Assessment of payment for ecological service (PES) scheme in lao PDR the case of nam kading protected area, bolikhamxay province

MINISTRY OF EDUCATION AND TRAINING THE NATIONAL ECONOMICS UNIVERSITY  BOUNKHAM VORACHIT ASSESSMENT OF PAYMENT FOR ECOLOGICAL SERVICE (PES) SCHEME IN LAO PDR: THE CASE OF NAM KADING PROTECTED AREA, BOLIKHAMXAY PROVINCE DOCTORAL THESIS BUSSINESS ADMINISTRATION Hanoi, 2022 MINISTRY OF EDUCATION AND TRAINING THE NATIONAL ECONOMICS UNIVERSITY  BOUNKHAM VORACHIT ASSESSMENT OF PAYMENT FOR ECOLOGICAL SERVICE (PES) SCHEME IN LAO PDR: THE CASE OF NAM KADING PROTECTED AREA, BOLIKHAMXAY PROVINCE BUSSINESS ADMINISTRATION Discipline Code: 9340101 DOCTORAL THESIS Supervisor 1: Associate PROF DR DINH DUC TRUONG Supervisor 2: Prof Dr TRAN THO DAT Hanoi, 2022 i DECLARATION I declare that the work in this dissertation titled “Assessment of Payment for Ecological Service (PES) scheme in Lao PDR: the case of Nam Kading protected area, Bolikhamxay Province” has been carried out by myself in the National Economics University, Hanoi, Vietnam The information derived from the literature has been duly acknowledged in the text as a list of references provided No part of this dissertation was previously presented for another degree or diploma at this or any institution ii ABBREVIATION PES ES MRC NKPA NGOs PRA SWOT CVM Payment For Ecological Service Environmental Services Mekong River Commission Nam Kading Protected Area Non-Governmental Organizations Participatory Rural Assessment Strengths, Weaknesses, Opportunities, Challenges Contingent Valuation Model REDD+ Reducing Emissions From Deforestation And Degradation MEA RUPES HEDCOR LHC Millennium Ecosystem Assessment Rewarding Upland Poor For Environmental Services Hydroelectric Development Corporation Luzon Hydropower Corporation iii TABLE OF CONTENTS DECLARATION i TABLE OF CONTENTS iii LIST OF TABLE vi LIST OF FIGURE viii INTRODUCTION 1 Rationale for research implementation .1 Objectives of the thesis Subject and scope of thesis Specific research methods .6 Structure of the thesis CHAPTER THE BASIS OF PAYMENT FOR ES 1.1 Scientific basis of PES 1.1.1 Concepts related to ES and PES .8 1.1.2 Market-based mechanisms for enhancing ES 1.2 What is Payment for ES (PES) 10 1.3 Concept of PES Schemes? 11 1.4 Types of ES and PES Schemes 12 1.4.1 Types of ES 12 1.4.2 Types of PES Schemes 15 1.4.3 Scientific basis of PES 17 1.5 Components of the PES schemes .19 1.5.1 Scale 19 1.5.2 Stakeholders 19 1.5.3 Benefits 20 1.5.4 Drivers 21 1.5.5 Payments .21 1.6 Principles for developing PES schemes 22 1.7 Policies to promote PES 24 1.7.1.Constitutions 24 1.7.2 Specific PES Law 26 1.7.3 Sectoral Environmental Legislation .28 1.7.4 Indirectly Relevant Laws 29 iv 1.8 Property Rights 31 1.8.1 Understanding Property Rights 31 1.8.2 The importance of Property Rights to PES 32 1.8.3 Challenges of PES Schemes Related to Property Rights .33 1.8.4 Finding Property Rights Solutions for PES 35 1.9 Overview of studies on PES .38 1.9.1 Studies on PES in the world 38 1.9.2 Studies on PES in Lao PDR 39 CHAPTER PAYMENT FOR ECOLOGICAL SERVICES IN COUNTRIES IN THE WORLD AND LAO PDR 41 2.1 PES in countries around the world 41 2.1.1 Experience of Brazil .41 2.1.2 Results and findings .44 2.2 Experience of Philippines 45 2.2.1 The process of formation and development of PES in the Philippines 45 2.2.2 PES organization and Institutional Arrangements in Philippines 45 2.2.3 Payment Schemes 46 2.2.4 Results and findings .47 2.3 Experiences of Vietnam 48 2.3.1 Process of