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PFES Policy in Vietnam: Innitial Results and Orientation to 2021-2030

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Presented by Nguyễn Chiến Cường on 9 November 2020 at "National workshop: Mangrove environmental services payments"

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PFES Policy in Vietnam: Innitial Results and Orientation to 2021-2030

  1. 1. 1 1
  2. 2. 2 OUTLINES 1. INTRODUCTION 2. RESULT, IMPACT 3. DIFFICULTIES, LIMITATIONS 4. POTENTIAL MECHANISM 5. FUTURE ORIENTATION
  3. 3. 3 1. BACKGROUND Structure VNFF BOD Control Unit MARD VNForest Units Other Funding Windows Technical Unit Admin. and Finance Unit FCPF/ WB result- based payment for CO2 Provincial Funds M&E Unit Other ODA projects
  4. 4. 4 Sustainable financing: Mobilize social sources; increase sectoral values; sectoral contribution to GDP. Sustainable environment: Forest protection and development; Sustainable forest management; Bio-diversity conservation. Xã hội bền vững: Nâng cao năng lực, nhận thức; Tạo việc làm, thu nhập; Cải thiện sinh kế. PHÁT TRIỂN BỀN VỮNG ECONOMIC ENVIRONM ENTAL SOCIAL 4 1. BACKGROUND PFES policy targets
  5. 5. 5 5 1. BACKGROUND BUSINESS PLAYERS
  6. 6. 6 1. BACKGROUND Payment rate 52 VND/m3 36 VND/kwh 50 VND/m3 Min. 1% revenue Min.1% revenue Hydropowers Industrial facilities Clean water suppliers Fisheries Eco-tourism ~ 96,7% ~ 2 ,8% ~ 0,3% 0,05 0,01%
  7. 7. 7 Insti. Eco. Social Envir. 2. RESULTS, IMPACTS
  8. 8. 8 2. RESULTS, IMPACTS 2.1. System of Funds • VNFF • 4 provi. Funds 2009 • VNFF • 45 provi. 2020
  9. 9. 9 2. RESULTS, IMPACTS 2.1. Operational tools Law and Decree 156 Manual of PFES mapping M&E Manual Manual of e- payment
  10. 10. 10 2. RESULTS, IMPACTS 2.2. ECONOMIC (2011-2020)
  11. 11. 11 2. RESULTS, IMPACTS 2.2. ECONOMIC (2011-2020)
  12. 12. 12 2. RESULT, IMPACTS 2.3. SOCIAL (2011-2020)
  13. 13. 13 2. RESULTS, IMPACTS 2.2. SOCIAL (2011-2020)
  14. 14. 14 2. RESULTS, IMPACTS 2.4. ENVIRONMENTAL (2011-2020)
  15. 15. 15 3. DIFFICULTIES, SHORTCOMINGS Only 4/5 FES operated, except for CO2, fisheries, breeding sites, feeding grouns Pending FES Rate 36 VND/kwh applicable for hydropowers and 52 VND/m3 applicable for clean water suppliers are much lower than real values of forest Low and inappropriate payment rate - M&E the disbursement process - M&E the forest quality Lack of IT tech. application in M&E
  16. 16. 16 3. DIFFICULTIES, SHORTCOMINGS As depending on user volume and location of the basin Big gap of payment rate/ha between basins Big budget is required for studying adjustment of payment rate, increasing payment rate, IT technology application in M&E, etc. as the Fund’s budget for management can not cover Mobilization of TA and FA support during implementation
  17. 17. 17 4. POTENTIALS  PFES is stipulated in the Forestry Law endorsed by the NA in 2017;  Some initiatives of applying high tech. (GIS, mobile, e- PFES banking) are of due attention of international partners;  PFES policy is confirmed with its initial success, hence receiving more support and consensus of the whole society;  PFES experience is used for REDD+, thus attracting more sources for forest protection and development;  Carbon service is potential, and need more studies on this.
  18. 18. 18 5. ORIENTATIONS TO 2021-2030 Expand FES users Expand FES beneficiaries Adjust payment rate among provinces within one river basin Increase payment rate of FES users Apply high-tech in M&E of disbursement and forest quality control Enhance international cooperation
  19. 19. 19 5. ORIENTATION TO 2021-2030 No Sources Unit 2020 - 2025 2025 - 2030 Unit cost Volume Estimated amount (bil.VND) Unit cost Volume Estimated amount (bil.VND) I FEASIBLE SOURCES 1 Hydropowers Kwh 36 70.897.391.107 2.552 43 70.897.391.10 7 3.063 2 Clean water suppliers m3 52 1.110.679.664 58 62 1.110.679.664 69 3 Water for industries m3 50 800.000.000 40 60 800.000.000 48 4 FCPF/ WB result-based payment for CO2 in North Central provinces of Vietnam 2018-2025 tCO2 5USD 10.300.000 275 5 Leasing forest environment Revenue 1% 70 84 6 Eco-tourism Revenue 1% 114 II POTENTIALS 6 Eco-tourism 1% 65 7 Domestic Carbon payment applicable for cement industry Ton of Clinker 2.100 VND 184 184 8 Domestic Carbon payment applicable for coal power plants kwh 4 VND 445 445 III TOTAL 3.244 4.007
  20. 20. 20 5.1. EXPAND USERS Expand eco-tourism users including those operating business outside forest boundary but still benefiting forest eco-services Expand industries using water for production Expand aquaculture activities: such as eco-shrimp farming under forest canopy, cold water fish farming, fishing farming in rivers, reservoirs, etc.) Expand CO2 emitters and carbon credit in the world market
  21. 21. 21 5.1. EXPAND RECEIPIENTS: Mangroves DECISION SUBMITTED TO PM ON PILOTING C-PFES: Payers: cement factories and cold power plants Payment rate: 2.100 VND/ton clinker; 4 VND/kwh Payment rate per ha of forest:
  22. 22. 22 5.2. ADJUSTMENT OF PAYMENT DISTRIBUTION FACT • Big gap of payment rate among provinces within a river basin, mainly relating to terraced hydropowers. • Max. payment rate up to 3.425.723 VND/ha/y, while min. rate of 23 VND/ha/y. (such as: Lai Châu province: min rate of 1.519.013 VND/ha/y; Hà Tĩnh province: max rate of 600 VND/ha/y; Bắc Kạn province: averaged 100 VND/ha/y). TARGET • Narrow the gap of payment rate among river basins and among provinces
  23. 23. 23 5.3. INCREASE THE PAYMENT RATE FACT • Current rate applicable for hydropowers (36VND/kwh) is much lower than real value of the service • PFES portion accounts for only 0.7% of price of clean water (averaged price of 7,000VND/m3) TARGET • Approach to the real value contributed by forest (63VND/kwh)
  24. 24. 24 5.4. INTERNATIONAL COOPERATION The expansion, adjustment, increasing and narrowing the gap of payment rate, etc. require deep studies, surveys on the willingness to pay, impact assessment as well as big investment of TA and FA VNFF Study PFES for mangroves, forest carbon measurement, impact assessment, communication skills, etc. CIFOR
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