Benefits sharing plan of Reducing Emissions from Deforestation and forest Degradation(REDD) Project in the North of Centre Vietnam

Over the past years, the management and protection of forests has been paid special attention by the Government including mechanisms and policies to attract more social resources. In particular, the importance of local communities living on the forest depends on their participation in forest management and protection. However, in order for policies and guidelines to be implemented effectively at the grassroots level to attract responsible participation, the sharing of benefits in sustainable forest management aims to help create jobs. Improving the household economy and stabilizing the lives of forest dependent people must be one of the top priorities.

In fact, in the northern central provinces in general and in Thanh Hoa province in particular, more than 70% of the natural forest area is currently under the management of the State Forests management boards, Forests special-use, national parks, forestry companies. However, the involvement of the private and community sectors in forest management and protection is still limited and there are potential conflicts of rights and interests related to forest and forest land between the community and the State forest owner.

In this context, to mobilize additional resources for sustainable forest management, it pilots new cooperation and benefit sharing mechanisms, on February 2, 2018, at the Carbon Fund Conference 17 (CF 17) in Paris (France), the Ministry of Agriculture and Rural Development (MARD) has successfully defended the REDD Program for the North Central Region (hereinafter referred to as Project), CF 17 The CFM / 17/2018/2 Resolution and its investment will be implemented in 6 provinces in the North Central (Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thien Hue Provinces) from 2019 to 2025

The objective of the project is to reduce greenhouse gas emissions by directly addressing the causes of deforestation, forest degradation and promoting forest restoration and sustainable forest management. It is registered1.088.208ha, total emission reductions (including emission reductions and carbon sequestration) are 19.5 million tons of equivalent carbon (denoted tCO2), of which 10.3 million ton of CO2 The scheme will be funded by the Carbon Fund of $ 5 / ton of CO2 if the scheme achieves 100% of the target emissions reductions.

Unlike other programs and investment projects, the scheme’s payment mechanism is outcome-based, meaning that beneficiaries will be paid when they mobilize their resources for successful implementation. Increase the absorption and conservation of forest carbon after the results are verified and recognized through six groups of direct intervention under the Scheme:

1.To protect the existing areas of evergreen natural forests; 2. Promote regeneration of natural forest without replanting; 3. Enrichment planting of poor natural forests; 4. afforestation of large timber production (long cycle); 5. Re-planting of protection and special-use forests; 6. Conversion of short-term to long-cycle plantations and indirect intervention is to improve livelihoods that do not result in deforestation, forest degradation, and group activity on mechanisms, policies and monitoring

The direct beneficiaries of the scheme include many agencies and organizations such as resident communities, Forest special-use, forest protection and management boards, forestry companies managing protection forests, forest special-use and enterprises. , cooperatives, civil society organizations, etc. The participants in the Scheme shall, on a voluntary basis, register their participation on the basis of their actual needs and conditions and satisfy the requirements of the Scheme such as: i) Participating areas have sufficient information on forest status, clear boundaries, no potential conflicts; ii) Have a long-term forest protection contract, at least from 2019 to 2024; iii) Having an application for participation, committing to carry out the activities required by the Scheme; iv) Private enterprises are encouraged to participate, committed to invest at least 30% of the total investment. Prioritize the use of on-site resources; v) In particular, the management boards of special-use forests and forest enterprises must cooperate with communities living close to forests to protect the majority of the forest areas managed under the cooperative management mechanism. Adaptation (ACM) under the project. Accordingly, the two parties must have an ACM Agreement and benefit sharing schemes are developed and benefited accordingly in accordance with the law. The benefits to be received by the beneficiaries are carbon benefits (carbon credits), and the sharing mechanism is designed on the basis of results of work and efforts to contribute to the forest protection and development. The benefit sharing mechanism is a measure of the extent to which the benefits are shared to the different beneficiaries at all levels in an equitable and transparent manner in which the local community will benefit.

Reduced emissions and benefits will be calculated based on input parameters: i) Area of implementation of 06 interventions mentioned above; ii) Result / net emission reduction (ER) of the whole project (tCO2e); iii) provinces’ contribution to ER project results (%); iv)  natural forest area of provinces compared to total natural forest area (%); v) Pre-investment levels in each province, participation and benefits of the community are prioritized.

Benefit levels include: The gross benefit is the proceeds from the sale of 10.3 million tCO2, equivalent to US $ 51.5 million, of which the 5% provision is equivalent to US $ 2,575,000 for compensation cost by disaster. General operating expenses were 6.8% or US $ 3,483,720; the remaining 88% was net income equivalent to US $ 45,441,280 for the direct costs of implementing the project. Interventions to achieve emission reduction targets of the project at all levels

Net beneficiaries will be allocated 12.6% ($ 5,747,268) for from Central, provincial, district level  to commune level for implementation of policy, monitoring and supervisory solutions, 20.7% (9.427. US $ 328 for special-use forest management boards and forestry companies, 18% (US $ 8,269,586) for parties outside the area of special-use forest management boards, forest enterprises (excluding ACM), the community participating in the scheme will benefit 48.4% ($ 21,997,098).

Thanh Hoa has registered the Ministry of Agriculture and Rural Development (MARD) in the North Central Region (Official Letter 9070 / UBND-NN dated 07/12/2012 by the Provincial People’s Committee) for 138 communes in 16 districts including Quan Son, Lang Chanh, Ba Thuoc, Thuong Xuan, Nhu Xuan, Nhu Thanh, Cam Thuy, Ngoc Lac, Hoang Hoa, Hau Loc, Tinh Gia, Thach Thanh, Ha Trung, Quang Xuong. the total area of the project is 238,179ha, of which the intervention groups protect the area of natural evergreen forest and plantation enrichment of poor natural forest is 219,479ha, the remaining 18,700 ha belong to the activity group Interventions remain.

Accordingly, the ratio of natural forest area to the whole area The project of Thanh Hoa province is 17.4%, the contribution rate for the region’s emission reduction is 8.2%, the average rate of contribution to the whole region was 12.81%. With the benefit sharing mechanism and emission reduction contribution under the scheme, Thanh Hoa province will benefit from a carbon benefit of US $ 5,634,755.

This is a financial source that is not large in comparison with the demand for forest management and development in the province but it is very special because it is the first project in Vietnam to sell forest carbon and a new approach to promoting effective cooperation between public and private sectors, in particular the cooperation between state forest managers and local communities at different scales and levels In different conditions, achieving sustainable results contributes to the common goal of mutual interest  The success of the Scheme will change the viewpoints and approaches on the role and cooperation of the stakeholders and open up opportunities for calling for domestic and international investments. This is a strategy for sustainable forest management and development in the future.

By Hoang Van Tuan – Forestry Specialist