Laos

Project title Sector SCP practice
AEMAS Utilities sector Product design for sustainability
Cook Stoves Business and products for the poor, Creating Demand for Better Products
Eat Greener Food and beverage Creating Demand for Better Products, Sustainable Supply Chain Management
Efficient Air Conditioners / ASEAN SHINE Electrical equipment industry Eco-labels, Product design for sustainability
LP: Handle with Care Service industry Eco-labels, Environmental Management Systems
SPIN-VCL Textile and leather industry Product design for sustainability
Sustainable Freight and Logistics Sustainable Supply Chain Management
Sustainable Rattan Wood-based industry Cleaner Production, Product design for sustainability

Focal point

Mr.Khamphanh NANTHAVONG 
Director General
Pollution Control Department
Ministry of Natural Resources and Environment (MONRE)

SWITCH-Asia RPSC

Under SWITCH-Asia’s Regional Policy Support Component, UNEP is set to implement a range of coordinated SCP activities in Lao PDR. For this policy support, UNEP’s main partner in Lao PDR is the Ministry of Natural Resources and Environment (MNRE). The following areas have been identified as priority for capacity building and policy support on SCP after a comprehensive needs’ analysis in the country. All of these areas are covered with specific activities and outputs from the SWITCH-Asia RPSC.

Cross cutting activities to build foundation of SCP policy in Lao PDR

  • In order to establish the technical foundation of a national SCP program, a report on SCP in the Lao context will be produced.  Elements of this can be used for the other work  and activities, such as curriculum development. 
  • Organise a multi-stakeholder national roundtable in order to engage key stakeholders and to recognize existing activities and policies relevant to SCP. 
  • Undertake a legal review to integrate SCP and resource efficiency in national policy and legislation.

Education and Training

  • A variety of needs exist, ranging from specific technical needs to more general ones around conceptualization of development and green growth. The latter we can consider as ‘social learning’.
  • Development, integration and delivery of course on SCP at the National University.
  • Development, integration and delivery of a one semester course on sustainable tourism into vocational training
  • SCP training material for the Poverty and Environment Initiative training program for the national assembly.
  • Workshop for SMEs and provincial officials on cleaner production in the steel recycling sector.

Statistics and indicators for SCP - building the evidence base for policy making

Given the special characteristics of Lao PDR (rich natural resource base, rapidly changing urban areas and industrial sector, high priority for poverty eradication and the provision of basic services), a set of SCP indicators that reflect its policy needs will need to be developed.  Three key areas will likely include: (1) alignment with SCP related SDGs, (2) contribution towards MONRE’s reporting requirements and the next NSEDP and (3) special emphasis on the extraction sector and industry SMEs SCP training material for the Poverty and Environment Initiative training program for the national assembly. 

Status of SCP policy framework

Lao does not have one overarching framework policy or national action plan on SCP. Instead, SCP-related objectives are integrated into several national policies and regulations, such as the National Socio-Economic Development Plan (NSEDP), the national policy on sustainable hydropower development and the Lao National Adaptation Programme of Action to Climate Change (NAPA).

The Seventh Five-year National Socio-Economic Development Plan (2011-2015)

The seventh National Plan has a clear focus on rapid economic growth and poverty reduction. The country has set formal targets for growth in per capita GDP. Industrialization and modernization are also identified as broadly desirable pathways.

Comprehensive framework laws or a national action plan on ‘SCP’ do not exist. However, a number of national policy agenda items relevant to SCP can be identified. First, the NSEDP expresses support for establishing clean development and carbon credit mechanisms, as well as support for improved urban environmental quality. Second, the Plan identifies a need for regulations to be established to give implementing force to the Environment Law. Third, the notion that economy is embedded within ecosystems which will undergo dangerous and undesired changes (e.g. floods, drought) – thus requiring ecosystem assessment, management and restoration – is on the Lao agenda, through strategic planning efforts such as the Lao National Adaptation Programme of Action to Climate Change (NAPA).

In 2012, UNEP also completed the National Environmental Assessment for Laos, which also provides an overview of key national environmental policies; pages 57-60 of this document contain a policy overview. It is available online here

In addition, the following two frameworks provide further basis for SCP in the country, however further information is needed on to specifically related current progress on SCP within these and other national policy frameworks. Specifically, further information is needed on national policies, programmes or initiatives that support sustainable consumption in the country as well, among government as a consumer, businesses and consumer households as well.

