Abstract
Payments for ecosystem services (PES), also known as payments for environmental services (or benefits), are incentives offered to farmers or landowners in exchange for managing their land to provide some sort of ecological service. They have been defined as a transparent system for the additional provision of environmental services through conditional payments to voluntary providers. These programmes promote the conservation of natural resources in the marketplace. This paper studies the impacts of PES scheme for local people at villages in Bolikhamxay Province, Lao PDR. It first gives an overal picture of PES at provincial level before going to details of local awareness of forest values and protection as well as the impacts of PES implementation to dimenssions of local people livelihood and forest protection behaviors.
Keyword: payment for ecological services, deforestration, community livelihood, governance
1. Introduction
Formerly known as the Land of Million Elephants, Lao PDR is blessed with abundant natural resources. It is endowed with valuable, productive and ecologically unique forests. These forests provide a habitat for the nation’s rich natural biodiversity and protect its soils, watershed and water resources1. The proportion of forest cover in 2015 was 46.7% of the total land area2. Because of the richness of its water resources, Laos has been called as the ‘Château d’Eau de l’Asie’. Recognizing the crucial role of the country’s natural resources, the Lao Government has opted for their wise, sustainable use and extraction with the effort to effectively safeguard its natural capital, the Government of the Lao PDR has done its utmost to mix the use of the regulatory and economic incentives. Several relevant pieces of regulation have been promulgated in the end of the 19s and mid-20s, namely the Environment Protection Law, the Forestry, Water and Land laws, while several pilot programs and projects in key sectors, e.g. the water, forest, fishery, agriculture and land sectors, have encouraged the local rural people to keep being actively involved in this capital’s effective conservation and wise use, while increasing their household daily income. In addition, the private sector has been also encouraged to actively engage in this national aim realization.
Nevertheless, this will be facing to tremendous challenges, namely the increased demand of the foreign market, the selfishness of human being, mostly in some private sectors, and the low awareness of the Lao people on the importance of natural resources into their daily livelihood. As a matter of facts, these natural resources have been gradually declined and deteriorated at an alarming scale. Most of the Lao Government institutions, population and private sectors still have the perception that environmental or ecological services are granted and endless.
At the global level, there has been attempts to use the economic tool to stimulate and encourage people being actively involved in natural and environment resources management. Payment for ecosystem services (PES) are payments to farmers or landowners who have agreed to take certain actions to manage their land of watersheds to provide an ecological service3. PES occur when a beneficiary or user of an ecosystem service makes a direct or indirect payment to the provider that service. The idea is that whoever preserves or maintains an ecosystem service should be paid for doing so4. These programs promote the conservation of natural resources in the marketplace.
This paper studies the impacts of PES scheme for local people at villages in Bolikhamxay Province. It first gives an overal picture of PES at provincial level before going to details of local awareness of forest values and protection as well as the impacts of PES implementation to dimenssions of local people livelihood and forest protection behaviors.
2. PES At Study Area - Bolikhamxay Province
2.1. Social - economic characteristics of study area
Bolikhamxay Province, situated in the central of the Lao PDR, is characterized by the Annamite Mountain Range stretching east to Vietnam, and the Mekong River and Thailand to the west. The Annamite Mountains in the east are blanketed by semi and wet evergreen forests and are home to a high number of endemic species. Western part of the province is largely covered by drier semi-evergreen forests of a type that is more widely distributed in Indochina and contains varied habitat including grasslands, wetlands, and limestone karst.
Bolikhamxay province is primarily covered with forest (57.9%) composed primarily of mixed deciduous forest and evergreen forests. The evergreen forest occurs primarily in the east of the province close to the Annamite range along the Vietnamese border. Plantation forest, mainly rubber and acacia, are found in the flatter areas and represent nearly 1% of the total forest cover. The Regenerating Vegetation describes fallow lands, both young and old, that can also be non-mature forest plantation areas or stable bamboo forest.
