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This report clearly answers this question with “no”. Based on field work in four provinces of Northern and Central Vietnam and interviews in Hanoi, the authors found important domestic concerns for environmental services in Vietnam, in particular the protection of watersheds. But there are a number of major obstacles to the use of PES. First and foremost, the State has so far allocated little forestland to households – much less areas that are critical in terms of environmental services. There is thus no real land-use choice whether or not to ‘provide’ environmental services, since protection is ensured by quite effective commandand-control policies, thus conflicting with the voluntary nature of PES agreements. Second, those conservation-oriented payments that do exist, notably Programme 327 and its successor Programme 661, are designed to cover the opportunity costs of labour in the protection of State forests; they are basically forest-guard salary payments. But they typically make up only 1-2% of rural households’ income and are often not fully conditional, and thus in most cases end up being inefficient as independent conservation incentives. Reforestation subsidies provide a more significant contribution to household incomes, but are probably in most cases predominantly motivated by concerns for increasing timber production, rather than environmental services.

Payment is good, control is better: why payments for forest environmental services in Vietnam have so far remained incipient