  • National Environment Five-Year Action Plan (NEAP) (2011-15)
  • Consumer Protection Law (30 June 2010) weblink with presentation from Government found here.
  • Eco-labelling: The Laos Organic Standard gives producers, traders and consumers a common definition of organic products. More information here.

A cleaner production project organized by UNIDO ran from 2005 to 2009 and involved almost twenty demonstration projects with a focus on textiles and food processing. The project noted an ‘obvious urgent need for productivity/product quality improvements’ in Lao but at the same time argued that most producers are motivated mainly by financial ‘bottom line’ considerations, rather than possibilities for reducing their environmental footprint.

A Cleaner Production office now exists under the Ministry of Industry and Commerce (MIC). An ongoing issue is that the domestic advisory services industry for ‘clean production’ is still small despite increased training of local professionals. The MIC report pointed to the important role customer requirements could play, expressed for example through demands for third-party environmental and social certification

The Lao Land Law requires that Master Plans be created for ‘urban’ areas (generally with populations greater than 10,000). Such plans are typically at 1:20,000 or finer scale and specify either the current situation or future plans, subject to rules for permitted land uses, such as maximum building height and coefficients of land use. Master Plans are approved by different authorities depending on the size of the urban area. For example, the Prime Minister’s Office is the approver of Master Plans for the five major cities of Vientiane, Luang Prabang, Pakse, Savannakhet, and Thakhek; the Ministry of Communications, Transport, Post and Construction (MCTPC) approves plans for the next tier down in size.

Resource consumption and production

Main Resource Consumption and Resource Efficiency Indicators (2010)

Population (millions) 6.396
GDP (billion USD) 3.988
GDP is in USD exchange rate based on year 2005 and deflated.
Source: UNSD database.
Subject Area Total Per person Per USD$ of GDP
Domestic Material Consumption, DMC
(tonnes, tonnes per capita, kgr per 1USD$)
48,284,226 7.55 12.11
GHG emissions
(kilotonnes,tonnes per capita, kgr per 1USD$)
38,034 5.95 9.54
Total Primary Energy Supply, TPES
(Petajoules, Gigajoules per capita, Megajoules per 1USD$)
135.37 21.17 33.94
Water Use
(Trillion litres, Kilolitres per capita, Litres per 1USD$)
3.49 546.12 875.83
Subject Area Indicator
Population density 2015 (UNESA 2012 revision), population per sq.km 30
GDP per capita (USD), 2013 WB 1,660.7
HDI Rank (2013) UNDP 0.569
Arable land (hectares per person) WB 2012 0.22
Forest cover in % (2010), UNSTATS 68
Material intensity (2010) UNEP 12.11
Per-capita energy use (kg of oil equivalent per capita) 2011, WB NA
Energy intensity (total primary energy consumption per USD of GDP) 2011, EIA 21,536.58
GHG intensity (2010) UNEP 9.54
CO2 emissions (metric tone per capita), 2010, WB 0.3
Number of Middle Class consumers % (2010), ADB 24
Number of people with income < 2USD/day (PPP, USD, %), 2010, ADB 76

Trends in Resource Consumption and Resource Efficiency Indicators (1970-2010)

DE: Domestic Extraction
MI: Material Intensity of the economy
MF: Material Footprint
All other abbreviations explained in the table above

In panel a) we can see that growth in the Lao PDR’s GDP was much faster than the other overview indicators until 2004, when DMC began to grow much more rapidly, followed by population, then GHG emissions (which display intermittent spikes). No TPES value was available for 1970 therefore no indexed value was derived. Growth in DE in panel b) is quite slow until 2003, at which point there is a very large increase in DE of metal ores which quadruples total DE in less than a decade, displacing biomass as the main component of DE. Given Lao PDR’s population of 6.4 million in 2010, the total increase in DE from metal ores is less than 30 million tonnes, which could be accounted for by a very few (or even one) major metallic mine commencing operation. Panel c) indicates that the MF of Lao society is much less than would indicated by DE. Panels d) and e) show MF and EF giving much lower estimates of the material and energy use of Lao society relative to conventional measures. The difference is particularly pronounced when comparing the ongoing increase in TPES per capita since 2000 against the stagnation in EF per capita over the same period. The sharp increase in DMC from 2004 seen in panel a) is reflected in a rapid deterioration (increase) seen from this time for both MI and adjusted MI in panel d). No consistent trend can be identified for GHGs as against GHGF in panel f).

