Trung t©m Nghiªn cøu & Ph¸t triÓn HÖ thèng N«ng nghiÖpCentre for Agrarian Systems Research & Development

Institutional options for agricultural mitigation in

Vietnam

PhD. Dao The Anh, Nguyen Ngoc Mai, Tran Van Toan

Hanoi, 3 May 2010

Agriculture mitigation and institutions for carbon market acces

Clean Development Mechanism (CDM) Voluntary carbon market (VCM)

Overview of Clean Development Mechanism (CDM) in Vietnam

The CDM has yet to gain real traction in Vietnam or deliver poverty reduction: 85 projects, but only 5 formally registered and only 1 having direct poverty reduction benefits (Cao Phong Reforestation Project)

Potential sub-sectors for CDM projects are identified Energy efficiency, conservation and saving Fuel switching Methane recovery and utilization from waste disposal sites and

coal mining Application of renewable energy Associated gas recovery and utilization Afforestation and reforestation Reduction of methane emissions from agriculture and livestock,

utilization of biogas

Legal context and Institution of CDM

Legal doc for implementation of CDM in VN: The Investment Law (Law No.59/2005/QH11), Directive 35 (October 2005), Decision 130 (August 2007) and Circular 58 (July 2008)

In May 2008, the Department of Meteorology, Hydrology and Climate Change of MONRE took over as DNA

The Department of Meteorology, Hydrology and Climate Change also serves as a National Focal Agency for managing and coordinating the implementation of all climate change related activities under UNFCCC and Kyoto Protocol in Vietnam

Legal context and Institutions of CDM

The Vietnam Environment Protection fund is responsible for registration of certified CERs; supervision and management of CERs granted by the CDM Executive Board to CDM projects in Vietnam; and collection of fees from CERs being sold.

There are no local Designated Operating Entities in Vietnam. There are some consultants working with Vietnamese organisations that are involved with validating CDM projects, but these projects are ultimately being evaluated by foreign DOEs.

Structure of Cao phong CDM project

District Administration

Forest development fund

Intermediares:JICAVFUForest Science InstituteDistrict extension center

Honda Vietnam

Households

Benefits

Carbon Wood

50

50

100

0

Relation flows

Financial flows

Lessons learned from Cao phong

Village regulation for forest management is developed by farmers, but lack of enforcement and monitoring

The Forest Development Fund (FDF) lacks farmer participation in management; the top-down approach further questions sustainability of the FDF

Lack of environnement staff at local level Farmers lack understanding of CER and their rights: lack of

capacity building Farmer only interested in economic (wood) benefit for poverty

reduction and not in environemental (carbon) benefits: lack of awarenss

Long project intervention: more than 8 years (acacia trees)

Voluntary carbon market institutions in Vietnam

No VCM in Vietnam at present VCM is not mentioned in existing legal documents, only listed

in the National CC Objective Program; potential difficulties for licensing authority unless MONRE proposes to revise and add some articles in the related legal documents

There are many similarities between the approval procedures for CDM and voluntary projects, but maybe simpler procedures outside MONRE can be used

Potential for agriculture mitigation is large because of high intensification levels of existing farming system

Potential for poverty reduction focus at smaller scale But who are the buyers? Who are the certificators? Currently

limited awareness Donors should play catalyzing role for VCM development

VCM: Challenges for agricultural activities

Aggregation of small scale and dispersed production geographically, but shorter cycle than forest

Non homogenous agricultural practices among farmers

Need effective local institutiosn for controlling emissions and chemical usage

VER accreditation appears more complex than CDM VER is not recorgnized officialy like CDM, thus

potential to combine with value chain or PES activities

Need action-research for institutions combining diverse stakeholders

Existing value chain institutional arrangement

Farmer association based on collaborative groups - supermarket:s collective cultural practices and internal quality control

Farmer groups – processing entreprises (contract farming)

Need to study arrangements between aggregation organisation and carbon buyer

Institutional model for carbon market access of small-holders

Supermarket, Distributor

Group

ASSOCIATION

Supply

- Production- Service provided to members

Group

Group

Carbon producers

Carbon aggregators

Carbon buyers

Institutional criteria for pilot study

Existing farmer organisation for a large area due to short time

Relative specialisation in one agricultural product and homogenous cropping practices

Good market acces Diversity of agro-ecological condition: 01 in

rice land and 01 in sloping land

Concluding remarks

Agricultural mitigation has potential in Vietnam Requires supportive legislative and policy

framework Need to conduct action-research on

institutional options for VCM in Vietnam focusing on smallholder access

Capacity building is in large demand Need a long intervention project integrated in

IFAD activities

Thank you for your attention!