Who will buy ? Potential buyers for mangrove environmental services in Vietnam Results from a case study in

• When it comes to mangroves in Vietnam, the payment mechanism for forest environmental services (PFES) can be applied to 8 types of environmental services: (1) carbon absorption and storage; (2) sedimentation and sludge reduction; (3) coastal erosion protection; (4) wave shielding; (5) supplying clean water, filtering heavy metals and pollutants; (6) spawning grounds provision; (7) landscape – tourism; and (8) food and ingredient provision. • There are 20 potential buyer groups that could pay for mangrove environment services in Hai Phong. These include: companies focused on dredging, sand mining, clean water, energy, banking, petroleum, entertainment, tourism, shipbuilding, air transport, and producers of agricultural, forestry and aquatic products; fishing and sea ports; those involved in the coastal economic zone; industries focused on mining and metallurgy, transportation and thermal power; dike management groups; and residential communities. While some buyer groups have expressed strong commitment to make payments (e.g. banks, energy companies, those producing agricultural, forestry and aquatic products), more research is needed to understand how willing other parties are to participate in paying for environmental services. • In Hai Phong, two of these environmental services – (1) carbon absorption and storage and (5) clean water provision and heavy metal filtration – have the largest number of potential buyers. • To develop a mechanism for payment for environmental services, four key questions must be answered: (1) Which services are being paid for? (2) Who is paying? (3) How much is the payment? and (4) What is the revenue and expenditure mechanism? Answering these will need long-term, thorough research, particularly demonstrating stakeholders use of environmental services. Based on the pre-feasibility study in 2018–2019, this policy summary answers the first two questions. The last two will be answered in another policy brief, once the study is complete in 2020. CIFOR infobriefs provide concise, accurate, peer-reviewed information on current topics in forest research


Background
The ecological, environmental and economic importance of mangroves has been widely recognized worldwide and proven by domestic and international scientists based on data of various scales and ecological regions. In its recent report, the Global Adaptation Commission emphasizes that benefits from mangrove protection and regeneration (e.g. from fisheries, forestry, ecological landscapes and risk reduction) can be worth 10 times as much as the cost. Nowadays, due to mangroves' rapid decline, their protection and development has become one of Vietnam's top priorities. Vietnam has established regulations on paying for two of the environment services mangroves provide -aquaculture services and the provision of spawning grounds. However, implementing the required payment mechanism is challenging, and the enormous potential represented by the other environmental services mangroves provide has not been taken into account. This report assesses the potential to expand the mangrove environmental service mechanism to new environmental services and buyers. It forms part of the USAID Sustainable Wetlands Reduction and Adaptation Project (SWAMP) funded by USAID, and the Global Comparative Study on REDD+ (GCS-REDD+) funded by NORAD. The report aims to provide input so that revenue from the PFES policy can be increased in future.

Method
The study was conducted in Hai Phong in 2018-2019. Hai Phong was selected as a research site for three main reasons, firstly because the area of mangroves in Hai Phong is decreasing rapidly, and the city government is strongly committed to protecting and expanding it. Secondly, because Hai Phong is the largest seaport in Northern Vietnam, and has potential to develop a marine economy superior to that of neighboring provinces. In Hai Phong, a wide variety of stakeholders use forest environmental services, including those working in ecotourism, aquaculture production, fishing ports and seaports, transportation and mining. Thirdly, because many buyer groups in Hai Phong are already voluntarily paying for forest environmental services to protect mangroves, like Germany's Stadtwerke Münster Energy, Standard Charter Bank and local businesses. This demonstrates both buyer interest and potential mangrove services.
The study also aligns with Hai Phong's policies around sustainable economic development, particularly their priority to increase ecological conservation. This provides advantages in terms of political commitment, as well as legal corridors for supporting the formation of the payment mechanism for mangrove environment services.
To identify new services and potential buyers of the environmental services provided by mangroves, the research team used a combination of different methods.
Secondary material research. Firstly, we reviewed and analyzed research papers on the role and potential of mangroves and mangrove environment services, as well as reports by government agencies, businesses, civil society organizations on economic lessons and experiences in developing payment mechanisms for domestic and foreign forest environmental services.
In-depth interviews. We conducted 50 stakeholder interviews (see Table 1) to understand their views on: • the role, importance and contribution of mangroves to each industry and stakeholder; • identifying buyers of each environmental service that mangroves provide in Hai Phong; • the willingness of parties to pay for the protection and development of mangroves; • opportunities and challenges in protecting and developing mangroves; • opportunities and challenges in implementing payments for mangrove environmental services.