(Source: UNEP CSIRO Indicators for a Resource Efficient and Green Asia and the Pacific, 2015). 

Key references relevant to SCP

  • UN UNDAF Action Plan in Lao PDR, 2012-2015
  • Lao Environment Outlook UNEP 2012, Vientiane, Lao
  • UNDP, 2010a. Accelerating Progress Towards the MDGs. UNDP, Vientiane
  • Ministry of Planning and Investment, 2010. Draft 7th National Socio-economic Development Plan (2011-2015)
  • Ministry of Industry and Commerce, 2009. Highlight 2005-2009 (Annual Report 2009). Cleaner Production Program in Lao PDR. Ministry of Industry and Commerce, Vientiane
  • SWITCH-Asia RPSC SCP Policy Needs Assessment, 2011 

UNEP's relevant activities

The information in the country profiles herein have been obtained through research with firsthand and secondhand sources. The information presented herein cannot be considered as official policy of governments or other official bodies. The SWITCH-Asia Programme cannot be held responsible for the content of the sites to which it provides links or for the availability of servers or links. Information is being continuously updated in order to maintain an up to date country profile. If you would like to contribute information for this profile or have any further comments, please send an email to: SWITCH-PSC@unep.org

Status

Introduction

The definition of SMEs in Laos is stated in the SME Promotion and Development and National Productivity Committee (SMEPDC) Decree No.42/PM/2004 on the Promotion and Development of Small and Medium sized Enterprises:[1]

Small enterprises are those employing up to 19 employees, or having total assets not exceeding 250 million LAK (EUR 28,091.46) or gaining an annual turnover not exceeding 450 million LAK (EUR 50,564.63); and (2) Medium enterprise are those employing 20 to 99 employees, or having total assets not exceeding 1,200 million LAK (EUR 134,839.03), or gaining an annual turnover not exceeding 1,000 million LAK (EUR 114,741.75).[2]

95% of the Lao economy is composed of micro, small, and medium sized enterprises: large enterprises (5%); medium enterprises (16%); small enterprises (58%); and micro enterprises (21%).[3] They are the backbone of economic activity and the government has made many efforts to create a business-enabling environment, including SME policy development and addressing SME technical and financial issues. 

According to latest data in 2013, there were 178,557 enterprises of which 158,915 (89.9%) were small and medium- sized enterprises that provided 63% of jobs.[4]

Of SMEs in urban areas, 68% did work related to trade, wholesaling, retailing, car and motorcycle repair work, 12.5% in industrial processing, and 11.7% in services.[5] Two thirds of SMEs are family-owned.


[1] Lao People's Democratic Republic National Assembly. (2011). Law on the Promotion of Small and Medium Sized Enterprises. Vientiane: Lao People's Democratic Republic. Retrieved from http://www.laoofficialgazette.gov.la/kcfinder/upload/files/Law%20on%20the%20%20Promotion%20of%20%20Small%20and%20Medium%20Sized%20Enterprises.pdf

[2] VIXATHEP, S. (2014). Entrepreneurship, Government Policy and Performance of SMEs in Laos. GSICS Working Paper SeriesNo. 28. Retrieved from http://www.research.kobe-u.ac.jp/gsics-publication/gwps/2014-28.pdf

[3]  Sisounonth, O. and Kongmanila, X. (2014). A Study on SME Development in Laos: The Case of Commerce Sector in Vientiane Capital. International Journal of Economics and Empirical Research. 2(6), 246- 255. Retrieved from http://tesdo.org/shared/upload/pdf/papers/IJEER,%202_6_,%20246-255.pdf

[4]  Bihler, T., & Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). (2014). SME in Laos. Retrieved from https://www.giz.de/en/downloads/giz2014-en-sme-laos.pdf

[5] Philavanh, S. (2016). Small and Medium-Sized Enterprises (SMEs) Difficulties and Challenges in Lao PDR. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2842492

Laos has a nascent financial system

  • Laos’ financial system is still developing, and although the banking sector has grown rapidly in the last 20 years, green financing is still not a priority for Laotian SMEs.
  • Most SMEs in Laos are still financed by themselves or through peers, rather than from commercial banks, partially because lending is based on collateral.
  • In 2014 less than 20% of SMEs could obtain long-term credit, which is a big hindrance to SME growth. 

