Payments for environmental services and contested neoliberalisation in developing countries: A case study from Vietnam

Abstract

Forest and water protection once relied primarily on regulatory means to achieve conservation ends, but an explosion of market-based and neoliberal approaches to environmental policy now depend instead on the creation and harnessing of financial instruments to value environmental goods and provide the funding needed for their preservation. Payments for environmental services (PES), which provides incentives for soil, water and forest conservation from users of services to those who provide them, is one of the most well-known of these approaches. However, many challenges remain for PES as a policy approach, and this paper explores how PES schemes have been implemented in practice in developing countries, how well they fit with descriptions of neoliberal environmental governance, and how these policies are being shaped by rural actors to make them more favourable to social, cultural or economic priorities in local areas. The paper shows that seemingly neoliberal policies like PES are actually a mix of both market economic incentives and regulatory approaches, and thus should not be labelled solely “neoliberal” per se. Further, much of this variegation in PES policy has resulted from active engagement of rural actors in shaping the parameters of what parts of neoliberal policy are acceptable, and what are not, and data from a Vietnam case study emphasize this point. Finally, the paper shows how key goals of neoliberal approaches, namely efficiency and conditionality, are often actually the weakest components of PES schemes, in Vietnam and elsewhere, particularly when they clash with local concerns over equity, which should pose a rethinking of how to understand PES success. The article concludes that PES plans should not be considered exclusively neoliberal per se, as they may in fact strengthen both state regulation and local participation and involvement in rural environmental management at the same time.