National reforestation, regional deforestation? : cross-border trade and forest transition in Vietnam

English. Norwegian University of Life Sciences - School of Economics and Business

English. MSc Thesis - Following the existing research on logging in Laos and Cambodia and wood import to Vietnam, I have become interested in one geographical zone in particular: the borderland between Vietnam and its two neighbouring countries. By studying forest cover and land use change of Vietnamese provinces in the region, I hope to learn more about the impact of trade, plantations and logging on deforestation, reforestation, and the leakage of climate change mitigation projects. In this thesis, I will try to answer the following questions:1)Do Vietnamese provinces that border Laos or Cambodia experience more or less deforestation than provinces that do not border these countries; and do they experience more or less reforestation?2)What are the factors that contribute to deforestation and reforestation in the Vietnamese borderland?In order to answer the research questions, the study is designed into five parts. The preceding part one discussed main topics of the thesis, in which I will elaborate upon my research questions. Part two will provide a background to the issues through a review of the existing literature on the topics of forest transition and leakage, followed by some facts about the forest transition process in Vietnam. In addition, I will discuss emerging problems of Vietnam’s forest protection policies, as well as their possible relevance to forest cover change in Laos and Cambodia. The literature review will be linked to statistical analysis by several hypotheses, which will be tested with two dependent variables: deforestation and reforestation. The panel dataset, explanatory variables, and testing method will be discussed in part three. In this part, several solutions are suggested in order to overcome endogeneity and unobserved effect problems. Regression results in part four will include a discussion of new findings based on the tests of hypotheses. In conclusion, part five sum up the issues and findings.

English. The Indochina borderlands are characterized by dense forests, which constitute the natural habitat of many animal and plant species. They are the homeland of several ethnic minority groups. The region’s forests are not only subject to conservation policies, but also to various national security concerns. In contemporary Indochina, climate change mitigation projects have brought new opportunities for the three neighbouring countries, Vietnam, Laos and Cambodia, to receive financial support to protect their forests and develop their economies. REDD+ projects are among these climate change mitigation projects. In order to make such projects feasible, scientists working on climate change issues have intensively studied the possibility of leakage, and possible solutions for this problem.Leakage may happen at a regional level in the Indochina borderlands. Since the mid-1990s, Vietnam has experienced forest transition; decades of net deforestation were followed by a period of net reforestation. The country’s wood industry has also experienced significant growth. Vietnam confidently proclaims that it is capable of supplying most of its timber demand itself, thanks to good policies in protecting natural forests and planting trees in deforested areas. But reports by NGOs claim that Vietnam has met its timber needs largely by importing illegal wood from Laos and Cambodia. Using a panel dataset for 60 provincial units over the period 2005-2011, this study reports regression results using Tobit models, in an attempt to determine whether the Vietnamese borderland with Laos and Cambodia is actually deforesting (reducing its forests) or reforesting (increasing its forests). A number of factors has been controlled for in the statistical analysis, such as border checkpoint density, population, provincial transparency level, wood production, etc. These factors have a significant impact on either deforestation, or on reforestation, or on both. The main conclusion of this study is that the Vietnamese borderland is subject to less reforestation than other regions in the country and that there is evidence of leakage. When it comes to reforestation and the prevention of deforestation, other regions are more successful. Leakage not only takes place inside the country (i.e., from the coastal area to the borderland), but also happens on a larger, transnational scale, affecting Laos and Cambodia. Legal and illegal wood is imported into Vietnam from Laos and Cambodia, but is then transported further inland, where it is used in the wood processing industries. Most of these industries are located in other regions than the Vietnamese borderland.