Relevant policies and regulations:

  • Ministry of Industry and Commerce (Department of SME Promotion) Law No.011/NA/2011 on Small and Medium sized Enterprises Promotion Department of Industry and Commerce of provinces, municipalities, and Industry and Commerce Office of districts
  • SME Promotion and Development and National Productivity Committee (SMEPDC) Decree No.42/PM/2004
  • National SME Development Plan 2011–2015

Challenges

  • Poor infrastructure
  • Lack of regulatory and legal framework
  • Limited technology and high energy costs
  • Lack of financial knowledge and book keeping 
  • Lack of technology use (such as computer use) in SMEs in rural areas
  • Lack of skilled workers
  • Limited access to long term credit
  • Few SMEs are registered
  • Limited credit information
  • High costs of licenses and fees
  • Lack of competition framework
  • Limited marketing and market access 

Main institutions providing Green Finance

  • Lao Development Bank
  • Bank of Lao PDR
  • Krungsri Ayudhya Bank
  • ACLEDA Bank Lao
  • ST Bank
  • Saigon Thuong Tin Bank Lao Co., Ltd. (Sacombank Lao)
  • Lao China Bank
  • CIMB Thai Bank (Vientiane Branch)
  • International Finance Corporation (IFC)
  • Asian Development Bank (ADB)
  • Ekphatthana Microfinance Institution (EMI)
  • Agricultural Promotion Bank

 

In January 2016 CIMB THAI Bank - Vientiane Branch provided USD 8 million equivalent Lao Kip loan to ACLEDA Bank Lao Ltd. to help finance micro, small and medium enterprises (MSMEs), including those in the agricultural sector. The local currency loan is fully guaranteed by IFC, a member of the World Bank Group.

Small and Medium Enterprise Access to Finance Project a World Bank project that includes a EUR 9.44 million grant and a EUR 9.44 million credit from the International Development Association, and at least EUR 3.77 million from the International Finance Corporation in risk sharing funds. The project will provide long-term credit to small enterprises and help them to grow and create more jobs.[1]

Krungsri Ayudhya Bank:

Offers three different types of SME loans, as well as SME services.

Krungsri SME Loan 3x Credit Line: grants credit line up to three times, with a long term repayment of up to 7 years.

Tun Jai Loan:

  • Loan amount: THB 300,000 - 12,000,000
  • Annual interest rate: Monthly Recurring Revenue (MRR) + 2.25%
  • Term: 3 – 7 years
  • Collateral: Krungsi Savings Account
  • Front-end fee of up to 2% of approved loan (minimum THB 20,000)

Prompt Ka Yai Loan:

  • Loan amount: THB 300,000 - 12,000,000
  • Annual interest rate: not more than MRR + 2.25%
  • Term: 3 – 7 years
  • Collateral: Land and construction: factory, residence (house, apt), commercial buildings.
  • Front-end fee of up to 2% of approved loan (minimum THB 20,000)

Kern-roi Loan:

  • Loan amount: From THB 200,000 - 12,000,000
  • Term: Up to 10 years
  • Annual interest rate: Not more than MRR+2.0%
  •  Collateral: Land and construction: factory, residence (house, apt), commercial buildings.
  • Front-end fee of up to 2% of approved loan (minimum of THB 20,000)

 

Agricultural Promotion Bank:

Provides loans to individual, business or enterprise with a small, medium, and big scale projects in areas such as crop planting, animal Raising, handicraft, production trading, construction, and other services. 

  • Loan amount: Minimum of 15 million (depending on the scale of the project)
  • Annual interest rate: 13%-17%
  • Term of Repayment: from 1 year onward (Based on the Loan purpose and capacity to pay)
  • Service charge: 0.5% of the approved loan amount

 

Sacombank allows SMEs to borrow at reasonable interest rates and loans can be extended to a maximum of five years.[2]

Lao Development Bank and the government established a SME fund in 2013 to provide loans to micro and small enterprises. Loans were mostly to farmers, retailers, traders, and landlords.

