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Source: WBCSD website
Payment for Ecosystem Services (PES), an environmental scheme now being trialled in this South-east Asian country, may serve as a model for the region, if found successful.
Two pilot projects, one in the southern Dong Nai River Basin and the other in Son La province, are the test beds that will determine if this blend of economics and environmental management is workable.
PES is an environmental management tool that has been used in one way or another since the 1990s and involves placing a monetary value upon an ecosystem and then finding both "buyers" and "sellers" for that ecosystem service, essentially finding the benefits an ecosystem provides and then striving to maintain those advantages through financial means.
The Dong Nai River Basin Project involves collaboration among Vietnamese government bodies, industry and local people, with support from the Geneva-based International Union for the Conservation of Nature (IUCN), Winrock International and USAID in the form of expertise and four million US dollars in financial aid. Hydro-electricity plants, government water companies and eco-tourism companies will now pay for the privilege of clean water downstream, by sending money upriver and giving locals incentives to keep the watershed pure.
Vietnam's National Assembly (NA), the main legislative body, is expected, late this month or early October, to pass a biodiversity law with provisions for PES.
Eventually, the Dong Nai River Basin is expected to supply 20 percent of Vietnam's power needs through hydro-electricity. Demand for water in Ho Chi Minh City (HCMC) increases by 19 percent each year.
"These services cannot be delivered for free. If they want secure access, they must pay for it," Jim Peters, chief of party, working for Winrock, told IPS.
On Apr. 10, Pilot Policy 380 (the Pilot Policy on Payment for Forest Environmental Services), was signed, bringing into effect the first PES. It will operate in five provinces and in HCMC. German voluntary agency GTZ is trialling its own project in Son La province.
"This is the first pilot policy in Vietnam. Rather than establish a full-blown policy in an area Vietnam has little experience in, the country is using the pilot policy decision to see how it works under local conditions, then apply it as a finance tool for the 2020 Forest Targets," said Peters. "They can check results (of the pilot) and base things on lessons learned and apply. It's a landmark policy."
Tran Minh Phuong, project coordinator for the Mekong Region Water Dialogues, working for IUCN, says that PES has remained unused because, "the government understood about PES but they needed the financial support''. Even when there is environmental understanding, day-to-day needs get in the way.
"Local people understand the role of the forest, but their income is very low so they still cut it down for their needs," she explained. It is hoped that the financial incentives offered by the trial scheme, whose second phase will run from October 2008 to 2010, managed by Winrock, will be enough to correct this imbalance.
Under the scheme, hydro-electricity plants will pay VND 20 (0.125 US cents) per kilowatt, water companies VND 40 (0.25cents) per cu litre of water and ecotourism companies 0.5 -- two percent of revenue.
According to Peters 80 percent of the revenue will go towards local people, the "sellers". Twenty percent of the revenue will go towards overheads and scientific monitoring.
Local people are now are now being persuaded to switch from crops like cashew -- which cause greater soil degradation and erosion (which then pollutes the river) but give high cash yields -- to crops like bamboo. Winrock and IUCN also help find buyers for end products, such as bamboo chopsticks or incense sticks.
Read full article on the WBCSD website
