HO CHI MINH CITY -- Vietnam is set to receive tens of millions of dollars to help it keep a promise not to cut down trees, part of a controversial World Bank program that critics say does not produce its intended effect -- carbon emission reductions.
The Southeast Asian nation has signed a contract that calls on the World Bank to pay out $51.5 million if Vietnam makes good on multiple pledges to protect its forests. It is the first Asian country to make such a deal.
Vietnam must measure how much future deforestation could contribute to emissions and, to qualify for the money, show how it is preempting forest loss.
The move is supposed to help Hanoi reach its Paris Climate Accord pledge but might have other benefits as well. It could act as an incentive for the Vietnamese government to step up its fight against illegal logging. A trade deal with the European Union requires Vietnam to combat illegal logging. And the U.S. this month launched a probe into illegal logging, though one source said the probe seems timed to curry voter favor ahead of U.S. elections on Nov. 3.
In other countries, carbon markets cap each company's emissions, but companies can buy offsets if they go over their ceilings. For now, Vietnam can be paid not to emit, and Hanoi's deal with the World Bank could lead to other organizations buying offsets from Vietnam.
"It opens the door for similar forms of international carbon finance in the future," World Bank Vietnam Director Carolyn Turk said last week, announcing the deal.
But such arrangements do not really cut emissions, said Chris Lang, founder of the REDD-Monitor blog. REDD is short for "reduce emissions from deforestation and forest degradation."
"In order to address the climate crisis, we have to stop burning fossil fuels," Lang told Nikkei. "Carbon trading makes the climate crisis worse by giving the oil, gas, and coal industries a new lease on life."
Vietnam is expected reduce emissions by 10.3 million tons of carbon across 5.1 million hectares of forest, or 16% of the country's land, to receive payment. The money is supposed to be reinvested in forests and nearby communities where ethnic minorities and people below the poverty line live.
Vietnam has said it will preserve woodlands by curbing new developments, such as rubber plantations and hydropower facilities, by cracking down on logging and by planting more trees.
It is the fifth country to sign a payment contract under the Carbon Fund, part of the Forest Carbon Partnership Facility, which is overseen by the World Bank. The four others are Chile, Democratic Republic of Congo, Ghana, and Mozambique.
"Carbon trading is clever," ecology consultant Nguyen Huu Thien told Nikkei. He said it could incentivize forest protection but that pitfalls remain, including the high cost of verifying data and the risk to people who rely on forest products for their livelihoods.
Senior climate change adviser Nguyen Ngoc Huy cited another challenge. Newer wooded areas, he said, will not store as much carbon as natural forests. The trees Vietnam plants tend to be acacias used for paper. This creates monocultures of trees with short life spans.
"I think this is a very important contract," Huy, an Oxfam adviser, told Nikkei. "In terms of implementation, of course, there will be difficulties."
There are questions about the success of programs designed to reduce deforestation emissions. A global study of REDD schemes commissioned by the German Institute for Development Evaluation says that "overall progress toward implementation has been slower than expected" and "actual emission reductions are broadly limited." The report came out this year.