Models For Incentivising Multiple Benefits: Options for the Lam Dong Provincial REDD+ Action Plan

Models For Incentivising Multiple Benefits:
Options for the Lam Dong Provincial
REDD+ Action Plan
Adrian Enright
January 2014


Acknowledgements

This paper is an output of the project ‘Delivering Multiple Benefits from REDD+ in Southeast
Asia’ (MB-REDD), implemented by SNV Netherlands Development Organisation. The MBREDD project is part of the International Climate Initiative. The German Federal Ministry
for the Environment, Nature Conservation and Nuclear Safety supports this initiative on the
basis of a decision adopted by the German Bundestag.
The author would like to extend his thanks to Mr Steve Swan (SNV) for his invaluable
comments to this report, in addition to those of Mr Nguyen Van Bang and Mr Pham Thanh
Nam.
Authors:
Adrian Enright
REDD+ Advisor, SNV Netherlands Development Organisation


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Table of Contents

Acknowledgements
List of Tables, Boxes and Figures
Abbreviations

Executive Summary



i
ii
iii

1Introduction
1.1 Background context
1.2 Aims, structure and audience

1
1
3

2. Models For Delivering Multiple Benefits
2.1.Ex-ante and ex-post incentive models
2.2 International experiences

5
5
7

3. Provincial REDD+ Action Planning In Vietnam

9

4.

Lam Dong Province
4.1 Socio-economic context
4.2 Forestry sector
4.3 Drivers of deforestation and forest degradation

10
10
11
12

5. Potential REDD+ Activities for Lam Dong Province

14

6. Models for Delivering Multiple Benefits Under
the Lam Dong Provincial REDD+ Action Plan18
6.1 Sustainable agro-forestry and supply-chain developments 18
6.2 Improving agricultural output in areas of

high forest-encroachment
19
6.3 Support agricultural value-add initiatives:

the case for bamboo
20
6.4 Bundling and stacking carbon payments under

Payments for Forest Environmental Services
21
6.5 Promoting sustainability standards for key

agricultural commodities & timber
22
6.6 Combined ex-ante and ex-post savings books
25
7.Conclusions

26

8. References

27

Annex I Selecting effective strategies for no deforestation

in supply chains

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List of Boxes, Figures, Maps
and Tables
Box 1

Possible multiple benefits from REDD+

Box 2

Payment for ecosystem services in Mexico

22

Box 3

Examples of certification to reduce deforestation

24

Figure 1 Key barriers and solutions to achieving multiple benefits

from landscape-level planning multiple benefits
Figure 2: Selecting effective strategies for no deforestation

in supply chains

Map 1

i

Lam Dong province

1

6
30

3

Table 1 International examples of models for incentivising

multiple benefits

8

Table 2 Forest type and ownership, Lam Dong province

12

Table 3 Candidate activities for Lam Dong’s Provincial REDD+

Action Plan and their potential multiple benefits

15

Table 4 List of forest owners potentially implementing future

REDD+ activities in Lam Dong

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Abbreviations

DARD
Department of Agriculture and Rural Development
FPDF
Forest Protection Development Fund
FPDP
Forest Protection and Development Plan
GHG
greenhouse gas
HCMC
Ho Chi Minh City
MARD
Ministry of Agriculture and Rural Development
MRV
measurement, reporting and verification
NRAP
National REDD+ Action Programme
NTFP
non-timber forest product
PaMs
policies and measures
PSA-CABSA payments for carbon, biodiversity and agroforestry
services
PES
payment for ecosystem services
PFES
payments for forest environmental services
PFMB
protection forest management boards

PIAM
participatory impact assessment and monitoring
PRAPs
Provincial REDD+ Action Plans
REDD+
Reducing Emissions from Deforestation and Forest

Degradation (including forest degradation and the role of

conservation, sustainable management of forests

and enhancement of forest carbon stocks)
RIL
reduced impact logging
SFE
state forest enterprise
UNFCCC
United Nations Framework Convention on Climate

Change
UN-REDD
United Nations Collaborative Programme on Reducing

Emissions from Deforestation and Forest Degradation in

Developing Countries

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Executive Summary

Vietnam has arguably been one of the faster movers in its preparedness for REDD+.1 On 27
June 2012 the Vietnamese Prime Minister approved the National REDD+ Action Programme.
Part of this plan stipulated the need to develop Provincial REDD+ Action Plans (PRAPs) for
eight provinces coming under the initial focus of REDD+ activities. One of these provinces
of focus is Lam Dong, in the central highlands of Vietnam. Lam Dong is the centre of piloting
activities for REDD+ under the United Nations Collaborative Programme on Reducing
Emissions from Deforestation and Forest Degradation in Developing Countries (UN-REDD)
Viet Nam Programme Phase I. Since 2009, Lam Dong has also been the site of several
initiatives from SNV Netherlands Development Organisation. The development of the Lam
Dong PRAP is underway and is expected to be completed within 2014.
Despite the progress being made in Vietnam, and more recent international advancements
under the United Nations Framework Convention on Climate Change (UNFCCC), there
remains uncertainty around the timing and size of future carbon financing. As a result,
greater attention has shifted to the role of REDD+ in generating ‘multiple benefits’. The
multiple benefits that could be delivered through REDD+ are defined here under five broad
categories: sustainable rural livelihoods; improved forest governance; strengthening human
rights; biodiversity conservation and ecosystem services; and climate change adaptation.
A multiple benefits approach looks beyond what REDD+ may provide in terms of direct
finance for ex-post emissions reductions and explores the suite of other possible social and
environmental benefits under REDD+, in addition to the carbon benefits.
This approach contrasts with the thinking to date in Vietnam around benefit sharing models
under REDD+. In particular, the expectations that significant benefits will be soon available
for distribution down to the household level using a one-size-fits-all distribution system
are now being put in the context of the uncertainty around future REDD+ funding and the

