Vietnam has had a national Payments for Forest Environmental Services (PFES) policy in place since 2010, which transfers money for forest protection from water and energy users to households who live in upland watersheds. However, despite a loose resemblance to general Payments for Ecosystem Services (PES) principles, implementation in Vietnam differs strongly from a theoretical ideal, and has a number of unique features, including: strong state involvement in transactions; no use of markets to set payments; poor definition and monitoring of ecosystem services; and the adoption of non-conditional incentives that strongly resemble livelihood subsidies for poor rural areas. The form that PES takes in Vietnam has been shaped by institutional histories of forest management that have envisioned a strong role for the state and for financial transfers to the rural uplands. At the same time, PES has also been influenced by active engagement and agency of central and local government actors, and local payment recipients, and key areas in which they have impacted PES design include shared governance and more equitable benefit distribution models. These institutional priorities and local values that have shaped PES policy and implementation in Vietnam have led to a hybrid model, full of contradictions and compromises, that neither fits a classical definition nor resembles neoliberal conservation outcomes, and whose success is difficult to judge.
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