formation and development of PES in Vietnam 48 2.3.2 PFES organization and institutional arrangement in Vietnam 49 2.3.3 Achievements .50 2.3.4 Result and recommendations 51 2.4 PES in Lao PDR – Case: Nam Theun 53 2.4.1 The process of formation and development of PES in Laos 53 2.4.2 Legal and institutional framework for PES 55 2.5 PES organization and institutional arrangement in Laos .60 2.5.1 Buyer 60 2.5.2 Seller .60 2.5.3 Conditionality .64 2.6 Other PES-like schemes in Laos 66 CHAPTER LOCATION, SCOPE AND METHODOLOGY 68 3.1 Overview of study site - Nam Kading Protected Area (PKPA) 68 3.1.1 Reasons for choosing study site 68 3.1.2 Natural characteristics of the study area .69 3.1.3 Socio-economic characteristics of the study area .71 v 3.1.4 Introduction to ES in the study area .72 3.2 Research Methods .74 3.2.1 Approach and analytical framework 74 3.3 The process of investigation, sampling, and data collecting 76 3.4 Models of non-market value evaluation 84 CHAPTER RESEARCH RESULTS OF ASSESSMENT OF PAYMENT SYSTEM FOR ES AT KPPA, BOLIKHAMXAY PROVINCE .89 4.1 General information of household 89 4.2 Awareness of forest values and protection .95 4.3 Household understanding of Payment for Forest Environmental Service (PES) in Nam Kading protected area, Boulikhamxay Province .108 4.4 Assessment of change in forest status and forest income in the past years since PES implementing 117 4.5 Evaluation of impact of implemented PES to household 120 4.6 Estimation of willingness to participate in PES of local community 124 4.7 Application of CVM model to estimate the payment level for participating in PES scheme of local communities 134 4.8 Results of interviews with management agencies, NGOs, the private sector, and protected areas on PES development in Laos 142 CHAPTER RECOMMENDATIONS FOR IMPROVEMENT OF PES MECHANISM IN LAO PDR 151 5.1 Recommendations related to regulatory and institutional systems supporting pes in Lao PDR .151 5.1.1 Recommendations to adjust some legal regulations on land allocation .151 5.1.2 Proposal to amend some regulations on land registration 153 5.1.3 Proposal to support business registration and supply PES 155 5.1.4 Proposal of PES contract types 157 5.2 Proposed on design and implementation of PES Programs in Lao PDR 158 CONCLUSIONS 160 LIST OF WORKS RELATED TO THE RESEARCH THESIS 166 REFERENCES 167 ANNEX .173 vi LIST OF TABLE Table 1.1 Types of ES 12 Table 1.2 The importance of legal frameworks to PES schemes 24 Table 1.3 Potential advantages and disadvantages of a specific PES law 27 Table 1.4 Objectives of PES legislation .30 Table 2.1: Three case studies on PES in Brazil .42 Table 2.2: Legal basis for PES in Lap PDR 57 Table 2.3 Comparison of incorporating the definitional criteria of PES schemes by the Nam Theun and Theun Hinboun hydropower projects 67 Table 3.1 Land cover 2018 breakdown areas .70 Table 3.2 Land cover 2018 breakdown areas (cont.) 70 Table 4.1: Summary of socio-economic characteristics of the sample 90 Table 4.2: Awareness on ecosystem values of the forest in the locality .96 Table 4.3: Comparing the importance levels of values to household family 98 Table 4.4: The percentage of people rating the importance for preserving forest resources (%) .100 Table 4.5: Comparing the importance reasons of forest degradation 106 Table 4.6: The numbers of respondents knowing forest values covered by PES mechanism .108 Table 4.7: The numbers of respondents choosing values paid by PES .110 Table 4.8: The largest forest area protected by household 113 Table 