Towards a Green, Developed and Prosperous Viet Nam

Le Duc Chung, National Technical ConsultantDept. of Science, Education, Natural Resources and Environment

Ministry of Planning and Investment of Vietnam

Vietnam Green Growth Strategy

Green Inclusive Growth

Contents

Vietnam National Green Growth Strategy (VGGS), and Draft Action plan (GGAP)

Challenges and Solutions Lessons

Viet Nam is among the most vulnerable countries in the world to CC

• Viet Nam’s rate of emissions growth currently outstrips that of its GDP growth and committed to reduce the emissions.

Vietnam Climate Vulnerability Map from Francisco & Yusuf 2009

• Over the past decade, climate related disasters (particularly storms and floods) have caused an annual average cost in damages of 2-6 percent of GDP;

LEGAL & INSTITUTIONAL FRAMEWORK

• 2011-2015 Socio-economic development planRecognizes climate change as a significant threat to development and reaffirms commitments on improved natural resource and disaster risk management.

• The CC related strategies/action plans - 2011 Vietnam Climate Change Strategy (VCCS);- 2012 Vietnam Green Growth Strategy (VGGS) and the National Action Plan to Respond to Climate Change (NAPCC); - Action Plan for Green Growth (just approved of 20 Mar 2014);- The National Target Program to Respond to Climate Change (NTP-RCC) - three phases (2008-2011, 2012-2015 and 2015-beyond).

VGGS development• Prime Minister (PM) issued notice in Mar’ 2011 (38/TB-VPCP

Mar 2011) which stated that low carbon growth is part of the Green growth strategy

• First step: Strategic Framework development– A drafting and Editorial board were established which included

representatives from key Ministries (MOIT, MONRE, MARD, MOT)– Development of a strategic Framework

• Consulted with the international community by November 24 2011• Second step: Detailed Strategy

– Consultation with stakeholders (2 with private sector and 3 with local government/academia and civil society; and one with international community (May 14, 2012))

– Review by editorial board and line ministries – Feasibility assessment of low carbon options– Study tours to Korea, Mexico and Germany/Netherlands– Peer review of the strategy by Global Green Growth Institute and UNDP.

• Final Draft submitted and approved on Sep 25, 2012 by the PM’s Decision: 1393/QD-TTg.

Vietnam Green Growth StrategyA strategy to promote the process

of restructuring and improving economic institutions towards more efficient use of natural resources, improved competitiveness of the economy which will be achieved through increased investments in technological innovation, natural capital and economic instruments. This will contribute to respond to climate change, reducing poverty and ensuring sustainable economic development.

•Strategic Task 1 - Low Carbon Growth: by 2020 to reduce voluntarily the intensity of greenhouse gas emissions by 8-10% as compared to the 2010 level and 20% with additional international support; •Strategic Task 2 - Greening Production with the aim to encourage the development of green industry and green agriculture based on environmentally friendly structures, technologies and equipment;•Strategic Task 3 - Greening of Lifestyles and promoting sustainable consumption.

Stakeholder involvement in Drafting the Viet Nam Green Growth Action Plan

• Based on the assigned tasks, MPI with the support of UNDP and the international donors, in collaboration with the working group of the industry, local, business associations develops the draft and organizes consultations;

• On 21 Jun’ 2013: 1st Consultation for the initial draft with ministries and donors, development partners in Hanoi;

• Consultation for 1st revised Draft with provinces, businesses and CSOs: 1) Central region, on 9 Aug’ 2013 in Da Nang City; 2) the Central Highlands region, on 12 Aug’ 2013 in Da Lat City (Lam Dong);

• Consultation for 2nd revised Draft with provinces, businesses and CSOs: 3) East and South West on 23 Aug’ 2013 in HCM City; 4) Northern region, on 06 Sep’ 2013 in Ha Long City (Quang Ninh);

VGGS Action Plan (Draft)

12 task groups with 66 activities dealing with several aspects:

- Institutional Arrangements;

- Revision of Master plans;

- Technological Transfer- Business promotion of

enterprise development;

- Financial arrangements.

•The role of the private sector and a number of incentives to encourage their participation, Vietnam Chamber of Commerce and Industry will chair one group of activities;

•The role of government: to create a favorable legal environment and promulgate the criteria, supporting technology transfer, replicating good models;

•Setting high priority for activities of awareness raising and institutional setting up for period 2013-2015;

• Provinces, ministries, sectors to prepare GG activity plan with at least 02 indicators: Reducing energy consumption per unit of GDP and Reducing GHG emission intensity in key production sectors;

•Green Finance, Green Job introduced;•M&E: reporting regime annually.

