Payment for ecosystem services – An effective economic tool for environmental protection and biodiversity conservation activities

Payment for ecosystem services (PES) is an economic tool to implement the principle that “those who use and benefit from resources and the environment pay”. In Vietnam, PES is widely known in the forestry sector with a mechanism for payment for forest environmental services that has been institutionalized in forestry law and brings proven benefits. However, besides forest ecosystems, there are many other types of ecosystems that have values ​​and potential for applying PES such as wetlands, seas… Therefore, the Law on Environmental Protection 2020 has introduced regulations on PES.

The policy on payment for forest environmental services is implemented in Thua Thien – Hue province

The role of  PES

Ecosystem services are direct or indirect benefits that people enjoy from ecosystem functions. Based on the different roles and functions of the ecosystem, ecologists have divided them into 4 functional groups or 4 types of services with different socio-economic purposes including: Providing services ( food, clean water, raw materials, fuel, fiber, genetic resources); Regulatory services (watershed protection, flood mitigation, climate regulation, water regulation, water filtration, pollination, disease prevention…); Support services (soil creation, nutrient regeneration, nutrient regulation, basic production…); Cultural services (aesthetic values, social relations, entertainment and eco-tourism, history, science and education).

PES is an economic tool for those who benefit from ecosystem services to pay participants to maintain, protect and develop the functions of that ecosystem. This is a new approach, applied in many countries around the world and is considered a sustainable financial mechanism for biodiversity resource conservation and hunger eradication and poverty reduction. With that approach, PES serves as a mechanism to benefit individuals and communities that protect ecosystem services by reimbursing them for the costs incurred from managing and protecting ecosystem services. provide ecosystem services. Specifically:

PES creates sustainable and long-term financial resources . PES is considered an effective economic tool for environmental protection and biodiversity conservation. Compared to other economic tools such as resource taxes or wastewater fees, discharge fees, PES is based on the “beneficiaries pay” and “willingness to pay” mechanism instead of “causers pay”. Pollution must be paid for. This will create a voluntary payment mechanism from service users to ecosystem service providers. In a situation where funding for environmental protection activities is increasingly demanding while the state budget is limited, PES is considered a breakthrough solution to generate revenue for environmental protection and conservation activities. biodiversity conservation. PES payment contracts have created a new revenue stream for sustainable land use, restoration, conservation and management activities, thereby enhancing the potential for sustainable ecosystem management. Accordingly, PES will support the implementation of the goals of the Convention on Biological Diversity, to stop and reduce the rate of biodiversity loss. PES not only brings economic benefits to ecosystem service providers but also brings sustainable benefits to both ecosystem service users and society as a whole. Because protecting resources, the environment and sustainable ecosystems brings both economic benefits and many other benefits to the entire society… In many cases, participating in PES projects will contribute to improving image for businesses, creating many sustainable business opportunities, especially business opportunities and cooperation with foreign partners.

PES has a great impact on environmental protection . PES generates a significant amount of revenue for ecosystem service providers and is a great motivation for communities and individuals to preserve and protect the environment. At the same time, it makes beneficiaries of ecosystem services more conscious of preserving and protecting the environment because they have to pay for those ecosystem services. The formation of PES will contribute to reducing greenhouse gas emissions, reducing pollution of water sources and wetlands, and reducing threats to habitats of endangered species globally. PES programs, when applied, are especially meaningful in raising community awareness of the values ​​that ecosystems bring, which will create changes in consumption patterns as well as in environmentally friendly production methods.