Figure 2.1. Location of the Study
There are Protected Forest Areas such as; The Nam Kading NPA, Phou Sithone ESCA, Nhot Nam Mouand PPF and Nacheng PES are mostly covered by mixed deciduous forest in similar proportions (Figure 2.1). The Phou Chom Voy PPA has the highest forest cover of any of the protected areas; half of the protected area is covered in evergreen forest while an additional third is covered by mixed deciduous forest. The Nam Gnouang South Protection Forest Area is a combination of the THXP reservoir, agricultural land, perennial grassland and mixed deciduous forest on its west side. The Khamkhuna PES area has nearly 37% of its area covered by regenerating vegetation suggesting it may be the most disturbed of all the protected areas.
The human population of Bolikhamxay is highly diverse, with several tribes from 3 major ethnic groups: Tai-kadai group, Khmuic group that encompasses Khamu and Pong, and Hmong group, totalling over 200,000 people. Population densities are, however, incredibly low with only 18 people/km2. Around the protected areas where WCS is involved (Nam Kading and Phou sithone), community livelihoods rely on upland farming systems that are based on paddies, swidden agriculture, natural ecosystems and the services they offer, such as the provision of food, medicines, fuel, and non-timber forest products (NTFPs) that are both consumed and sold to help generate rural incomes.
2.2. Introduction to ecological services in the study area
Nam Kading NPA was created in 1993. With little villages located inside the NPA and given the difficult access to the core area, the forests remained in good state of conservation. In 2005, began support to the Nam Kading NPA Management Unit, providing technical assistance, intensive biodiversity monitoring, outreach to communities, ecotourism training and law enforcement. Nam Kading NPA is currently witnessing the development of the Nam theun 1 hydropower project, increasing pressure over land for agriculture, and significant hunting related threats. Although large fauna was present, it has disappeared or became scarce (Gaur, big cats, elephants and primates).
Since 2019, Provincial Authorities are engaged in the management of the NPA through integrated management of the Protected Area, that includes revision of the management plan, Spatial planning and land management, Law Enforcement and patrolling, capacity building of the personnel assigned, awareness campaign and Biodiversity monitoring. Approach adopted is to support rural communities in and around Nam KAding NPA to develop their livelihoods through ecotourism, non-timber forest products and village incentive funds. Finally, WCS is facilitating the Public Private Partnership between the Hydropower Company and the Government in order to sustain long term financing mechanism to the NPA.
2. Methods
2.1. Approach and analytical framework
The conceptual map guiding our analysis and approach throughout the research is depicted in the figure below. The success or failure of PES schemes and benefit-sharing mechanisms depends largely on the institutional framework and setting (Archer et al. 2008; Clements et al. 2010; Vatn 2010). Institutional frameworks influence actor relationships, funding flows and financial distribution, motivational factors such as the level of interest and involvement of beneficiaries, and the overall outcomes (Kosoy et al. 2008; Corbera et al. 2009). Therefore, the first step in our research was to review Laos’s laws and regulations on PES to identify both enabling factors and constraints for PES implementation. We assess the PES schemes in terms of their ability to deliver 3E outcomes (effectiveness, efficiency and equity). Effectiveness refers to whether environmental services are in fact maintained and improved as a result of the PES scheme (environmental performance). Efficiency considers whether PES schemes are set up, implemented and monitored at minimum cost (financial performance). Equity refers to both distributive equity (the fair distribution of PES payments) and procedural equity (the inclusiveness of PES processes) (social performance).
2.2. Data collection
According to the General Statistics Office (2016), the population in the 2 villages in the study area is about 1,180 people (on average, each village has about 590 people). With an average population of 5 people / household, the total number of families is about 236 households. The study uses the following Moore formula (2003) to estimate the number of survey samples:
In which: n is the sample size, N is the total number of households in the population, e is the accepted tolerance.
