Payment for Environment Service

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ENVIRONMENTAL ECONOMICS

PAYMENT FOR FOREST ENVIRONMENTAL SERVICES Evaluating A Policy

Table of contents

1 Introduction .................................................................................................................................. 2 2 PEFS mechanism - from theory to practice ................................................................................. 3 3 Analysis frame ............................................................................................................................. 6 3.1 Without PFES regulation .............................................................................................. 6 3.2 With PFES regulation ................................................................................................... 6 3.2.1 Social impacts ................................................................................................ 6 3.2.2 Environmental impacts .................................................................................. 7 3.2.3 Economic impacts .......................................................................................... 7 4 Application in Vietnam ................................................................................................................ 8 4.1 Pilot implementation ..................................................................................................... 8 4.2 PFES Policy ............................................................................................................... 11 4.3 Drawbacks................................................................................................................... 12 5 Conclusion ................................................................................................................................. 12 6 Reference list ............................................................................................................................. 13

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1 Introduction
We, human, more than ever have lived on by the generosity of the Forests. In fact, Forests are our one and only resource of timber, fuel wood and fodder. That lets alone other crucial yet unnoticed ecosystem services, for example, protecting upstream watersheds and biodiversity, providing landscape beauty and sequestering carbon dioxide from the atmosphere. Do you know in a recent year we have emitted over 30 gigatons of carbon dioxide in to the air? 1

It has been

scientifically proved that more than a quarter of that amount is absorbed by the Forests. That absorbed 7.5 gigatons saved the Earth from warming up insanely, from becoming a heated kettle, and, consequently, saved us-mankind from suffocating. Yet, unfortunately, worries come to environmental scientists that the faster the global warming accelerates, the more likely the Trees themselves become a victim as well. Indeed, “At the same time that we‟re recognizing the potential great value of trees and forests in helping us deal with the excess carbon we‟re generating, we‟re starting to lose forests” said Thomas W. Swetnam (2010), an expert on forest history of the University of Arizona 2. Forests have been taken for granted and receive little or no compensation for the services that they provide. Recognition this has encouraged the development of Payment for Forest Environmental Services (PFES). The question is that why should it be PFES? On the one hand, the Forests are becoming the victim of carbon dioxide density and illegal logging. On the other hand, the communities supposed to protecting the Forests are impoverished. So the dilemma is that they are incapable of earning themselves a living, how could they fulfilled the expectation to be the forest protector “voluntarily”? In consequence, even some of them couldn‟t help but logging illegally, too. That is war of tug between environmental benefits and economic benefits. If a policy maker can‟t balance these two, the newborn policy would be in void. According...
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