Payments for environmental services in Lao PDR

Paying local landholders to provide environmental services (PES) has been recognised by the Government of Lao PDR as a prospective mechanism for achieving forestry, conservation and livelihood goals. However, the practicalities of how to implement PES schemes in the Lao PDR context are yet unknown. Investigating the practical application of PES is the focus of this research. The project goal is to develop PES policy options for the Government of the Lao PDR.

The Ministry of Agriculture and Forestry, in its Agricultural Master Plan 2011-2015, identified payments for environmental services (PES) schemes as a mechanism for achieving environmental management goals and improving the livelihoods of landholders. This project will investigate how a PES scheme could be designed and implemented in the Lao PDR.

PES policy options will be investigated for two case study applications. The project will develop bio-economic models that predict how different management actions affect environmental services. Economic market and nonmarket valuation will then be used to estimate the values of changed environmental services to stakeholders – which inform the level of potential payments. Other key issues to be considered are the determination of the aggregate level of payments to be made under each scheme, the design of the mechanism to be used to distribute the payments to individual environmental service producers and the institutional structures under which PES schemes can operate.


  • Dr. Phouphet Kyophilavong, University of Lao
  • Professor Jeff Bennett, Australian National University