Mangrove PES decision preparation: issues and opportunities

26 September 2011 | News story

Vietnam Administration of Forestry (VNFOREST) is responsible for preparing four prime ministerial decisions under Decree 99. One of these relates to PES in forests that serve as fish breeding and nursery grounds, including but not restricted to mangroves. Key factors that the decision needs to address include: What are environmental services? Who are service providers? Who are the service buyers? What are the appropriate payment levels?

IUCN has offered to assist VNFOREST with the preparation of this decision by contributing to the development of text relevant to goods and services provided by mangroves. IUCN has offered to fund an international consultant and a series of consultations to prepare and review text that MARD’s legal specialists can use to prepare the decision. The draft text will be submitted to MARD by June 2012. Guidelines will also be issued to assist implementation of the decision at the provincial level.

VNFOREST will propose that GIZ contributes to this decision by providing mangrove-related inputs and supporting research on relevant non-mangrove forest types.

Dr. Don Macintosh, ex - MFF Regional coordinator, pointed out that there is large and growing body of information on the values that mangroves provide in Vietnam, particularly coastal protection and biological support functions, including recent publications from Forest Trends (which has completed a legal review of PES mangrove potential in Vietnam), SNV (which has completed a study of the economics of mangrove projects for the voluntary carbon market), GIZ (which has coastal zone management project in three provinces in the Mekong Delta), CIFOR (which focuses on PES institutional arrangements and monitoring), ICRAF (which runs a PES project in Bac Kan), and the Red Cross (which has just completed a review of the costs and benefits of 10 years of mangrove planting in northern Vietnam).

Decree 99 specifies cash payments. However, several participants observed that non-cash benefits may be more appropriate. GIZ’s project in Soc Trang and CARE’s in Thanh Hoa, for example, offer communities clearly defined harvesting rights that in the case of Soc Tang have increased local incomes by VND50,000/day. It may therefore be appropriate for the decision to support stewardship agreements rather than cash-based PES as it is commonly understood in Vietnam.

By not requiring cash payments, the decision can avoid having to specify cost norms, which would be particularly complex given the dynamic nature of mangrove ecosystems and the high and variable opportunity costs. The agreement, which GIZ facilitated, between a clam cooperative and mangrove management board in Soc Trang simply states that the cooperative will cover the management board’s operating costs, which come to about $200/month. Transaction costs are thereby minimized.

Another advantage of a negotiated approach, whether it includes cash or not, is that it avoids the risk of buyers refusing to pay because they cannot afford the cost norms and/or challenge the evidence on which the cost norms are based. Some dam companies and water utilities are unwilling to pay the fee stated in Decrees 380 and 99 for the supply of clean water. (There are also cases of service providers not wanting to participate in PES schemes because they are not paid what they expect to be paid.) Under these circumstances, a negotiated agreement could improve the performance and delivery of services because of stronger commitment from both buyers and sellers. It may also offer an opportunity to build on cultural norms. If forests are perceived as an integral part of custom and culture, measures that strengthen local traditions may be more effective than cash payments.

One way to avoid such disagreements is for the decision to specify that buyers and sellers must reach a negotiated agreement that complies with a set of criteria but not specify the level of payment, which would be up to the buyers and sellers to agree to.