In the forestry sector, avoiding deforestation is recognized under the regulations of the CDM. This means that countries like Nepal that promote CFM and contribute to reducing global emission by biological sequestration of carbon through forest management can claim carbon credits under the CDM. The problem that this study addresses is whether CFM can be integrated into the market-based mechanism under the new climate change treaty for reducing global emission. It will analyses whether the carbon trading from REDD Strategy will actually benefit the local community.The total carbon stock of the forest was 122.29 ton/ha including SOC and below ground carbon of 45.18 ton/ha and 12.85 ton/ha, respectively. Rich, medium and poor HH were willing to pay 25.97 %, 51.95 %, 22.08 % of total WTP respectively for the ecological services provided by the forest. The annual total benefit and cost in 2010 was US $ 7300 and 2456 respectively. BCR measured directly without discounting and with discounting was 2.97 and 3.91 respectively. CF had already benefitted in the current state. If REDD scheme is implemented, it will provide additional benefit to the local people in the future.