing Mahendra Bahadur Pandey told Nepali Times. “China has been concerned about the MCC from the very beginning, and views it with suspicion.”<a href="https://www.nepalitimes.com/latest/mcc-damned-if-we-do-damned-if-we-dont/">MCC: damned if we do, damned if we don’t</a>, Nepali TimesChina’s objection to the MCC is most noticeably expressed through op-eds. Wang Yiwei, a professor of international relations at the Renmin University, in one interview with <a href="http://nepalkhabar.com/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=http://nepalkhabar.com&amp;source=gmail&amp;ust=1640329948769000&amp;usg=AOvVaw1-5zGkO7r9layvLRxbBfav">nepalkhabar.com</a> last October called the MCC ‘an American ploy’.Diplomatic affairs expert Geja Sharma Wagle says that besides the Americans, Nepal needs to balance the interests of its neighbours India and China as well. He says, “It is in Nepal’s best interest to implement both the American MCC and Chinese BRI projects based on our national needs.”Many analysts see the MCC as America’s response to <a href="https://www.nepalitimes.com/latest/bri-and-trans-himalayan-connectivity/" target="_blank" rel="noopener noreferrer">Beijing Belt-Road Initiative (BRI) </a>which promotes connectivity and infrastructure in order to benefit China’s influence and trade in the region.Apart from Dahal’s CPN (Maoist Centre) and Nepal’s CPN (Unified Socialist), other coalition members Janata Samajwadi Party and Rastriya Janamorcha are also against the American grant. Even the Hindu-Right Rastriya Prajatantra Party recently spoke against it. Deuba called an all-party meeting this week to discuss the MCC, but Oli did not show up. Representatives of other parties reiterated their opposition to the compact in its present form. Jhala Nath Khanal of Unified Socialists was once more named to a committee to further study the MCC agreement.Dahal and Nepal used KP Oli’s support for the MCC against him in a<a href="https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/" target="_blank" rel="noopener noreferrer"> bitter power struggle</a> that did not just split the Nepal Communist Party, but also the UML. They were so successful in generating public opinion against the MCC, saying it was an American strategy against China, that they find it difficult to back it now, especially with <a href="https://www.nepalitimes.com/here-now/all-eyes-on-2023/" target="_blank" rel="noopener noreferrer">elections a year away</a>.  Dahal is also concerned about his Maoist Centre general convention.At the height of political infighting last year, Chinese Ambassador Hou Yanqi lobbied unsuccessfully to keep Nepal’s communists united. Now that KP Oli is in the opposition, he is not as openly pro-MCC, but sees it as a weapon to get back at Deuba and Dahal by splitting their coalition — even if it means forging an alliance with the NC.Nepal signed the MCC agreement in Washington in 2017 when Deuba led a similar NC-Maoist coalition. The US has repeatedly said that the project is a grant that Nepal qualified for, and has no strings attached. MCC Vice President Fatima Sumar and US Deputy Secretary of State Donald Lu <a href="https://www.nepalitimes.com/latest/nepal-stuck-between-rock-and-hard-place/" target="_blank" rel="noopener noreferrer">visited Nepal recently</a>, and reportedly gave Deuba an ultimatum to have Parliament ratification by the end of this year. <img width="1142" height="868" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161152/636d1eac9c7e80680e0af422jpeg.jpg" alt="">Experts say the MCC is important to expand Nepal’s power grid into the future with 400kVA transmission lines that can also allow Nepal to export more surplus electricity to India. Nepal will be generating 4,500MW of hydroelectricity in the next three years, and over 12,000MW by 2030, and much of it risks being wasted if it cannot be supplied to load centres. In monetary terms, Nepal’s <a href="https://www.nepalitimes.com/banner/nepals-precious-electricity-going-waste/" target="_blank" rel="noopener noreferrer">power producers could lose</a> at least Rs142 billion annually. Which is why energy experts say Nepal should start work immediately on transmission lines even if the MCC does not go ahead.Although most of the $500 million project is for upgrading transmission lines, it will also improve highway connectivity in central Nepal to <a href="https://www.nepalitimes.com/latest/generating-electricity-and-cash-for-nepalis/" target="_blank" rel="noopener noreferrer">boost economic growth</a>.  Read also: <a href="https://www.nepalitimes.com/latest/the-cost-of-no-mcc/">The cost of no MCC</a>, Nepali Times

China lobbying against MCC

