The forests of Hindu Kush Himalayan region present an opportunity for both enhancement of carbon and extraction of timber and energy biomass. Community institutions are an asset in the region which enhances the value of total forest capital stock considerably. At the conceptual level Sustainable Forest Management means that total forest capital stock, which is the sum total of natural capital stock, man made capital stock and the forest related institutional capital, must not corrode over succeeding generations subject to the further condition that Natural Capital should also not dip below the critical Natural Capital threshold. This implies that if natural forest capital can be kept above the critical threshold at all times it is possible to enhance human welfare through man made forest capital also.