Vietnam leads global effort with innovative carbon program

Vietnam leads global effort with innovative carbon program
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Ajay Banga, 14th president of the World Bank | Linkedin

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.

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

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 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 of the Department of Forestry at the Ministry of Agriculture and Rural Development. “It paves the way for additional financing sources to support forest protection and people’s livelihoods while contributing to greenhouse gas emission reductions.”

Viet Nam’s success with ERPA stems from its commitment to forest management since 2017 when it strictly enforced protection against illegal encroachment among other threats. Additionally, it offers incentives for forest communities to diversify their income sources and reduce resource exploitation.

Households receive money for protecting forests along with opportunities for livelihood programs through initiatives like Payment for Forest Environmental Services (PFES). Communities earn additional income from water suppliers and hydropower plants under PFES—a program 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 financial benefits from valuing forests as carbon stores.”

In March 2024, Viet Nam received full payment for delivering contracted volumes under ERPA—the largest single payment made by FCPF globally for verified emission reductions so far—ensuring fair distribution through a legal framework established in 2022.

Tham’s community has already received nearly US$2,000 for their collective efforts among more than 1,300 participating communities representing some 70,000 forest guardians across six provinces benefiting from payments supporting both forest protection measures as well as local investments such as solar power installations improving safety within off-grid areas inhabited by ethnic minorities using digital technology ensuring remote area accessibility supported by EnABLE trust fund app usage tracking managing payments efficiently enhancing access benefits lowering emissions trust fund members’ ethnic minority communities utilize apps track manage payments effectively

Viet Nam's forestry efforts reduced CO2e emissions by an impressive margin during initial reporting periods; expectations remain high regarding future targets surpassing potential leveraging excess carbon credits sales bilateral agreements trading markets maximizing financial rewards ongoing World Bank support scaling up capturing full potential estimated annually

Forest guardians like Tham consider protecting these forests their life's work despite facing demanding challenges daily long patrols exposure natural hazards human threats resources hope government find ways keep program going possibly even expanding further

"With more resources we can do even better," Tham expressed optimism looking ahead hoping continuous improvement expansion initiatives