Earlier this month, Nepal received Rs1.6 billion from the World Bank as part of its <a href="https://nepalitimes.com/news/will-nepal-ever-be-paid-for-saving-trees">Forest Carbon Partnership Facility (FCPF)</a>, rewarding the country for increasing its carbon sink capacity. Nepal is the first in South Asia to benefit from this facility, and it is specifically to recompense the country for increasing forest cover in 13 Tarai districts between 2018-2024. “We are also trying to get another Rs13 billion from the facility while also preparing for free market-based carbon trading in the international market,” says Nabaraj Pudasaini of the REDD (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) Implementation Centre. Big emitters of greenhouse gases are under pressure to reduce their carbon emissions, and many have signed agreements to do so by investing in decarbonisation projects in developing countries. Countries that emit more than a specified amount of carbon would be able to buy emission rights from countries that emit less. Nepal is internationally known for its community forestry program which has been largely credited for <a href="https://nepalitimes.com/banner/tree-mendous">increasing tree cover to over 45%</a> in less than three decades. But this achievement had not been adequately recognised or rewarded internationally before. Forests, especially in the tropics, absorb and store large amounts of carbon while releasing oxygen in a process known as photosynthesis. <a href="https://www.fao.org/forest-resources-assessment/en/">Preventing deforestation</a> and increasing canopy cover is considered a much more achievable goal than reducing emission in the scale necessary to limit global average temperature to 1.5°C above pre-industrial levels. COP11 in Montreal in 2005 first proposed reducing carbon emissions by improving forest quality by halting degradation. By 2015, a new mechanism of financial assistance was created to help less developed countries with sustainable management of forests <a href="https://www.un-redd.org/">(called REDD+)</a>. Under this new mechanism, countries receive aid based on their efforts to prevent forest degradation and increase carbon sink, and in 2021 the World Bank was entrusted with implementing it. Nepal’s FCPF receipt this month was calculated on the basis of 2.4 million tons of carbon stored at a rate of $5 per ton. In the second phase, Nepal will receive more than Rs4 billion within the next year for storing an additional 7 million tons of carbon. Eighty per cent of this amount obtained from carbon trading needs to be spent on local beneficiaries and indigenous communities.&nbsp; But carbon trading is not easy, Nepal needs to prove that protected forests will not be destroyed in future.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241121091132_c8a381c9a95aa86fec558951650d97bb87914741f01766982ba2b086af001f16.jpg" data-media-id="editor_4" data-image-id="20241121091132_c8a381c9a95aa86fec558951650d97bb87914741f01766982ba2b086af001f16" data-rendition-name="original" width="1500" height="999" loading="lazy" alt="Greenbacks for greenery NT "> <figcaption>Photo: KUNDA DIXIT</figcaption> </figure>  Explains carbon trading expert Yugan Manandhar. “Forests should be handed over to the community and shown that they are managed sustainably. Proving this will be particularly challenging; forest encroachment and degradation is rife in the Tarai.” <a href="https://nepalitimes.com/multimedia/nepal-is-going-up-in-smoke">Deliberate forest fires</a> have also added to the challenge because they increase carbon emissions and reduce the sink capacity of forests. The basis for the amount that Nepal received was set five years ago by calculating the carbon reserves of forests in the 13 Tarai districts. In the meantime, sustainable forest management, tree plantation, forest destruction and erosion control were prioritised to increase carbon reserves in those forests. Nepal is signing another carbon trading agreement during the ongoing Baku climate conference. The <a href="https://www.leafcoalition.org/">Lowering Emissions by Accelerating Forest finance (LEAF Coalition) </a>proposes to sell the carbon stored in the forests of Bagmati, Gandaki and Lumbini provinces. For this, Nepal signed the letter of intent three years ago at COP26 in Glasgow. The target is to store 70 million tons of carbon in 32 million hectares of forest in the three provinces per which Nepal will receive Rs13 billion in four years at $10 per ton with provisions to increase the rate if various conditions are met. However, the agreement in itself doesn’t guarantee the amount. According to the targets set by Nepal, forest degradation should be stopped and carbon reserves increased by protecting tree cover. Preparations are also underway for clean air carbon trade because it has offset fossil fuel use by introducing 30,000 electric vehicles. Nepal has been selected for the first round to receive $40 million within one and a half years through the Clean Air System of the World Bank. Given that most of Nepal’s energy mix is from biomass, replacing them with electric stoves can significantly improve health by reducing indoor pollution as well as strengthen the country’s capacity for carbon trade. “Nepal's goal now is to sell carbon in the free market where carbon credits are bought and sold based on supply and demand in an open and transparent manner,” adds Pudasaini of the REDD Implementation Centre. “Nepal can now set its own price and bargain with interested buyer countries and organisations.” Lately, India has been discussing setting up a carbon market. Nepal has exported Rs12.72 billion worth of electricity to India so far this fiscal year, which can be traded under Nepal’s carbon market. “Carbon trading can create significant economic benefits for Nepal, which will help reinvest in development and environmental protection projects,” says Manandhar. “But we must prioritise sustainable management of forests, cutting older trees and allowing regrowth as well as promoting electric stoves and electric vehicles.”

