Experts suggest that Vietnam establish Net Zero areas to reform infrastructure and capacity, thereby attracting climate finance flows and creating growth breakthroughs.
Associate Professor. Dr. Nguyen Dinh Tho – Director of the Institute of Policy, Natural Resources and Environment – raised the above proposal at the Vietnam Economic Scenarios Forum, on the afternoon of January 7. Mr. Tho’s proposal is in the context of the green economy only accounting for 2% of Vietnam’s scale.
To create a breakthrough in green growth, Mr. Tho believes that it is necessary to look at how the world moves towards a net zero emissions economy (Net Zero). With climate capital flows, rich countries pledged to finance the developing group with 100 billion USD per year from 2009 under the Parái Climate Agreement and increased to 300 billion USD after the COP29 climate conference late last year. However, Vietnam has not benefited much from this capital flow.
Associate Professor. Dr. Nguyen Dinh Tho – Director of the Institute of Policy, Natural Resources and Environment at the event. Image: Vneconomy
The Paris Agreement provides a framework for financial, technical and capacity-building support for countries. Vietnam’s capacity is currently not enough to absorb finance and technology, according to the Director of the Institute of Policy, Natural Resources and Environment.
To upgrade the economy’s infrastructure and technology, 368 billion USD is needed in the period 2022 – 2040, according to the World Bank. Zoning some Net Zero areas, for example Phu Quoc and Van Don, to implement reform and green growth, thereby absorbing climate capital flows from abroad will be more appropriate, according to Mr. Tho.
This also facilitates the use of the $15.5 billion capital flow from the Just Energy Transition Partnership (JETP), where international partners mobilize capital to help Vietnam transition to a developed economy. net emissions are zero.
Another financial tool that Vietnam can take advantage of is carbon credits. It is expected that this type of credit trading platform will be tested this year and officially operate from 2028.
Carbon credits are trading on the European compliance market at 74 EUR per ton of CO2 equivalent (about 2 million VND) and China at 95 USD (2.4 million VND).
Citing the price of this credit, Dr. Dang Huy Dong – former Deputy Minister of Planning and Investment – affirmed that green transformation will be “a jet engine” contributing to Vietnam’s ambitious double-digit growth. Nam, next to digital transformation.
“If fully identified and implemented promptly, green transformation is a very new engine for us to accelerate,” Mr. Dong said. By green transformation, digital transformation and eliminating administrative procedure barriers, he believes that Vietnam can grow in double digits in the coming period.