Oxfam- Vietnam Facsheet- Owning Adaptation

8/3/2019 Oxfam- Vietnam Facsheet- Owning Adaptation

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Owning AdaptationFactsheet: Viet Nam

Thailand

Myanmar

Cambodia

Viet Nam

Bangladesh

Introduction

Viet Nam is one o the countries likely to be most aected by climatechange. In part, this is due to its long coastline, dependence onagriculture and relatively low levels o development in rural areas. Theprojected eects include: an increase in rainall in wet seasons and adecrease during the dry season by 10 per cent or more; an increasedintensity and requency o storms and oods; and a sea level rise o around one metre by 2100.1

The eects o climate change are already evident: the average suracetemperature has risen 0.7°C since 1950; the typhoon and ood seasonsare longer than they used to be; there have been droughts in areaspreviously not vulnerable to aridity; there is more heavy rainall and

ooding; and storms are moving south.2

Policy Instruments and ImplementingMechanisms

Viet Nam ratifed the United Nations Framework Convention onClimate Change (UNFCCC) in 1994 and completed the NationalTarget Program to Respond to Climate Change (NTP-RCC) in 2008.The government sought to mainstream climate change in its Socio-Economic Development Strategy (SEDS 2011–20) and Social EconomicDevelopment Plan (SEDP 2011–15), as well as committing to a long-

term, ‘low carbon’ industrial economy, and prioritising greenhouse gasreduction in energy, orestry and agriculture. However, climate changeadaptation is only mentioned in the agriculture section o the SEDP, andis not mainstreamed as a development challenge across all sectors.

The NTP-RCC provides the institutional ramework or developing actionplans related to climate change. The Ministry o Natural Resources andEnvironment (MONRE) is the lead ministry, as well as the UNFCCCand Kyoto Protocol ocal point and the designated national authority or Clean Development Mechanism (CDM) projects. MoNRE is now dratingcriteria or climate change project selection with the aim o guiding thenext round o climate change planning in the line ministries.

Concerns about the climate-change planning process include the actthat the NTP-RCC is considered technocratic, with ew opportunitiesor input rom lower levels o government such as provinces or people’sorganisations. The ear is that the likely recommendations, such aslarge-scale inrastructure improvements, are not attuned to the localised,community-level impacts o climate change. The SEDS and SEDP willprovide or guidance in the integration o climate change at sub-nationallevels.

1 World Bank (2010), ‘The social dimensions of adaptation to climate change in Vietnam’,

http://climatechange.worldbank.org/reports/social-dimensions-adaptation-climate-change-vietnam

2 Ibid .

Challenges and issues

The overlap o unctions between and withinministries represents a signifcant challengein the disbursement o climate change unds:

• TheMinistryofFinance(MoF)is

responsible or the budget, while theMinistry o Planning and Investment (MPI)leads the development planning processand is responsible or management and

coordination o Ofcial Development Assistance (ODA);

• AstheleadagencyfortheNTP-RCC,the

work o a number o Ministry o NaturalResources and Environment (MonRE)departments now intersect with variousMPI unctions;

• Themajorityofclimatechangeprojects

are implemented by other line ministries.The MoF has highlighted concerns aboutdelegating too much responsibility to the

MoNRE, which could weaken the MoF’saccountability to stakeholders such as theNational Assembly;

• Donorsarecallingforanexpandedrole

o the NTP-RCC Standing Ofce or or the creation o a new unit that will handlelarge-scale ODA coordination.



Financing Mechanisms and Issues

Budget support

This is the government’s preerred choice, with the possible exception o MoNRE. However, donors have concerns about the possible diversiono climate change unds to other activities. This could be addressedby institutionalising a process or mainstreaming climate change intoministry-level and local development plans. A urther concern is that

budget support mechanisms are limited in their ability to attract privatesector fnancing, which is seen to be crucial to meet the fnancing targetsin particular or mitigation.

ODA support is expected or the NTP-RCC where 50 per cent o undsare expected to come rom ‘oreign capital’. The Japanese and Frenchgovernments have committed $134 million in ODA loans under a SupportProgram to Respond to Climate Change (SP-RCC). The interest on theJapanese loans, which orm the majority o unds, will be 0.25 per centover a 40-year repayment period with a 10-year grace period. The undswork in a similar way to the Poverty Reduction Support Credit whereprogress is measured through a policy matrix. The World Bank and

the Canadian International Development Agency (CIDA) are now alsoplanning additional unds or this mechanism.

