Viet Nam Green Growth Strategy

Dr. Pham Hoang MaiDirector General

Dept. of Science, Education, Natural Resources and Environment

Ministry of Planning and Investment of Vietnam

VIETNAM and MDGs

• Vietnam has completed three MDGs: (i) to eradicate extreme poverty and hunger, (ii) to achieve universal primary education, (iii) to promote gender equality and empower women.

• There is big possibility that Vietnam complete MDG 4 and MDG 5 of reducing Child mortality rates and improving maternal health before 2015.

• Three other MDGs including (i) to combat HIV/AIDS, Malaria and Other Diseases, (ii) to ensure environmental sustainability, (iii) global partnership for development have created positive outcome.

CHALLENGESEconomic Challenges:

Existing Growth model of Vietnam based on:• Extensive exploitation of natural resources;• Investment from Government (including ODA) and foreign

direct investment;• Low competitiveness;

Social and Environmental Challenges:• Many MDGs have been achieved but still fragile;• Low quality of life due to pollution, decreasing traditional

cultural values;• New challenges such as climate change, widening the gap

between developed and developing countries. New Way of Growth – GREEN GROWTH.

VIETNAM GREEN GROWTH• Vietnam Green Growth Strategy:

To promote the process of restructuring and improving economic institutions towards more efficient use of natural resources, improved competitiveness of the economy. This will contribute to respond to climate change, reducing poverty and ensuring sustainable economic development.

Vietnam Green Growth Strategy

• Strategic Task 1 of 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 3: Greening of Lifestyles and promoting sustainable consumption.

MACC OPTIONS

Sub-sector

Cost of CO2 emission reduction (US$/ton CO2)

<=0 <=5 <=10 <=20

No. of option

Amount of emission reduction

(MtCO2)

No. of option

Amount of emission reduction

(MtCO2)

No. of option

Amount of emission reduction

(MtCO2)

No. of option

Amount of emission reduction

(MtCO2)

Building 3 0.17 3 0.17 3 0.17 3 0.17

Construction material 1 0.49 1 0.49 1 0.49 1 0.49

Cement 3 2.61 3 2.61 3 2.61 3 2.61Textile 2 0.08 2 0.08 2 0.08 2 0.08

Household 8 14.80 9 16.22 9 16.22 9 16.22

Pulp and paper 2 0.19 2 0.19 2 0.19 2 0.19

Electricity Gen. 0 0 1 15.49 3 17.96 9 61.23

Iron and steel 2 0.09 3 0.22 3 0.22 3 0.22Road transportation 1 3.45 1 3.45 1 3.45 1 3.45

Total 22 21.88 25 38.92 27 41.38 33 84.65

CO2 emission reduction potential of sub-sectors/options by cost 2020

KEY SOLLUTIONS

• Review and adjust sectoral and regional master plans towards limiting the development of economic sectors that generate significant environmental pollution and degradation of natural resources, while creating favourable conditions for the development of new green production sectors;

• Create legal frameworks supporting Green Growth;

• Development of sustainable infrastructure for: transportation, energy, irrigation and urban works

• Promote clean and green technological innovation

• Sustainable Urbanization• Develop the new rural model with lifestyles in

harmony with environment• Promoting sustainable consumption and

building green lifestyles• Human Resource Development

KEY SOLLUTIONS

VGGS Action Plan

Total: 12 group of activities with 66 activities dealing with several aspects:

- Institutional arrangements;

- Revision of Master plans;

- Technological transfer;

- Promotion business involvements;

- Financial arrangements.

Challenges • Total economic costs of CC are about 2-6% GDP or $3-9

billions (ADB 2009) and $1-2,5 billion will be needed for

adaptation;

• To implement Green growth strategy, about $30 billion will be

needed by 2020;

• Shortage of policies to mobilize financial sources, particularly

International Climate funds;

• Difficulties in mobilizing international and domestic investors.

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%)

THE ROLE OF GOVERNMENT

• Revise development strategy toward scale down industries which heavily based on the exploitation and consumption of natural resources;

• Create social security system to maintain the MDGs achievements;

• Set up legal framework for Green Growth;• Promote the participation of private sector;• Facilitate the transfer of modern technology;• Implement pilot Green projects and disseminate good

practices.

Forms of Climate Change Finance 1. Public:

• Government investment for Climate Change projects and programs including Green Growth (around $1 billion annually):

- National Targeted Programs (NTP-RCC, Energy Efficiency, Reforestation);

- Projects and programs directly link to Climate Change and Green Growth.

• Current expenditure for research, capacity building projects

• ODA: from 1993 of about $12 billion under the forms of CC related projects & programs and budget support;

• Others: REDD+, Vietnam Environment Protection Fund, CDM.

2. Non-Public: Private Investment under the forms of FDI, Equity, Local Investment etc.

PUBLIC EXPENDITURE & INVESTMENT FOR 5 MINISTRIES & 2 NTP (2010-2013)

ODA & CLIMATE FINANCE

04/19/23

Solutions• Legal Framework: Formulating Action plans/ Priority Projects for

Climate Change & Green Growth strategies.• 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…) and formulating national institutions eligible for direct access to funds.

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

+ Formulating Adaptation Prioritization Framework & Green Investment Guidelines for public investment.

Solutions

• Engagement of private sector:

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

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