Greenbacks for greenery

Khukri Rum is <a href="http://archive.nepalitimes.com/news.php?id=3719#.WurBk6SFPIU">one of Nepal’s most iconic brands</a>, and is now launching a new Cask Series premium product to sell in Nepal and abroad. The Cask Series Smoked Finish Khukri Rum is a limited edition with only about 7,000 bottles, most of it for export and rest to be sold to rum connoisseurs in Nepal itself. Each bottle is numbered and will mention the cask from which it is derived. “We are working on taking a classic Nepali rum to a new luxury premium brand category, the Cask Series will only be produced this year with new product ranges in future,” explains Subash Lamichhane, managing director of Nepal Distilleries that first started making Khukri rum in 1959 in Balaju and has never stopped. Fermented from molasses in Bara district in the Tarai after the annual sugarcane harvest, the rum is matured for at least eight months during distillation. The distillery bottles the classic Khukri XXX, Coronation Khukri XXX, Khukri White Rum and Khukri Spiced Rum.&nbsp; The distillery is now adding this limited edition of its ‘Cask Series’. While the original rum is stored in huge wooden vats, the rum used for this more exclusive line is in smaller casks made either from oak or sal, with charred insides to give the rum a smoky flavour. The Cask Series rum is indeed smokier than the classic, while the spiced rum tastes toasty and mostly of cardamom. The company has a tasting suite with a master blender and tasters who have to approve the palate test.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241122131124_10b8ddca93b37b0348bf964b4f09e7fac6ef4e754cca6231368850539cd558e2.jpg" data-media-id="editor_1" data-image-id="20241122131124_10b8ddca93b37b0348bf964b4f09e7fac6ef4e754cca6231368850539cd558e2" data-rendition-name="original" width="1498" height="1000" loading="lazy" alt="Khukri Rum"> </figure>  The packaging for the Cask Series is as special as the process. A sturdy patterned box that opens up to a black glass bottle with gold lettering, and an indication of which cask the rum is from. These are then shipped to premium customers around the world One of the reasons this is the more expensive premium line is because the casks are smaller than the vats and the blenders reject more than half of the rum in the casks when the aging period is complete. The trick for the blender is also to decide when to take the run out of the cask.&nbsp; Says Lamichhane: “If we have 25 casks, we expect to throw away about fifteen.”Over the decades, Nepal Distilleries have created and maintained a brand that feels quintessentially Nepali, and has served as Nepal’s ‘ambassador’ with exports to Germany, Korea, Belgium, Finland, the Czech Republic, besides the existing markets among Nepalis in the US, UK, Hong Kong and Australia. &nbsp;Its unique <a href="https://nepalitimes.com/here-now/khukri-rum-sharpens-its-act">khukri shaped bottle</a> first introduced for King Birendra’s coronation in 1975 has been a collector’s item. The bottle and rum have been a staple for Nepalis and visitors to take as gifts when they leave the country, and is used as decoration on bar tables around the world. Now, nearly 40 years later, even that bottle will soon be getting a makeover with a sharper design and sleeker handle. “Our bottle design has always been instantly recognisable, and it is,” says Lamichhane. The Himalayan restaurant at The Hague, for example, has a Khukri Coronation bottle adorning its bar (page 6-7). In Washington DC Himalayan Heritage Restaurant &amp; Bar offers ‘Nepalese Khukri Rum’ mojito in its drinks menu with fresh mint, soda water, lime juice and sugar syrup, for $12.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241122131124_b9474db3fc83c85845348dddc30c49652ee1f17229531867fa241de50849cedc.jpg" data-media-id="editor_3" data-image-id="20241122131124_b9474db3fc83c85845348dddc30c49652ee1f17229531867fa241de50849cedc" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Khukri Rum NT"> <figcaption>Christopher Armes, master blender of the Cask Series.