With e = 0.05 (the estimated error is 5%) and for a total of 236 households, the estimated number of samples to ensure reliability is n> 148. In this study, n = 150 households were chosen. To ensure the representation of each villages in the province, stratified samples were selected, in which the cluster was selected according to administrative units. N-There are 2 villages with relatively equal population so in each village, researchers will select 75 households for interview. The total number of research samples is therefore allocated as follows:
Figure 3.2: Distribution of survey sample by village
The questionnaire is a key tool in collecting information and data for evaluation. In this study, the questionnaire was also built according to the standard procedure of Diamond (2000). The questionnaire focuses on the following aspects:
- The people's opinion on forest management, conservation and preservation
- Understanding of degradation of forest environment with livelihoods, life and health, people's psychology
- Resources for forest management and protection
- The status of Payment for Forest Environmental Service (PES) in Nam Kading protected area
- Impact of implemented PES to household
- Difficulties when participating in forest management and protection
3. Results
Awareness on forest values and protection
The study first evaluates people's awareness of the values of forest resources and environment and awareness of forest protection through questions about identifying these value groups. There are 5 groups of forest ecological values that are disseminated to the survey sample:
- Forests provide disaster protection values
- The forest absorbs CO2 and provides O2
- Forests provide landscape value and conserve biodiversity
- Forests protect water sources and prevent soil erosion
- Forests have a heritage for future generations
The results show that:
A quite special result is that 100% of the respondents know the value of assets for their future descendants, no one is unaware. 10% of respondents (equivalent to 15 people) said that they were well aware that forests were valuable assets to their descendants, and that up to 90% (equivalent to 135 people) answered that they know to some extent that they need to protect forest land for their future offsprings. Interview with both villages shows that most of the people and business households want to pass on the profession to future generations, they want to preserve the value of natural resources and environment so that their children and grandchildren can enjoy these values.
Regarding the value of forests that protect water sources and prevent soil erosion, up to 64% of people know this value very clear, 36% of people know a little (know to some extent), nobody answered that they don’t know (0%). This perception may be due to households in the area experiencing water problems or having been affected by soil erosion, who also live along the forest, so have experience and knowledge about prices this kind of forest value.
Table 4.1: Awareness on ecological values of the forest in the locality
|
Clearly know
|
Know to some extent
|
Don’t know
|
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
A1.1. Forests provide disaster protection values
|
60
|
40%
|
81
|
54%
|
9
|
6%
|
A1.2. The forest absorbs CO2 and provides O2
|
12
|
8%
|
36
|
24%
|
102
|
68%
|
A1.3. Forests provide landscape value and conserve biodiversity
|
54
|
36%
|
90
|
60%
|
6
|
4%
|
A1.4. Forests protect water sources and prevent soil erosion
|
96
|
64%
|
54
|
36%
|
0
|
0%
|
A1.5. Forests have a heritage for future generations
|
15
|
10%
|
135
|
90%
|
0
|
0%
|
|
|
|
|
|
|
|
|
Source: Processing from survey sample (2020)
After that, the expert group conducted a survey on the importance of natural resources and forest environment to households with scores of 1,2,3,4. Where 1 is the most important and 4 is the least important value to them and their family. Villagers would say what values 1 -> 4 corresponding to which forest values those are important for their lives and their families. The results for number of grader and average point of each value as below:
Figure 4.1: The percentage of people rating the importance for preserving forest resources (%)
Source: Processing from survey sample (2020)
Roles of forest to household livelihoods and threatens
Regarding the importance and the values of forest resources and environment to family livelihoods, 62% of people said that forest is very important for livelihoods, 10% of villagers said that they are particularly important for livelihood. 22% of people think it is normal and 6% of them think it is some what important. There are no villagers who think that forest environment is totally not important for their livelihood.
Figure 4.2: The percentage of people rating the importance of forest to the family livelihood (%)
Source: Processing from survey sample (2020)
More specifically, income from forest activities accounts for a small proportion of the income of interviewed households. 34% of household heads report that forest activities only bring about 0-10% of their total income. 44% of heads said that income from the forest only accounted for 10-30% of the total family income. Only 20% of them think that 30-50% of total income of the whole family comes from forest-related activities and only 2% think that forests provide 50-80% of total income of their family. No household said that forests products or forest activities bring over 80% of total income. So for the people in these locality, the forest has not really played an important role in household total income.
