The present study identifies and analyses the environmental and socio-economic impacts on the livelihoods in urban and rural settings of the mountainous state of Himachal Pradesh. The findings deal with the broader objectives of

the changing patterns of agricultural production with special reference to diversification, as well as forest-based livelihood outcomes, Clean Development Mechanism (CDM) forest project activities, the roles of different ethnic groups and

non-governmental organizations, and the benefits and shortcomings of tourism as a livelihood source. The research suggests that for better agricultural performance and improved land productivity; irrigational facilities need to be strengthened, an overall governmental programme for supporting the farmers of small land holdings should secure the farmers’ livelihood utilities and stop the process of scattered land transforming into wasteland, also the monkey menace shall be controlled. Moreover, the forestry CDM projects have been found to involve several financial, ecological, and social challenges which should be urgently recognized, and the conditions of the plantations and the impacts the projects have on livelihood properly and continuously followed by an independent monitoring agency in Himachal Pradesh, and in the other areas as well. The role of the NGOs is acknowledged due to their operations in health and social sector, and the fact that they concentrate on the very poorest and the most marginalized people.