Vietnam has become the first country in the East Asia Pacific region to receive a results-based payment worth US$51.5 million from the World Bank for verified emissions reductions, the bank said in a press release on Thursday.

The payment was made to Vietnam for cutting 10.3 million metric tons of carbon emissions between February 1, 2018 and December 31, 2019, as part of the country’s efforts to reduce deforestation and forest degradation, commonly known as REDD+, and to enhance carbon stored in forests through reforestation and afforestation.

It is the largest single payment to date having been made by the bank’s Forest Carbon Partnership Facility (FCPF) for verified and high integrity carbon credits. 

The payment will benefit 70,055 forest owners and 1,356 communities near the forest, to be distributed according to a robust benefit sharing plan designed through a consultative, participatory, and transparent process.

“The success of this REDD+ program brings Vietnam closer to delivering on our ambitious Nationally Determined Contributions under the Paris Agreement, while protecting areas of vital importance to biodiversity conservation,” said Vietnamese Minister of Agriculture and Rural Development Le Minh Hoan.

Vietnam is already generating emission reductions in excess of the volume contracted with the FCPF, and can sell the credits to third-party buyers through bilateral agreements or carbon markets. 

The Southeast Asian country can also use the excess credits to fulfill its Nationally Determined Contributions or retire them, which is a net climate benefit.

“This landmark payment marks another step for Vietnam toward joining the global carbon credit market and opens a new opportunity to finance the country’s ambitious climate commitments and targets,” said World Bank country director for Vietnam Carolyn Turk.

The program generated 16.2 million verified emission reductions between 2018 and 2019, which is 5.9 million more than the 10.3 million contracted volume in the Emission Reduction Payment Agreement. 

The World Bank has issued a call option notice to buy an additional one million emission reductions beyond the contracted amount.

Vietnam’s emission reduction program protects most of the country’s tropical forests, covering 3.1 million of the 5.1 million hectares of land in the program area. 

These forests are of significant ecological importance, encompassing five internationally recognized conservation corridors. 

The area is also home to 12 percent of Vietnam’s population, including 13 ethnic minority groups and many forest-dependent communities. Almost one-third of the people in the region live below the national poverty line. 

Through improved forest management, investment in the forest sector, and the enhancement of agricultural policies, the program is increasing both the extent and quality of forest coverage in collaboration with local communities.

The FCPF is a global partnership of governments, businesses, civil society, and indigenous peoples' organizations focused on reducing emissions from deforestation and forest degradation, forest carbon stock conservation, the sustainable management of forests, and the enhancement of forest carbon stocks in developing countries, activities commonly referred to as REDD+. 

Launched in 2008, the FCPF has worked with 47 developing countries across Africa, Asia, and Latin America and the Caribbean, along with 17 donors that have made contributions and commitments totaling $1.3 billion.

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