Evaluation of pilot program on payment for forest environmental services in Vietnam and policy implications for Lao PDR and Cambodia

This research project is to evaluate the performance and impacts of the pilot program for payment of forest environmental services, which has been implemented in Lam Dong province of Viet Nam since 2008, and to evaluate potentials to adopt in Laos and Cambodia. The result of research will establish the basis for the development of the legal framework for a national policy on payment for forest environmental services for implementation in practice. 

Partnering institutions

1. Hue College of Economics (HCE)
2. The Royal University of Phnom Penh (RUPP)
3. National University of Laos

Countries covered

1. Vietnam: Lam Dong province
2. Cambodia and Laos

Vision and mission

The vision of this study is to up scale the implementation of PFES in Mekong Region, gradually mainstreaming PFES into poverty reduction and development policy and project, and finally PFES will play a significant role in the development and protection of forest in the upland regions to ensure sustainable provision of water for low land people.

The mission of this research project is to take the practical experiences in Vietnam through  the comprehensive evaluation of the pilot PFES program in Lam Dong province to encourage greater participation in improving, sustaining and managing existing programs as well as setting new PFES programs. The project serves as the channel for the introduction of new ideas and research findings in improving the performance and output of PFES models. The implication and potential for application will be introduced in Laos and Cambodia. The study also helps develop structures for model forest partnerships by providing technical advice and guidance notes, and linkages to other forest management networks. Furthermore, it will provide opportunities through meetings, workshops, and group meeting at local and higher levels for participants to cooperate with each other by coordinating and fostering the exchange of information and experience within the network.

Boundary partners

1. Ministry of Agriculture and Rural Development (MARD) of Vietnam
2. Ministry of Agriculture and Forestry of Laos
3. Ministry of Agriculture, Forestry and Fisheries of Cambodia
4. Department of Agriculture and Rural Development (DARD) of Lam Dong
5. District PFES M&E Boards
6. FES providers: Local farmers, forest enterprises, community forest protection boards
7. FES buyers:
             Saigon Water Supply Company
             Bien Hoa City Water Supply Company
             Dai Ninh Hydropower Plant
             Da Nhim Hydropower Plant
8. Da Lat University, in Lam Dong
9. Nong Lam University in HCMC

Project’s objectives

The general objective of this study is to support the implementation of policy on payments for forest environmental services in Vietnam, and the development of PFES policy in Laos and Cambodia. The project specific objectives are:
To evaluate the performance of the PFES program for the pilot period in terms of effectiveness, efficiency, consistency and sustainability and other crosscutting issues;

To assess the preliminary socio-economic and environmental impacts of the pilot policy;
To explore the behaviors of stakeholders involved especially service providers and users;
To assess the potential for payment for forest environmental services in Laos and Cambodia;
Draw lessons and propose recommendations for the development of PFES policy for Vietnam, Laos and Cambodia.


This research combines qualitative and quantitative data sources. To meet its objectives, the research will focus on five main areas including (1) methods to evaluate the performance of the pilot policy; (2) methods to evaluate the impacts of PFES projects; (3) methods to analyze the behavior of service providers; (4) methods to analyze the behavior of service users and (5) Methods to assess the potential for PFES in Laos and Cambodia.

(1) Methods to evaluate the performance of the pilot policy
The evaluation of the PFES performance is considered by legal/institutional and political feasibility, financial and human resources of implementation. More particular we consider the following aspects: covering of the pilot program: forest land area involved; number of households participated as well as percent of poor households participated; assessment of payment methods for different forest holders such as forest owners, contracted forest farmers, forest under the ownership of household group...; income sources generated by the PFES and the change of these income sources over time; managing and monitoring the payment mechanism: identifying stakeholders involved in (service providers, service users, forest protection agency) and assessing the commitment made by these stakeholders to the payment mechanism.

The literature review, survey-based approach and observations will be used to collect data for evaluation of the performance of PFES policy. Combining the literature review and current situation, the strengths and weaknesses of FPES implementation in these provinces will be figured out.     

(2) Methods to evaluate the impact of the PFES program
The preliminary socio-economic and environmental impacts of the pilot policy on stakeholders will be evaluated through quantitative and qualitative data: 

Economic impact: The most obvious impact of a PFES program on participants is through the additional income it provides. The annual household income received from PFES is measured by amount of money received by forest protection and management activities per year (Household income from PFES (VND) = Unit payment (VND/ha) x Average forest cover per household (ha)). The contribution of income from the PFES program to households' livelihood of local people. In addition, the project will consider the additional income generating by employment opportunities and non-timber income as a result of additional conservation incentives arising for forest and better tenure like beehives and herbs.

This impact will be evaluated through household survey combined with secondary data collected from forest protection agencies.
Environmental effect: PFES scheme have proved effective in application to watersheds, carbon sequestration, biodiversity conservation, landscape beauty and bundled services (Mayrand and Paquin 2004). However, for the pilot period, these effects is not clearly recognized hence impossible for measuring the variables related to environmental services such as forest land cover, biodiversity enrichment, watershed improvement.Therefore, we are going to evaluate the environmental impact by using some following proxy variables:

Total time that households spend for a hectare of forest protection or conservation per year before and after participated in the FPES.
Numbers of illegal logging per year before and after applying FPES.

