Earning a Living by Preserving the Environment in Viet Nam | Asian Development Bank

Earning a Living by Preserving the Environment in Viet Nam

Article | 22 August 2014

Protecting forest land is a source of livelihood for farming communities that were displaced to make way for hydropower projects.

In Viet Nam and other countries in the Greater Mekong Subregion, hydropower is promoted as an alternative to fossil fuel-based power, central to solving the subregion's energy supply challenges. Hundreds of dams have been constructed across Viet Nam, as it races to keep pace with galloping demand for electricity, which is growing annually by 14%.

However, the surge in hydropower plants over the past 10 years is not without controversy. The dams have resulted in a wide range of problems, including flooding, forest loss, and environmental destruction. The impact on displaced people is another concern, with conditions in resettlement areas often worse than their original lands.

A Ral Son and A Lang T'koot, middle-aged farmers and ethnic Co Tu minority, were among the 1,100 people resettled in 2006 to make way for the 210-megawatt (MW) A Vuong hydropower project in Quang Nam province. In their new village of Thou Ta Reng, most resettled households were allocated 1.2 hectares of land, part of which they use to rotate one season of upland rice with two seasons of fallow. Most resettled families appreciated the modern amenities of their new home - all-weather roads, electricity, clinics, and schools - but have struggled with the lack of livelihood opportunities.

Increased support for affected households

For many years, the ADB has been working with the Electricity and Regulatory Authority of Viet Nam to design benefit-sharing mechanisms as part of continuing efforts to improve social safeguards in the Asia and Pacific region. Payments are made to compensate households that have been physically displaced or whose economic activities have been disrupted by a hydropower investment.

The A Vuong project provided ADB with an opportunity to help resettled people improve their living conditions even further. Through a pilot project supported by the Poverty and Environment Fund, ADB did so by combining a benefit-sharing approach with another method - payments for forest environmental services (PFES) - a market-based mechanism.

Under this mechanism, supported in Viet Nam by progressive national legislation, resettled villagers are entitled to receive payments for patrolling assigned forest areas to prevent logging and other illegal activities, thus providing a reliable source of additional income to improve their livelihoods. The funds for these payments are provided by hydropower companies, which benefit from the improved forest cover through reduced erosion and silt build-up in the reservoirs, which in turn reduces operating costs.

Pilot project on ecosystem services

Through the project from 2011 to 2013, ADB piloted a PFES approach in Quang Nam that could be scaled up at a provincial level. The project set out to tackle key challenges in implementing the project, particularly a lack of reliable forest information, and a shortage of financial resources and manpower.

It did so by piloting two innovations. First, the project promoted a group approach, whereby 10 or more households from the same village team up to take responsibility for forest protection and maintenance services. Second, it utilized satellite imagery and geographic information systems to provide a quicker and more accurate method of calculating forest quality than detailed ground surveys. In addition to saving costs and time, these approaches helped build better social cohesion and opened the way for communal livelihood activities.

In Dong Giang District, the project applied these PFES innovations in five villages in Ma Cooih commune (including in Thou Ta Reng). In only 4 months, the project allocated 6,882 hectares to 303 households in 25 groups. Payments are now made to groups every 3 months in Ma Cooih. Of this payment, each group decides to set aside 20% to 40% of the total funds received for ecosystem services to livelihood activities.

The Government of Viet Nam can now mobilize the same approach throughout Quang Nam and in other provinces. To that end, the project is now being scaled up nationally by the Ministry of Agriculture and Rural Development with a follow-on grant from the Japan Fund for Poverty Reduction managed jointly with ADB.

Positive impact on the community

Due in part to the new PFES scheme, A Ral Son and A Lang T'koot have fashioned a diverse livelihood since they have moved to Thou Ta Reng. Aside from their livestock, which they expanded with the help of the start-up funds from the project, they grow bananas and bamboo shoots for day-to-day income and acacia trees as a longer-term investment.

A Ral Son already notices an attitude change in the new village. The forests they once exploited with little regard for formal ownership or environmental sustainability are now viewed as the moral property of their community.

"When we moved here, everyone tried to acquire more land in addition to the land allocated by the government," A Ral Son recalls. "The quicker you were, the more land you acquired. Such practices have been dramatically reduced since the new policy of forest management and protection. We are now responsible for forest protection."