Little study was done to understand the role of high-altitude oak forests in climate change mitigation. Here, we analyzed data from 30 sample plots collected along the four altitudinal gradients to assess species distribution and carbon stocks in the Panchase Conservation Area in Nepal. Three carbon pools were considered, namely aboveground carbon (AGC), belowground carbon (BGC), and carbon in litters (leaf litters, grass, and herb biomass, CiL). Seven species were found, of which two are oak tree species (Quercus semecarpifolia and Quercus lamellosa). Quercus semecarpifolia is the most dominant species in terms of stem density and carbon stocks, followed by Quercus lamellose. Average tree diameter, height, and total carbon stocks were 27.7 cm, 8.4 m, and 127.6 MgC ha−1, respectively. Our study found higher carbon stocks at the higher altitudinal gradient. Pearson’s correlation analysis shows a strong effect of altitudinal gradients on carbon stocks (r = 0.7124), moderate effect on tree height (r = 0.5263), and less effects on diameter (r = 0.1733). A stepwise multiple regression analysis shows strong relationship between carbon stocks with height (P = 0.0059) and carbon stocks with tree diameter (P = 0.0148). Our ground observations and random interviews indicate that the low carbon stocks at the low altitude were due to human disturbance. Oak forests at lower altitudes are sparse forest stands with poor regeneration capacity, overgrazing, and extensive lopping. If such disturbance is prevented, oak forest can increase carbon stocks to 361.7 MgC ha−1 as found at the higher altitude. Conservation of oak forests in the Panchase Conservation Area could result in emission reductions of 633.0 MgCO2 ha−1. These reductions could be eligible for financial incentives under the REDD + scheme.