realisation of wider multiple benefits. This paper attempts to broaden the dialogue around
benefit sharing by linking candidate REDD+ activities to incentives for multiple benefit
delivery.
In response to the growing attention around multiple benefits under REDD+, this paper
investigates options for incentivising multiple benefits in the context of the future Lam Dong
PRAP. In particular, the paper draws on the Lam Dong Forest Protection and Development
Plan (FPDP) as a guide for the types of activities likely to be included under the eventual
PRAP. It will combine this analysis with a look at international examples of incentive models
for multiple benefit provision. Taking these examples, a series of possible incentive models
specific to the possible activities in Lam Dong are discussed. These models should not be
seen as mutually exclusive and can often be used in association with each other.
For example, consideration is given to conditional ex-ante REDD+ investments to support
agro-forestry and supply chain developments in key agricultural commodities in Lam Dong,
such as coffee. Potential exists for these activities to be coupled with appropriately targeted
investments into local value-add processing facilities in other sectors (e.g. cocoa) where
almost 75 per cent of the commodities’ value currently lies. Such opportunities may be
especially useful for commodities such as bamboo which are currently crippled by high levels
of wastage and poor access to capital.

1. Reduction of Green-house Gas Emissions through efforts to Reduce Deforestation and Forest Degradation,Sustainable
Management of Forest Resources, and Conservation and Enhancement of Forest Carbon Stocks

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Other options explored include looking at land sharing opportunities in areas

where forest encroachment is an important driver of deforestation. In this
case, agreements between local actors to move towards reduced or zero
deforestation in adjacent forest areas could be rewarded through improved
agricultural extension services or the establishment of hub and outgrower
models (where smaller farmers within the vicinity of larger producers gain
access to extensions services and processing facilities) to increase incomes
and promote conservation.
Consideration is also given to the role sustainable agriculture and timber
standards can play in contributing to sustainable livelihoods and promotion
of reduced deforestation and degradation. Here, plans under the FPDP
to expand pilots for Reduced Impact Logging (RIL) could be supported
through up-front financing for training and capital through REDD+. Such
measures would need to be coupled with compliance conditions placed
on loans ensuring proven emissions reductions at a later point in time.
Furthermore, plans under the FPDP to promote natural regeneration in
degraded areas could be integrated alongside agricultural standards in
areas where encroachment is a key driver of deforestation and degradation.
Similar strategies could also be applied in areas where there is an agricultural
interface with protected forest areas. The planned conservation efforts in
the Cat Tien and Bi Doup-Nui Ba national parks could, for example, engage
local communities in forest patrol and monitoring efforts to help curb illegal
poaching and deforestation. Compensation for these efforts under REDD+
may be explored through the introduction of sustainably accredited cropping
regimes that could be primed for certification.
Building on existing systems will also be important in the context of
incentivising multiple benefits through REDD+. For example, a combined exante and ex-post payment system trialled under reforestation pilots supported
by KfW might provide a replicable model which has the potential to yield
progressive income gains alongside important environmental benefits. Options
for bundling or stacking carbon payments with those for other ecosystem
services under the existing payments for forest environmental services (PFES)

system could also be considered, offering more immediate and tangible
financial benefits to local actors in compensation for foregone agricultural land
use opportunities.
In exploring these incentive models it is acknowledged that incentives
should also be balanced on the other side of the equation with disincentives.
For example, plans to incentivise forest patrol efforts should also consider
approaches to strengthen law enforcement and penalties for those people
who do not comply with the forest protection and development law. Efforts to
integrate multiple benefits into the PRAP through participatory environmental
and social impact assessment will complement the mix of incentive options
to achieve the economic, environmental and social objectives of Lam Dong’s
existing development and sectoral plans for forestry and land use. However,
whilst recognising the importance of disincentives and other supporting
mechanisms, this report will focus specifically on the role of REDD+ in
realising multiple benefits through incentive models. Coupling these with
approaches addressing disincentives should be considered as a possible
extension exercise, or one that is incorporated into the development of the
Lam Dong PRAP.

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Introduction

1.1 Background context
Reducing Emissions from Deforestation and Forest Degradation (REDD+) has generated

significant international interest and finance as a means for addressing carbon emissions
associated with the forestry and other land use sectors. Deforestation and forest degradation
have been found to contribute between 4 and 14 per cent of global emissions making
efforts to reduce these unsustainable land use practices important contributions to global
commitments to mitigating climate change (Vermeulen et al. 2012). However, following
the initial enthusiasm around REDD+, and hopes for it to deliver a cost effective means
of emissions reductions, subsequent slow progress of international climate change
negotiations, long-term financial uncertainty and technical challenges have limited progress.
Recent decisions under the United Nations Framework Convention on Climate Change
(UNFCCC) have established a decision-making framework for future performance-based
payments under REDD+. This, coupled with concomitant pledges by donor countries for
further REDD+ financing, has helped provide renewed momentum for REDD+. However, the
size and shape of long-term financing continues to be uncertain.
In view of these challenges, greater attention has turned to the provision of multiple benefits
under REDD+ (see Karousakis 2009, Dickson et al. 2009, Sasaki and Putz 2009, SCBD
2009, Miles and Dickson 2010, Harvey et al. 2010, Midgley et al. 2010, Pistorius et al. 2010,
Cowling 2013). Multiple benefits refer to benefits that go beyond carbon sequestration and
can include improved biodiversity conservation, forest governance, expanded social capital
and more secure land tenure for local communities (see Box 1).