  • Loan amount: 14 billion LAK
  • Term: 5 years
  • Annual interest rate: 5%

Ekphatthana Microfinance Institution (EMI) is the first licensed microfinance institution to operate in Lao PDR under the government’s Microfinance regulations. EMI provides micro financing to poor and middle-income households without access to financial services. As of December 31, 2015, EMI has over 78,000 savers, 8,000 active borrowers.  


[1] World Bank. (2014). Small Firms, Hydropower and Mining Sectors in Lao PDR to Benefit from New World Bank Group Financing. Retrieved from http://www.worldbank.org/en/news/press-release/2014/08/14/small-firms-hydropower-and-mining-sectors-in-lao-pdr-to-benefit-from-new-wbg-financing

[2] Establishment and Deveplopment. (2017). Sacombank.com.la. Retrieved from https://www.sacombank.com.la/la/en/CorporateProfile/Pages/Establishment-and-Deveplopment.aspx

Status and policies

GHG emissions data

2015 total territorial GHG emissions[1]* (excluding land use change and forestry): 2.3 MtCO2

2015 territorial GHG emissions per capita: 0.3 tCO2/person

2014 CO2 consumption emissions:[2] 6.5 MtCO2

*GHG territorial emissions are Carbon dioxide emissions from the use of coal, oil and gas (combustion and industrial processes), the process of gas flaring and the manufacture of cement.


[1] CO2 Emissions | Global Carbon Atlas. (2016). Globalcarbonatlas.org. Retrieved from www.globalcarbonatlas.org/en/CO2-emissions&nbsp;

[2] Carbon dioxide emissions occurring anywhere in the world attributed to the country in which goods and services are consumed. For more information see: Section 2.1.2, The global carbon budget 1959-2015, Le Quéré et al. 2016. 

GDP

2016 GDP: EUR 12.41 billion[1]

GDP composition by sector:[2]

Agriculture: 21.3%
Industry: 32.5%
Services: 39.4% 

Agricultural products: sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; cassava (manioc, tapioca), water buffalo, pigs, cattle, poultry. 

Industry sub-sectors: Mining, agricultural processing, hydropower, timber/wood processing, construction, garments, tourism 

Timber and Logging:

Timber and logging is a large source of GHG emissions. Timber is used for hydropower dam construction, roads, and mining. It contributes to deforestation, land degradation, and soil erosion.


[1] The World Factbook — Central Intelligence Agency. (2017). Cia.gov. Retrieved 3 August 2017, from https://www.cia.gov/library/publications/the-world-factbook/geos/la.html

[2] Ibid

Climate change policies

National policies

  1. Climate Change and Disaster Law (under development)
  2. National Action Plan on Climate Change 2013- 2020
  3. National Strategy on Climate Change (NSCC) 2010
  4. Laos PDR National Adaptation Program of Action (NAPA) 2009
  5. National Environmental Strategy to 2020
  6. National Forestry Strategy to the Year 2020 2005
  7. National Biodiversity Strategy and Action Plan (NBSAP) 2016 – 2025 

International mitigation targets

UNFCCC ratified in 1995
The Kyoto Protocol ratified in 2003
Paris Agreement ratified in 2016

 

Mitigation targets

Lao PDR’s INDC to the UNFCCC:[1]

  • To increase forest cover to 70% of land area (i.e. to 16.58 million hectares) by 2020, reducing 60,000 to 69,000 ktCO2e.
  •  Increase the share of small-scale renewable energy to 30% of total energy consumption by 2025, reducing 1,468,000 ktCO2e. 
  • To make electricity available to 90% of households in rural area by the year 2020, reducing 63 ktCO2/pa. 
  • Build large-scale (>15 MW) hydropower plants with a total capacity of 5,500 MW by 2020, and an additional 20,000 MW of hydroelectric capacity is planned for after 2020. This would deliver an estimated 16,284 ktCO2 per annum from 2020-2030.

Lao PDR estimates that USD 1.4 billion is needed for mitigation and USD 0.97 billion is needed for adaptation policies and action is needed.

