Payment for ecosystem services (PES) is defined as incentives offered to farmers or landowners in exchange for managing their land sustainably, and/or to provide some sort of ecological service. PES has also been described as a transparent system for the additional provision of environmental services through conditional payments to (voluntary) providers. These programmes promote conservations of natural resources in the marketplace.

At Inclusive Business Sweden, we were involved in a PES-project implemented in Vietnam. The government of Vietnam is pursuing market-based (or “price-based”) approaches to environmental protection, with a strategic focus on Ecosystem Services (ES). ES are the benefits that nature provides society including biodiversity, carbon sequestration, food provision, recreation, etc. The country’s vision – identified through the Biodiversity Conservation Law adopted in 2008 – is to identify the benefits that people derive from ecosystem services and to seek a system where beneficiaries of such services pay service providers.

Vietnam river

Price-based policy instruments are attractive because they lead to the most cost-efficient achievement of environmental objectives by relying on the use of economic incentives to influence actors. One type of price-based approach is to develop a market for ecosystem services whereby proper pricing of environmental goods and services can influence actors to choose production methods and consumption options that are more environmentally friendly. An increasingly popular approach is the establishment of Payment for Ecosystem Services (PES) schemes in Vietnam and elsewhere.

Mui Ca Mau National Park (MCMNP) Pilot Project

The pilot project focused on low-income households within the Zone of Ecological Restoration (ZER) of Mui Ca Mau National Park (MCMNP).

The project aimed to improve income possibilities through a livelihood model while also improving the supply of ecosystem services from coastal wetlands and mangrove ecosystems.

The results of the project has informed the design of future PES models for coastal wetlands and mangrove ecosystems in MCMNP and elsewhere in Vietnam.

The project has focused on four main objectives:

1. The development of a livelihood model for 20 local households aimed at reducing poverty

2. The suggestion of a mechanism for buyers and sellers of ES to interact and conduct transactions (PES)

3. The improvement of capacity-building and public awareness of PES in Vietnam and Sweden

4. The creation of a strategic partnership and long-term cooperation between Vietnamese and Swedish partners

Please click here to read our collaborative report on “ Development Payment for Ecosystem Services”, published by FORES.