Box 1: Possible multiple benefits from REDD+
Pro-poor rural development - REDD+ could provide important opportunities to reduce
poverty if it can deliver significant financial flows to rural areas, which are among the
poorest parts of most developing economies.
Improved forest governance - The performance-based nature of REDD+ should drive
significant improvements in forest management that can only be achieved through
reforms and strengthening of forest governance systems.
Protection of human rights - The heightened international scrutiny of forest
management that will accompany REDD+ finance could strengthen the
implementation of existing safeguards and have positive implications for the respect

for human rights.
Biodiversity conservation and other ecosystem services - Retaining existing
biodiversity and ecosystem services; reducing pressures on biodiversity associated
with fragmentation and loss of forest; ensuring long-term maintenance of forest
resources; increasing the connectivity between patches of intact forest.
Climate change adaptation - As a climate change policy tool intended to protect and
reduce impacts on tropical forests, REDD+ can mitigate greenhouse gas (GHG)
emissions and at the same time help forest- dependent communities to adapt to the
impacts of climate change.
Source: adapted from GlobalWitness 2010, Miles and Dickson 2010; Swan 2012,
Schmidt et al. 2012; Mant et al. 2013 Peskett & Todd 2013

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With the increased focus on the potential for multiple benefits through REDD+,
attention has also be given to the possible delivery mechanisms for multiple
benefits. Mechanisms available to REDD+ countries include (Gardner et al.
2011, Swan and McNally 2011, Rey et al. 2013, Ochieng et al. 2013, Marfo et
al. 2013):
•

country safeguard systems (national level safeguards to ensure the
ecological integrity of REDD+ activities)

•

mainstreaming multiple benefits in national policies and sub-national
plans

•

economic incentive models

•

disincentives (e.g. law enforcement and penalties).

The specific focus of this paper, however, will be to explore models which
provide incentives to generate multiple benefits. These models will be
considered in terms of both ex-ante enabling conditions and ex-post outcomes
(results) based approaches of REDD+ policies and measures which can be
linked to future benefit distribution systems. Benefit distribution systems refers
here to the mechanisms for which REDD+ finances will be used to distribute
both cash and in-kind benefits to actors involved in REDD+ activities (Enright
et al. 2012).
This exploration of incentive models will be set in the context of REDD+
developments in Vietnam. Specifically, the models will be considered in
regards to the possible set of activities under the Lam Dong province REDD+
Action Plan. Provincial REDD+ Actions Plans (PRAPs) are mandated to
operationalise the National REDD+ Action Programme (NRAP).2 These plans
will set a ten year agenda stipulating the REDD+ activities relevant to each of
the eight initial REDD+ pilot provinces in Vietnam.
Lam Dong province, in the central highlands of Vietnam (see Map 1), has

been a pioneer in Vietnam’s attempts to introduce results-based financing
for forest protection and development, firstly through piloting PFES, and
more recently with REDD+ readiness activities and PRAP development. In
response to Lam Dong province’s request, SNV is currently providing technical
assistance to the development of the PRAP. As part of this support, SNV
and the PRAP drafting team are exploring cost-effective ways to incorporate
multiple benefits from REDD+ in the province, namely participatory impact
assessment and monitoring (PIAM) of the PRAP and this paper’s exploration
of incentive structures linked to candidate REDD+ activities.

2. Decision 799/QD-TTg

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Map 1: Lam Dong province
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1.2 Aims, structure and audience

The aim of this paper is to provide a series of possible models for incentivising multiple
benefits which are relevant to the Lam Dong PRAP. These models are not exhaustive and
are intended to stimulate further dialogue in the development of the PRAP. However, this
work will also be of interest to similar stakeholders in other provinces looking to implement
PRAPs, as well as the wider set of international development partners assisting REDD+
countries to move towards a second phase of demonstration activities.
This paper will first briefly review some international experiences in incentivising multiple
benefits through REDD+, payment for ecosystem services (PES) and other models. This will
help to provide a series of generic options that will be considered later in the paper for use in
the Lam Dong context.
Secondly, the paper will present an overview of the socio-economic characteristics and
current status of the forestry sector in Lam Dong. This will cover some of the important
forest characteristics, key drivers of deforestation and some of the important policy decisions
influencing forestry and land-use planning in the province.
Thirdly, the above analysis will be used to inform a discussion around the specific multiple
benefits that might be of relevance to Lam Dong. This section will largely draw on information
provided in the 2011-2020 Lam Dong Forest Protection and Development Plan (FPDP) to
help identify how the generic types of global multiple benefits defined in Box 1 are relevant to
Lam Dong province.3
As indicated in the NRAP and directed by the Vietnam REDD+ office, the Lam Dong FPDP
will form the basis for identifying priority activities comprising the PRAP, where they would be
implemented and who would be involved in their implementation. This exercise works on the
understanding that the list of REDD+ activities likely to be included in the future Lam Dong
PRAP will be extensively informed by the existing FPDP. This follows direct conversations
between SNV and government representatives confirming that the FPDP will form the basis
of the PRAP.
Finally, based on the list of activities and stakeholders likely under the PRAP, the paper will
make recommendations of the potential models for incentivising multiple benefits. This will
draw on international experiences and the context provided by the FPDP as to the sorts of
activities likely under the PRAP. These options will be presented to primary stakeholders

during consultation meetings convened to inform the development of the Lam Dong PRAP.
They also serve as examples of how to link REDD+ activities and incentives for multiple
benefits for other provinces in Vietnam, as well as subnational planning processes for
REDD+ in other countries.

3. During the PRAP process, in 2014, SNV will facilitate primary stakeholders in Lam Dong to identify, and negotiate the tradeoffs between, the different economic, environmental and social benefits (and risks) of the PRAP using participatory impact
assessment and monitoring (PIAM) methodology.

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Models For Delivering
Multiple Benefits
2.1 Ex-ante and ex-post incentive models
As illustrated in Box 1, multiple benefits can be considered under a broad suite of headings.
To help narrow the scope of the options available to incentivising this broad suite of
benefits, it is useful to contextualise the possible approaches in two ways. The first relates
to approaches which provide the enabling conditions for multiple benefits to be promoted.
These are typically considered as ex-ante of REDD+ activities. Naturally, the second refers
to incentives that are provided ex-post REDD+ activities and can be packaged alongside
performance based incentives under REDD+. The two approaches can be seen as
complementary: ex-ante incentives provide financing to enable the multiple benefits to be
realised, whilst ex-post approaches deliver compensation for their provision.
Ex-ante enabling conditions help to lay the foundation for realising multiple benefits. They
can also be thought of as removing barriers to their provision. In the former case, options
for incentivising multiple benefits may come in the form of secure statutory land tenure

