The Prospects for Payment for Ecosystem Services (PES) in Vietnam: A Look at Three Payment Schemes

Background

Conservation strategies globally use market-based solutions to conserve forests and foster economic development. These solutions assume proper market incentives in a liberalized economy best manage resources and benefit livelihoods. Payments for Ecosystem Services (PES) assigns market values to ecosystem services to fund conservation. PES involves a conditional transaction where a buyer purchases a defined environmental service (or securing land use) from a seller. Creating new markets and institutions for these transactions often requires states, donors, and civil society. Market-based approaches are exchanges embedded in socio-political and historical contexts.

Goals and Methods

This paper critically examines the development and implementation of three national PES schemes in Vietnam. It explores the feasibility of implementing PES under a centralized government, considering challenges like insecure land tenure, high transaction costs, high opportunity costs, and elite capture. The authors aim to show how these factors can undermine long-term benefits for local households and threaten their livelihoods. They also discuss the difficulties in achieving the Vietnamese government's social, economic, and environmental objectives for PES, which include alleviating rural poverty, establishing sustainable funding for forest protection and rural development, and supporting ecological functions. The research involves fieldwork and interviews to understand local perceptions and on-the-ground implementation.

Conclusions and Takeaways

Vietnam's PES schemes have not achieved the government's goals of stakeholder involvement, improved livelihoods, and poverty alleviation. Insecure land tenure, high transaction costs, and opportunity costs hinder long-term benefits for local households. Political and economic constraints prevent payments from reaching the poor, and local elites capture benefits by monopolizing forestland access and through state forestry management. Weak resource governance, stemming from complex land tenure and limited inventory capacity, also challenges implementation. PES has not proven to effectively socialize forest protection, improve livelihoods, establish sustainable funding, or enhance forest quality. The existing tenure structure may marginalize the poor and worsen disparities. The state's central role in PES design, contracts, and purchasing indicates a state-centered initiative, and national scaling may exacerbate inequalities.