Title: Progress on the Viet Nam Green Growth Strategy
1Progress on the Viet Nam Green Growth Strategy
- Presentation for the G20 Development Working
Group - Workshop on Inclusive Green Growth
- Ms. Nguyen Thi Dieu Trinh (DSENRE Vietnam
Ministry of Planning and Investment) - Ms. Ngo Thi Nhung (Vietnam Ministry of Finance)
- Moscow - July 2013
2Content
- Overview of the Vietnam National Green Growth
Strategy (VGGS) - Institutional framework
- Key Challenges
- Green growth financing
- Tools and Instruments
- Next Steps
3Overview of the Vietnam National Green Growth
Strategy (VGGS)
- Approved on September 25th 2012 by the Prime
Minister (decision 1393/QD-TTG) - Overall objective of the VGGS (Low carbon
Development Strategy) - Green growth, as a means to achieve a low carbon
economy and to enrich natural capital, will
become the principal direction in sustainable
economic development reduction of greenhouse gas
emissions and increased capability to absorb
greenhouse gas are gradually becoming essential
indicators in social-economic development. - 3 strategic tasks outlining the scope of the
strategy - Low Carbon Growth
- Greening of Production
- Greening of Lifestyles
- 17 solutions addressing specific Green Growth
policy directions for sectors and provinces - 10 priority actions to initiate immediate Green
Growth action - Overall supervision through the National
Committee on Climate Change which is headed by
the Prime Minister
4Participatory Process
- Prime Minister assigns the Ministry of Planning
and Investment to formulate and implement the
Vietnam National Green Growth Strategy (Notice
38/TB-VPCP dated 03/03/2011 and Decision
1393/QD-TTg dated 25/9/2012) - Phase 1
- Establish Drafting Board and Editing Board
including Ministerial Leaders and Directors from
relevant sectors (Finance, Industry and Trade,
Natural Resources and Environment, Agriculture
and Rural Development, Transportation, Science
and Technology and Construction) - Formulate the Green Growth Framework for Vietnam
with consultation with international community on
24 November 2011 - Phase 2 Building the Vietnam National Green
Growth strategy - Consultation with stakeholders (twice with
business community, 3 times with local
authorities, research institutes and social
society organization and international community
in 5, 2012) - Receiving directions from Country Top Leaders
through thematic reports and comments from
members of the National Council for Climate
Change getting recommendations from Drafting
Board and Editing Board - Assessments on low carbon development options
- Gaining experiences through site visits South
Korea, Mexico, Germany and the Netherlands - International Expert consultations (with support
from UNDP, WB, KOICA and GGGI).
5Targets
- The VGGS sets the following targets for GDP
growth and GHG emission reductions - For the year 2020
- GDP per capita is doubled compared to 2010
- Reduce energy consumption per unit of GDP by 1.5
to 2 per year - Reduce intensity of greenhouse gas emissions per
unit of GDP by 8-10 or double the target with
international support - For the year 2030
- Reduce total GHG emissions by at least 1 per
year without and 2 with international support. - Environmental degradation is addressed and
natural capital stocks have been improved while
the access and use of clean and green technology
is significantly enhanced. - In 2050, Viet Nam has mainstreamed Green
Economic Development
6Implementation
- Establish an Inter-ministerial Coordinating Board
for implementation of the Green Growth Strategy
under the National Committee on Climate Change to
direct the implementation of the green growth
strategy. - The Board will have the Deputy Prime Minister as
its Head. The Minister of Planning and Investment
will be the standing vice Head of the
Inter-ministerial Coordinating Board and four
other vice-Heads are leaders of ministries
Finance, Industry and Trade, Agriculture and
Rural Development, Natural Resources and
Environment. Inter-ministerial Coordinating Board
members include representatives of some
ministries, sectors and local authorities and
representative of some associations. - The supporting office for the ICB is located in
the Ministry of Planning and Investment. - Establishment of Climate Finance Task Force to
advise Government on policies and mechanisms
7Key Challenges
- Moving from strategy development towards
implementation - Developing mechanisms for provincial and sectoral
target setting requires tools/mechanisms - Criteria for green growth projects/ programs.
- Assess investment requirements
- Sources of finance (domestic vs. external)
- Assessing what market based mechanisms are
appropriate - Promote private sector involvement
- Work on development partner coordination
- A coordination framework has been developed but
needs to be rolled out - Development partners have converging approaches
which hampers coordination - Limited understanding at local level.
- Despite significant identified win-win potential
the upfront investment costs remain significant
for private sectors which demands new financing
mechanism. - Uncertainty on climate finance and green climate
funds limits mid to longer term commitments.
8Climate Finance in Viet Nam
- Government investment for Climate Change projects
and program of around 1 annually. - Viet Nam has received International Climate
Finance support under the form of ODA from 1993
of about 2 billion - Almost all CFs are for adaptation purpose
- Funding channels SPRCC, REDD, VEPF, CDM.