</figcaption> </figure>  A distinct element of the award-winning <a href="https://nepalitimes.com/business/khukri-rum-gets-award">classic Khukri rum</a> is its burgundy colour from caramel sourced from cooking sugar and blended with the raw rum. The spirits are then stored in a warehouse with floor-to-ceiling vats. The vats are not just for storage, the wood in the vats imparts flavour into the rum, and removes a lot of the harshness. &nbsp; On a visit this week, the bottling room was just about to begin for the day and the production line was churning out different shapes and sizes of Khukri Rum bottles. Most of the process is automated, including screwing bottle caps, sticking labels, placing the government seal, and packaging. The only manual intervention is the quality control where bottles are held against the light to check for sediment and colour. A mural on the wall of the distillery in Balaju depicts the rum-making process. A lady slings sugarcane on her shoulder, the molasses is churned in a pot, water is channelled into the distillation process, cinnamon, cloves and cardamom are added to a container, and finally there is a bottle of the classic Khukri Rum against a Kathmandu backdrop.

Khukri goes premium with new rum

Turkish Airlines has introduced a new amenity kit collection designed in collaboration with French fashion house Lanvin for international business class passengers on flights more than five hours. It consists of five pieces designed for sustainability and elegance. Bags are reusable and will consist of Lanvin cosmetic products like hand and body lotions and lip balm. Eye masks and socks are made from recycled materials, earplugs are packaged in paper and the toothbrush is bamboo.

Turkish amenity kit

Nepal now generates a surplus of electricity and it is all from renewable hydropower. Nearly half the country is under forest cover. Despite meeting these decarbonisation goals, Nepal’s hydropower plants are threatened by increased risk due to climate impact.&nbsp; Till <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">28 September</a>, Nepal was <a href="https://nepalitimes.com/news/india-nepal-sign-power-exchange-deal">exporting just over 1,000MW</a> of electricity to power-hungry India, when flash floods and landslides unleashed by historically heavy rains damaged over 30 hydropower plants across the country, temporarily <a href="https://nepalitimes.com/news/power-to-the-people">slashing nearly half the power generation.</a> The 456MW Upper Tamakosi in Dolakha was the hardest hit and it will take six months and Rs2 billion to repair. This has significantly reduced exports as well as domestic generation. Two months later, Nepal has still not been unable to fully keep its export commitment, and is actually paying Rs100 million in fines to India. Thirty-seven existing and under construction projects under the Independent Power Producers' Association Nepal (IPPAN) suffered Rs2.5 billion in damage. One of them is the 22MW Bagmati project in Makwanpur which was almost completely buried in flood debris. Even before <a href="https://nepalitimes.com/news/60-dead-64-missing-in-nepal-floods">record-breaking rain in September</a>, 15 other hydropower projects had been damaged by floods. Last year, floods caused by heavy localised rain damaged 28 hydropower plants. World governments met in Baku for COP29 to discuss the Loss &amp; Damage Fund and the Adaptation Fund, but for countries like Nepal the commas and brackets are meaningless until they are turned into $ and €. And likelihood of adequate compensation for climate-related damage is a long way off, if ever. Nepal’s national strategy is to use its vast hydropower resource as clean energy to spur economic growth, job creation, and boost export revenue. But the plants are located in narrow Himalayan valleys prone to landslides and floods even at the best of times. Now, those <a href="https://nepalitimes.com/opinion/comment/changing-climate-for-investment-in-nepal">risks have been heightened by weather extremes</a> due to climate breakdown. At present, Nepal generates over 3,300MW of clean hydropower, and the target is to reach 12,700MW in the next five years. Projects equivalent to 6,000MW are under construction or ready to start. The Ministry of Energy, Water Resources and Irrigation has an Energy Development Roadmap and Action Plan with the target of producing 28,500MW by 2035 by when more than half of it will be exported.