Next, the expert group consulted with local people on the most important causes of forest degradation in Bolikhamxay. Similar to the previous section, people rated 1, 2, 3, 4,5 for corresponding reasons. 1 means the most important reason and 5 means the least important reason. So the smaller the average point, the more important it is to the family life. The calculation of the average point takes into account the weight, similar to the previous section:
For example, there were x1 respondents rated reason A by point 1, there were x2 respondents rated reason A by point 2, there were x3 respondents rated reason A by point 3, there were x4 respondents rated reason A by point 4, there were x5 respondents rated reason A by point 5. Then:
Average point of reason A =
The results are shown in the following table:
Table 4.2: Comparing the importance reasons of forest degradation
|
1
|
2
|
3
|
4
|
5
|
Average point
|
- Expanding agricultural area
|
93,0
|
27,0
|
9,0
|
15,0
|
0,0
|
1,63
|
- Deforestation for non-agricultural purposes
|
47,0
|
18,0
|
6,0
|
0,0
|
0,0
|
1,42
|
- Tourism activities
|
0,0
|
0,0
|
0,0
|
0,0
|
0,0
|
0,00
|
- Incidents of forest fire and forest burning
|
15,0
|
51,0
|
9,0
|
12,0
|
0,0
|
2,21
|
- Mining
|
0,0
|
0,0
|
0,0
|
0,0
|
0,0
|
0,00
|
- Exploit non-timber products indiscriminately
|
0,0
|
12,0
|
15,0
|
30,0
|
3,0
|
3,40
|
Source: Processing from survey sample (2020)
Thus, it can be seen that people mainly choose reasons 1, 2, 4 and 6 as the most important reasons leading to the deterioration of forest environment quality. Reason 2 "deforestation for non-agircultural purposes" has the lowest average point, at 1.42, most of surveyed people think that this is the most important cause of forest environmental degradation. These purposes are usually to build houses, to open warehouses, or to make yards.
Reason 1 “expanding agricultureal area” has the second average score, at 1.63, which is also an important cause of local forest degradation. There are 47 people who think that this is the number 1 cause and 18 people think that this is the number 2 cause (they think reason 1 is more important). This is entirely consistent with the above results. In general, the development of agriculture makes people tend to exploit forests to convert into agricultural land.
Impacts of PES to households
In this section, the author evaluated the impact of PES policy on households.
PES participation
100% of survey household heads in Nacheng and Khamkuna village participated in forest protection and management at the level of community. And, 100% of them heard about PES before this interview. Most of them heard about PES from PES staff or heads of villages or commune officers. 100% of survey respondents said they all received money from the PES program and actively participated in meetings where the village leaders/ officers inform the program and also the meetings that vote on PES implementation. 100% of the subject matter investigated said that they or at least their family member has been or are involved in implementing PES in their village.
The results are shown in the following table:
Table 4.3: Options housholds involved in the PES implementation
|
Khamkhuna
|
Nacheng
|
Total
|
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Participate in a meeting organized by officials to inform the project implementation
|
75
|
100
|
75
|
100,0%
|
150
|
100,0%
|
Attend a meeting organized by officials to ask people how the project should be done
|
62
|
82,7%
|
73
|
97,3%
|
135
|
90,0%
|
Participate in training on PES
|
71
|
94,7%
|
69
|
92,0%
|
140
|
93,3%
|
Participate in the clarification of forest boundaries
|
47
|
62,7%
|
40
|
53,3%
|
87
|
58,0%
|
Participate in measurement of plants and biomass
|
21
|
28,0%
|
30
|
40,0%
|
51
|
34,0%
|
Engage with officers/rangers in protecting forests or detecting forest violations
|
34
|
45,3%
|
32
|
42,7%
|
66
|
44,0%
|
Not involving
|
0
|
0%
|
0
|
0%
|
0
|
0%
|
Source: Processing from survey sample (2020)
100% of people involved in the decision-making process to use and spend money earned from PES and they do know how PES payment is managed, also the persons pay for the PES money, mostly PES staffs. 100% of the household heads said that PES payment has been made 3 times per year and on time.
