Abstract

The Leng River basin in BacKan province, northwest Vietnam hosts critical natural resources where lessons learnt from the pilot project of payment for forest environmental services (PFES) in Lam Dong and Son La provinces can be applied. PFES is broadly defined as an economic instrument that facilitates payments of forest environmental service flows to forest dwellers. The passage of a national PFES Decree in Vietnam where the K-factor framework was used to determine the payment level of environmental services created both opportunities and challenges in the design and implementation of PFES schemes.This paper presents how the national PFES policy was adapted, and how lessons in the pilot provinces were considered in developing a local PFES scheme. Important considerations and criteria for determining K-factors to standardize payments for similar environmental services, as well as the proposed PFES scheme for the Leng River Basin are discussed. The paper concludes that national policy framework and local interpretation of K-factors are crucially important in designing a PFES scheme that meets the realistic and pro-poor elements of PES. Finally, a PFES scheme must have detailed implementing guidelines that are developed with local stakeholders.

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