&nbsp; “The climate crisis will further change the rainfall patterns making hydropower generation a big question mark in the future,” Manjeet Dhakal in Baku, who is also the Nepali adviser to the LDC Chair at the United Nations Framework Convention on Climate Change (UNFCCC). “We are building hydropower projects on rivers without evaluating risk. This whole process needs to be reviewed and reconsidered.” The report of the National Adaptation Plan published by the Ministry of Forest and Environment last year mentions that hydropower production, transmission and distribution will be at risk from flash floods, debris flows, glacial lake outbursts and rising temperatures.&nbsp; This risk is not confined to Nepal. Average global temperatures have increased by 1.3°C compared to the pre-industrial era. Worse, the Himalayan mountains are warming faster than the global average by 0.7°C because of elevation-dependent warming. A study conducted by our own Department of Hydrology and Meteorology in 2017 showed that the average temperature in Nepal has increased in the last four decades. Scientists say this is leading to extreme weather unleashing floods and landslides on slopes already destabilized by seismicity.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241124071128_d22901a360e8958f606d80ffa21defba05a671f65afec65539dc21a6885d8345.jpg" data-media-id="editor_5" data-image-id="20241124071128_d22901a360e8958f606d80ffa21defba05a671f65afec65539dc21a6885d8345" data-rendition-name="original" width="1333" height="1000" loading="lazy" alt="Right climate for Nepal’s energy transition NT"> <figcaption>BIBLICAL RAIN: Photo taken during catastrophic rain on 27-28 September at the Upper Tamakosi project site that destroyed the control room, killing four staff and burying the sedimentation tanks. Photo: RSS</figcaption> </figure>  Increased atmospheric temperatures has made the monsoon rains more erratic. It does not rain when it is supposed to, and it comes down in torrents when it is not supposed to. The September floods happened two weeks after the monsoon was supposed to retreat from central Nepal. Kathmandu Valley received half its annual precipitation in just over a day. &nbsp; Winter precipitation has also failed, especially in the high mountains and trans-Himalayan valleys. Thirteen of the past 19 years experienced winter drought. This impacts on dry season flows of the rivers, reducing hydropower generation. Nepal’s power capacity normally goes down by one-fourth during winter, but the gap is widening. The Kabeli corridor could only generate 20MW November-March even though plants there have an installed capacity of 200MW. Similarly, Upper Tamakosi only produced 65MW at most against its 456MW capacity last winter. The Nepal Electricity Authority (NEA) pays producers double the price for winter electricity, Rs8.40 per unit. Even though winter operation is highly profitable the rivers run low and NEA has to import from India to meet the winter demand. “This is not just a weather problem but a serious challenge also for the country's energy future, good climate-friendly design should be combined with policy and effective implementation,” says Subarna Das Shrestha, a hydropower investor and CEO of Sanima Mai Hydropower. “Insurance premiums have gone up as well, and settlement for damage is not timely.” <a href="https://nepalitimes.com/opinion/climate-risk-to-hydropower-investment">Hydropower investment</a> at one time was regarded as having a high rate of return. Now, some investors have become <a href="https://nepalitimes.com/banner/climate-smarter-himalayan-infrastructure">wary of the risks involved</a>. Says IPPAN’s Uttam Blon Lama: “Hydropower projects expected to give stable returns are now looking risky. Not only is climate adaptation design and planning expensive, but future repair and maintenance costs will also skyrocket.” Nepal has only one storage type dam <a href="https://nepalitimes.com/multimedia/rivers-be-dammed">in Kulekhani</a> and another one is being built in <a href="https://nepalitimes.com/multimedia/missing-pieces-of-the-hydropower-jigsaw">Tanahu</a>, but they are also at risk. In September, the sluice gates of Kulekhani Dam had to be opened causing loss of life and destruction downstream. Nepal has to learn lessons from the deadly collapse of the $1 billion <a href="https://nepalitimes.com/news/sikkim-flood-is-warning-to-nepal">Chungthang Dam in Sikkim</a> in October 