Vietnam’s Payment for Forest Environmental Services (PFES) system, designed with USAID support, engages individuals and communities to sustainably manage and protect their forests by providing compensation for their efforts. Since PFES was first piloted in 2008, it has generated approximately $600 million in revenue to support the protection of these valuable forest watersheds. Over the past two years, USAID’s Vietnam Forests and Deltas (VFD) project worked with PFES managers to improve two components of the system. First, the project introduced an electronic payment method in two provinces to replace the costly and time-consuming process of paying forest owners in cash. Second, VFD worked with three provinces to develop improved monitoring and evaluation (M&E) practices to allow for more rigorous analysis of PFES’ impact. Based on the success of these two innovative approaches, VFD and the Vietnam Forest Protection and Development Fund developed national PFES M&E guidelines and e-payment guidelines that were approved last week. These important guidelines will now be used by the 44 provinces implementing PFES in order to improve the efficiency and effectiveness of the PFES system nationwide.
So What? The recent approval of PFES guidelines for improved M&E practices and e-payment solutions increases transparency, security, and efficiency, and will allow Vietnam to rapidly scale up USAID-supported innovations by clearly outlining policy guidance.