VIE_PES in Lam Dong - Feb 2011-ADB Workshop

8/2/2019 VIE_PES in Lam Dong - Feb 2011-ADB Workshop

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To Xuan Phuc

Policy analyst, Finance and Trade Program, ForestTrends

02/03/2012 1

Current forest situation

PES enabling conditions

PES implementation in Lam Dong province

Key issues

Conclusion

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13 million ha, 39.1% forest cover Special use forest (PA): 1.94 mil ha (14.9%)

Protection forest: 4.38mil ha (33.7%)

Production forest: 6.28 mil ha (48.3%)

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PES including REDD+ involving in Vietnam

PES piloting policy (PFES) and Decree 99

Vietnam participate in UNREDD: Phase 1 about to complete

Phase 2 forthcoming

National REDD+ Program under development

Sub-national jurisdiction activities are

involving (both at province and project level) Private initiative: Forest certification, SFM

FLEGT VPA negotiation ongoing

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IdentifyService buyers (hydro,

water supply)

IdentifyService buyers (hydro,

water supply)

Vietnam Forest FundVietnam Forest Fund

The whole area ofwatershed located in more

than 1 province

The whole area ofwatershed located in more

than 1 province

Provincial FundProvincial Fund

The whole area ofwatershed area located

within a province

The whole area ofwatershed area located

within a province

TruFnd:nomainstreamingintothe

governmentbudget

TruFnd:nomainstreamingintothe

governmentbudget

Exemption, ReductionExemption, Reduction

Household withallocated land

Household withallocated land

Organization (SFEs,SOCs, MBs, etc.)

Organization (SFEs,SOCs, MBs, etc.)

HH with contractedland

HH with contractedland

K-factor; evaluation, determiningpayment level

K-factor; evaluation, determiningpayment level

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100% payment

to forest useras non-

organization(households

with allocatedland)

100% payment

to forest useras non-organization(households

with allocatedland)

Vietnam/National Forest

Fund

Vietnam/National Forest

Fund

Provincial FundProvincial Fund

Service buyers(hydro, water

supply)

Service buyers(hydro, water

supply)

Maximum 10%management/operation fee

Maximum 10%management/operation fee

Max. 5 % contingentfee (reserve account)Max. 5 % contingentfee (reserve account)

Min. 85% as payment(as 100%)

Min. 85% as payment(as 100%)

Forest user asorganization (MBs, SFEs)

Forest user asorganization (MBs, SFEs)

10%management/Operation fee

10%management/Operation fee

90% tohouseholds withcontracted land

90% tohouseholds withcontracted land

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Option2

Option1

Viet Nam receives revenues into a National REDD Fund (stand alone fund, or sub-fund of an existing fund), overseen by a broad-based, multi-stakeholder

governing body

(1) Staff of National REDD Fund calculate provincial shares of the total revenuesbased on provincial performance

(2) Staff of the National REDD Fund calculate implementations, transaction costs,and opportunity costs incurred by the central government and subtract these

amounts from the gross revenues

(3) Net revenues are distributed to Provincial REDD Funds (mirrored on theNational Fund, and also with participatory governance structures), according to RP

coefficients

A. Provincial REDD Fund staff repeat steps 1-3to determine distribution of net REDD revenues

to District Funds

B. Provincial REDD Fund staff areresponsible for disbursement to

ultimate beneficiaries

Provincial/District Fund staff (depending on Option A or B) determine net revenues to bedistributed to ultimate beneficiaries, and deliver payments or other benefits

Agencies monitor disbursement activities

Agencies responsible for providing recourse in the event of disputes undertake actionsto ensure that all beneficiaries are able to register a complaint if desired

Staff of the National REDD Fund initiate independent external auditing ofNational, Provincial, and (if relevant) District REDD Funds

Enabling conditions (4) Proposed REDD+ BDS: regulated market

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4 key buyers: 2 hydropower, 1 water supply,1 tourist company

