Payments for Environmental Services in Lao PDR

Paying local landholders to provide environmental services has been recognised by the Government of Lao PDR as a prospective mechanism for achieving environmental management goals and improving the livelihoods of landholders. The Ministry of Agriculture and Forestry, in its Agricultural Master Plan 2011-2015 specifically identified payments for environmental services (PES) schemes as a mechanism for achieving forestry, conservation and livelihood goals. Support for PES schemes has also come from hydro-electricity suppliers and mining companies and future PES schemes are being supported by the World bank under the PAWP programme.

However, the practicalities of how to implement PES schemes in the Lao PDR context are yet to be investigated. These application practicalities are the focus of this research. The project goal is to develop PES policy options for the Government of the Lao PDR.

The PES policy options will be informed by the experience gained in case study applications and the economic analysis of the data collected during those applications. Key issues to be considered are the determination of the aggregate level of payments to be made under each scheme, the design of the mechanism to be used to distribute the payments to individual environmental service producers and the institutional structures under which PES schemes can operate.