Area (ha)
Year Pham et al. (2019) summarize many studies on mangrove environmental service valuation across Vietnam during 1990-2019 to show the average value of environmental services provided by mangrove forests. Nationally, mangroves add significant value to the economy -up to USD 1,436.82/ha for a single environmental service ( Figure 2). However, Hai Phong's mangroves are not yet being valued in this way, which many experts feel is a missed opportunity. To ensure these mangrove environmental services are being properly valued will require adequate mangrove protection and investment.

Mangrove environmental services and their potential users in Hai Phong
The study results show that the payment mechanism for forest environmental services (PFES) for mangroves in Vietnam can be applied to 8 main types of environmental services. There are different groups of potential buyers for various types of services. However, many potential buyers currently benefit from (i) carbon sequestration and (ii) clean water supply and heavy metal purification, as environmental   Figure 4). Over 20 industry groups and users of mangrove environmental services could be potential buyers under the PFES mechanism in Hai Phong. Figure 5 shows how these buyer groups are scattered throughout Hai Phong. • Mangrove deforestation generates 0.02-0.12 Pg of carbon each year -accounting for about 10% of global deforestation emissions, even though mangroves only cover 0.7% of total tropical forest area (Donato et al. 2011).

Sedimentation and sludge reduction
• The Hai Phong channel has an actual depth of 7-7.2 m, and could therefore accommodate large tonnage vessels to handle cargo. Navigational channel depth, however, currently stands at just 6.5 m. If not dredged, this could greatly impact many port enterprises, shipping lines and logistic businesses, affecting the circulation of goods and economic advantage of Vietnamese seaports (Hoang 2017). According to expert calculations, 10 cm of sediment is equivalent to a reduction of 300 tons of cargo. A ship which used to be able to handle 10,000 tons of goods at the port, can now handle just 8,000 tons, losing around 20% of its capacity (Hoang 2017). The Vietnam Maritime Administration reported that up to 1.1 million m 3 of navigable channels required dredging in 2015 (Nguyen 2015). Hai Phong has to pay large sums of money to sediment dredging companies annually.
• Mangroves, especially populations of pioneering plants with thick densities, have a special root system that makes sediment settle faster, prevents waves, and obstructs sediment deposits. Beck et al. (2018) have also shown that mangroves have a distinct impact on shoreline erosion; bank erosion can increase to 29% in areas without mangroves. With the ability to hold soils, new planting and protection of mangroves can help reduce sediment and sludge volumes, decreasing sediment dredging costs and the associated economic risks.

Coastal erosion prevention
• Coastal erosion is mainly influenced by shoreline shapes, wave direction, wave energy, flow velocity and tidal amplitude. When coastal erosion occurs, many economic sectors (e.g. fishing ports, sea ports, defense ports) as well as related parties are affected. When coastal erosion occurs, for example, resorts, hotels and ports are affected by infrastructure work subsidence, which costs a lot to repair. Subsidence also causes land loss for households and companies in the agroforestry business. Likewise, many industries are exacerbating coastal erosion through their activities (e.g. sand mining, port construction), reducing mangrove area and increasing the speed of shoreline erosion through loss of the vegetative belt perimeter.
• The contribution of mangroves to reducing erosion tends to be quite local. Where erosion forces are weak, mangroves provide resistance to erosion. Where erosion forces are stronger, mangroves can significantly help to reduce the rate of erosion. However, where coastal wave energy is really strong, mangroves have little or no effect in preventing coastal erosion.