arrangements, which are widely recognised in the REDD+ literature as a precondition for
REDD+ (Larson et al. 2013, Peskett and Brodnig 2011, Lindhjem et al. 2009). Other options
might include forest governance reforms to ensure transparency in REDD+ benefit sharing or
to ensure REDD+ is appropriately integrated into broader forest management and planning
efforts. Front-loading performance based REDD+ payments may also help to overcome
many of the up-front costs associated with REDD+ activities. Agro-forestry initiatives in
particular can be promoted through reducing the high up-front establishment costs of such
ventures through front-loading REDD+ performance payments. Private financing may also be
available to subsidise REDD+-related efforts where they link into supply chains of a carbon
label product. Loans, grants and insurance models are also promoted as possible ex-ante
sources of financing to help incentivise multiple benefits under REDD+ (Streck and Zurek
2013).
Understanding the barriers to multiple benefit provision helps to frame other possible
ex-ante approaches to incentivising multiple benefits. Four key barriers to what is referred
to as ‘landscape based approaches’ to land management can be identified. This landscape
based idea embodies similar principles to multiple benefits in so far as it encourages looking
at the broad suite of social and environmental benefits that can be provided at a landscape
level, rather than targeting specific service provision in isolated areas of land. The sustainable
landscapes approach is therefore a cross-sectoral way of negotiating the trade-offs between
these benefits. This has relevance to the Lam Dong PRAP which is essentially landscape
level approach with a view of reducing emissions and promoting economic benefits. The four
inter-related barrier categories are summarised below in Figure 1, alongside the potential
options for overcoming them (Emerton 2012).

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Figure 1: Key barriers and solutions to achieving multiple benefits from
landscape-level planning multiple benefits

BARRIERS

SOLUTIONS

Role of forests in rural
livelihoods and
ecosystem service
provision are undervalued
in decision making

Need to consider localised
benefits of forests and
ecosystem services and
incorporate these values into
commercial decisions

Forest goods and services
are often not captured or
are undervalued by the
market resulting in an
undervaluing of
forest benefits

Developing local forest-based

markets to recognise the true
value of forest goods and
services to help incentivise
multiple benefits

Economic policies tend to
discriminate against
forest livelihoods and
sustainable planning

Removal of distortionary
market effects such as taxes
and subsidies which
discriminate against
forest-dependent livelihoods
and sustainable management

Market-based tools alone
are insufficient to
overcome barriers

Equipping forest users,
consumers and investors with
rights, responsibilities and
information to enable them to
access forest benefits

(Source: adapted from Emerton 2012)
Ex-post options for multiple benefits delivery are considered here as measures
which can be integrated into the performance-based incentive structures of

REDD+ (Enright et al. 2012). Such measures can include premium payments
for REDD+ activities which can be proved to have adhered to certain social
and environmental conditions, such as under the Gold Standard certification
label (Macintosh and Waugh 2012). Certification schemes can also be
combined with ex-ante options. For example, options could exist whereby
small-scale REDD+ actors may repay (part of) a loan provided to cover the upfront costs of certification in order to create a sustainable pool of funding for
other REDD+ stakeholders (Streck and Zurek 2013).

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Additional ex-post incentive models for multiple benefits include performance-based in-kind
benefits which are directly linked to livelihood improvements, including productive assets
(e.g. farm capital), infrastructure or even property rights. Payments for Ecosystem Services
schemes can also be considered as a possible ex-post measure for incentivising multiple
benefits under REDD+ (Streck and Zurek 2013). For example, bundling or stacking payments
for biodiversity, watershed and other ecosystem services in addition to REDD+ carbon-based
incentives have been considered across a range of different contexts (Porras et al. 2008).
Bundling refers to the packaging of multiple ecosystem services into a single credit for a
transaction with a single buyer (Cooley and Olander 2011). Stacking differs from this as it
involves accrediting each service separately and selling them to multiple buyers individually
(Cooley and Olander 2011). Both require substantive market and governance systems to be
in place to facilitate transactions.

2.2 International experiences
Having broadly classified some of the options and barriers to multiple benefit provision, it is

important to contextualise this brief analysis with practical examples. Experiences can be
drawn from early piloting trials under REDD+. However, rich experience also exists in other
initiatives aimed at incentivising social and environmental benefits. Such initiatives include
payments for ecosystem services (PES) schemes, certification models, improved value-chain
initiatives and traditional economic instruments such as taxes and subsidies.
Table 1 draws together some of the key experiences from a range of different countries and
contexts using the ex-ante and ex-post delineation defined above. Each example attempts to
illustrate different options for incentivising multiple benefits that will later be considered in the
case for the Lam Dong Provincial REDD+ Action Plan.
It’s important to note, however, that Table 1 provides only a brief synopsis of the
interventions. As depicted in Figure 1, often these incentive models are combined with
other enabling approaches. For example, the cases shown for Champassak landscape in
Laos, Lachuá in Guatemala and Acre, Brazil each required reforms to forestland tenure to
support the incentive models (Emerton 2012). This illustrates the broader point that such
interventions should not be seen as mutually exclusive and can often be used in association
with each other.
The options presented in Table 1 also do not capture other important contexts that
have helped design these different approaches. Incentive models which realise multiple
benefits are entirely dependent on the REDD+ activities proposed in the area. The
activities themselves must be informed by a comprehensive understanding of the drivers
of deforestation and degradation. By understanding the drivers, alongside the activities to
prevent or slow these processes, incentive models can then be best tailored to fit the local
context (Streck and Zurek 2013).

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Champassak, Lao
PDR

BougnounouNébiélianayou,
Burkina Faso

Mount

Market enabling forest
management plans

Market enabling
conditions for NTFPs

Land-tenure security

Lachuá and Tacaná,
Guatemala

Miyun, China

Mato Grosso, Brazil

‘Eco-compensation’
(PES)

In-kind incentives

province, Brazil

Acre

Payments for ecosystem
services (PES)

Payments for ecosystem
services (PES)

Acre

Access to certification
markets

province, Brazil

Meru Betiri National
Park, Indonesia

Amenfi, Ghana

Wassa

Support for agro-forestry
and reforestation

Privatising tree
ownership

Improved valuation of neighbouring forests to include non-market ecosystem and livelihood values

which led to the strengthening of reserve areas alongside the development of a development plan
incorporating sustainable harvesting levels and processing facilities (Emerton 2012; pp 5).

