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Effective implementation of payments for environmental services in Lao PDR

This project aims to develop policy options for implementing 'payments for environmental services' (PES) in Lao PDR to increase smallholder livelihoods and improve environmental conditions through changed land management practices.
The Government of Lao PDR has acknowledged that paying local landholders to provide environmental services can achieve environmental management goals and improving the landholders' livelihoods. Hydro-electricity suppliers and mining companies also support PES schemes.
Researchers will design a 'virtual' PES scheme as a 'proof of concept', and establish a draft set of guidelines for PES operation. The project will develop PES policy options informed by the experience gained in two pilot PES schemes and the economic analysis of the data collected during those applications. The project will consider the determination of the aggregate level of payments to be made under each scheme, the design of the mechanism to distribute the payments to environmental service producers, and the institutional structures under which PES schemes can operate.