Benefit of PES
When asked about the impact of the PES scheme, the survey team focused on benefits in three groups: people’s awareness, the forest and the income, and the life. The result is shown below:
Table 4.4: Impacts of PES
Local people know and comply better with forest protection and development policies
|
68%
|
The forest is getting better
|
92%
|
The forest is getting worse
|
6%
|
The income is getting better
|
70%
|
The income is getting worse
|
0.6%
|
The life is getting better (more jobs, roads, public facilities)
|
78%
|
The life is not getting better
|
0.6%
|
Source: Processing from survey sample (2020)
PES, income and livelihoods
Results show that 92% of people recognize PES created better forests, and 70% of people saying that income has changed more positively and they get the better lives (have more jobs, better infrastructure…). Regarding negative impacts, only 0-6% of people agreed that these impacts occur.
Table 4.5: PES affects household income
|
Khamkuna
|
Nacheng
|
Total
|
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
0%
|
0
|
0%
|
0
|
0%
|
0
|
0%
|
1-5%
|
43
|
57%
|
50
|
67%
|
93
|
62%
|
6-10%
|
32
|
43%
|
25
|
33%
|
57
|
38%
|
11-20%
|
0
|
0%
|
0
|
0%
|
0
|
0%
|
>20%
|
0
|
0%
|
0
|
0%
|
0
|
0%
|
Source: Processing from survey sample (2020)
According to the table above, up to 62% of the interviewees, equivalent to 93, said that the impact of PES on household income is very little (1-5%), including 50 Nacheng villagers and 43 Khamkuna villagers. At the level of some what little influence, at 6-10%, the results are almost similar when 43% of Khamkuna people and 33% of Nacheng people chose. No one answered that they did not see any impact of PES on household income (0%). At the level of fairly high and very high, the survey also showed that no people rated these.
Regarding negative impact on household (for example, no more timber or forest products), 4% of the residents responded that they found negative impacts from the PES scheme, corresponding to 6 people. The negative impacts were explained by the local people that PES no longer allows them to consume free forest products as before, nor can they exploit the free forest products, leading to a significant decrease in forest products, affecting their households. The remaining 96%, saying that PES scheme has no negative impact on their households.
When asking people about the changes that PES program should implement for better impacts on local life, 100% of people are enthusiastically contributing ideas about the changes that PES should implement. 87% of the people answered that PES should take actions to help promote agriculture in the area because this is the main livelihood of the villagers, whether through providing clean water and spring water, or helping them to broaden agricultural land to increase agricultural production, or through the provision of locally appropriate crop varieties and training or consultation to promote agriculture in their locality, or PES needs to creat funds for agriculture. Therefore, people will be more active doing their livelihoods without deforestation indiscriminately. 13% of households said that they needed support in terms of changing their livelihoods or proving jobs related to forests, or expanding the forest products market to enable them to sell, increase sales and have a better life.
PES and deforestration
The PES program has been implemented in localities since 2018. 98% of households said that since PES implementation, they were completely stopped deforested. 2% said that they were still deforest because of their family's life and livelihood.
Figure 4.3: The percentage of respondent rating the deforestation changing level
Source: Processing from survey sample (2020)
52% said that compared with the years before PES was implemented, these households had less deforestation, 44% answered that household has not deforested or not yet. The remaining 2% refused to provide information and 2% deforested more. When asked about the reasons and motivations for reducing deforestation, households answered that is because before PES implementation, there is no strict forest management policy, no project to support them in their lives and livelihoods. Households report more deforestation because they need to expand farmland to grow upland rice to maintain their lives and livelihoods.
44% of households, equivalent to 66, said it was difficult to tell the change in forest product consumption by households because it depends very much on what kind of forest product, and the needs of the household in each time and circumstance. Household heads said that the local grass called Khem in the locality has increased over the years but many of the other local grass species have declined and people cannot afford to handle this.