Wave shielding
Mangroves can drastically reduce the height and energy of waves during high tide. The height of waves decreases sharply from 75% to 85% when passing through mangrove, from 1.3 m to 0.2-0.3 m (Phan 2011). When typhoon no. 7 (29 September 2005) hit the shores of Thai Thuy, Thai Binh, over 5 km of the national dike embankment in Thai Do commune was unaffected. Meanwhile, the remaining 650 m of dike, located in Tan Boi hamlet with no mangroves to protect it, was seriously eroded (Le, Phan and Truong 2018). Mangroves must be considered as a critical element of sea dike construction, to which reasonable budget is allocated for their maintenance and protection.
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Services Summary of mangroves' roles and benefits
5. Supplying clean water, filtering heavy metals and pollutants As a transitional zone between sea and mainland, mangroves collect impurities through the circulation of tide, river and surface runoff (Tam and Wong 1993;Tam and Wong 1996). It is estimated that between 75-90% of the total continuous flow of matter accumulates in the coastal environment (Berner and Raiswell 1983). Mangroves have been recorded as being a repository for contaminants, including nitrogen (Tam et al. 1995), inorganic and organic pollutants (Maskaoui et al. 2002). Because mangroves are capable of effectively trapping suspended waste matter in water columns (Furukawa et al. 1997) and because mangrove sediment attracts both organic matter and metals, significant volumes of pollutants can accumulate within mangroves (Harbison 1986;Tam and Wong 2000;Marchand et al. 2011). As a result, coastal areas can act as filters, capturing material released by rivers, oceans and the atmosphere for a relatively long time (Berner 1984;Kjerfve and Magill 1989).

Providing spawning grounds
The loss of mangroves has significantly reduced the number of plankton and benthic food for aquatic species, leading to a decline in the productivity of shrimp farms: productivity in 1980 was 200-250 kg/ha/ season, yet this had decreased to just 70-80 kg/ha/season by 2001 (MARD 2010). It is estimated that from 1 ha of mangrove, farmers were able to harvest 700-1,000 kg of aquatic products; recently they can harvest just 5% of that amount (MARD 2010).

Landscapetourism
Hai Phong's mangroves provide the landscape from which tourism companies can operate their various services.

Providing food and ingredients
In Hai Phong, numerous local businesses make wine, beverage and honey products with raw materials sourced directly from mangroves.

Discussions and recommendations
The pre-feasibility study results show the potential and feasibility of developing the PFES mechanism for mangroves in Hai Phong; mangroves provide environmental services to many stakeholders. The government of Hai Phong is politically committed to both economic development and environmental protection. However, our pre-feasibility study results also show that more complete, accurate and scientific studies are needed for each type of environmental service, in particular to provide scientific evidence on the benefits of mangrove environmental services, potential buyers' willingness to pay, revenue and expenditure mechanisms, and monitoring and evaluation mechanisms to assess the impact of PFES on each type of environmental service.
With our limited time and budget, CIFOR selected 2 out of the 8 potential environment services for further analysis: clean water and heavy metal filtration, and carbon payment. This is because: (i) these two services have the largest number of potential buyers; (ii) payment collection for service users like ports can be based on the port fee collection system, so it is more feasible than other services; (iii) a carbon payment mechanism is being piloted in Vietnam under Decree 156, and its expansion to mangroves will make a positive contribution to PFES carbon policy. The carbon market and interest in carbon credits are also longestablished, meaning potential buyers are likely to have deeper knowledge and stronger interest; and (iv) these two environmental services can be applied to both mangroves and terrestrial forests, with potential for successful replication effects.
In order to develop a mechanism for payment for these mangrove environmental services, four key questions must be answered: (1) Which services are being paid for?
(2) Who is paying? (3) How much is the payment? and (4) What is the revenue and expenditure mechanism? Answering these four questions will require long-term and thorough research, particularly demonstrating the parties' relationships to the use of forest environmental services. Based on the pre-feasibility study results in 2018-2019, this policy summary answers the first two questions. The last two questions will be answered through another policy brief after the study is completed by the end of 2020.
So far, finding and securing budget for mangrove protection has been challenging. Even when the potential service is identified, it is not easy to prove the relationship between service and user, nor operate the payment mechanism.