Mtanza Msona,
Tanzania

Valuation of forest
livelihoods and
ecosystem services

Elgon, Uganda

Calls for “hub and outgrower” schemes, in which smallholders in the vicinity of large-scale farms will
be able to access inputs, extension services, value adding facilities and markets. The blueprint aims
to convert tens of thousands of smallholders into commercial farmers with access to irrigation and
weather insurance, while lifting more than two million people permanently out of poverty by 2030
(Streck and Zurek 2013; pp 21).

Tanzania

Improved market access
for farmers

Companies under Reduced Impact Logging agreements are provided with training and support in
applying for official harvesting concessions. (McDermott 2012; pp128)

Forest protection and restoration compensation provided for farmers engaged in these activities
within Beijing’s watershed (Emerton 2012; pp 9)

Introduction of payments for watershed services via tax revenues delivered to farmers in protection

forested areas within the catchment (Emerton 2012; pp 9).

Single payments for ecosystem service provision (including carbon payments) (McDermott 2012;
pp128)

Market access for certified wood, rubber and Brazil nut being facilitated through introduction of
sustainable production and harvesting techniques, reducing pressures to clear neighbouring forests
(Emerton 2012; pp 9).

National Park authorities recruited local communities in reforestation efforts on degraded land
which later provided opportunities to integrate agroforestry initiatives into the areas to generate
sustainable income beyond the reforestation payments (McDermott 2012; pp 127).

Creating a private certification system to ensure local people owned the trees on their land, leading
to increased reforestation efforts in degraded areas (Emerton 2012; pp 13).

Collaborative resource management agreements with local actors, alongside by-laws stipulating
more secure land tenure which led to improved NTFP management and market access (Emerton
2012; pp 13).

Improved forest planning efforts led to the creation of links to market for local women to sell honey,
shae butter and grass fodder. Planning efforts also instilled harvesting plans and invested in valueadded processing capital (Emerton 2012; pp 8).

Introduction of an improved management system in Scaphium Macropodum forests which produces
the higher value Malva (Mak Jong) nut. This allowed controlled access to the forest, harvesting fees
and higher prices to be generated by local communities (Emerton 2012; pp 8).

The Beira Agricultural Growth Corridor (BAGC) will provide up-front financing of up to USD250
million to stimulate further investment by landowners in capital to improve harvesting yields to
reduce pressure on forested areas (Streck and Zurek 2013; pp 21).

Mozambique

Up-front agricultural
capital support

Description (source)

Country

Model

Table 1: International examples of models for incentivising multiple benefits

Ex-ante

Ex-post

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Provincial REDD+
Action Planning In Vietnam
In 2012, the Government of Vietnam approved its National REDD+ Action
Programme (NRAP) (Decision 799/QD-TTg). Under the NRAP, provisions
have been made for the development of individual Provincial REDD+ Action

Plans (PRAPs) to guide REDD+ activities at the provincial level for the period
2014-2020. The PRAPs will operationalise the NRAP with specific activities
relevant to existing forestry and other land use plans in the province.
The Lam Dong PRAP is under development and is expected to be approved
in 2014. As such, the exact policies and measures (PaMs) to be implemented
under the auspices of REDD+ in the province will not be known until this time.
However, it is likely that the PRAP will draw extensively from the 2011-2020
Forest Protection and Development Plan (FPDP) for Lam Dong. As such,
consideration of the possible incentive models for multiple benefits under the
Lam Dong PRAP will be done in the context of understanding the details of the
province’s FPDP.

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Lam Dong Province:

4

Socio-Economic Context And Overview Of The Forestry Sector

This section attempts to capture some of the key socio-economic factors
and forest profile of Lam Dong province. It will provide a brief context before
considering options for incentivising multiple benefits. A fuller picture can be

obtained in other documents, including the Lam Dong FPDP from which most
of the following material has been extracted.

4.1 Socio-economic context
Lam Dong province has a population of around 1.2 million people, of which the
majority (75%) are Kinh ethnic majority, with the remaining consisting of up to
41 ethnic minority groups. Across the province, around 70 per cent of people
are engaged in agricultural activities (including forestry) with 85 per cent being
employed in rural areas.
It is acknowledged that Lam Dong province has concentrated areas of
poverty. In particular, communes such as Loc Bac, Loc Bao, Loc Lam and
Dong Nai Thuong have been shown to experience persistent food security
issues (Nguyen and Enright 2011). Cash cropping activities (tea, coffee,
rice, pepper) provide the main source of income for most rural people in
Lam Dong province, with small amounts of cash and in-kind income flowing
through the collection of non-timber forest products, animal husbandry and
forest patrols. This heavy reliance on agriculture, coupled with the risk of
price variability, crop failures and capital constraints continues to constrain
the earning potential of many rural people in Lam Dong. However, it should
be acknowledged that government efforts, especially under the Program 30A,
have targeted poverty reduction with some degree of success. In particular,
average poverty rates were reduced to 5 per cent across the province in 2010;
however rates amongst rural people remained relatively high at 20 per cent.
Alongside measures to address poverty, there is a clear shift mandated in
the FPDP 2011-2020 towards developing the industrial sector as a means
of increasing incomes and reducing reliance of the agricultural and forestry
sector. In particular, the FPDP 2011-2020 suggests that “It is time for Lam
Dong to bring strong impacts on economic development in the industries
and services” (pg 37). Greater effort has subsequently been invested into
vocational training activities across the province.

Other areas of development identified in the FPDP also relate more closely
to the processing and preservation of agricultural and forest products. Such
activities include rice milling and processing (rice noodles, dried noodles and
rice paper), processing of coffee, tea, sugar and artichoke, and the production
of rattan and bamboo products (e.g. furniture and chopsticks). Such activities
are important to consider in the context of REDD+, especially where this
industrial development can complement or compete with REDD+ activities.