2023 cause by a glacial lake burst. Glacial Lake Outburst Floods (GLOFs) in Nepal pose potentially catastrophic risk to infrastructure. The <a href="https://nepalitimes.com/here-now/lives-on-the-line-in-the-himalaya">Thame flood in August</a> was a relatively minor debris flow that damaged half of this village in the Everest region when <a href="https://nepalitimes.com/news/climate-breakdown-linked-to-thame-flood">two glacial lakes at 4,760m burst</a>. Luckily there was no loss of life. Of the <a href="https://nepalitimes.com/here-now/lives-on-the-line-in-the-himalaya">47 high-risk glacial lakes</a> in the eastern Nepal Himalaya, 21 are in Nepal and the rest are in rivers in China that are tributaries of the Arun and Bhote Kosi where Nepal has major hydropower plants under construction, or planned.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241123021128_b596cd8520c57a6c5476031e7a3ea6510f26b464c4d5351d2bc10f6f7d6b70d8.jpg" data-media-id="editor_14" data-image-id="20241123021128_b596cd8520c57a6c5476031e7a3ea6510f26b464c4d5351d2bc10f6f7d6b70d8" data-rendition-name="original" width="871" height="648" loading="lazy" alt="Page 10-11 map #1236 NT"> </figure>  Global temperature rise is accelerating the melting of Himalayan snow and ice, increasing the <a href="https://nepalitimes.com/here-now/living-below-nepal-s-melting-mountains">number and size of glacial lakes</a> so that we do not even have names for them. Imja Tso did not even exist in the old trekking maps until 25 years ago, but is now a 2km long lake. “Natural moraine dams in the mountains are weak, and the projects downstream can face major destruction if they burst, and the risk will only increase in future,” warns climatologist Arun Bhakta Shrestha at the <a href="https://www.icimod.org/">International Centre for Integrated Mountain Development (ICIMOD)</a>. <a href="https://nepalitimes.com/here-now/terrifying-assessment-of-a-himalayan-melting">An ICIMOD assessment in 2019</a> projected that if present heating trends continue, as they probably will, the Himalaya will lose two-thirds of our glaciers by the end of this century. “Generally speaking, hydropower developers hand over the project to the government after 30 years but by that time given the climate risks, they may not be an asset anymore,” says Manjeet Dhakal. Indeed, the cascade of expensive projects India is building on the Arun River are supposed to be handed back to Nepal in 25 years, but there is a big ‘if’ about whether they will survive that long. &nbsp;&nbsp; Planning of hydropower projects is still based on historical hydrological data, and does not take into account future temperature rise and its consequences. Investors, on the other hand, say that planning hydropower projects with climate components would make them even more expensive.&nbsp; “It’s not that we aren’t preparing for climate risk, we design keeping in mind the once-in-100-year flood,” says Blon of IPPAN. “But if we start designing based on once in 1,000 years flood, the cost would be so high that we won’t be able to build them at all.” Nonetheless, Subarna Das Shrestha of Sanima Mai Hydropower says that there is no option but to go for climate smart infrastructure despite the higher cost. Sanima Mai's powerhouse, for example, is completely underground. The strategy could also be to spread the risk by building less expensive plants located on rivers all over the country. Nepal is also diversifying away from its sole reliance on hydroelectricity, which at present supplies 92% of the power in the grid. Most of the rest comes from solar plants, where the total potential has not even been scratched. &nbsp; This article is brought to you by <a href="https://nepalitimes.com/" target="_blank">Nepali Times</a>, in collaboration with <a href="https://inpsjapan.com/en/" target="_blank">INPS Japan</a> and <a href="https://sgi-peace.org/" target="_blank">Soka Gakkai International</a>, in consultative status with UN ECOSOC.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240630110640_30c3782f9c09219bf1c249b51483a3cfb7a53a06d117d2aebd23ca7080d12758.jpg" data-media-id="editor_21" data-image-id="20240630110640_30c3782f9c09219bf1c249b51483a3cfb7a53a06d117d2aebd23ca7080d12758" data-rendition-name="original" width="680" height="103" loading="lazy" alt="SDG logo"> </figure>  &nbsp;