The site

Shivapuri Nagarjun National Park is situated in the north of Kathmandu valley and is the nearest national park to the capital city, Kathmandu. The park lies between 1350 and 2732 m altitude and is spread over Kathmandu, Nuwakot and Sindhupalchwok districts of central Nepal. It is rich in biodiversity, with more than 2000 plant species, 21 mammals and 180 birds, and also has cultural and livelihoods’ importance for local communities. Sundarijal catchment inside the park provides up to one-third of the piped water of Kathmandu Valley. Water from the catchment is also used for generating hydroelectricity, irrigating paddy fields, bottled water, and the soft drink industry. The catchment is also an important site for both domestic and international visitors who come to enjoy its natural beauty.

The issues

The park manager are facing difficulty in its management. Deforestation for agricultural cultivation and harvest of forest products coupled with human–wildlife conflict were serious issues. The local people’s livelihoods depended on access to forest resources and continued cultivation for those living inside the park. Limited budget for park management made it difficult to effectively control deforestation. This was compounded by the fact that local people had no interest in upland conservation because they did not receive tangible incentives. However, upland watershed conservation was of significant economic value to the downstream population, with water services provided at low or zero cost to users, and at low or zero reward or compensation for the upland conservation efforts of the locals and the park authority.

The park is also a story of quintessential conservation at the cost of local livelihoods. There are people living in the villages located within the park boundary who have literally been fenced in and are subjected to ‘command and control’. The condition of the land and ecosystem of the catchment improved significantly while the local people’s status remains difficult, with many households living in poverty especially through human–wildlife conflict, lack of infrastructure and development. The International Union for the Conservation of Nature’s biophysical-economic-livelihoods assessment of conservation inside the park indicated that even though conservation makes economic sense, continuing to expect catchment land and resource managers to cover the costs for downstream water users will further marginalise the local people.

Environmental services and the people involved

Environmental services

Regular supply of clean water for domestic use and hydropower generation, biodiversity, recreation and religious significance

People who provide the services

National Park Authority and local communities (320 households of 1667 people)

People who benefit from the services

Water users in Kathmandu valley, farmers downstream, water company, industries, visitors and tourism

People who act as intermediaries between the providers and the beneficiaries

Nepal Environment and Tourism Initiative Foundation

The park protects a vital catchment of the Bagmati, Bishnumati and Yashomati rivers. The watershed is one of the main sources of drinking water for Kathmandu. Everyday about 30 million litre (about one-third of the demand) is tapped from the rivers as well as several other smaller streams. The downstream users include the hydropower plant, drinking water processing centres, and farmers (irrigation). The water company, Kathmandu Upatyaka Khanepani Limited (KUKL), is the key beneficiary (on behalf of water users). Some hydropower is also generated by the state-owned Nepal Electricity Authority. Tourism is a significant income-generating sector for the government. A number of industries downstream rely on water from the upstream catchment.

The rewards

Potential for a payment for environmental services mechanism

While all evidence points to the need for a rewards mechanism for enhancing conservation and local livelihoods, there is little clarity on how such a mechanism could be designed and what the policy issues are. There are multiple stakeholders: Department of National Parks and Wildlife Conservation, local communities living in and around the park, Nepal Army guarding the park, KUKL representing the water users in Kathmandu and local communities living downstream.

Continuing work and future plans

The feasibility study of 2010 established the rationale for initiating an environmental services rewards’ scheme in Sundarijal watershed, identified major stakeholders, recommended a potential framework for the scheme and made a number of suggestions.

In 2011, numerous activities were implemented to enhance local stakeholders’ awareness about ecosystem services and improve their negotiation skills in order to negotiate with the beneficiaries of the services. A local stakeholder forum was established to co-ordinate progress. A 13-member Sundarijal Environment Committee was also established and remains active in pursuing government agencies and ecosystem services’ beneficiary groups. Eco-clubs at local schools, established to promote conservation awareness have been mobilised in collaboration with local university students and local clubs.

The field-level activities were led by the Nepal Environment and Tourism Initiative Foundation. Dialogues with various stakeholders (ecosystem services’ beneficiaries) and relevant government agencies continue to engage them in the development and implementation of a feasible rewards’ scheme. Significant progress has been made. Research support was provided by Forest Action and ICIMOD. Analysis of national policies—in particular those related to land-use changes and their drivers, and buffer zone management—in order to develop recommendations for pro-rewards national policies in the country. Efforts are underway to secure funding for local activities to complement rewards’ schemes initiatives. Consultations with the key stakeholders are being held with the local Sundarijal Environment Committee taking the leading role.


No rewards’ scheme has yet been developed although a framework for a feasible scheme has been proposed based on a series of studies. The locally formed Sundarijal Environment Committee with support from Nepal Environment and Tourism Initiative Foundation and ICIMOD is taking a proactive role in approaching various ecosystem beneficiary groups and government agencies to implement the scheme. The progress is relatively slow, mainly due to the unstable political situation, unclear intentions and confidence of key beneficiary groups.


  • International Centre for Integrated Mountain Development

A regional intergovernmental learning and knowledge sharing centre serving the eight regional member countries of the Hindu Kush Himalayas - Afghanistan, Bangladesh, Bhutan, China, India, Myanmar, Nepal, and Pakistan – and based in Kathmandu, Nepal, which aims to assist mountain people to understand these changes, adapt to them, and make the most of new opportunities, while addressing upstream-downstream issues.

  • Nepal Environment and Tourism Initiative Foundation

A local NGO promoting conservation and responsible tourism in Shivapuri and other tourist destinations around Kathmandu

  • Forest Action Nepal

A local NGO active in policy and action research in the field of natural resource management and livelihoods

Contact for more information 

Dr Laxman Joshi,