Project support

Although compiled and updated into a matrix o climate change projectsby the World Bank, this modality suggests a high level o ragmentation.In addition, the level o investment, especially or adaptation projects, isrelatively low. However, project support will be essential, especially in theshort term, to encourage innovation in dierent sectors. This mode o support is also likely to be one o the ew available to civil society groups.Project support is bound to decline, however, once multi-donor unds

such as the Adaptation Fund are up and running.

Multilateral channels and multi-donor trust unds

The Trust Fund for Forests (TFF)

The national-level Trust Fund or Forests (TFF) has been consideredas a potential channel or reducing emissions rom deorestation anddegradation. It was established in 2004 with pooled unding romFinland, the Netherlands, Sweden, and Switzerland. It addresses sector priorities within agreed policy rameworks, such as the National ForestDevelopment Strategy. TFF unding appears to be on the decline as only

Finland and Switzerland have committed to support it ater 2012.

The Global Environmental Facility (GEF)

The Global Environmental Facility (GEF) is a hosting fnancingmechanism or the dierent UN conventions, including the UNFCCC.GEF provides grants or projects tackling climate change, biologicaldiversity, international waters and ozone layer depletion. The UnitedNations Development Programme (UNDP), United Nations EnvironmentProgramme (UNEP) and World Bank are traditionally the threeimplementing agencies that channel most o the GEF resources tonational partners in a wide range o projects. Increasingly, regional

development banks and other UN organisations also channel GEFfnance, as ‘executing agencies’. In Viet Nam, most GEF unding is or large technical assistance projects ocusing on mitigation, e.g. efcientenergy.

Useul lessons and

limitations o the Trust Fund

or Forests (TFF)

• TheTFFcreatesacommonapproachto

capacity building in the sector.

• Therotationofthechairensuresthatall

donors eel equal in the decision-making

process.

• Governmentanddonorproceduresare

harmonised and thereore efcient.

• Donorsstillplayamajorroleinproject

management because o the governmentmanagement board’s low capacity.

• Proceduralcompliancehasbeenweak,

exposing the work to fnancial risks.

• Projectsselectedareeithercarriedoutby

large entities (e.g. the Asian Development

Bank or World Bank) where the bulko unding is absorbed by internationalconsultants or by agencies lacking incapacity, leading to project ailure.

• Withsofewdonors,sustainabilityofthe

und is weak.

Limitations o the Global

Environmental Facility (GEF)

• Limitedtechnicalcapacityofnationalstakeholders in project design.

• Government’sinabilitytoprovide

counterpart unding, which is an oten-criticised GEF requirement.

• Slowprojectcyclesandinefciency,e.g.

because o the need to apply throughintermediate agencies.



Government trust unds

These include the Viet Nam Environmental Protection Fund (VEPF), VietNam Conservation Fund (VCF) and Forest Protection and DevelopmentFund (FPDF).

• VEPFsupportsenvironmentalprojects,mostlyintheformofsoft

loans. Current regulations require that all ODA-supported CDMcredits will accrue to this und and not to the project owners. Somestakeholders are concerned that this could limit the development o carbon fnancing and cause Viet Nam to lose out on signifcant undingopportunities in the uture.

• VCFaimstoimprovetheconservationandsustainableuseof

biodiversity resources in special-use orests (SUFs), and undssupport projects up to $200,000. The projects are considered to begenerally successul. Sustainability is a signifcant concern as SUFscannot be used or commercial purposes.

• FPDFisanon-prot,stateentitylaunchedin2008toacceptmoney

rom various sources to invest directly in activities that seek to developand protect orests, socialize orestry and raise awareness about the

need to protect orests.

Adaptation Fund (AF)

This was set up under the Kyoto Protocol to help mainstream climaterisk management into policies and plans. Initial unding is rom a levy onCDM proceeds and some bilateral donors have also started to fnance it. AF unds are made available through Multilateral Implementing Entities(MIEs) such as UNDP and the World Bank, which provide countries withindirect access to the unds and through National Implementing Entities(NIEs) which are accredited by the AF or direct access by developingcountries’ organisations. Viet Nam is keen to access climate undsthrough this new channel and is currently considering potential NIEs.

