Viet Nam Leads in Forest Protection through Innovative Carbon Program

For Nguyen Tham, Bach Ma National Park in Hue Province is his life. It holds his childhood memories, sustains his family, and is where he works as a forest guardian.

Tham isn't alone in his dedication. He and other villagers regularly join park rangers on arduous treks, clearing poachers' traps and removing plastic waste left behind by tourists. It's a constant battle, but the quiet moments – like a recent day collecting bamboo shoots – remind Tham why he fights to protect this vital ecosystem.

“This isn’t about us here in the village,” said Tham, “These healthy forests benefit everyone – they clean our air, prevent floods, and help fight climate change. We're all in this together.”

Protecting these forests is no easy feat. "Having the villagers with us strengthens our understaffed force,” said Vo Hong Minh, a park ranger.

Rewarding Guardians of the Green

The World Bank's Forest Carbon Partnership Facility (FCPF) is rewarding the efforts of Tham, Minh, and others from more than 1,300 of communities across Viet Nam. The FCPF recognizes the importance of forests in the fight against climate change, and how protecting and better managing existing forest, reforestation, and forest enhancement can effectively reduce CO2 emissions. CO2 and other greenhouse gas emissions are the primary drivers of the global climate change.

FCPF and the government of Viet Nam signed an Emission Reductions Payment Agreement (ERPA) in October 2020 that covers 2.9 million hectares of natural forests in six provinces in the north central region of Viet Nam. Under this agreement, FCPF would pay Viet Nam US$51.5 million if its forest-related activities resulted in the reduction of 10.3 million metric tons of CO2 equivalent (CO2e) over a six-year period beginning in 2018. Some of the funds are directed to individuals and communities that help maintain healthy woodlands.

Remarkably, the country surpassed this goal in just the first reporting period (2018-2019), reducing 16.2 million tons of CO2e, which were independently verified by Aster Global Environmental Solutions.

“This is a groundbreaking deal for Viet Nam's forestry sector”, said Tran Quang Bao, Director General, Department of Forestry of the Ministry of Agriculture and Rural Development. “It paves the way for additional financing sources to support forest protection and people livelihoods and contribute to greenhouse gases emission reductions.”

Viet Nam’s success with the ERPA stems from its commitment to forest management. Since 2017, the country has strictly enforced protection of natural forests from threats, including illegal encroachment. Additionally, it offers incentives for forest communities to diversify their income sources and reduce resource exploitation.

For example, households receive money for protecting forests along with opportunities for livelihood programs. Communities can also earn additional income through the Payment for Forest Environmental Services (PFES) program, receiving payments from water suppliers and hydropower plants. Viet Nam is a global leader in PFES, generating nearly US$400 million since 2008.

“The ERPA is a game-changer for Viet Nam,” said Nguyen Thi Le Thu, Senior Environmental Specialist at the World Bank. “It boosts government funds for forest protection and shows the financial benefits of valuing forests as carbon stores.”

Fair Distribution and Looking Ahead

The government of Viet Nam in March 2024 received full payment for delivering the contracted volume under the ERPA. This is the largest single payment to date made by the FCPF globally for verified emission reductions. To ensure the fair distribution of benefits, the Vietnamese government established a legal framework in 2022. Tham’s community has already received 50 million Vietnamese dong (nearly US$2,000) for their collective efforts. More than 1,300 communities across the six participating provinces, representing some 70,000 forest guardians, are benefiting from the payment.

While these payments support forest protection, communities have a say in how they are used. Tham's community chose to invest in solar power for an off-grid area inhabited by ethnic minorities. "It will help improve safety there," Tham said, highlighting the community's focus on improving the lives of its most vulnerable members.

Digital technology ensures payments reach the most remote areas. Supported by the EnABLE - Enhancing Access to Benefits while Lowering Emissions trust fund, members of ethnic minority communities use an app to track and manage payments.

The Future is Green

Viet Nam's forestry efforts reduced CO2e emissions by 16.2 million tons during the first reporting period, 5.9 million tons above its target. The country is expected to surpass its targets again in the two remaining reporting periods (2020-2024).

The Vietnamese government has several options for capitalizing on these excess carbon credits, such as direct sales through bilateral agreements or trading them on carbon markets. The World Bank is actively supporting Viet Nam in navigating these options to maximize the financial rewards from its forest protection efforts. The partnership also aims to scale up this payment program to fully capture Viet Nam's forest carbon reduction potential, estimated to be up to 40 million tons of CO2e annually.

Forest guardians like Tham consider protecting these forests their life's work despite facing demanding challenges. Exhaustive long patrols and exposure to both natural hazards and human threats are daily realities.

"With more resources, we can do even better," Tham said. "I hope the government can find a way to keep this program going, maybe even make it bigger."