Payments for forest environmental services in Vietnam

The basic idea of “payments for environmental services”, or PES, is to create incentives for individuals and communities to protect environmental services by compensating them for any costs incurred in managing and providing those services. In 2004, the government of Vietnam, drawing on the concept of PES, laid the foundations for a nationwide program of Payments for Forest Environmental Services (PFES), set out in the revised Forest Protection and Development Law. This study assesses the implementation of PFES since 2008 with the aim of providing policymakers with practical policy recommendations for achieving effective, efficient and equitable outcomes. The paper focuses on the following three aspects of PFES: (1) institutional setting (rules of the game and organizational arrangements); (2) benefit-sharing mechanisms (distribution of payments among suppliers and participation in processes); and (3) monitoring and evaluation (monitoring of environmental services, contracts, financial flows and social impacts).