IS FAIR BENEFIT-SHARING IN PES REALISTIC? --- A CASE STUDY IN BAC KAN PROVINCE, VIETNAM

Dam Viet Bac & Delia Catacutan ICRAF Vietnam

3rd Mekong Forum on Water, Food and Energy

Hanoi, 19-21 November 2013

GIVEN: PES IS AN EFFICIENT MARKET-BASED INSTRUMENT THAT PROVIDES BENEFITS TO ES PROVIDERS.

QUESTIONS:

1. BUT HOW FAIR IS THIS BENEFIT TO ES PROVIDERS?

2. HOW CAN THESE BENEFITS BE MADE ‘FAIRER’ TO ES PROVIDERS?

3. WHAT ARE THE METHODS THAT ENSURE ‘FAIRNESS’ IN PES BENEFIT-SHARING?

Efficiency VS fairness in PES

Realistic

Conditional

Voluntary

Pro-poorBDS

Designer

Efficiency and Fairness in BDS Design

Efficiency

Fairness

CASE STUDY: Payment for Forest Environmental services (PFES) in Bac

Kan Province, Northeast Vietnam

Nang River basin as ES Providers LOCATED IN 2 PROVINCES

Environmental Services (ES)

Watershed protection, and landscape beauty (Eco-tourism)

ES Providers Owners (households, communities, organizations), contracted forest protectors, Ba Be national park management

ES Beneficiaries • Na Hang and Ta Lang hydropower plants• Ba Be national park visitors (tourist entrance fee, boat cooperatives);• Voluntary carbon market

ES Intermediaries ICRAF, 3PAD (IFAD), Government line agencies at central, provincial, district, and commune levels

Context of RUPES project site in Bac Kan

PFES Benefit Distribution System in Vietnam

Payment sources

Payment based on K & R factors

Provincial Forest Protection and Development Fund (VNFPF)

Paym

ent

base

d on

lo

cally

sp

ecifi

c m

echa

nis

ms

Environmental services’ providers* Forest owners* Households/individuals contracted by forest owners

Paym

ent

per

fore

st

area

s w

ithin

Ri

ver

Basi

n

An appropriate intermediate payment level(e.g. district or commune)

1. Oppcost: (Land use change analysis, NPV …)

2. Participatory Landscape Analysis (PaLA): was designed through packaging some appropriate Rapid Rural Appraisal/Participatory Rural Appraisal (RRA/PRA) tools/methods in combination with an approach of Agro-ecological analysis in order to capture local knowledge at relevant temporal and spatial scales.

3. Modified REDD+BDS game: choices for benefit types included cash payments, cash for infrastructure provision, agricultural inputs, land use rights certificates or other benefits they proposed.

4. Structured decision-making (SDM) for benefit-sharing:

(SDM) approach is a collaborative and facilitated approach to decision-making that draws upon multiple objective decision-making and group deliberation methods to environmental management problems.

SDM is founded on the idea that good decisions are based on an in-depth understanding of objectives (what’s important) and consequences (what is likely to happen if an alternative is implemented)

Methodology

Na HangHydropowerPlant

• Ba Be National Park• Ba Be Forest

Enterprise• Protection Forest

Management Board• Commune People’s

Committee (uncontracted)

Ta Leng Hydropower plant

• Ba Be National Park

• Boat cooperative• Households with

homestay businesses in Bo Lu and Pac Ngoi villages

Village communityContracted teams/groups

-10% management fee

- < 10% management

- < 5% contingency

Bac Kan FPF

(99.5%)

Vietnam FPF (100%)

VND 20/Kwh

-0.5% mangt. fee

1-2% of revenues

Households

VND 20/Kwh

> 85%

Proposed BDS in PFES in Ba Be District, Bac Kan

Stakeholders’ preference on BDS: case study in Ba Be and Na Ri Districts (Modified REDD+ Game by Dave Eastman, ICRAF/Oregon University)

(1) Preference over purpose-oriented cash for infrastructure and LURCs

(2) First-ranked benefit type, by individual land tenure status (LURC: Land use right certificate)

Opportunity costs of land use changes should be considered and integrated into BDS design.

In the context of unclear, overlapping, or even unrecognized land rights, the BDS must contain arrangements to channel benefit to legitimate groups of forest users in effective and equitable ways.

Making use of existing arrangements for benefit transfer will help to reduce transaction costs.

A wide range of approaches to BDS may be combined, or may work in parallel with different regions, at both national and sub-national levels.

LESSONS LEARNED

Partnerships with national and local partners such as governmental agencies, existing programs/projects, CSOs, NGOs, etc. in terms of learning local knowledge, taking advantage of existing BDS, capacity building, and policy advocacy, will be a key element of a successful BDS.

Finally, the decision to implement PES BDS will not be made without at least a rough estimate of how much PES will cost, and what could be the impacts of such a mechanism.

LESSONS LEARNED (Cont …)

Thanks !

Dam Viet BacResearcher

ICRAF-Vietnam No. 8, Lot13A, Trung Hoa St.Yen Hoa Ward, Cau Giay DistrictHanoi, VietnamEmail: d.vietbac@cgiar.org

Visit us:

www.worldagroforestrycentre.org www.worldagroforestrycentre.org/sea/vnwww.rupes.worldagroforestrycentre.org