Hue aims for Net Zero: [4] The effectiveness of ERPA payments

As climate change increasingly impacts daily life and production, preserving natural forest areas and ensuring sustainable livelihoods for local communities has become ever more urgent. Hue City is among the North Central provinces participating in the pilot Emission Reductions Payment Agreement (ERPA) with the World Bank (WB). More than 205,500 hectares of natural forest in the locality are eligible for payments under the scheme. For the 2023-2025 period, Hue City has been allocated over VND 135.97 billion by the Ministry of Agriculture and Environment to implement the program.

Effective forest protection

At the Phong Dien Nature Reserve, an area with extensive natural forests that play a vital role in the ecological environment of the entire region, ERPA funding has strengthened forest protection forces, helping them overcome longstanding challenges related to manpower and equipment.

According to Mr. Le Van Huong, Director of the Phong Dien Nature Reserve, the reserve has used ERPA payments to sign agreements with 22 communities adjacent to the reserve, including 15 communities in the former A Luoi district and 7 communities in the former Phong Dien town. Besides supporting forest patrol activities, a portion of this funding is allocated to community management, thereby fostering close cooperation between local communities, local authorities, and the reserve. Without community-led efforts at the centre, forest protection and biodiversity conservation would be unlikely to achieve meaningful results.

In the highland area of A Luoi, where forests are intertwined with the daily lives of ethnic minority communities, ERPA payments not only provide income but also help shift perceptions and inspire a sense of responsibility and self-awareness in forest protection. This is also the locality with the largest number of ERPA beneficiaries in Hue City.

Mr. Blup Ham, head of the community forest management group of A Roang 1 village (A Luoi 4 commune), shared that the village team includes 20 members (representing 120 households), divided into four groups of five. In 2024, the A Luoi Protection Forest Management Board assigned the village community to manage and safeguard 134.82 hectares of forest. They received nearly VND 41 million in ERPA payments and VND 50 million for livelihood support. In 2025, with 120.22 hectares under their protection, the community is entitled to over VND 72 million, of which more than VND 57 million has already been paid across two instalments.

“Our village develops an annual forest protection plan, conducting an average of four patrols per month, along with unscheduled patrols whenever there are signs of forest violations. We also hold village meetings to integrate training on patrol skills and forest protection for members. Through the implementation of forest allocation and community-based forest protection, local people have shown strong support and clearly understand the benefits they gain from sustainable forest management. Thanks to this, there have been no cases of encroachment or illegal logging in our village,” he said.

Mr. Van Than, Director of the A Luoi Protection Forest Management Board, said that A Luoi has been allocated more than VND 4.2 billion in ERPA payments for 2025. So far, the Board has contracted forest protection to 15 village communities, covering a total area of 1,786.80 hectares, and has disbursed more than VND 1 billion. In addition, the Board provides livelihood support, funding for communal People’s Committees, and resources for silvicultural activities.

“The Board has implemented forest protection contracts with village communities in accordance with regulations, conducting regular monitoring and inspections of contract implementation. Overall, those assigned to protect the forest have performed well, maintaining proper record-keeping and documentation. In the coming period, we will continue working closely with local authorities and relevant organizations to enhance the effectiveness of forest protection through ERPA payments, while expanding livelihood support programmes that increase household income in connection with forest conservation and greenhouse gas emission reduction,” Mr. Than said.

Contributing to carbon and greenhouse gas emission eduction

Mr. Nguyen Tat Tung, Director of the Hue City Forest Protection and Development Fund, said the ERPA agreement marks an important milestone in piloting a financial mechanism for transferring verified CO₂ emission reductions, helping mobilize international resources for forest protection and sustainable development. It is also a results-based payment scheme grounded in the forest’s capacity to absorb and store carbon, paving the way for full implementation of forest environmental service payments.

In 2024, Hue City disbursed VND 42.96 out of 43.78 billion - equivalent to 98.1% of the plan. Nearly 99.4% of this amount was paid to more than 600 forest owners, including community groups, households, commune-level People’s Committees, and various organizations. In 2025, as of November, the city has disbursed about VND 52.44 out of 52.80 billion, reaching 99.33%. All payments are made through cashless methods, bank accounts, e-wallets, or public postal services, ensuring transparency, convenience, and accountability, especially for ethnic minority communities in remote areas.

The Hue City Forest Protection and Development Fund has worked with the Vietnam Forest Protection and Development Fund and representatives of the World Bank to conduct consultations on ERPA implementation guidelines for organizational forest owners, commune-level authorities, community groups, and other stakeholders in mountainous communes. Through these outreach sessions, local people have gained a better understanding of forest protection and development, while also learning about livelihood models they can consider and plan to apply within their communities.

“The additional ERPA funding has enabled organizational forest owners to strengthen their forest protection forces through contracting local communities living near the forest. It has also provided resources for forest development through silvicultural activities such as assisted natural regeneration and enrichment planting, helping improve the quality of natural forests. Meanwhile, the forests allocated to communities for management, nearly 31,000 hectares, have helped raise local awareness of forest protection, improve living environments, and influence concrete actions in conserving ecosystems, safeguarding natural resources, and reducing practices harmful to forest environments,” he said.

According to Mr. Nguyen Dinh Duc, Director of the Hue Department of Agriculture and Environment, after three years of implementing the North Central Region ERPA agreement in Hue City, the programme has achieved positive results despite many challenges. This has been made possible thanks to the close, decisive, and proactive leadership of Party committees and local authorities at all levels, together with the strong unity and consensus of the political system and the public. The programme has strengthened cooperation and coordination, created positive changes in mobilizing social resources for the forestry sector, and made an important contribution to the city’s socio-economic development.

“The ERPA payment mechanism not only provides essential financial resources for forest protection and development but also reaffirms the role of natural forests as an effective ‘carbon sink’. This is a key step for Hue City to sustainably reduce greenhouse gas emissions and move closer to its Net Zero target and green economic development in the coming years,” Mr. Duc emphasized.

After nearly three years of implementing ERPA (2023-2025), Hue City has disbursed VND 123 billion. The forest cover rate has reached 57.18%.

$ 1 = VND 26.359 - Source: Vietcombank.