Total PES/PFES revenue: 5 million USD

Disbursement of the PFES payment to eligiblegroups in 2009 and 2010

202,251 ha of forest, 7,997 households (viacontract with 18 forest users)

Average payment: 350-400,000 VND/ha/year(17-20 US)

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Watersupply

companies

ForestProtection

andDevelopment

Fund (central)

LamDongForest

Protection and

DevelopmentFund

Touristcompany Hydropower plant

MinistryofAgriculture &

RuralDevelopment, others

Decision380

Department ofAgricultureand

RuralDevelopmentofLam

Dong

People'sCommitteeofLam

Dong

EnergyofVietnam

Dept. ofculture,

sport,andtourism

Management

Boards/forest company

Households

40D/m3

1%

20D/kwh

10%

10%

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UNREDD Vietnam Program ongoing

Vietnam National REDD+ Program is underdevelopment

WB FCPF is undertaking

Bilateral negotiation: sub-national jurisdiction

Private sector investment: involving, atproject level

The government appreciate both regulatedand voluntary markets

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Land tenure

Service buyers

Service providers

Intermediaries

Institutions

Others

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Clearly defined rights are very important for the success ofPES /REDD+ (particularly for voluntary market)

Land tenure in Vietnam is not always clear: 8 forest user groups Contracted land and allocated land

Lam Dong: 18 main forest users; short-term contract signed with localhouseholds; no long-term guaranteed

Son La: land allocated to households, but changes have not beenupdated before the implementation of PFES, thus potential for conflict;some land allocated to communities, yet communities have not gainedlegal status.

Different forest types (special use, protection, production), withdifferent management regime

Who own carbon rights in Vietnam is not clear, thus the lack ofbenefit sharing mechanism (for voluntary market/PES)

PES/REDD+ operates within the current tenure structures:lacking mechanism for benefiting the poor

Local elite capture

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Hybrid between public and private, thuspowerful buyers (e.g. Hoa Binh hydro/EVN)

Payment is not performance-based, but madebecause Prime Minister requests

ES payment should be built in price structure,but constraint thus uncertainty for PESrevenue

The lack of institutional and policy frameworkfor facilitating carbon market, thus risks for

investors but creating opportunity for elitecapture?

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8 forest user groups with different quality of forest,thus different payment levels

Ownership right: government Unequal distribution of PES/REDD+ benefits among

users Potentials for conflicts Difficulties in protecting the forest

Payment to MB, SFEs/SCs? Payment to commune PC? Payment mode: individual households, group of

households, or community? (transaction costs) How is payment used within community? Opportunity costs? Operational costs?

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Government as intermediaries, connecting buyersand sellers

Government decide level of payment, how thepayment is made on what basics

The government regulates carbon transaction:Trading emissions is stipulated by the PrimeMinister

Local government: socioeconomic indicators are

important for deciding how payment is made,thus Potential conflicts between negotiation decision

(performance-based) and local priorities

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Institution and policy framework for PES isevolving

The lack of policy framework for regulatinginvestment in carbon market

Weak coordination among government agencies(e.g. MARD, MONRE)

Weak coordination between government andprivate sector, government and CS.

The lack of capacity and human resources withinthe government and non-government sector

Unclear about post-Kyoto, thus governmentshesitancy in carbon market

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Capacity building particularly for the local government PES/REDD+ should not be seen as money, but huge cost

implications: Operational costs Capacity Transaction Others?

PES/REDD+ should be seen as opportunity for improvement offorest governance

PES/REDD+ as opportunities but also risks, thus adopting thiswith careful attention particularly on the issues land tenure andequity in benefit distribution

Implementation of PES/REDD+ should be step-wise, starting withparticipatory payment while building up capacity. Result-basedpayment should be later, when the country is ready

Policy framework for regulating carbon market should bedeveloped, at least to regulating investment activities on theground, thus mitigating negative impacts for local communities

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VIE_PES in Lam Dong - Feb 2011-ADB Workshop

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