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4.2 Forestry sector
The forestry sector plays an important role in socio-economic development of the province,
with forests covering approximately 61% of the provincial area (581,435 ha). This land is
distributed across three forest management types in Vietnam:
•

Production forest: 342,175 ha, 57% of the total forestland; of which forested land is
295,702 ha; non-forested land is 15,719 ha; and agricultural land accounts for 30,754
ha

•

Protection forest: 173,148 ha, accounting for 29% of forestland; of which: forested
land is 147,631 ha; non-forested land is 7,924 ha; agricultural land accounts for
17,593 ha

•

Special use-forests: 83,674 ha, accounting for 14% of the forestland, concentrated in
two National Parks of Bi Doup Nui Ba and Cat Tien

The forestry and agricultural sectors are important components of the provinces’ economic
structure, accounting for nearly half of the province’s economy. This has come through a
renewed focus on plantation forestry development (Acacia and rubber) alongside expansion
in the areas of key perennial cash crops including tea, coffee, cassava and cashews.
However, timber logging and processing technology is considered behind that of other
neighbouring provinces in the Central Highlands region. This is said to be constraining the
potential for the forestry sector to obtain higher revenues, especially amongst small-scale
operators.
Lam Dong’s forests are also important in the context of watershed service provision which
feeds into water sources for Ho Chi Minh City (HCMC). Under the national payments for
forest environmental services (PFES) policy, suppliers of electricity from hydropower stations
and water suppliers in HCMC and surrounding areas pay fixed amounts into the Forest
Protection Development Fund (FPDF) in Lam Dong for activities conducted by forest owners
to ensure water quality and soil conservation through forest protection efforts. Payments
are made from the FPDF to individual forest owners, which, if they are relatively large state
management boards, subcontract forest protection responsibilities to households. The
payment rates for household PFES contracts in Lam Dong are in the range of VND 300,000
to 450,000 ha-1 yr-1.4
Although total forested land has increased in recent years, the quality of forest is generally
agreed to be in decline due to the expansion of plantation forest at the expense of natural
forest, and a suite of deforestation and degradation issues driven by expanding agriculture
and infrastructure. Despite this, Lam Dong’s forests are still considered to support “high
biological diversity” (DARD 2012) including a known 2,647 forest plant species, 91 mammal
species, 301 bird species, 102 species of reptiles, 368 species of butterflies and 111 species

of fish. However, the integrity of Lam Dong’s biodiversity remains under constant threat.
In particular, 206 species of wild animals are considered threatened with extinction within
Vietnam and listed in the Red Book of Vietnam; 99 species are globally threatened and listed
in the IUCN Red List; and 110 species are considered protected under Decree No. 32/2006/

4. Equivalent to around USD 15.00 to 22.50 ha-1 yr-1.

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ND-CP of the Government. One of the most recent, high profile extinctions of Vietnam’s
mega-fauna occurred in Lam Dong province through the declaration of the last Javan
Rhinoceros in Vietnam poached for its horn in 2011 (Brook et al. 2012).
Forestland ownership in Lam Dong can be classified under five broad sets of stakeholders.
These are shown in Table 2 alongside the proportion and type of forest under each
ownership classification.
Table 2: Forest type and ownership, Lam Dong province (Source: Lam Dong DARD 2012)
Types Of Forest
And Forestland

Total

Forest
Management
Board

State Own
Forest
Enterprise

National
Park

Household

Other
Owners

Total

598.997

250.270

178.706

91.972

8.716

69.333

I. Natural forest

479.584

193.822

157075

84.733

5.558

38.396

1. Broad- leaved
forest

189.707

77.652

68.065

32.265

1.099

10.626

2. Coniferous
forest

105.736

66.558

12.164

17.561

9.453

3. Deciduous
forest

16.467

2.499

10.926

101

2.941

4. Mixed timber
forest

27.230

4.569

6.414

15.630

617

5. Mixed timber
and bamboo
forest

90.246

29.131

37.559

12.764

1.527

9.265

6. Bamboo forest

50.198

13.413

21.947

6.412

2.932

5.494

II. Plantation
forest

42.650

18.419

14.298

1.732

1.619

6.582

III. Non-forested
land

27.512

13.221

5.506

4.509

838

3.438

IV. Agriculture
land

49.251

24.808

1.827

998

701

20.917

4.3 Drivers of deforestation and forest degradation
Under the Lam Dong FPDP, a target of maintaining total forest cover at 61% has been
established for the province. This target is currently being met, but the rate of natural forests
is decreasing and the rate of plantations is increasing. In particular, between 1999 and 2010,
Lam Dong lost almost 6 per cent of its natural forest area (DARD 2012).
The drivers of deforestation and degradation in Lam Dong involve a complex interaction
with key socio-economic developments. For example, population growth in Lam Dong has
been identified as a major driver of illegal deforestation for the creation of new dwellings and
productive agricultural land. Industrial plantations have also led to the conversion of forested
lands to mono-culture plantations. This is particularly true for rubber plantations, which
remain a key focus of the current FPDP. For example, the Circular No. 99/2006/TT-BNN on

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November 6 2006 by the MARD saw a major expansion between 2006 and 2012 of rubber
plantations on degraded forest land. A total of 53 projects have been implemented across
15,082 ha (including 13,900 ha of natural forest) in Lam Dong province. Bao Lam district has
seen the largest proportion of rubber projects, with around 6,390ha of conversions (FREC
2013).
Price fluctuations have also been an important indirect driver of forest conversion into
industrial crops, namely coffee, cocoa, tea and pepper. Between 1995 and 2000, the largest
rate of conversion of this type occurred, coinciding with hikes in coffee prices to a peak of
VND 45,000 (roughly USD 2.25) per kg in 2000 (FREC 2013). This prompted a wave of
deforestation which saw the area of coffee plantations rise by 200% in the decade 1990 to
2000 (FREC 2013).
Deforestation of this type has also prompted illegal clearing with almost 1,000ha of forest
being reported to have been cleared illegally between 2006 and 2010 (FREC 2013). Although
infringements are reportedly said to have lessened in recent years, illegal deforestation is still
regarded as an important driver of deforestation and has been aided through infrastructure
developments (especially road improvements) and inadequate forest patrol efforts which see
one or two forest officers patrolling stations which cover 10,000ha of forest (FREC 2013).
Natural bamboo forests have also declined considerably over the decade with conversions
to crops taking place in response to poor access to value-add facilities and subsequent low
market values for raw bamboo material. Major infrastructure projects, including hydro-electric
dams, have also driven deforestation in the province, accounting for around 4 per cent of the
total forest area converted between 2003 and 2010 (DARD 2012, FREC 2013).