DEMAND FOR GREEN FINANCE

Sub-sectorNo. of

optionsTotal capital

cost (mil. US$)

Total annual CO2 emission saved

(MtCO2)

Average MAC

(US$/ton CO2)

Building 3 3.33 0.17 -69.46

Construction materials 1 17.54 0.49 -14.39

Cement 3 725.00 2.61 -45.27

Textile 2 0.00 0.08 -60.28

Household 10 2,279.19 16.54 -32.32

Pulp and paper 2 0.00 0.19 -93.46

Electricity Generation 10 27,625.00 61.37 16.11

Iron and steel 3 79.50 0.22 -44.60

Road transportation 1 0.00 3.45 0.00

Total 35 30,729.56 85.12

List of GHG emission options and the result of MACC, 2020 (discount rate = 12%)

Solutions• Improve Legal Framework to mainstreaming CC/GG in Socio-

economic development plan, public financial managements, banking

• Climate Financial Mobilization:

+ Develop market based mechanism to generate financing for green growth (NAMAs, future cap and trade system);

+ Improve existing capacity and consolidate the set up and strengthening of fiduciary procedures for resource mobilization (VEPF, VGGSF…).

+ Set up Climate Finance Task Force & Climate Finance Options.• Climate Finance Utilization:

+ Green Investment Guideline for public investment in cooperation with Global Green Growth Institute.

Challenges • Resources both finance and technology: to implement Green

growth strategy, about $30 billion needed by 2020 while and the Gov’t and private sector investment limited, technology level of Vietnam is still low;

• Shortage of policies to mobilize financial sources, particularly International Climate funds to invest in CC/GG;

• Difficulties in mobilizing international and domestic investors for in terms of legal framework, policy;

• Banking sector and SMEs competencies remain issues;• Social and environmental co-benefits are taken into account;• Ensure stakeholder engagement in selecting low carbon

development options;• Training and retraining the green jobs; • Avoid the reliance on difficult to manage high data demanding

models (demystifying low carbon growth).

04/07/23

Solutions

• Establishment of Climate Finance Task force to advice the Government of Vietnam on necessary reforms needed to utilize and mobilize better financial resources available World wide.

• Vietnam Climate Public Expenditure/Investment Review (CPEIR) to assess the institutional set up and governance structures, the existing climate finance architecture and suggest appropriate directions for developments of the fiscal policy framework in Viet Nam.

Future Options for Climate/GG Finance Management

Two options for mobilizing and managing climate finance

Develop a new entity Use existing structures

Green Growth Facility

MPI (mobilizes &monitores)

Line ministries(strategic functions &

coordinating implementation

Implementing agencies(NGOs, etc)

National ClimateChange

Committee

GoverningBodies

Steering committee, Technical committee

Implementing agencies(NGOs, etc)

Trusteee.g. a bank, or aninternat.l organ.

(If it is a trust fund)

All lineministries

and relevant

governm. agencies

CF TaskForce

CB forGGS

Facilitymanager

(MPI, or a seperateorganisation)

Source: UNEP/Frankfurt School of Finance and Business

Solutions• Engagement of private sector:

+ Government investment policy and ODA will be used as a catalyst to attract/create favorable environment for private investment in CC/GG (Technology transfer/Pilot projects/Good practice);

+ Introducing on PPP modalities (infrastructure, power generation).

• Example: Green Growth Supporting Facility: 5,500,000EUR in which: Belgian contribution: 5,000,000 Euro, Vietnam contribution: 500,000 Euro

Factors for Success Use multiple channels to raise awareness and policy development at all levels—

from top leaders to the grassroots level with participatory approach from the beginning and throughout the policymaking process;

Provide direction and clarity to local governments, community and investors through the development of long-term strategies for achieving green growth and addressing climate change;

Integrate CC/GG and other climate measures into development planning; Enhance and make use of international cooperation and support; Develop appropriate flexible finance modalities which enable blending of different

funding sources and facilitate innovation; Business and local people community engagement and full participation are key for

succeed; Market-based mechanisms are important driver for GiG options.

(sources: Low Emission Development Strategies and others)

Thank you for your attention!04/07/23