Q+A: Transforming payments for forest environmental services in Vietnam

Insights from CIFOR senior scientist Pham Thu Thuy
Floating fishing village of Ha Long bay, Vietnam. CIFOR/Terry Sunderland

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Signaling its commitment to forest conservation and management, in 2008 Vietnam became the first country in Asia to introduce a nationwide Payment for Forest Ecosystem Services (PFES) scheme. It was designed to account for the value of services provided by the forestry sector and protect the vital benefits forests provide to people – from carbon sequestration, watershed protection, sediment reduction in reservoirs to biodiversity conservation and provision of water for aquaculture and industrial uses.

Through PFES, Vietnam also aims to enhance forest quality and quantity, improve local livelihoods and advance overall socioeconomic development.

Despite these efforts, 12 years on, the number of rigorous impact assessments that examine additionality and conditionality — which means payments are only made when environmental services are delivered — on both environmental and socioeconomic fronts is limited. As a result, as yet, it is difficult to measure the actual impact of PFES.

Fast forward to 2020. After Vietnam passed its Forestry Law of 2017 to more fully incorporate PFES and shore up an earlier 2004 Law on Forest Protection and Development, priorities shifted to address such key issues as policy monitoring and evaluation (M&E), and transparent and equitable distribution of benefits.

Now, more than 98 percent of PFES revenue is generated from public payments through electricity and water bills, hydropower plants and, to a lesser extent, water companies.

These sectors acted as intermediaries to collect money from the public and pay it into Central and provincial Forest Protection and Development Funds. These funds are then distributed as payments to forest owners, including state such as national parks, protected areas, state businesses and forest management boards. The private sector, individual households, social organizations – farmers’ associations, women’s unions, youth unions – military, and communities that protect and restore forest ecosystems also benefit.

 Pham Thu Thuy, senior scientist with the Center for International Forestry Research (CIFOR), spoke with Forest News about this transformational research and the role the organization has played in enhancing PFES policies and practices in Vietnam over the past decade.

Her particular focus is on the Global Comparative Study on REDD+ (GCS-REDD+), which launched in 2009 to guide policymakers and implementers in 13 countries — including Vietnam — in designing and rolling out more effective, efficient and fair REDD+ (Reducing Emissions from Deforestation and forest Degradation) and PFES activities.

She will speak at the upcoming online GCS-REDD+ knowledge-sharing event in Vietnam.

Q: CIFOR’s recommendations have shaped significant regulations in Vietnam’s forestry sector. Of which achievements are you most proud?

A: Our research is always policy and scientific demand-driven to address emerging and important issues that the country wants to address. We work jointly, through a process involving government agencies and local stakeholders that is often welcomed by stakeholders at the national level. Notably, in 2016, CIFOR was awarded by the Ministry of Agriculture and Rural Development (MARD) for our outstanding contribution to the design and implementation of PFES in Vietnam between 2011 and 2016. It’s rewarding to see how our research and recommendations are now reflected in legislation addressing the need for adequate forest valuation, transparent payments, equitable benefit sharing and a rigorous M&E)

system. Embedded in the law is recognition of the need for an accessible grievance mechanism, which ensures transparency and accountability in the distribution of PFES revenues from national to the provincial and local levels.

Q: What does the scope of your work involve?

A: We support both national and provincial decision-making processes. Our work with the Son La Forest Protection and Development Fund into how PFES payments have been distributed and used has served as the main scientific input for provincial guidelines for the PFES benefit-sharing mechanism. Based on our , the monitoring system in Son La for PFES payment distribution flows has been improved. The province has also been able to access new funding from international agencies to pilot a new PFES grievance handling system and M&E system based on solid research and analysis of problems and proposed solutions.

Q: You worked across Vietnam in the frame of GCS REDD+. Are there any findings that surprised you?

A: What surprised us the most was the strong demand and interest from government agencies, civil society organizations and environmental services users in Vietnam for scientific and reliable evidence on the value of PFES. Government agencies have actively requested CIFOR to work with them to provide independent analysis so they can relay strong evidence to public and environmental services user groups. We were also surprised by the stark difference in the way each stakeholder group and province perceives equity. Some communities believe that payments should be equally distributed among households, while others believe benefits should go to the people who most contribute to forest conservation and restoration. I’ve also noticed that, in the field, PFES money is not the main motivation for people to protect and sustainably use forests, given the small amount each family receives. Associated non-financial incentives such as recognition of land use rights, inclusive decision-making processes and equitable benefit-sharing mechanisms are far more important.

Q: What are the next steps for GCS REDD+ in Vietnam?

A: We’re currently supporting the development of a new national PFES scheme for mangroves by addressing four policy questions raised by policy makers: what to pay for; who should pay; who should be paid; and how payment should be arranged. Essentially, we are identifying the whole range of environmental services these intertidal forests can provide. They act as carbon sinks. They protect coastal areas from sea surges, storm waves, seal level rise and erosion. They also provide breeding grounds for species of commercial interest such as barracudas, among other benefits they offer people and the planet.

Q: What longer-term impacts do you expect?

A: Through our work with authorities, civil society organizations and international partners such as Winrock, we hope to support  Vietnam’s efforts to increase  the extension and health of its forests, improving forest governance, as well as the income of households that benefit from PFES.

For more information on this topic, please contact Thu Thuy Pham at
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Topic(s) :   REDD+