Degradation also continues to be a major threat to forest quality and biodiversity. Smallholder
encroachment into forested areas adjacent to agricultural plots remains a threat in certain
areas, namely Bao Lam district. This process has been accelerated by high rates of
population growth, particularly following concerted government efforts to relocate people in
certain areas of Lam Dong province.
Illegal logging is persistent, especially in remote mountainous areas which are difficult for
forest rangers to monitor effectively (Nguyen and Enright 2012). Unsustainable non-timber
forest product (NTFP) harvesting is also an important driver of degradation especially in
areas of high population growth (DARD 2012). In particular, bamboo and rattan harvesting
accounted for an average extraction of around 15 tons yr-1 and 170 tons -1 biomass,
between 2000 and 2005, respectively. Forest fires are also considered an important driver
of degradation in Lam Dong, although improved management techniques are said to have
avoided more considerable losses in recent years (FREC 2013).

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Potential REDD+
Activities For Lam Dong Province

5

The Lam Dong Provincial REDD+ Action Plan (PRAP) will not be completed
until 2014. Therefore, definitive activities to be included in the PRAP will not
be revealed until this time. However, it is likely the PRAP will be extensively
informed by the existing Lam Dong Provincial Forest Development Plan

(FPDP) 2011-2020. This is evident from both discussions with key government
stakeholders and also through the inclusion of REDD+ in the FPDP. In
particular, the FPDP makes explicit plans to “exploit financial resources
from carbon emission reduction services when REDD issues have had legal
framework agreed by international organizations” (pg 93).
This section uses the FPDP to list the series of possible activities that could
be included as REDD+ activities under the PRAP. Each activity in Table
3 is matched alongside the type of multiple benefits it could deliver using
those defined in Box 1. It should be noted that in the absence of the PRAP,
the activities presented here are simply the anticipated activities that could
constitute those in the eventual PRAP. Some general indication of the types
of activities has been provided in the draft PRAP plan (DARD 2013); however,
such activities are too general and provisional to be considered for analysis
here. The subsequent incentive models that are linked to the more detailed
activities of the existing FPDP are therefore presented with the intention of
stimulating thinking and further debate in the process of developing the PRAP.
A total of 13 activity types have been identified from the FPDP. These range
from expanding the existing PFES scheme to forest certification schemes and
fire prevention activities. Across the 13 activities all of the multiple benefits
listed in Box 1 are represented, with a large majority of activities being
associated with pro-poor rural development, conservation efforts and climate
change adaptation. These activities are not mutually exclusive and may
even overlap in some cases (e.g. restoration efforts on degraded land and
forestland allocations to households). Table 4 also presents a list of key forest
owners likely to be involved in each of these activities.5
The following assessment should contribute to other PRAP supporting
processes. In particular, the proposed participatory impact assessment and
monitoring (PIAM) of the Lam Dong PRAP will be a key process to facilitate
the identification of multiple benefits (and their risks) relevant to the PRAP.
The PIAM will help to identify those REDD+ activities that promote multiple

benefits and can be considered in conjunction with the set of incentive models
presented later in this paper to ensure these benefits are realised (Richards
2013).

5. This list has been compiled using the Lam Dong FPDP as well as the UN-REDD Viet Nam Phase II
programme document (UN-REDD 2013).

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Table 3: Candidate activities for Lam Dong’s Provincial REDD+ Action Plan
and their potential multiple benefits

1

Activity

Principal drivers addressed

Afforestation on degraded lands

Shifting cultivation & agriculture;
timber harvesting

2

Agro-forestry expansion

Unsustainable NTFP harvesting

3

Biodiversity conservation efforts in National
Parks

Illegal logging;

4

Expansion of SFM certification

Unsustainable forest management and harvesting practices

5

Natural regeneration

Carbon stock enhancement

6

Expansion of forest manager training

Illegal logging

7

Fire prevention activities in new plantations

Fire

8

Forest-land allocations to households for
community monitoring efforts

Illegal logging and encroachment for agricultural expansion

9

Improved silvicultural techniques in Protection
Forests and RIL in natural forest areas

Unsustainable forest management

10

Improved special use and production forest
monitoring efforts to prevent illegal deforestation

Illegal deforestation

11

Improved management of NTFP harvesting

Unsustainable NTFP harvesting

12

Payments for Ecosystem Services

Illegal logging, encroachment; unsustainable NTFP collection

13

Forest landscape restoration

Carbon stock enhancement

inadequate forest patrol resourcing

Principal drivers addressed: NTFP = non-timber forest product Possible multiple benefits:
PP = pro-poor rural development; FG = improved forest governance; HR = protection of human rights;
BC = biodiversity conservation & other ecosystem services; CC = climate change adaption
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Proposed commitment under the FPDP 2011-2020 (directly quoted)

Possible
multiple

benefits

For special use forest: implementing afforestation on 257 ha of shifting cultivation land.

PP + BC +
CC

For protection forest: implementing afforestation on 2,093 ha of vacant land (Ia, Ib) and 10,016 ha of
shifting cultivation land.
For production forest: implementing afforestation on 2,509 ha of vacant land (Ia, Ib); 18,305 ha of
shifting cultivation land; 12,425 ha of clear-cut forest plantations; 32,664 ha of exhausted natural
forest; 14,963 ha of clear-cut open, mature pine forest.
Plantation of medicinal plants under the protection forest canopy within protection forests.

