Sweden and Nepal to speed up climate action through emissions trading

Dr. Deepak Kharal, Secretary, Ministry of Forests and Environment, Nepal and Ms. Caroline Asserup, Acting Director General at the Swedish Energy Agency.

Photo: Ulrika Karlsson-Arne

The agreement enables the two countries to mobilise much-needed capital that can deliver emission reductions at scale.

Nepal has been an early mover in carbon markets and signed a Memorandum of Understanding (MOU) with Sweden on climate cooperation in 2022. Since then, both Nepal and Sweden have put in place national legal frameworks for article 6 and are ready for next steps to accelerate climate action on the ground.

Article 6 of the Paris Agreement enables countries to cooperate to reach their respective nationally determined contributions. This type of cooperation can offer an additional revenue stream for climate projects that in turn help attract private capital and accelerate technology adoption.

– This cooperation is intended to be of mutual benefit to both Nepal and Sweden, contributing to the implementation of both parties’ climate goals. We plan to provide financing for climate mitigation activities in Nepal that contribute to the energy transition and promote sustainable development, says Caroline Asserup, Acting Director General at the Swedish Energy Agency.

The Bilateral Cooperation Agreement has been negotiated between the Swedish Energy Agency and Nepal’s Ministry of Forests and Environment. The Global Green Growth Institute has supported the development of the agreement.

In addition to Nepal, Sweden has signed a bilateral cooperation agreement with Zambia during COP29. Sweden has also previously signed bilateral cooperation agreements with Ghana. Sweden’s first emission reduction project under Article 6 has already been procured in Ghana and more is under way.