Payments their living. PES can only workPayments their living. PES can only work

Payments for ecosystem services (PES), often known as Payments for environmental services are lure that are offered to landowners or farmers. It is basically an instrument that is designed to help change the practice of people who carry out damaging activities recognizing that if they do so they contribute to provide services that are valuable to others. For example, downstream villagers can pay those who cut down trees and take care of the forest instead; this allows them to continue earning a living while improving the environmental conditions of their community without damaging other communities. To make it work it should be beneficial for both the parties. The proposal should be good enough to compensate the money that they are going to invest. And at the same time it should be equal to or more than that of what the farmers were already making for their living. PES can only work if there is transparent institutional capacity where resource, access and ownership are not in dispute and there is a balance distribution of power. PES is the lures that are offered to landowners in exchange to manage their lands to improve the ecological services. PES needs to follow policies and conservation programs that are designed with the participation of local communities. After few years communities are thriving, they have good resources and are also secured. PES is actually working successfully in a lot of parts of the world as it improves the environmental conditions. Whereas, developing countries are still trying to improve and study PES system and use it on a large scale. PES is used to conserve and expand the ecosystems by including non-polluting resource management decisions. It should also look over the concerns to reduce the cost of policy implementation. PES requires the leadership to entrepreneurs that are willing to build diverse coalitions of stakeholders sustain and give consistent financial support to promote change.

PES is open to everyone; anyone can individually volunteer their participation. It is diverse and inhomogeneous whether it is institutional or non-institutional. It include human rights, it imply legality. It does not include violence. It is helping to conserve our society and ecosystem for the coming future. There are in total twenty four specific ecosystem services from which currently only three are making most money and receiving most interest worldwide, these are climate change mitigation, watershed services and biodiversity conservation and the demand for these services will grow in the coming few years.

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The minimum remuneration is set to balance the loss that farmers may have by not farming at a particular piece of the land or the cost that would be required for a new activity that they might start. The payments to the landowners can be done in two ways.

a)      Directly: Where the payments of private beneficiaries are made directly to the public.

b)      Indirectly: Here the payments by the beneficiaries are done through an intermediate of a public authority, which is working on the behalf of the wider public.

In Vietnam prices are regulated for hydropower generators (20 VND/KWH), clean water suppliers (20 VND/m3), tourist service providers (1-2 per cent of revenues) for a total value of contracts that surpassed US$150 million in 2016.  In this paper we will explore the three nationally supported payments for ecosystem services schemes in Vietnam. In a lot of cases, the benefits from the PES programmes do not reach the local households or the poor people because of the political and economic duress. Depending on how PES is working with national, regional and local conditions they have ramifications for the property rights, local socio political relations, livelihood transitions, and cultural dynamics and landscape changes.

The experiments of PES in Latin America are of diverse types whereas these services have been lagging behind in Asia and Africa. We will discuss the projects that are implemented under central government, national level and then at the local level.

Three months of fieldwork is done in Ba Vi National Park in 2004-5005 and later in Lam Dong and Son La provinces in 2009-2010, here the government PES policy is being governed. Data was collected by the interviews of 50 households, group discussions and looking over the interested participants within the communities those were interested in the PES schemes. Government reports and project documents were analyzed. Project staff and policymakers were interviewed. It is a very effective scheme for environmental conservation among the local public.

Before the independence in Vietnam, the forests were managed by French colonial states, most local communities managed forests. In 1954 the post colonial government nationalized all the forests. And from 1950s to 1980s different State Forest Enterprises and the local authorities of the district managed the forests. In 1986 the government decided to renovate the whole idea of SFEs, and soon all the SFEs which were unproductive were shut down. In 1980s the forest sector was in crisis, there were a lot of disputes between SFEs and local villagers over lands as the villagers were asking SFEs to return their lands which now were absorbed. Due to this crisis government changed the forestry sector with an export ban on timber.  Later in 1993, Land Law was passed by the government under which the landowners can easily exchange or rent the land. Later in 1990s a lot of deforestation was seen due to transition to market- oriented socialism for which two campaigns were started by the government as Program 327 and Program 661, which had a plan of replanting 14.3 million hectares by 2010. Under these plans a lot of individual households were paid money to save the forest lands and plant more trees.

