Day 1 session 3.1 evalutions of pilot payments for forest environmental services. phong tran


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3rd Mekong Forum on Water, Food & Energy 2013. Presentation from Sessions 3 &5: Extending the benefits of hydropower: Clever suggestion or realistic goal?

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Day 1 session 3.1 evalutions of pilot payments for forest environmental services. phong tran

  2. 2. Overview  Introduction  Background  Objectives  Project Methodology  Analytical framework  Data collection   Key Findings Conclusion
  3. 3. Introduction  The Government of Viet Nam has made great efforts to protect and improve forest resources in country  Government’s 5 million hectares of forest (Program 661),  National Program 327 of re-greening barren hills, closing forest gate policy, control illegal activities and forest certification were implemented.  However, achievements have been limited to only some parts of Viet Nam, while significant losses of forests led to loss of biological
  4. 4. Pilot PFES program  The Decision 380/QD-TTg dated on 10 April 2008 to establish the foundation for the development of the legal framework for a national policy on PFES  to socialize the forest protection and development  to improve livelihoods of forest laborers  to eradicate hunger and reduce poverty for the mountainous and forest areas.  Pilot PFES is considered as tool for forest protection, carbon sequestration, biodiversity conservation, watershed improvement, local
  5. 5. Objectives of the research project     To evaluate the performance of the PFES program in Lam Dong To assess the socio-economic and environmental impacts of the pilot program To explore the behaviors of stakeholders involved especially service providers and users Draw lessons and propose recommendations for the development of PFES policy for Vietnam
  6. 6. Methodology   Socio-economic and environmental impacts of the PFES policy on participants were evaluated through quantitative and qualitative data analysis Data collection  Secondary data collected  25 key informant interviews conducted  11 focus group discussions organized  218 household questionnaire surveys completed and cleaned for data entry and analysis
  7. 7. Analytical framework  Economic impact: The annual household income received from PFES is measured by amount of money received for forest protection and management activities:  Household income from PFES (VND) = Unit payment (VND/ha) x Forest area managed by household (ha) and income generating by employment opportunities and non-timber products  Change in net profits in pre-PFES and post-PFES period is calculated as (Post-income – Post- expense) – (Pre-income – Pre-expenses).  Changes in net profit = f(district, ethnicity, education, land area, ratio of labor, ratio of dependent and family labor). 
  8. 8. Analytical framework  Environmental impact:  Total labor-days that households spend for a hectare of forest protection or conservation per year before and after participated in the PFES  Numbers of illegal logging cases per year before and after applying PFES  Forest area burnt before and after the application of PFES policy  Deforestation rate  Local awareness
  9. 9. Study site    Lam Dong is the third largest plateau province on the Central Highlands in Vietnam. Lam Dong is considered a forest province with forest coverage accounting for 70 percent of the total area. With 1,179,200 persons living in total area of 9,776km2, Lam Dong is largest population province in Central Highlands
  10. 10. Pilot PFES in Lam Dong   Fund for PFES was collected from the fees of VND 20/kw for hydropower, VND 40/m3 for water supply companies and 1% of total revenue generated from ticket of tourism firms. 2 years (2009 – 2010) pilot PFES program in Lam Dong:  There are 584,396 ha of state-owned forest area were allocated to 7,997 households  On average, US$ 500 – 600/household/year
  11. 11. Pilot PFES in Lam Dong    PFES does not use government budget for payment Fees collected from PFES users and paid to households that are contributing to forest protection. Total PFES Revenue generated over the 2 years 2009 and 2010 was VND 98.6 billion (nearly US$ 5million).
  12. 12. PFES revenues by its sources Water supply Tourism companies companies 1% 10% Dai Ninh Hydropower 48% Da Nhim Hydropower 41%
  13. 13. PFES and effects at household level   PFES has contributed a significant improvement in average household income. A strong economic impact of the PFES program to local households in Lam Dong province
  14. 14. Household income from PFES    Household income of PFES depends on the forest area they protected and the payment rate/ha In total, the costs for labor, equipment, and materials is about VND 7.7million per year Benefit change was VND 18.5 million (equivalent US$900) per household
  15. 15. Different benefit by group   Changes in household benefit between different ethnic groups show significant difference. Despite the positive effects of the PFES program, it apparently failed in counteracting social inequities.
  16. 16. Different benefit by location   The profit between 4 districts in pilot PFES catchments is significance difference This is partly explained by a far greater proportion of households in Da Lat district are Kinh while more other ethnic (non-Kinh) groups are living in other districts.
  17. 17. Predictor of profit changes   Yi = βo + β1X1i + β2 X2i + …βn Xni + εi Where: – profit changes of households Pre-PFES and Post-PFES  βi – Coefficient of predictor i  Xi - Predictor I  Yi  Three predictors having negative impacts on profit changes of households, including ethnicity of respondents, distance to PFES forest, and number of dependents in household
  18. 18. Impacts on poverty reduction  Significant positive effect of the PFES program on poverty reduction
  19. 19. PFES and Environment protection    The pilot PFES program has generated significant change in forest management at household level. Households involved in the PFES program have formed groups to protect the forests allocated to them. Each group operated as community-based forest management unit. The number of forest fires decreased significantly  The number of illegal logging cases reduced significantly (50%)  The area of forest invaded/encroached has been reduced. 
  20. 20. Other impacts     The source of income from PFES is more stable than from illegal invasion in to forest. Payment rate by PFES program largely depend on their achievements in forest protection. The quality of forest is better by PFES program, however it is difficult to evaluate the quality of forest as the Pilot PFES has only adopted in 2 years. A common concern of users is the quality of forest services and responsibility of PFES providers in maintaining it
  21. 21. Challenges    The main questions are how to manage and evaluate the quality forest services, when the quality is affected by many factors, both human-made and natural factors. No mechanisms for monitoring and evaluation of PFES services and define the rights and tasks of PFES providers in the pilot PFES PFES users have not clearly understood about the framework of PFES program, which is a constraint to their willingness to participate in PFES program
  22. 22. Conclusion and policy implication      Pilot PFES created positive effects on local livelihoods, particularly for the poor households, in terms of income improvement and poverty reduction. The contribution of income source from PFES program to household income is accounted for about 32 percent in 2010. Pilot PFES has also contributed to raising awareness to environmental issues and the role of forests to different stakeholders. Pilot PFES has significantly contributed to forest service improvement and forest protection. The pilot PFES has exacerbated social inequities between Kinh and non-Kinh minorities.