Lessons for Pro-Poor Payments for Environmental Services: An Analysis of Projects in Vietnam

Abstract

Payments for environmental services (PES) are seen as a useful economic tool to ensure both environmental health and human welfare. Doubts have been expressed, however, as to whether PES can be pro-poor. Using four PES case studies in Vietnam (one project on carbon sequestration, two projects on landscape beauty and biodiversity conservation, and one project on watershed protection), the article highlights the pitfalls of PES projects and discusses lessons learnt for PES and pro-poor PES approaches. Major pitfalls and lessons for PES and pro-poor PES are: high transaction costs due to complex project administration and conficts among actors; limited number of ES buyers due to political interference; the need for continuous follow-up activities among potential ES buyers; the need to adopt an approach to PES that is more bottom-up than the current rather top-down approach; and transparent and well monitored mechanisms for the distribution of benefits. The studied projects, although still incipient, have had both positive and negative impacts on the poor. The impacts have been mainly fnancial.