Payments For Forest Environmental Services In Vietnam And Its Impacts On Local Livelihoods

Payments for Forest Environmental Services (PFES) is described as an arrangement where beneficiaries of the environmental services, such as downstream water users, hydropower plants or tourism businesses, provide direct economic incentives to local land stewards for the maintenance of forest ecosystems. In addition to these incentives, PFES provides associated environmental services such as watershed conservation, biodiversity, carbon sequestration and scenic beauty.This paper aims to analyze PFES pilot projects in Vietnam implemented by the Vietnamese Government, Ministry of Agricultural and Rural Development and Management, and with support from the Asia Regional Biodiversity Conservation Program and ICRAF Vietnam. The research was commissioned by China Agricultural University and was conducted with the following objectives:1) Gain a better understanding of how ES can be applied to the forest sector in developing countries;2) Determine how PFES impacts local livelihoods;3) Evaluate policy approaches and implementation; and4) Garner lessons for further implementation of PFES on a country scale. Specifically, this paper aims to assess:1) Market institution policies and governance failures in the pilot project;2) Processes of designing the pilot project;3) Implementation from the perspectives of informed and meaningful stakeholders;4) Participation and transaction costs; and5) Effectiveness and equity of strategies that the pilot sets out to achieve in local livelihoods at both social and economic levels.Reviewing the country’s legal framework, household participation, land tenure, and information on property rights collected secondary data on the study. A PFES scheme typically involves sustainable forest management and an evaluation of its impact on local household income. In light of these findings, it is suggested that more practical policy/program trials should be implemented. Such trials would allow policy makers to adjust accordingly to prepare for large-scale implementation of PFES in the country.This thesis proposes a framework that could potentially be used in the case of Lamdong and/or Backan (Ba Be National Park). It describes how payments from environmental services can be bundled with payments from hydropower plants and income from tourism to flow into a locally established PFES fund, from which payments are then dispersed to contracted local land stewards. Bundling payments increases the chances make significant contributions to local livelihoods. Individual contributions from ES are still comparably small. However, if measures are scaled up to include mainstream and high-end tourism, PFES can be promising sustainable and financial mechanisms for conservation.