Deforestation and forest degradation have continued over the last decades despite all the attention and efforts to implement Sustainable Forest Management (SFM). One of the reasons for the continuation of unsustainable practices is the undervaluation of the multi-functionality of forests. Most non-timber forest goods and services are largely not capturing their value because of lack of markets or other compensation mechanisms. One of the main challenges faced by many countries in stopping forest degradation and deforestation — and in enhancing the contribution of forests to development — is the need to increase the competitiveness of SFM and generate more investment in and revenues from forests.

Forests have a vitally important role to play in providing alternative sources of energy and mitigating climate change. The concept of Reducing Emissions from Deforestation and Forest Degradation (REDD) is yet another recognition of forests’ role in climate-change mitigation. REDD, irrespective of timber quality or accessibility, increases the potential value of natural forest-land and thus, could tempt both public and private sectors to invest in areas previously considered not commercially viable. REDD could make an important contribution to SFM by valuing the maintained Carbon stocks of a sustainably managed forest, thus increasing the opportunity cost of converting forest-lands into agricultural lands.

Under the Climate Change Convention and Kyoto Protocol various financing instruments have been developed for climate change adaptation and mitigation measures that include projects on forest management, afforestation and deforestation. The evolving policy discussions within UNFCCC to establish a financing mechanism for Reducing Emissions from Deforestation and Degradation (REDD) have induced high expectations for its role as a financing tool for SFM and forest conservation.

Tropical forested countries are stepping up the fight to combat climate change via a pioneering new initiative called the UN-REDD Programme. This programme will support these countries as part of an international move to include REDD in new and more comprehensive UN climate change arrangements to kick-in post 2012. Furthermore it is aimed at tipping the economic balance in favor of sustain-able management of forests so that their formidable economic, environmental and social goods and services benefit countries, communities and forest users while also contributing to important reductions in greenhouse gas emissions. Vietnam is among the 14 countries which were selected within the UN-REDD Programme and has already started two pilots, one in Lam Dong province and another one in Son La province. Envisaged steps including the elaboration or resilient national developing strategies, establishing robust systems for monitoring, assessment, reporting and verification of forest cover and Carbon stocks, and building necessary capabilities-with support to others to follow in due course.