Forest removed or burned: The forest burning area before and after the FPES policy will be measured with expectation that the forest holders are more responsible in forest burning prevention, thus forest cover area and forest quality could be improved. This information is collected from forest protection local agencies, related local staffs.    

Deforestation rate: This information will be collected through interviewing households and meeting the local forest managers. Deforestation will be compared before and after participate in the PFES scheme.

In addition, the study also evaluates the pilot policy through qualitative indicators such as farmers' and local authorities’ knowledge, and perception on the FPES, training on forest conservation/management for farmers and local authorities, and the awareness of their responsibility on forest sustainable management and conservation.

These indicators will be calculated by using both qualitative and quantitative data from the conduction of KIIs, FGDs and household survey in the Lam Dong province.

(3) Analysis the behavior of service providers
It is important to note that service providers in the PFES scheme are local households who own forest. The project will analyze the behavior of local households to the PFES such as  level of payment, method for payment of the PFES scheme, as well as the change in forest management and conservation over time.

KIIs and FGDs will firstly be used to acquire the valuable insights about behaviors of forest holders. The household questionnaire survey will be used to collect primary data to evaluate the implementation and environmental impacts of PFES program. The data will be collected from forest owners (i.e. service providers) in Lam Dong  province with PFES participants. For the household survey, the tentative sample size is 200.  

(4) Analysis the behavior of service users
Service users in the pilot PFES scheme was identified as hydropower plants (including Dai Ninh Hydropower plant in Binh Thuan province, Da Nhim Hydropower plant in Ninh Thuan province), water supply companies (the Water Supply Company of Ho Chi Minh City (SAWACO), the Water Supply Company of Bien Hoa City of Dong Nai Province), organizations and individuals doing ecotourism business in the areas of the special use forests and protection forests within the administrative boundaries of Lam Dong province.

The project will collect information on their opinions on payment responsibility, assessment on environment service (e.g., change in water quality provided by forest before and after applying the PFES scheme), payment level (e.g., if it is reasonable?), their pricing policy (whether the payment are included in pricing), and if the implementation of the PFES affects their revenues and benefits.

We will conduct key informant interviews (KIIs) with representative of service providers for collected information and data by structure-based questionnaire.

Moreover, the research also deeply evaluates the government’s and local authorities’ solutions for implementing this program such as capacity in human resource, finance, and the supported legal framework. It is significant to consider on the monitoring and evaluating systems the performance of the project.

(5) Methods to assess the potential for PFES in Laos and Cambodia
To assess the potential for PFES adoption in Laos and Cambodia, the research will assess current institutional context in Lao & Cambodia; factors that enable and unable to implement the PFES, investigate awareness of key informants about PFES from relevant ministries in Lao & Cambodia (e.g., ministries of agriculture and rural development, ministries of energy), identify PFES related experience and explore potential areas for PFES implementation in Lao and Cambodia.

The research will use in combination of qualitative methods and quantitative ones including secondary data collection, key informant interviews and focus group discussion.

For secondary data collection, secondary data and published information related to the study issues will be collected from national to local authorities, academic and research institutes, related projects and websites. National institutional frameworks of PFES and PFES relevancies will also be collected for reviews. Review report of these sources of information will be main product of this project from Laos and Cambodia sides.

KIIs and FGDs will be held with different stakeholders in Laos and Cambodia in order to evaluate their awareness to, and the potential for adoption of PFES program for forest management in Laos and Cambodia. The study will also conduct household questionnaire surveys with smaller sample size in Laos and Cambodia to assess behavior of potential forest holders and private sector. The results of the project from Laos and Cambodia will be combined with results from Vietnam where PFES will be disseminated to stakeholders related to PFES in Laos and Cambodia.

Expected outputs

Output 1: Technical report

  1. the evaluation of PFES program in Lam Dong Province (challenges/ benefits/ impact analysis/ international experiences/ PFES implications for Laos and Cambodia);
  2. assessment report on institutional linkages and capacity needs for integration of PFES policy development at provincial level;
  3. Broad Livelihoods impact assessment report of the pilot PFES in Lam Dong Province

Output 2.1: Suggested Institutional Framework/Design developed for PFES implementation

Output 2. 2: Guidance notes for PFES implementation

Output 3: Leaflet and poster on benefit of FES and how it relates to poverty reduction

Output 4: Comprehensive economic review of PFES:

  1. The analysis of PFES benefits;
  2. The correlation between FES and revenue generation;
  3. The concept of full cost pricing to FES buyers

Output 5.1: At least 2 scientific papers

Output 5.2: Discussion paper on PFES program/policy evaluation methodology and process

Output 5.3: Model course outlines and contents for PFES in University education

Communication materials

Scientific papers
Policy briefs, leaflets

Planned project events

Consultative meetings with stakeholders to share the research findings: Dec 2011 in Lam Dong
Workshops for comprehensive reports to decision and policy makers: April 2012 in Hue City

Focal point for contact

Phong Tran, Ph.D.
Faculty of Economics and Development Studies
College of Economics, Hue University
100 Phung Hung Street, Hue City, Viet Nam
Tel/Fax: +84 54 3885341/+84 54 3529491
Mobile: +84 91 4051223