The Mid-Himalayan Watershed Development Project (MHWDP) is a 222,951 ha (550,920 acres) land husbandry initiative in Himachal Pradesh, India, that aims by means of green growth and sustainable development to establish a functionally tenable watershed ecosystem. MHWDP has started to reverse several decades of degradation of the natural resource base including forests, has achieved improved agricultural yields and productivity, and has raised rural household incomes. It includes the Himachal Pradesh Reforestation Project (HPRF), the world's largest clean development mechanism (CDM) project.

The Mid-Himalayan Watershed Development Project (MHWDP) is an administrative unit of the Department of Forests of the Government of Himachal Pradesh. MHWDP stakeholders are the Department of Forests, local gram panchayats (GPs), and the World Bank. The project aims to reverse several decades of degradation of the natural resource base and improve the productive potential and incomes of the rural households in the project areas. Using a community-driven development approach, MHWDP aims to improve water harvesting, increase the area under irrigation to diversify agriculture and horticulture, and conserve and sustainably develop soil and water resources.

MHWDP covers 222,951 ha in the watersheds of Mid-Himalayan region in the Siwalik Hills between 600 and 1800 metres above mean sea level. It encompasses the catchment areas for three major rivers of Northern India, the Ravi, Beas and Sutlej. These rivers join the Indus, which carries water that sustains more than 200 million people. The project covers 11 watershed divisions and involves 704 gram panchayats located in 43 blocks spread over 10 districts of the state.

MHWDP manages a subproject, the Himachal Pradesh Reforestation Project (HPRP), also called the HP Bio-Carbon Reforestation Project-Improving Livelihoods and Watersheds. HPRP implements Afforestation and Reforestation Clean Development Mechanism (A/R CDM) activities, initially on 4,003.07 ha but subsequently expanded to approximately 10,000 ha of degraded lands.^{[citation needed]} MHWDP will manage HPRP until 2013 or beyond. The State Forest Department will subsequently manage the project. HPRP was registered with the UNFCCC 30 Jun 2011 (or whenever...)

The natural habitats of Himachal Pradesh exhibit a high degree of endemism, referring to species only found in these areas. Watershed management aims at multifaceted environmental benefits such as habitats for biodiversity, soil conservation, reduced sedimentation, and improved forest cover.

The forests of the Himachal Pradesh watersheds are an important carbon sink for greenhouse gases. Trees naturally sequester carbon dioxide, contributing about 90% of the earth's surface carbon storage. A cubic foot of merchantable wood retains approximately 15 kg of carbon. The UN recognised carbon trading as mitigating greenhouse gas emissions. The approximate international market value of one tonne of carbon is US$19.

Himachal Pradesh endeavors to become the first carbon-neutral state in India. The A/R CDM project is developed under the umbrella of the World Bank funded MHWD Project and it expected to sequester 828,016 units tCO2-e of Certified Emission Reductions (tCER)^{[citation needed]} commonly known as carbon credits, each unit being equivalent to the reduction of one tonne of CO₂e, e.g. CO₂ or its equivalent),

over the first crediting period of 20-years at the rate of 10.34 tCO2-e/ha/year.^{[citation needed]}