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Watershed is not only a hydrological unit for hydrologist but also a socio-political-ecological entity for rural community. Ethiopian highlands hailing as the cradle of humanity and home to about 80% of the population helped shelter from foreign conquest and making a strong base of rural community. The area is threatened with erosion and loss of agricultural productivity. The soil and water conservation program initiated in 1970 achieved only limited success due to its failure in addressing to the problems of local people. The prominent reasons assigned were lack of community participation, ignoring indigenous knowledge, adopting top down approach and poor institutional collaboration. The present government taking lessons from the past, started community based integrated watershed management program removing all the shortcomings through the instrument of new policies for improved livelihood and living conditions of rural communities.

Background: Elsewhere in other developing countries, and 85% of the Ethiopian population is living in rural part of the country and more than 90% of domestic energy source is dependent of traditional biofuel. Increase in population is causing more demand for human use and more pressure on natural resources. This adversely affect the increase of multi-purpose and indigenous tree plantation and ago-forestry practice and hence has a vicious circle with food security. However, following the start of community based watershed management practice, households are encouraged to plant trees on their private land, which contributed to the increase of forest coverage. Therefore, the objective of this study was to assess household level tree planting, domestic energy consumption, and explore implication for environmental conservation.Results: Fuelwood and dung was major source of domestic energy in the area, consumed on an average 2280 and 1533 kg/year respectively and the total biofuel consumption was 268.06 t/year. The decline in natural forest and increase in demand for wood motivated people to have privately planted trees. Though it was variable among various socio-economic characteristics of farmers, tree planting was encouraged, based on ground reality. Therefore, promoting private based tree plantation should be considered as economic relief and filling the demand gap of fuelwood. Likewise, the opportunity cost of dung available for soil conditioner. The use of fuel saving stove and other alternative source of energy should be encouraged. Conclusion:Local context policy option used for favoring for the allocation of bare land and mountainous topography for community and private tree planting for landless and small holder farmers has to be encouraged.