Payments for forest environmental services in Vietnam : from policy to practice

Abstract

This CIFOR Occasional Paper assesses the government of Vietnam's program of Payments for Forest Environmental Services (PFES), with the aim of providing policy makers with practical policy recommendations for achieving effective, efficient and equitable outcomes. The authors focus on three aspects of PFES: (1) institutional setting; (2) benefit-sharing mechanisms; and (3) monitoring and evaluation. Vietnam's PFES policies demonstrate the government's commitment to forest protection and development. The scheme, which is a major breakthrough for Vietnam's forestry sector, underwent numerous refinements during the pilot phase. In particular, major achievements have been made in establishing institutional arrangements, generating substantial revenue and gaining political commitment and support for PFES at all government levels and among local people, all of which suggest a bright future for the scheme. By examining case studies and PFES pilot projects, the authors draw numerous lessons. In particular, they note that the context in which a PFES initiative is implemented heavily influences the effectiveness of the policy design and the likelihood of the stated goals being achieved. Potential trade-offs between environmental and social goals can be assessed reasonably well by considering the correlation between the characteristics of poor landholders and their land, the costs and benefits of providing environmental services, and the political feasibility of each policy option. For PFES to be more effective and efficient, transaction costs need to be reduced, which could be achieved by strengthening coordination between central organizations and local line agencies, ensuring that each body has the necessary capacity, clarifying roles, rights and responsibilities, and sharing information on forest areas, land allocation and forest owners. A combination of monitoring techniques and bundling of environmental services could also enhance the efficiency and effectiveness of PFES. Policy makers must also work toward developing a functional monitoring and evaluation system with an accessible grievance mechanism, to ensure transparency and accountability in the distribution of PFES revenues from central to local levels. PFES could also benefit from being part of a more holistic program, working with complementary conservation and socioeconomic development programs. PFES program delivery would be further supported by long-term capacity building for government staff and households, communities and their representatives