4. Conclusion
This report aims to review PES implementation in Lao PDR and to draw lessons from the case studies. PES cases in Lao PDR are also at the design stage; however, the mining and hydro-power projects of private sectors in Lao PDR have developed their own incentive or benefit-sharing mechanisms, which depend on the outcome of negotiations for concession agreements. This study shows the performance and impacts of a specific scheme of PES for local people in Laos. The Government of Lao PDR has shown strong interest in the PES mechanism. The main constraint in Lao PDR is not the legal issue itself, but rather the lack of human and financial capacity to implement PES. The way forward for PES in Laos may be to work within the existing reality, and focus on innovative, smaller-scale PES schemes, which are not tied to changes in land use, and are not dependent on novel approaches by the GoL. Examples are NGO-managed conservation projects that pay villagers for sightings of wildlife by eco-tourists. While the impact and benefits of such acutely local projects may be comparatively small, some impact is preferable to no impact at all, and in particular to no impact that comes at a high cost of betting against reality.
Ms. Bounkham Vorachit: bounkham_v@yahoo.com
Ministry of Natural Resource and Environmental of Lao PDR
Prof. Dr. Tran Tho Dat: tranthodat@neu.edu.vn
Associate Prof. Dr Dinh Duc Truong: truongdd@neu.edu.vn
National Economics University, Hanoi, Vietnam
(International Conference ICSEED2020)
References
- Ministry of Agriculture and Forestry, Forestry Strategy to the Year 2020 of the Lao PDR, Vientiane, 2005.
- Japan’s Programme Grant Aid for Environment and Climate Change FPPTA6, Ministry of Agriculture and Forestry, Vientiane, Lao PDR.
- Bernard Gay, La République Démocratique Populaire Lao, Ministry of Information and Culture, Vientiane, 1985.
- Water Resources and Environment Agency, National Water Policy, Vientiane, Lao PDR, 2012.
- Ministry of Natural Resources and Environment, MONRE National Biodiversity Strategy and Action Plan for Lao PDR 2016-205, Vientiane, Lao PDR, 2015.
- International Institute for Environment and Development - IIED, Markets and Payments for Environmental Services, 2014
- UNDP, 50 Years, Financing Solutions for Sustainable Development: Payments for Ecosystem Services,2016.
- Michael Esbach, Mike Hedemark, Payments for Ecosystem Services (PES): An Introduction and Case Study on Lao PDR, Center for Biodiversity and Conservation of the American Museum of Natural History, Washington DC. USA, 2012.
- Minister of Natural Resources and Environment Resolution, Vientiane, Laos PDR, 2018.
- Sharachchandra Lel, Oliver Springnate-Baginski, Roan Lakerveld, Déballer Deb, Prada Dash, Ecosystem Services: Origins, Contribution, Pitfalls, and Alternatives, Conservat Soc 2013; 11:343-58.
- Erik Gomez-Baggethun, Rudolf de Groot, Pedro L. Lima’s, Carlos Montes, The History of Ecosystem Services in Economic Theory and Practice: From Early Notions to Markets and Payment Schemes, Elsevier B.V, 2009.
- Sharachchandra Lel, Oliver Springnate-Baginski, Roan Lakerveld, Déballer Deb, Prada Dash, Ecosystem Services: Origins, Contribution, Pitfalls, and Alternatives, Conservat Soc 2013; 11:343-58.
Acknowledgment
This research is implemented in the framework of the Project “Valuation of economic losses caused by extreme hydro-meteorological phenomena in the context of climate change and proposed risk management solutions for coastal provinces of Central Vietnam” (Code BDKH 22/16-20) funded by the National Program on Science and Technology to Respond to Climate Change, Management of Natural Resources and Environment during 2016-2020 for the National Economics University.
1 Ministry of Agriculture and Forestry, Forestry Strategy to the Year 2020 of the Lao PDR, Vientiane, 2005
2 Japan’s Programme Grant Aid for Environment and Climate Change FPPTA6, Ministry of Agriculture and Forestry, Vientiane, Lao PDR
3 International Institute for Environment and Development - IIED, Markets and Payments for Environmental Services,
4 UNDP, 50 Years, Financing Solutions for Sustainable Development: Payments for Ecosystem Services,