4.9: The number and the percentage of respondents rating PES money 113 Table 4.10: Options housholds involved in the PES implementation 120 Table 4.11: Impacts of PES 122 Table 4.12: PES affects household income 122 Table 4.13: Numbers of different reasons for joining PES 129 Table 4.14: Numbers of different reasons for joining PES 130 Table 4.15: Proposed amount (Y) equivalent to each (X) 131 Table 4.16: The participatin in PES 134 Table 4.17: The sample distribution rate for each village 135 vii Table 4.18: Describe the WTP estimation model 136 Table 4.19: Distribution of X levels in the sample 136 Table 4.20: The variables in the WTP estimation model 137 Table 4.21: Estimate the WTP model with parameters for the overall .138 Table 4.22: Estimate the WTP model with parameters for Khamkuna village 139 Table 4.23: Estimate the WTP model with parameters for Nacheng village 140 Table 4.24: WTP Estimation from the parameter regression model 142 viii LIST OF FIGURE Figure 1.1 The eight Broad Habitats assessed and examples of the ES derived from each Figure 1.2 PES Scientific basis 18 Figure 1.3: Components of the “environmental policy toolkit” 18 Figure 1.4 Land managed primarily for agricultural production vs land managed to provide multiple ES under a PES scheme 23 Figure 1.5 The relation of convinience and Legal security 38 Figure 2.1 Institutional framework for PES in Brazil 43 Figure 2.2 Relationship between Users and Suppliers 49 Figure 3.1 Forest Cover and Protected Areas in Bolikhamxay Province 71 Figure 3.2 Location of the Study 74 Figure 3.3 Approach and analytical framework 75 Figure 3.4: Distribution of survey sample by village 77 Figure 4.1: Number of questionnaire in Khamkhuna and Nacheng village 89 Figure 4.2: Number of household heads born in the village or from another place 90 Figure 3.3: Number of different ethnicity in Khamkuna and Nacheng villages 92 Figure 4.4: Percentage of the education level of head of household in a (Khamkuna and b) Nacheng villages and c) both villages 93 Figure 4.5: Total income of the household per year (kip) 94 Figure 4.6: Number of main occupations surveyed in Khamkuna and Nacheng (samples) 95 Figure 4.7: Comparing people’s awareness of ecosystem values of the forest (person) .97 Figure 4.8: The main sources of information on ecosystem values of the forest to the household heads (%) 97 Figure 4.9: The average point of forest values to household heads and their family 99 Figure 4.10: The opinion on the conservation of forest resources in the locality (%) 100 Figure 4.11: The percentage of people rating the importance for preserving forest resources (%) .101 Figure 4.12: The percentage of people rating the importance of the forest to the family livelihood (%) 102 Figure 4.13: The percentage of the total income from forest-related activities (%) 103 Figure 4.14: The percentage of responding to the changing of income from forest-related activities in the past years (%) .104 ... I declare that the work in this dissertation titled ? ?Assessment of Payment for Ecological Service (PES) scheme in Lao PDR: the case of Nam Kading protected area, Bolikhamxay Province? ?? has been...MINISTRY OF EDUCATION AND TRAINING THE NATIONAL ECONOMICS UNIVERSITY  BOUNKHAM VORACHIT ASSESSMENT OF PAYMENT FOR ECOLOGICAL SERVICE (PES) SCHEME IN LAO PDR: THE CASE OF NAM KADING. .. Environmental Service (PES) in Nam Kading protected area, Boulikhamxay Province .108 4.4 Assessment of change in forest status and forest income in the past years since PES implementing