Lessons learned and recommendations

1. Adaptation strategies must target those who are most vulnerable,including poor people, women, children and minority ethnic groups.They should be participatory, ensuring that those who are mostvulnerable have a voice in planning and decision-making. Povertyreduction programmes such as Programme 135 can be used as anexample o how marginalised groups can be reached. Participationand ownership are essential to resource allocation and project

implementation.

2. From the highest level o government ofcers to village heads, rominternational and local NGOs to mass organisations (e.g. the Farmers’ Association and Women’s Union) and inormal interest groups, itis important to have trusted and accountable representatives andintermediaries. Evaluations have shown that such representatives andintermediaries increase the voice o vulnerable groups, although attimes their work can suer rom donor pressure, weak capacity and alack o sustainability.

3. It is vital that climate change unds are available or local capacity

building, rom addressing poor working conditions or village ofcials topromoting participation o the people and community in programme andproject implementation. Training should be prioritised at the communelevel so that sta and communities become trusted owners o thework. Building capacity at local level is essential because the impact o climate change varies signifcantly rom one locality to another.

Adaptation Fund: direct and

indirect access

• Theadvantagesofdirectaccessare

that it could speed up the project cycle,depending on the capacities o NIEs, andenhance country ownership, thus oeringgreater potential or alignment withnational needs and priorities. However,

there are no guarantees that the actionplans are inclusive or attuned to theneeds o the most vulnerable sectorsand local communities, and there are nomechanisms in place to hold approvedapplications accountable to programmeoutcomes.

• Themajordrawbackofindirectaccessis

that government ownership is diminished.In addition, within the UNFCCCnegotiations, developing countries appear to have lost aith in the ability o the World

Bank to manage climate unding.



www.oxam.org© Oxam International, June 2011

Oxam International is a conederation o fteen organisations working together inninety-eight countries to fnd lasting solutions to poverty and injustice.

4.ThenatureofpovertyischanginginVietNam.Localcivilsociety

groups can provide useul insights into the types o adaptationinvestments that will yield results. However, traditional ODA tosuch groups is on the decline. Future unding schemes such asthe Adaptation Fund should be reviewed soon in terms o stronger procedures or community and civil society engagement, and theselessons should be captured or the design o the new Green ClimateFund established in Cancun.

5.Leadershipcapacityshouldbebuiltatalllevels,inparticularat commune and village level. The SEDP should consider howdecentralisation, grassroots democracy and the role o the National Assembly should evolve over the next fve years in terms o developingnew and dierent orms o accountability. Transparent design, undingand implementation practices will allow the government and people’sorganisations to provide sufcient oversight. Government, massorganisations and NGOs should work together to fnd ways to improveaccountability to and leadership by vulnerable groups.

6. Viet Nam should reach out to other developing countries and together establish a position such as demanding grants – rather than loans –

or all adaptation plans. Adaptation unds should be made availableto meet the demands o decentralisation, including building localcapacities and project ownership. Communities should alreadybe developing adaptation options, and local-level planning andexperimentation should be a unding priority.

7. Climate fnance projects and programmes must be mobilisedaccording to national, sector and local socio-development plans.The government should accept only those grants that are consistentwith the principles underlying the Hanoi Core Statement on AidEectiveness.

More inormation on this issue

can be ound in Oxam’s new

briefng paper, Owning adaptation:

Country-level governance o

climate adaptation fnance. To

download your ree copy o Owningadaptation, please go to

www.oxam.org.uk/publications.

As fnancing or climate change adaptationgathers pace, it has become undamentallyimportant to identiy how it ows intodeveloping countries. This is a major opportunity to shape the governance o unding at the national level so that the needso the most vulnerable can be met. The coreissue is country-level ownership o adaptation

fnance. Consequently, providers o adaptationfnance must put developing countries in thedriver’s seat, and the countries themselvesmust exercise leadership and respond tothe needs o those most aected by climatechange. Most importantly, civil society andvulnerable communities must be able tosteer and hold accountable the way in whichadaptation fnance is used.

For more inormation on climate

fnance governance in Viet Nam,

please contact Le Minh

([email protected])

Oxfam- Vietnam Facsheet- Owning Adaptation

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