Improving Payment for Forest Ecosystem Services Implementation: TA-8592 VIE (2014-2016)

Viet Nam is a country with rich biodiversity, possessing natural ecosystems from tropical jungles to dry forests, mountains, wetlands, and marine ecosystems. Forests cover 43% of the land and provide ecosystem goods and services that are essential to sustain the livelihoods of much of the population.

Recognizing the importance of forest ecosystems and to ensure they continue to contribute to biodiversity conservation and livelihoods, Viet Nam was one of the first countries to pilot a national policy framework for payments for forest environmental services (PFES). The Vietnamese Decree 99/2010, issued in January 2010 mandates the application of PFES schemes.

A key aspect of the Viet Nam’s emerging PFES scheme has been the establishment of the forest protection and development fund system. It covers central to provincial levels, and includes the National Forest Development and Protection Fund (VNFF) and 41 Provincial Forest Development and Protection Funds. Its core role is to collect fees from FES users, such as hydropower plants and ecotourism and aquaculture operations, and pay FES suppliers who maintain and protect forest areas.

FES suppliers are mostly poor communities living in remote areas and currently protect up to five million hectares of forest. Annually, the funds collect total revenue of US$ 50-60. The distribution of the revenue to FES suppliers helps create jobs and contributes to improved livelihoods and reduced poverty for more than 500,000 households.

After five years of implementation, the national PFES scheme has collected and disbursed around 5,220 billion VND (equivalent to around US$ 230 million). The implementation of the PFES scheme has illustrated the effectiveness of the government policy in regard to forest protection and poverty reduction.

However, several technological issues and problems have been identified that need to be addressed in legislation to enable PFES to be more effective. One area is improving the distribution and monitoring of PFES revenue to ensure it is used for the intended purpose of sustainable forestry and livelihood development.

In response to a government request, since 2013 ADB piloted a new approach to PFES distribution and monitoring in Quang Nam Province under the TA subproject titled “Support for the National Roll Out of Payment for Forest Environmental Services and Benefit Sharing Mechanisms in Viet Nam.” In five villages in Ma Cooil Commune, the project piloted a group approach to forest patrolling and fund management, and tested the application of satellite data to determine forest ownership and payment levels, and to monitor forest management efforts.

The “Improving Payment for Forest Ecosystem Services Implementation” (TA 8592-VIE) was subsequently implemented from September 2014 to December 2016. The $USD 1.5 million project was funded by the Japan Fund for Poverty Reduction, administered by ADB and implemented in collaboration with the Ministry of Agriculture and Rural Development (MARD). It aimed to strengthen PFES policy implementation and contribute to improved rural livelihoods and environmental quality in three target provinces.

The project achievements included:

  • Developed the PFES scheme for new sectors including aquaculture, tourism and industrial water.
  • Trained more than 1,600 stakeholders on PFES through 31 capacity building events.
  • Produced a wide range of knowledge products, including assessment reports on PFES, audio-visual products including for ethnic minorities, as well as technical handbooks and guidelines for improved approaches and technologies for PFES implementation.
  • Widely disseminated project experiences through ADB’s regional network and VNFF’s national network.

Key knowledge products from the project can be downloaded below.

Back to Online Library