PES has a positive impact on livelihoods, poverty reduction policies and social security. PES can create many opportunities for low-income people to increase their income levels by restoring and preserving ecosystems. Even if this payment is only at a modest level, it is still a stable source of income for many years and in certain circumstances it is a very meaningful source of income in addition to actual income. of low-income people. PES programs in countries such as Costa Rica, Mexico, the United States, and Ecuador have all brought results, contributing to poverty reduction and creating stable livelihoods for a segment of the population. PES also creates fairness in access to environmental information through a mechanism where users of environmental services must pay environmental service providers through voluntary agreements. Accordingly, environmental service providers themselves must have access to full environmental information to avoid being paid below the market price for the services they provide. In fact, through PES programs, people have increased access to environmental information and the legal system in the field of natural resources and the environment. PES also creates social equality when the poor have the opportunity to access healthcare, education and other cultural and entertainment values ​​through increased income and infrastructure investment programs. . PES contributes to raising community awareness of the value of provided ecosystem services, improving sustainable livelihoods for service providers and enhancing the quality of life of society as a whole.

In addition, the PES mechanism also contributes to forming a price market for ecosystem services through evaluating the value of provided ecosystem services, trading and exchange relationships between beneficiaries. from the ecosystem (buyers) and ecosystem service providers (sellers), thereby forming a PES market and creating a sustainable financial source to maintain ecosystem functions to provide ecosystem services and sustainable development.

PES regulations

In Vietnam, a number of legal documents have mentioned ecosystem services such as the Law on Water Resources (1998), the Land Law (2003), the Law on Forest Protection and Development (2004) and the Law on Environmental Protection. Truong (2005) recognized that the elements of ecosystem services are biodiversity conservation, landscape protection, watershed protection forests and carbon sequestration. In particular, the Law on Biodiversity (2008) stipulates that “Organizations and individuals using environmental services related to biodiversity are responsible for paying the organizations and individuals providing the service”. In addition, the Government issued Decree No. 99/2010/ND-CP dated September 24, 2010 on payment policy for forest environmental services, Circular No. 80/2011/TT-BNNPTNT, dated September 23, 2010. November 2011 of the Ministry of Agriculture and Rural Development Guidance on methods for determining payments for forest environmental services… These are important legal bases for PES work in our country.

According to the Law on Environmental Protection 2020, natural PES is when organizations and individuals using natural ecosystem services pay money to organizations and individuals that provide environmental and landscape values ​​created by natural ecosystems. to protect, maintain and develop natural ecosystems. Natural ecosystem services covered include: Forest environmental services of forest ecosystems according to the provisions of forestry law; Wetland ecosystem services serve the purposes of tourism, entertainment, and aquaculture; Marine ecosystem services serve the purposes of tourism, entertainment, and aquaculture; Ecosystem services of rocky mountains, caves and geoparks for tourism and entertainment business purposes; Natural ecosystem services serve the purpose of absorbing and storing carbon.

Wetland ecosystems serving the purposes of tourism, entertainment, and aquaculture  are subject to  the ecosystem service  payment  policy .

Organizations and individuals must pay for natural ecosystem services when there are activities to exploit and use the water and sea surface of the ecosystem for aquaculture and underwater entertainment services; Exploit and use the landscape of the ecosystem for tourism and entertainment services; Production and business that emit greenhouse gases must use the ecosystem’s carbon absorption and storage services to mitigate greenhouse gas emissions.

Accordingly, the natural PES principle is clearly stipulated: “Organizations and individuals using one or several natural ecosystem services must pay for natural ecosystem services”. Payment for natural ecosystem services is made in the form of direct payment or indirect payment through trust; Natural PES money is accounted for in the cost of products and services of the party using natural ecosystem services, and must ensure to offset the costs of protecting, maintaining and developing natural ecosystems. ; Organizations and individuals providing natural ecosystem services must use proceeds from natural PES to protect, maintain and develop natural ecosystems.

In short, in the context of living activities causing environmental pollution and increasing environmental degradation, it is necessary to have solutions to protect the environment sustainably. Besides the deterrent legal system, finding a solution that brings benefits to those who are participating in environmental protection activities and maintaining the ecosystem is necessary to motivate all individuals. individuals participate in environmental protection. PES was born as an economic tool, bringing benefits to stakeholders. In the context of a limited state budget and having to pay for many different activities, creating a financial source for environmental protection is necessary and PES is considered a breakthrough solution in this era. In the coming time, there needs to be more determination from the Government to operate the PES system synchronously and effectively.

Source: Environmental magazine