PP

In-situ conservation of biodiversity, scientific research and protection of endangered endemic animals
and plants with high scientific and economic values in order to stabilize 84,153 ha of special-use
forests with high biological diversity in the two national parks: Cat Tien National Park (the part in Lam
Dong territory) and Bidoup-Nui Ba National Park.

BC

Implement sustainable forest management certification for eligible forestry limited companies,
organisations and individuals.

PP + BC +
CC

Natural regeneration: 11,375 ha, which is 2,275 ha/year on average (2011-15)

PP + BC +
CC

Natural regeneration: 18,340 ha, which is 3,650 ha/year on average (2016-20)
Provide technical training for 80% of the forestry workers (training for 40-50% of the workers during
the period 2010-2015); to establish forest protection groups in all villages and communes which have
forests (with support from the local governments and rangers) and provide training for these groups to
improve forest management capacity and limit illegal forest exploitation and burning.

PP + FG +
CC

Mobilise financial resources to replace the solution of clearing flammable materials through prior
burning with other non-fire measures in order to avoid reducing forest vegetation biodiversity and
carbon emissions.

CC

Continue forestland allocation, contracting, leasing and grant of land use right certificates; to focus
PP + FG +
on contracting forestland to the households for protection; to complete allocation and contracting of
HR
protection forests and production forests to households and individuals for management under the
policies, programs and projects on forestry, especially the policy on PFES during the period 2011-2015.
Improving quality of 172,800 ha of protection forests based on application of silvicultural measures
to stabilise and develop eco-environment of protection forests; conducting pilot models applying
reduced impact logging (RIL) technology in natural forest timber selection cutting and moving forward
to the commitment of province wide comprehensive application after 2020. Reduced impact logging
is considered one of the efforts to promote sustainable forest management towards the application for

Forest Certification in the coming time.

C + CC

Strengthen monitoring of key special-use forests, protection forests and production forests to timely
detect and prevent illegal activities and violations; to prevent deforestation, illegal forest exploitation,
illegal trafficking and transport of forest products, especially in the area bordering the province.

PP + CC

Management of NTFP exploitation and development for protection forests.

PP + CC

Exploiting revenues from eco-tourism and cultural tourism development in special-use forests and
protection forests. Exploiting revenues from forest environmental services through the implementation
of Decree 99/2010/ND-CP dated 24/9/2010 of the Government and the activities to perform REDD
mechanisms effectively. Developing PFES into the basic revenues of the forestry sector.

PP + BC +
CC

Implementing forest enrichment on a total area of 4,979 ha, on average 498 ha/year, of which :

BC + CC

- In the period 2011-2015, total enrichment area is 2,409 ha, on average 482 ha/year ;
- In the period 2016-2020, total enrichment area is 2,570 ha, on average 514 ha/year.

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Table 4: List of forest owners potentially implementing future REDD+ activities in Lam Dong
Forest owners

Examples

Households (smallholders)
Community forest operations

17

State Forest Enterprises

Da The SFE, Loc Bac SFE, Bao Lam SFE, Don Duong SFE, Di Linh
SFE, Tam Hiep SFE, Bao Thuan SFE & Da Huoai SFE

National Parks

Cat Tien National Park & Bidoup Nui Ba National Park

Commune Peoples Committee

Commune level committees

Protection Forest Management Boards

Nam Ban PFMB, Dam Rong PFMB, Dai Ninh PFMB & Duc Trong
PFMB

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Models For Delivering Multiple Benefits 6
Under The Lam Dong Provincial REDD+ Action Plan
This concluding section takes the discussion around ex-ante and ex-post
multiple benefits delivery models and the international experience illustrated in
Table 1 and compares this with the potential list of REDD+ activities outlined
in Table 3. The models presented below are in no order of priority and will
need to be considered in the context of broader provincial planning efforts and
the financial and human capacity constraints of the province. The intention of
these options is to stimulate further thought on appropriate mechanisms for
inclusion under the eventual Lam Dong PRAP.

6.1 Sustainable agro-forestry and supply-chain developments
The expansion of agriculture in Lam Dong is a considerable driver of
deforestation and degradation. This expansion comprises small-scale
encroachment and the establishment of new fields and plantations (especially
rubber) in degraded forests. Opportunities, therefore, exist to use REDD+
finances to support agro-forestry expansion efforts alongside supply chain
improvements in key agricultural commodities. The Lam Dong FPDP clearly
articulates a desire to develop sustainable agro-forestry as part of a larger
push for increased business investment into the forestry sector. Agro-forestry
initiatives already exist across the province and are heralded as generating

important benefits for local communities. However, as suggested below, the
province is looking for other sources of financing to support these initiatives:
Funding for implementation [of afforestation and agro-forestry], apart
from budgetary funds, needs to be mobilised from other programmes
and projects such as forest environmental services payments project;
Greenhouse gas emissions reduction projects (pp139).
Ex-ante REDD+ financing could be an important source of funding to help
co-finance investments into sustainable agro-forestry initiatives. This may
be appropriate for commodities such as shade grown coffee. Lam Dong is a
major producer of Arabica coffee, a high yield, low quality coffee type. The
province also has an even larger area of Robusta coffee which is of poorer
quality, but higher yield. Coffee remains one of the most valuable sources of
agricultural income for many poorer households living in Lam Dong, alongside
tea, cashews, cassava and maize (Nguyen and Enright 2012). However,
coffee plantations are also a significant driver of deforestation (Nguyen and
Enright 2012). For example, industrial coffee farming has promoted severe
deforestation, especially following spikes in coffee prices in Tan Thanh and
Phi To communes in Lam Ha district, Dinh Trang Thuong commune in Di
Linh district and Phi Lieng commune in Dam Rong district (DARD 2012).
Thus, looking at ways to promote more sustainable production through agroforestry may help alleviate this pressure on forested areas, whilst maintaining
an important income source. Similar initiatives could also be explored for
medicinal products which are listed as a priority in the FPDP (see page 91 of
DARD 2012).

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