Hanoi (VNA) - The Ministry of Agriculture andRural Development (MARD) and the World Bank (WB) - the trustee agency of theForest Carbon Partnership Facility (FCPF) - signed an Emissions ReductionPurchase Agreement (ERPA) at a ceremony on October 22. 

Under the terms, the FCPF will pay Vietnam 51.5 million USDif Vietnam fully implements its commitments, under which the north-central andcentral provinces of Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, andThua Thien-Hue are to reduce CO2 emissions by 10.3 million tonnes in the2018-2024 period.

Carolyn Turk, WB Country Director in Vietnam, said this is aresults-based payment and the basic indicators underpinning it are to reducegreenhouse gases in these provinces.

MARD must periodically report on the volume of reduced emissionsafter it is confirmed by an independent international agency, and will thenreceive the payment for investing in developing sustainable forests andforestry land.

Carolyn Turk said there has never been a deal of this size inVietnam or in Asia-Pacific, adding that it not only creates a strategic sourceof finance to invest in agriculture but also represents an importantcontribution to achieving the goals of climate change mitigation in Vietnam.

The agreement also opens up other future forms ofinternational carbon finance, including those for the private sector, and thisis only the first source of financing to be introduced in Vietnam, she noted. 

To sign the agreement, Vietnam had to meet high technicalrequirements, including the capacity to measure and report on emissions in linewith international standards and the ability to distribute and pay funds tolocal beneficiaries, she said.

Standing Deputy Minister of Agriculture and Rural DevelopmentHa Cong Tuan said the payment for results-based emissions reduction is part ofefforts to implement the reduction of greenhouse gas emissions in line with the“Reducing Emissions from Deforestation and Forest Degradation” (REDD+)international framework.

The agreement is the result of cooperation between Vietnam,the FCPF, and the WB in joint efforts to implement the Paris Agreement onclimate change, he added. 

Implementing the ERPA will create a new additional source offinance, contributing to investing in activities to reduce deforestation andforest degradation, and increase incomes for forest owners, towards a domesticand international carbon credit market, contributing to forest protection andsustainable development in the north-central and central region, Tuan said.

Vietnam is the fifth partner in the FCPF and the first inAsia-Pacific to sign an ERPA. 

Agreements on emission reduction are a new tool to promotesustainable land management at large scale and help connect countries withother climate finance sources. To date, the committed funding for the FCPF topay for forest emission reduction services has reached 1.3 billion USD.

In 2018, the FCPF recognised that Vietnam had basicallycompleted the preparatory phase to reduce greenhouse gas emissions in line withthe REDD+  international framework, which is an international initiative aimedat providing financial and technical assistance for developing countries, tohelp reduce greenhouse gas emissions and mitigate the impact of climate changevia efforts against deforestation and forest degradation.

Vietnam has participated in REDD+  since 2008 and more than 45related projects have been implemented in the country to date./.