Institutional options for agricultural mitigation in Vietnam


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Dao The Anh, Nguyen Ngoc Mai, Tran Van Toan
Centre for Agrarian Systems Research and Development
Hanoi, May 3, 2010

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Institutional options for agricultural mitigation in Vietnam

  1. 1. Trung t©m Nghiªn cøu & Ph¸t triÓn HÖ thèng N«ng nghiÖp Centre for Agrarian Systems Research & Development Institutional options for agricultural mitigation in Vietnam PhD. Dao The Anh, Nguyen Ngoc Mai, Tran Van Toan Hanoi, 3 May 2010
  2. 2. Agriculture mitigation and institutions for carbon market acces  Clean Development Mechanism (CDM)  Voluntary carbon market (VCM)
  3. 3. Overview of Clean Development Mechanism (CDM) in Vietnam  The CDM has yet to gain real traction in Vietnam or deliver poverty reduction: 85 projects, but only 5 formally registered and only 1 having direct poverty reduction benefits (Cao Phong Reforestation Project)  Potential sub-sectors for CDM projects are identified  Energy efficiency, conservation and saving  Fuel switching  Methane recovery and utilization from waste disposal sites and coal mining  Application of renewable energy  Associated gas recovery and utilization  Afforestation and reforestation  Reduction of methane emissions from agriculture and livestock, utilization of biogas
  4. 4. Legal context and Institution of CDM  Legal doc for implementation of CDM in VN: The Investment Law (Law No.59/2005/QH11), Directive 35 (October 2005), Decision 130 (August 2007) and Circular 58 (July 2008)  In May 2008, the Department of Meteorology, Hydrology and Climate Change of MONRE took over as DNA  The Department of Meteorology, Hydrology and Climate Change also serves as a National Focal Agency for managing and coordinating the implementation of all climate change related activities under UNFCCC and Kyoto Protocol in Vietnam
  5. 5. Legal context and Institutions of CDM  The Vietnam Environment Protection fund is responsible for registration of certified CERs; supervision and management of CERs granted by the CDM Executive Board to CDM projects in Vietnam; and collection of fees from CERs being sold.  There are no local Designated Operating Entities in Vietnam. There are some consultants working with Vietnamese organisations that are involved with validating CDM projects, but these projects are ultimately being evaluated by foreign DOEs.
  6. 6. Structure of Cao phong CDM project Intermediares: Honda Vietnam JICA VFU Relation Forest Science flows Institute District Administration District extension center Forest development fund 50 0 Financial flows Households 100 50 Benefits Carbon Wood
  7. 7. Lessons learned from Cao phong  Village regulation for forest management is developed by farmers, but lack of enforcement and monitoring  The Forest Development Fund (FDF) lacks farmer participation in management; the top-down approach further questions sustainability of the FDF  Lack of environnement staff at local level  Farmers lack understanding of CER and their rights: lack of capacity building  Farmer only interested in economic (wood) benefit for poverty reduction and not in environemental (carbon) benefits: lack of awarenss  Long project intervention: more than 8 years (acacia trees)
  8. 8. Voluntary carbon market institutions in Vietnam  No VCM in Vietnam at present  VCM is not mentioned in existing legal documents, only listed in the National CC Objective Program; potential difficulties for licensing authority unless MONRE proposes to revise and add some articles in the related legal documents  There are many similarities between the approval procedures for CDM and voluntary projects, but maybe simpler procedures outside MONRE can be used  Potential for agriculture mitigation is large because of high intensification levels of existing farming system  Potential for poverty reduction focus at smaller scale  But who are the buyers? Who are the certificators? Currently limited awareness  Donors should play catalyzing role for VCM development
  9. 9. VCM: Challenges for agricultural activities  Aggregation of small scale and dispersed production geographically, but shorter cycle than forest  Non homogenous agricultural practices among farmers  Need effective local institutiosn for controlling emissions and chemical usage  VER accreditation appears more complex than CDM  VER is not recorgnized officialy like CDM, thus potential to combine with value chain or PES activities  Need action-research for institutions combining diverse stakeholders
  10. 10. Existing value chain institutional arrangement  Farmer association based on collaborative groups - supermarket:s collective cultural practices and internal quality control  Farmer groups – processing entreprises (contract farming)  Need to study arrangements between aggregation organisation and carbon buyer
  11. 11. Institutional model for carbon market access of small-holders - Production - Service ASSOCIATION provided to members Supermarket, Supply Distributor Carbon buyers Group Group Group Carbon aggregators Carbon producers
  12. 12. Institutional criteria for pilot study  Existing farmer organisation for a large area due to short time  Relative specialisation in one agricultural product and homogenous cropping practices  Good market acces  Diversity of agro-ecological condition: 01 in rice land and 01 in sloping land
  13. 13. Concluding remarks  Agricultural mitigation has potential in Vietnam  Requires supportive legislative and policy framework  Need to conduct action-research on institutional options for VCM in Vietnam focusing on smallholder access  Capacity building is in large demand  Need a long intervention project integrated in IFAD activities
  14. 14. Thank you for your attention!