The Vietnam Forestry Development Strategy 2006-2020 again enforced the focus to forest protection and financial incentives were drawn from the markets in a way so that they can pay the users to conserve and reserve the forest. They projected that by 2020 the country would derive US$2 billion from environmental services. In 2008, first national policy was made by government known as Payment for Forest Ecosystem Services. The PES chiefly focused on water, soil and land conservation for tourism purpose with the help of local contracts.

The PES program that has been discussed here is government supported and it was started in early 1990s in Ba Vi National Park. And the other two are not very old PES schemes from Lam Dong and Son La. The main difference between them is that buyers for the Ba Vi National Park is government, whereas buyers for Lam Dong and Son La are water supply companies and hydropower plants.

Case Study I:

Payment for Forest Protection and Planting in Ba Vi National Park. Earlier this place was called the forbidden forest with 2400 hectares of the land. Later government declared it as a conservation area to be a national park with 6400 hectares of land and it was further extended to 12,000 hectares by the government. In 1989, the Food and Agriculture Organization started a eucalyptus plantation program in Ba Vi with aim to increase both local households income and forest cover. Households were given 1-2 ha of land on lease of 30 years with the possibility of extension of the time at the time of expiry. Later there were a lot of conflicts related to the land of the park that the land which was previously allotted to them. Various households had conflict claiming the land for a long period of time which resulted in conflicts between farmers and the authorities. And the unofficial deals between six households and the villagers which resulted in failing of villagers from getting benefit from the FAO scheme. On the other hand the new local households and people migrating to this place now were not able to get any benefits and were continuously getting neglected from the PES benefits. This resulted in high transaction cost and injustice in benefit distribution from the PES schemes.


Case Study II:

Decision 380 was the environmental scheme that was started in the Lam Dong Province setting a particular price that the electricity and water supply companies had to pay, but they were still confused about the payment levels for the tourism companies as they were also getting benefits from the land they even consulted a lot of professionals for the same. It was stated in Decision 380 that 10% of the total payment will be retained by the government and rest 90% will be distributed amongst the farmers, the service providers. This scheme was in force since 2008 and 564 households were distributed with 2,356 ha of forest land in Lam Dong. The main activities that included were measurement of the economic value of ecosystem services, identification of buyers and sellers and formulation of the structures for the distribution of the payments. At the starting of 2009 all the buyers were asked to pay the service fees. The three levels annual payments were suggested for soil protection, water regulation and for scenic landscapes. And to check whether the local people are getting incentives from the scheme, local authorities made their own contracts as 327 and 661 Program.  It was seen that under PES implementation a particular household was earning U $600/year which was three times their own income. Later it was seen that only people who have signed Program 661 were only eligible to sign Decision 380. It is seen that by the implementation of PESS schemes still there is a problem that the poor aren’t able to receive the incentives, those are the new established households and migrants. There was still a deficiency in providing the effective forest protection and rural poverty.


Case Study III

Son La Pilot PES Scheme. The application of Decision 380 in Son LA was similar as that in Lam Dong. Here three buyers were there with around 50,000 local households. There were a lot of issues with the payment schemes in Son La as the households were not receiving the money only 4,507 local households received the money. There was another problem that there were a lot of changes on the land in past eight years since the forest allocation were actually started. There was a delay by the Ministry of Agriculture and Rural Development (MARD) contact the Prime Minister regarding the problem that they were facing. And it was later proposed by the Vice Minister that let the public accurately report the land that they were allocated with.


Even after so many changes in the PES schemes over time still there are problems in the payment system to the poor households they remain unrecognized. As stated in the paper, it is still not clear whether PES will be an effective mechanism for socializing forest protection, improving livelihoods of poor, funding forestry sector for improving the quality.