Lam Dong forest economy: [3] High expectations from ‘green capital’

As the province with largest forest area in Viet Nam, Lam Dong not only serves as the Central Highlands and Central regions "green lung" but also possesses significant potential for developing a sustainable forest-based economy. In recent years, alongside its efforts to manage, protect, and restore forests, the province has gradually introduced modern forestry business models, with forest carbon credit development identified as a particularly promising opportunity.

Most recently, Lam Dong Province, in collaboration with the Coalition for Corporate Transparency and Partnership in Asia (CCTPA), launched a forest carbon credit development project covering more than 957,000 hectares of forest. The project focuses on afforestation of barren land, as well as the conservation and restoration of natural forests, to generate carbon credits under the Verra Verified Carbon Standard (VCS), enabling participation in the global carbon market.

According to forestry experts, the global carbon market is expanding rapidly, with carbon credit prices ranging from around USD 1-2 to nearly USD 200/credit, depending on their quality and certification standards. This presents substantial opportunities to enhance the economic value of forests.

In addition to generating a new source of revenue, the commercialization of forest carbon credits is expected to encourage communities living near forests to take a more active role in forest protection and ecosystem restoration, helping reduce forest encroachment while promoting sustainable livelihoods.

Viet Nam's plan to officially launch its carbon trading market has further strengthened expectations among forest management agencies and local communities engaged in forest protection.

Nguyen Ngoc Binh, Chairman and General Director of Nam Tay Nguyen Forestry One Member Co., Ltd., said that forest owners are eagerly awaiting the Government's official launch of the carbon market.

Beyond forest management agencies, local communities contracted to protect forests also expect to benefit from additional income generated through forest conservation. While the concept of "selling clean air" is still relatively new, it offers significant potential to enhance the economic value of forest protection.

Despite these opportunities, forest carbon credit development continues to face several challenges.

According to Nguyen Ngoc Binh, the first major challenge is the increasing impact of climate change. More frequent extreme weather events are affecting the growth and health of forests. At the same time, human activities, including changing land-use demands from local communities and development by organizations and companies, continue to put pressure on forest areas, contributing to forest degradation.

To facilitate the development of forest carbon credits, he stressed the need to strengthen forest management and protection, minimize forest loss and degradation, and prevent forest fires and illegal forest clearing for cultivation. In addition, afforestation efforts should be accelerated, while production forests should gradually shift from short-rotation timber plantations to large-timber forests with greater carbon sequestration capacity.

"It is essential to improve both the productivity and quality of forests, especially natural forests, through silvicultural measures such as forest enrichment and assisted natural regeneration. At the same time, the six-step process for obtaining forest carbon certification must be properly implemented," Binh said.

To generate carbon credits that meet the Verra Verified Carbon Standard (VCS), forest inventories, carbon measurement, monitoring, and carbon stock assessments must comply with rigorous technical procedures. Lam Dong is currently investing resources in forest surveys, developing forest databases, and completing the technical documentation required for the project. This work requires a high level of technical expertise, and forest owners emphasize the need for independent third-party organizations to ensure objectivity and compliance with international certification requirements.

Another major challenge concerns the legal framework governing carbon credit ownership, payment mechanisms, and benefit-sharing arrangements among the State, forest owners, and project developers.

These obstacles are gradually being addressed. On May 21, 2026, the Government issued Decree No. 180, which regulates forest carbon sequestration and storage services. The decree represents a significant milestone in the development of Viet Nam's forest carbon market.

The decree provides for two payment mechanisms: direct payment under contractual agreements or payment entrusted to the Forest Protection and Development Fund. For privately developed projects such as those in Lam Dong, forest owners are granted ownership rights over the carbon credits generated by their forests. It also clearly defines the role of provincial People's Committees as representatives of the State in exercising ownership rights over publicly owned forest areas. In addition, Decree No. 180 requires that revenues from the transfer of emission reductions and forest carbon credits be prioritized for reinvestment in forest protection and development, and for direct livelihood support to forest-dependent communities.

"Once the carbon market officially becomes operational, Lam Dong expects forest carbon credits to become a new driver of development, creating a stable source of revenue to reinvest in forest management and protection while improving the livelihoods of people who depend on forests," said Nguyen Ngoc Binh, Chairman of Nam Tay Nguyen Forestry One Member Co., Ltd.