Government financing for climate change related initiatives

State funds related to climate change:

Environmental Protection Fund (EPF): funded by ADB through the Environment and Social Program Loan (EUR 5.38 million), and EUR 3.77 million from the World Bank through the Lao Environmental and Social Project (LEnS).[2]

Forestry and Forest Resource Development Fund (FRDF): established in 2005, under the Ministry of Agriculture and Forestry (MAF), receives funds from ADB, FAO, and national sources.

In 2012, LAO PDR climate change expenditure was EUR 11.80 million[3]


[1] INDCs - Intended Nationally Determined ContributionsUnfccc.int. 2017. Retrieved from http://unfccc.int/focus/indc_portal/items/8766.php

Lao People’s Democratic Republic. (2015). Intended Nationally Determined Contribution Retrieved from http://www4.unfccc.int/submissions/INDC/Published%20Documents/Laos/1/Lao%20PDR%20INDC.pdf 

[2] Buric, B., & Gorin, P. (2011). Overview of climate change financing mechanisms in Cambodia, Lao PDR, Thailand, and Vietnam. FAO draft study.

[3] Lao People’s Democratic Republic. (2015). Intended Nationally Determined Contribution Retrieved from http://www4.unfccc.int/submissions/INDC/Published%20Documents/Laos/1/Lao%20PDR%20INDC.pdf 

Climate change adaptation efforts

The National Adaptation Program of Action (2009)[1]

Four main focuses of climate adaptation:

  • Agriculture,
  • Forestry
  • Water and water resources
  • Public health

Objectives to 2020:

1. Improve the safety of Lao society by mitigating the negative impacts of disasters on the lives, economies and properties of the people and Government.

 2. Ensure that all disaster-affected people get adequate help and support on time, and that their livelihoods recover as fast as possible.

3. Ensure that Lao PDR has sufficient regulations and laws to mitigate the impacts of disasters on an individuals, communities, society and the economy of the country.

4. Ensure that knowledge about disaster management and environmental protection is in line with, and integrated into, all development issues and that general public awareness is raised.

Laos’ INDC adaptation component (as also stated in their NSCC):

Adaptation priorities:

  1. Climate resilient agriculture
  2. Promote resilience in forest ecosystems and managing forests for adaptation
  3. Strengthening water resource information systems, and watershed and wetlands management
  4. Increasing resilience of transport and urban development
  5. Enhancing resilience of public health infrastructure and services

[1] Lao People’s Democratic Republic 2009. National Adaptation Programme of Action to Climate Change http://unfccc.int/resource/docs/napa/laos01.pdf

Climate change impacts

With around 70% of the Lao population relying on subsistence agriculture for their livelihoods.[1] climate change impacts such as unpredictable rains and extended dry seasons, will have a significant impact on the lives of people across the country. Laos also has relatively low adaptive capacities. Laos has a population of 7 million[2] and around 22% are living below the poverty line. Many poor people are also food insecure; this population will be disproportionately affected by climate change. Laos also has 40% of forest cover, and many Laotians rely on forest resources for their livelihoods. Emissions from agriculture, land use change and forestry (LULUCF) make up the majority of GHG emissions. 

Main climate change impacts include: 

  • Rising temperature
  • Changes in precipitation
  • Droughts
  • Floods
  • Typhoons
  • Erosion
  • Biodiversity loss  

[1] Lao People’s Democratic Republic. (2015). Intended Nationally Determined Contribution.Retrieved from www4.unfccc.int/submissions/INDC/Published%20Documents/Laos/1/Lao%20PDR%20INDC.pdf

[2] The World Factbook — Central Intelligence Agency. (2017). Cia.gov. Retrieved 3 August 2017, from https://www.cia.gov/library/publications/the-world-factbook/geos/la.html

Economic, social, and environmental impacts of climate change

Agriculture:

  • 70% of the population is dependent on the agriculture sector for their livelihoods. With a high number of smallholder farmers and high reliance on agriculture for subsistence, climate change is threatening food security in Laos.
  • 6 out of 17 provinces are at high risk from drought, adversely affecting water resources; Water shortages and groundwater depletion will reduce agricultural productivity.[1]
  • Rain-fed and irrigated rice will be heat stressed in March, April and May in the Lower Mekong River Basin area where 50% of days will experience 35oC temperatures. Heat stress will also affect livestock.[2]
  • Lowland rain-fed rice production will decrease with only slight temperature rises (1-2 degrees C) and with flooding events.
  • Floods also impacts water resources and agricultural production, as it uproots plants and seedlings and damages croplands. 

