2017 – 2018
The Ministry of Planning and Investment of Vietnam, through its Central Institute for Economic Management, and the EU REDD Facility mapped and analysed planned public investments (2016-2020) in land use in the five provinces of the Central Highlands region. This innovative research looked at the main sources of finance and their role in supporting the objectives of Vietnam’s National REDD+ Action Plan (NRAP). The study also looked at broader land-use finance and its potential negative impact on forests to identify opportunities to ‘green’ investments and align them with national REDD+ commitments.
The objective of this study was to identify and quantify relevant planned public investments (2016-2020) in land-use sectors in the Central Highlands’ five provinces to:
The results of the study support the implementation of the NRAP in Central Highlands and the integration of sustainable land-use objectives into provincial socioeconomic development.
Vietnam has an ambitious legal framework aimed at halting deforestation and forest degradation, and its national forest cover has increased over the past 20 years. However, driven mainly by unsustainable logging, forest conversion for infrastructure, land conversion for agriculture and population increase, deforestation and forest degradation continue to dramatically threaten Vietnam’s environment.
The Central Highlands region, whose forests represent 22.3 per cent of the national cover, is considered a deforestation hotspot. The regions’ forest cover decreased from 67 to 46 per cent between 1976 and 2016, amounting to 22 per cent of national emissions from forestry and land-use change.
Central Highlands is also one of the least economically productive regions of Vietnam, with an economy dominated by agriculture and the often unsustainable exploitation of natural resources. Notably, the poverty rate is high in the large areas covered by forests.
The scheduled update of the region’s Master Plan by the Ministry of Planning and Investment and planned targeted REDD+ support provide various opportunities to better integrate REDD+ objectives in future land-use decisions, if priorities for the alignment of spending with green growth objectives are well identified.
This study analysed planned international, national and provincial public investments for the period 2016-2020 in the Central Highlands’ five provinces (Kon Tum, Gia Lai, Dak Lak, Dak Nong and Lam Dong) that have a potential impact on forest cover. These include investments in agriculture and rural development, forest development, forest protection, non-urban land management, and to a certain extent, those related to social policies and hydropower construction.
The scope of the study was defined based on the Government’s wish to analyse to what extent planned investments in Central Highlands will support environmental and forest protection objectives, and to identify opportunities to better mainstream these objectives in its budget planning.
In Vietnam, spending from sub-national governments accounts for approximately 70 per cent of total public spending. It is therefore a key level for examining the landscape of land-use finance. It enables an understanding of the impact of local financing in delivering sustainable land-use objectives and its contribution to national policies.
The study considered public finance related to both the revenue and expenditure of public authorities. The sources of revenue considered included that collected from private entities and redistributed to public entities, such as the Payment for Forest Environmental Services (PFES) scheme. The analysis focused on national and provincial ministries and bilateral and multilateral donors. Public enterprises and funds were integrated to the extent possible, while private investments were not covered.
The study divided the flows of planned land-use investments into two groups: