Forest carbon credits and people's expectations

Government Decree No. 107/2022/ND-CP, issued on December 28, 2022, on pilot transfer of emission reduction results and financial management of agreement on payment of GHG emission reduction in the North Central region, is the first decree to help create a process for the exchange, transfer, and deployment of forest carbon in Vietnam.
Illutriative photo
Illutriative photo

Accordingly, it has created quite a large source of funds for the management and protection of forests and supports the development of livelihoods for people living closely with the forest.

In 2020, the Ministry of Agriculture and Rural Development and the International Bank for Reconstruction and Development (as Trustee of the World Bank’s Forest Carbon Partnership Facility) signed an Emissions Reduction Purchase Agreement (ERPA) for the North Central region.

Subsequently, this ERPA agreement was institutionalized in Government Decree No. 107 on piloting the transfer of emission reductions and financial management under the Emission Reductions Payment Agreement for the North Central region.

Decree No. 107 has marked a turning point for Vietnam to take the first step towards and join the world's common trend in the exchange, transfer, and trade of emission reduction and forest carbon credits.

The revenue from ERPA (estimated 51.5 million USD) comes from forest environmental services for forest carbon sequestration and storage services.

This is considered a very significant financial source for the management and protection of 2.2 million hectares of natural forests in six provinces in the North Central region, contributing to an increase in income for nearly 70,000 households, with the participation of about 950 communities, including poor and disadvantaged ethnic minorities in remote and isolated areas.

Payments to forest owners, People's Committees, residential communities, and the Forest Protection and Development Fund are implemented on the basis of the benefit-sharing plan and the ERPA implementation manual along with Decree No. 107. This provides an important, complete, and clear legal basis to ensure publicity, transparency, and efficiency in the pilot implementation process.

The pilot implementation of ERPA helps to open and promptly receive significant resources for the management, protection, and development of forests. It also supports the development of livelihoods for people living closely attached to the forest.

Furthermore, the pilot implementation of ERPA is also a good opportunity to acquire more resources, contributing to the implementation of the Vietnam Forestry Development Strategy (VFDS) 2021-2030, with a vision of 2050, the National Strategy on Climate change, the National Green Growth Strategy, and Vietnam's COP26 commitments to bring net emissions to zero by 2050.

With the support of the Forest Carbon Partnership Fund, many propaganda activities have been implemented in the North Central provinces to raise awareness for the people and relevant departments and units in the provinces about Reducing Emissions from Deforestation and Forest Degradation” (REDD+) and climate change.

Recently, the Vietnam Forest Protection and Development Fund held a workshop "Consultation on guidebook to direct the implementation of agreement supports reducing carbon emissions in the North Central region", with the participation of forest owners from six North Central provinces, in order to soon bring Decree No. 107 into life.

On the basis of the comments of the delegates, the advisory group and functional agencies synthesize, supplement, complete, and soon submit their reccomendations to the Ministry of Agriculture and Rural Development for early issuance of a guidebook to support people in protecting forests in the North Central region.