The experiences and successes of Vietnam’s Payments for Forest Environmental Services (PFES) scheme, which has generated significant resources to support forest protection and local livelihoods, were shared at a workshop in Da Lat last Friday.

The Asia Regional Biodiversity Conservation Program (ARBCP), a project of the US Agency for International Development (USAID), helped Vietnamese officials pilot PFES in the Central Highlands province of Lam Dong.

The scheme has increased financial incentives for forest protection by the providers of environmental services, including rural communities and forest managers, by creating linkages with the beneficiaries of such services - hydropower facilities, municipal water supply companies, and ecotourism operators.

In the 2009-2010 pilot phase, PFES generated US$4.46 million in payments from hydropower plants and tourism businesses in Lam Dong and a water company in Ho Chi Minh City. This money was used to create a forest protection and development fund.

Payments from the fund were disbursed to 22 forest management boards and forestry businesses as well as 9,870 mostly ethnic households to conduct forest protection activities. These activities have resulted in enhanced Eof more than 200,000 hectares of threatened forest. Last year, the average annual payment per household was $540- 615, an almost 400 percent increase

over previous forest protection payments by the Vietnamese government.

USAID director Frank Donovan commended the Vietnamese government for its leadership and foresight in piloting the PFES approach.

“This is transforming the way forests are viewed and managed in Vietnam,” he said. “It also serves as a model for other countries to support biodiversity conservation while channeling needed resources to rural communities.”

Beginning this year, a national roll-out of the PFES Decree is expected to contribute to the

Eof more than 12 million hectares of forest and the improvement of livelihoods of over 20 million people, many the most marginalized and poor.

This is the first such policy in Asia and serves as a model for other countries in the region to develop economically viable approaches to support conservation and sustainable management of forests and biodiversity.

Cambodia, Laos, and Thailand have been learning from Vietnam’s experience and are working on similar approaches.