Taking a cue from its much larger neighbor to the north, Vietnam has outsourced deforestation to neighboring countries, according to a new study that quantified the amount of displacement resulting from restrictions on domestic logging. Like China, Vietnam has experienced a resurgence in forest cover over the past twenty years, largely as a result a forestry policies that restricted timber harvesting and encouraged the development of processing industries that turned raw log imports into finished products for export. These measures contributed to a 55 percent of Vietnam's forests between 1992 and 2005, while bolstering the country's stunning economic growth.

But the environmental benefit of the increase in Vietnam's forest cover is deceptive: it came at the expense of forests in Laos, Cambodia, and Indonesia. Authors Patrick Meyfroidt and Eric F. Lambin of the Universite Catholique de Louvain in Belgium calculate that 39 percent of Vietnam's forest regrowth between 1987 and 2006 was effectively logged in other countries. Half of the wood imports into Vietnam were illegal.

Conversion of old-growth forest for a rubber plantation in Northern Laos in January 2009. This particular project is run by a Chinese firm, but in eastern Laos Vietnamese companies are significant players in the timber trade.

"Vietnam protected its forests and developed its economy by exporting its deforestation to neighboring countries," the authors write, noting that the apparent "leakage" - an increase in deforestation in one region caused by reduction of deforestation in another - is "a major challenge in policies aimed at protecting forests and mitigating carbon emissions".

Indeed, international leakage has been a chief concern under a proposed mechanism for mitigating greenhouse gas emissions by reducing deforestation and degradation (REDD). The authors say that in Vietnam's case, where illicit deforestation in neighboring countries has fueled domestic economic growth, leakage is particularly complex. Should Vietnam be penalized for illegal forest clearing in Laos, Cambodia, and Indonesia? If so, should it also receive carbon credits for the carbon stored in the wood products it exports? Or should the carbon emissions burden ultimately fall on the consumer, likely a furniture buyer in an industrialized country?

The authors don't take a position, but they do argue that any REDD mechanism will need to somehow account for leakage.

"When policies - such as may be implemented through a REDD scheme - aimed at protecting forests lead to a decrease in harvests without accompanying measures to control wood consumption and/or increase wood production from plantations and processing efficiency, then leakage abroad will most likely occur," the authors write. "Leakage should thus be directly addressed in forest protection policies."

But there is another twist in the story for Vietnam should it seek compensation via a REDD scheme for regrowing its forests. While the country has seen a dramatic recovery in net forest cover, its primary cover has been dramatically reduced. According to the U.N. Food and Agriculture Organization Vietnam lost a staggering 78 percent of its old-growth forests between 1990 and 2005. Given that old-growth forests store more carbon than plantations and regenerating secondary forests, the emissions resulting from the transition from old to new forests have been substantial.