Vientiane Times August 4, 2014

The Lao government has identified payments for environmental services as a way to achieve environmental management goals and improve smallholder livelihoods. It is recognised that villagers in Laos need some financial incentive and long term interest in the preservation of biodiversity if they are to be recruited to participate in conservation efforts.

However the issue now for policy makers is how they can be rewarded financially for not degrading forests or ecosystems through inappropriate harvesting of trees or forest products or the illegal hunting off wildlife. In this regard, a Memorandum of Understanding to implement a Payments for Environmental Services (PES) scheme in Borikhamxay province was signed recently between the project ‘Effective Implementation of Payments for Environmental Services in the Lao PDR'and the Provincial Department of Natural Resources and Environment.

The MOU was signed in Borikhamxay province between the project leader Mr Khamphan Nanthavong from the Ministry of Natural Resources (MONRE) and the Director of the Provincial Department of Natural Resources and Environment Mr Khampasong Vongtana. The event was also attended by Deputy GVT Bolikhamxay villagersovernor of Borikhamxay province Ms Bounnhong Sisouvannakhone as well as representatives from the Environment Protection Fund (EPF), the Forestry Department within the Ministry of Agriculture and Forestry (MAF), project team members and other government officials.

The project coordinator, Associate Professor Phouphet Kyophilavong from the National University of Laos, said that the overall project aim was to develop PES policy options for the Lao government. PES schemes aimed to increase the amount and quality of environmental services. This is achieved by establishing and sustaining a financial link between those with a demand for environmental services and those who have the potential to supply them.

PES schemes provide financial benefits to smallholders who improve environmental conditions through changing their land use practices. The payment for villagers will be funded by Theun-Hinboun Power Company though the Environment Protection Fund (EPF).

The payments are expected to commence next year but the officials and advisors concerned have yet to determine exactly how the payments will be calculated or how they will be divided up amongst local communities. However if the pilot project in Borikhamxay proves to be successful it will be proposed to the government for upgrading the scheme into national policy and rolling it out nationwide.

The research activities are being funded by the Australian Centre for International Agricultural Research within the Australian government and undertaken by MONRE, MAF, the National University of Laos, the Australian National University (ANU) and the University of Western Australia (UWA).

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