Infrastructure:

  • 14 out of 17 provinces have experienced floods for the past 20 years.
  • Floods adversely impact housing and industrial activities by damaging roads, buildings, and interrupting electricity supply.
  • The flooding in 2005 caused widespread disruption and the estimated economic costs were EUR 22 million.
  • The industry sector is highly dependent on natural resources, making these sectors more vulnerable to climate change. 

Small and Medium-sized Enterprises (SMEs)

  • Extreme climatic events like floods and storms damage infrastructure and facilities.
  • Interruptions to business transactions.
  • Transport and logistics routes are damaged or disrupted.
  • Heightened price and market volatility.
  • Impacts on employees and consumers – lack of access to basic goods and services.
  • Lack of water and energy availability affect operations and productions.
  • Health issues from heat waves and increase of disease will cause decreases in labor and work production.
  • Interruptions and damage to transport infrastructure also negatively impact the tourism industry. 

Health:

  •  There will be an increase of water-borne and vector diseases related to rainfall changes and rises in temperature from climate change.                                         

Hydropower:

  • Laos’ electricity grid relies heavily on hydropower. Laos also plans to export hydroelectricity to neighboring countries such as Cambodia, Viet Nam, Thailand and Singapore.
  • Power generation will be affected by changes in water resources and heat waves or periods of droughts.

Ecosystem services:

  • Temperature increase has caused dry seasons and more intense wet season (flooding) which negatively affects the Lower Mekong Basin, which regulates climate and water resources in the region
  • Decreases in soil moisture and quality  
  • Landslides from intense rains destroys natural habitats

[1] Lao People’s Democratic Republic. (2015). Intended Nationally Determined Contribution.Retrieved from www4.unfccc.int/submissions/INDC/Published%20Documents/Laos/1/Lao%20PDR%20INDC.pdf

[2] Climate change vulnerability assessment for Beung Kiat Ngong Ramsar site, Lao PDR. (2015). IUCN. Retrieved from https://www.iucn.org/content/climate-change-vulnerability-assessment-beung-kiat-ngong-ramsar-site-lao-pdr

International cooperation on climate change

Status: 2017. Inclusive of grants and loans; not an exhaustible list.

Partner

No. of Projects

Program/ Areas of focus

Funding Amount

Duration

Funding Sources

Global Environment Facility

 

56

Climate Change, Biodiversity, Land degradation, Persistent Organic Pollutants

 

 

€292.28

Million

Ongoing

GEF Trust Fund, Least Developed Countries Fund

USAID Global Climate Change Program

4

Adaptation, clean energy, sustainable landscapes

€14.17

Million

 

Ongoing

USAID

UN REDD Program: REDD+

 

7

 

Reducing deforestation and degradation

€43.92 million

 

6/2008 –12/2020

JICA, Germany (BMZ), EU, Norway-NORAD, US, World Bank

Asian Development Bank (ADB)

 

 

2

Biodiversity corridors in the Lao PDR, community scale up of REDD+ activities and readiness

€12.09 million

1/2017 – 6/2020

 

Strategic Climate Fund

 

Sustainable Natural Resource Management and Productivity Enhancement Project

€661,188

2010-2017

Japan Special Fund

Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH. (GIZ)

 

 

 

3

Integrated nature conservation and sustainable resource management in the Hin Nam No region

€6.33 Million

2013- 2018

 

German Federal Ministry for Economic Cooperation and Development (BMZ)

 

Climate protection through avoided deforestation (CliPAD)

€3.6 Million

2014-2018

Promotion of climate related environmental education

€4 Million

2014-2017

International Climate Initiative (IKI)

1

Forest carbon stocks for REDD+, climate change adaptation

€2.5 Million

10/2011 – 04/2018

German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) 

Climate Investment Funds

1

Protecting Forests for Sustainable Ecosystem Services

 

€12.56

Million (expected co-financing of $40 million)

2016 – Ongoing

ADB, Climate Investment Funds