REDD has emerged as a major mitigation measure of climate change. It is proposed as a win-win strategy for both north and south. Nepal has also participated in pilot project of REDD. It is believed that CFUGs can also benefit from carbon trade due to high success of community forestry in high hill of Nepal, Nepal’s current laws and policies, communities have clear rights to manage and use trees and forest products. However ownerships right of forest could create some difficulty between government and community forest user groups in benefit sharing of REDD. Further REDD itself has multiple prior-condition for the REDD trade. This paper tries to analyze the conceptual ambiguities in the REDD trade and further tries to explore thegovernance and technical aspects of REDD with especial focus on community forestry of Nepal