(KPL) The Government of the Lao PDR, in partnership with the Food and Agriculture Organization of the United Nations (FAO) and other development partners, last Thursday launched a feasibility study on establishing a national Payment for Forest Environmental Services (PfES) system. The kickoff workshop, held in Vientiane, marks a step towards creating a sustainable, long-term financing mechanism for the nation's forest ecosystems.

The initiative aims to address the decline in forestry sector revenue after a temporary suspension of logging in natural forests since 2013 and the financial challenges of forest protection, which has historically relied on international support. The PfES model could offer a transformative model by requiring key economic sectors that benefit from healthy forests—such as hydropower, ecotourism, and water and beverage industries—to contribute financially to their conservation and management.

This approach is inspired by the success of the PfES program in neighboring Viet Nam, which generates approximately US$170 million annually, primarily from the hydropower sector. The Lao PDR and Viet Nam have a Memorandum of Understanding on Cooperation in Forestry (2024-2028) that identifies PfES as a key area for collaboration. The Prime Minister's Office approved the piloting of PfES , and a multi-stakeholder Steering Committee and Technical Working Group has been established.

Speaking at the workshop, Mr. Thoumthone Vongvisouk, Deputy Director-General of the Department of Forestry, Ministry of Agriculture and Environment, highlighted the national importance of the initiative. "PfES provides a pathway where those who benefit from these forest services can compensate those who manage and protect them. This creates a sustainable, domestically-funded model for conservation," he stated.

Bakhodir Burkhanov, the UN Resident Coordinator in the Lao PDR, emphasized the innovative potential of the program. "The challenges posed by climate change force us to think seriously and innovatively about what we can do. And in that context, domestic Payments for Environmental Services, or PES, is one such opportunity that is within our reach," he said. "This initiative holds much promise, and it is within our ability to study it, adapt it, and make it work in our unique country context."

The workshop officially launched the PfES Steering Committee and Technical Working Group, bringing together representatives from numerous government ministries, the private sector, academic institutions, Civil Society Organization (CSOs) and international development partners to guide the process. The outcomes of the feasibility study are expected to provide policy options and a roadmap for piloting, and eventual national rollout of PfES.  The feasibility study will be led by the Department of Forestry, and supported by FAO through the UN-REDD Programme and GIZ, with funding from Luxembourg, EU and other donors.

KPL