Viet Nam Payment for Forest

Environmental Services Policy Pham Thanh Nam

namdalat83@gmail.com

28-30 September, 2011

Stresa, Italy

Outline

Existing PFES policy in Viet Nam

Benefit of PFES policy implementation

Challenges

Looking forward

The need of PFES

Forests and ES are threaten from deforestation and

forest degradation (13 millions ha at risk);

State budget can afford 20-25% of needed funds;

The mountainous and forest areas are home to 25

million of people living in difficult socio-economic

conditions;

Determination of government to combat poverty

reduction and forest protection

Existing PFES policy in Viet Nam

Existing PFES policy in Viet Nam

PES concept introduced in 2006 with USAID-funded

ARBCP-WI, studies, meetings, workshops, esp. valuation

of FES study with engagement of potential buyers, EVN,

SAWACO

Basis for Gov leaders, NGOs to negotiate payment rate

with buyers, PM decision 380

PFES, piloted in Lam Dong and Son La provinces in 2009-

2010.

2010, Prime Minister of Vietnam signs the National PFES

Decree into Law.

Existing PFES policy in Viet Nam

Type of Forest Environmental Services

• Soil protection, reduction of erosion and sedimentation of reservoirs, rivers, and streams.

• Regulation and maintenance of water sources for production and living activities of the society.

• Forest carbon sequestration and retention, reduction of emissions of green house gases through measures for preventing forest degradation and loss of forest area, and for forest sustainable development.

• Protection of natural landscape and conservation of biodiversity of forest ecosystems for tourism services.

• Provision of spawning grounds, sources of feeds, and natural seeds, use of water from forest for aquaculture.

Existing PFES policy in Viet Nam

FES Buyers: hydropower facilities, clean water

production, industries using water, tourism businesses.

FES Sellers: forest owners, including FMBs, NPs, FCs,

Communities, HHs.

Intermediaries: State and Provincial FPD Fund.

Benefits of PFES policy

implementation

Current payment flow in provincial level.

2009-2010: 5mil USD

2011: 3.5 mil USD

Projected future potential payment in national level,

solely hydropower estimate.

2011: 9.200MW = 62 mil USD

2020: 17.400MW = 117 mil USD

Benefits of PFES policy

implementation

Awareness of value of FES at all levels raised oHigh consensus on value of FES

oBuyers recognize that to invest in forest protection is to invest for sustainable production of hydropower, water supply, and tourism.

oForest protectors understand that the value of FES and their responsibilities in supplying FES; a shift of mind.

Benefits of PFES policy

implementation

Deforestation and forest degradation reduced o Forest is better managed, number of violations

reduced by 50%

Livelihoods of forest laborers improved

oReduction of number of poor households by 15% (socio-economic survey)

Global economy, Viet Nam economy 5.7% GDP increase

in 2011 but inflation of 19%.

Social and economic impact, poor standard is outdated

Biggest FES buyers, EVN is in debt

There is no legal document to force buyers pay

There require a great deal of communication and

coordination between a wide range of governmental,

private sector, community and institutional

stakeholders.

Challenges

Challenges

Capacity building challenging, PES concept is so new,

raising awareness to government officials from national

to local level is important.

Improving scientific basis for establishing environmental

services values and pricing

Bundling and stacking services payments

New ecosystem-service-focused policies and initiatives

under consideration

o Under PFES policy, forest carbon sequestration and

retention, basis for REDD+ implementation.

o Some REDD project undertaking such as UN-REDD, SNV,

JICA, FFI, ICRAF, RECOFTC, etc.

Looking forward

Looking forward

Most influence program

UN-REDD is the most influence program, play major role

in the National REDD+ Program with substantial funding

from Norway.

Non government ecosystem services

VCS-REDD project of WI, FFI, KPMG, JICA, Truong Thanh

companies.

Conclusion

PFES is being implemented at national scale.

Further REDD mechanism under PFES has been explored

Thank You! Contact: namdalat83@gmail.com