- Assessing existing expenditures on climate and
green growth will provide more detail and
accurate data - UNDP and WB supported Climate Public Expenditure
and Investment Review (has been initiated). - Improving access to climate finance
- Establish the Vietnam Climate Finance Options
Framework (inception workshop March 26 ) - In collaboration with UNEP and Frankfurt School
of Finance and Business develop green
growth/climate financing mechanisms - MPI DSENRE is a member of the Steering Committee
for the Asia Low Emission Development Strategies
Partnership Forum a partner network of the LEDS
Global Partnership. - Work with sectors and provinces to set targets
and identify policy actions and investments - Work on developing the MACC (Marginal Abatement
Cost Curve) findings into investments and policy
actions. - Develop synergies between existing work at
sectoral level (agriculture and rural
development, renewable energy, green industry
strategy)
8
9VGGS requires a broad based funding strategy
- - Engagement of private sector, as investor and
as recipient - Building on PPP modalities work on blending
CF/Green finance sources in private sector
investments in infrastructure, power generation - Develop new modalities to facilitate innovation
through subsidizing promising R D which engage
private and public sector partners. - - Use the Budget as entry point? enlarging fiscal
space to allow public investments in green
growth. - - Develop market based mechanism to generate
financing for green growth (with PMR support) - NAMA development (credited/performance based)
- A future cap and trade system (probably initiated
through sector based CO2 based emission
allocations).
10Proposed Roadmap
Phases Learning ?main-streaming-? Green Growth?
towards a GE? green Viet Nam
- 2012------------------2015------------------2020--
-----------------2025-----------------------2030--
-? 2050
GGS
Mainstream GG in (SEDP 2015-2020
Gradual sharpen targets through cap and trade,
increased and targeted env taxes,
Learning On GG, identify win-wins
GGS tasks 1. Low carbon growth 2. Greening of
production 3. Green lifestyles
Establish national REDD Program
Green Viet Nam high Green GDP and low GHG/unit
GDP
Develop MRV
Initiate innovation in Green Supply Chains
Develop financial infrastructure and market
based mechanism (new mechanism/NAMA)s
CDM
Climate finance master plan
Green public Procurement
PMR support area
Public awareness campaigns
IEC
Develop Human resources and technology for GG
11Tools and Instruments
TAX POLICIES
FINANCIAL POLICIES ON LAND
CDM POLICIES
12TAX POLICIES
CIT PROMOTE GREEN ENTERPRISES
Enterprises in the domains of high technology,
scientific research and technological development
and Enterprises operating in environmental domains
are entitled to tax exemption for no more than
four years and a 50 reduction of payable tax
amounts for no more than nine subsequent years.
are entitled to the tax rate of 10 (general tax
rate is 25) for 15 years since enterprise has
turnover.
13TAX POLICIES
IMPORT TAX Encourage enterprises to invest in
waste treatment sector
ROYALTIES Limit wasteful resource use,
especially water resources
machines, equipment, means, tools and materials
for exclusive use in collection, storage,
transportation, recycling and treatment of wastes
are entitled to tax exemption.
machines, equipment, means, tools and materials
for exclusive use in environmental observation
and analysis generation of clean or renewable
energy are entitled to tax exemption
Tax rate for exploiting groundwater is from 3 to
8 prevent environmental pollution caused by
exploiting and processing minerals
Tax rate for exploiting surface water is from 1
to 3 prevent the depletion of water resources
14Financial policies on land
List of domains are entitled to special
investment preferences Treatment of pollution
and protection of environment production of
equipment for pollution treatment and equipment
for observation and analysis of the environment.
Collection and treatment of wastewater, waste gas
and solid waste recycling or reuse of waste...
located in geographical areas with exceptionally
difficult socio-economic conditions.
are exempted from land use levy and land rents
1
1
2
2
Are reduced 50 of land use levy, land rents
amounts payable into the state budget
List of domains are entitled to special
investment preferences Manufacture of
equipment for responding to and dealing with oil
spills Manufacture of equipment for waste
treatment.
located in geographical areas with difficult
socio-economic conditions
3
3
15CDM (Clean Development Mechanism) policies
- Invest in producing certain goods in "clean
production - environmental protection way
requires large capital investments and its profit
will be lower than invest in producing other
goods. So, there should be an appropriate
mechanisms and policies to encourage investment
in this sector. - To encourage investment, support enterprises, the
Prime Minister issued Decision dated 02/7/2007
No.130/2007/QD-TTg on a number of mechanisms and
fiscal policies for projects under the clean
development mechanism (CDM). Investors that build
and implement CDM projects in Vietnam are - ) Exempt or reduce CIT
- ) Exempt or reduce land use levy, land rents in
special investment preferences domain (highest
preference) - ) Consider subsidies for products of CDM
projects in Vietnam
16Next steps
- Roll out the 10 priority programs (including the
financing) - Design the VGGS Implementation Plan, obtain
approval and roll out of the priority actions
(second half of 2013) which includes low carbon
policy instruments. - Coordinate interested Development partners based
on aid effectiveness principles. - Building capacity for Climate Finance Fask Force
- At provincial and sectoral level, awareness and
understanding remains limited? requires
additional capacity building investments. - Develop an overall climate/green growth finance
mechanism to start working towards directly
assessing the Green Climate Fund.
17- Thank you for your attention!