Green growth targets more pivotal than ever

The government last week ordered localities to soon implement policies and action plans on sustainable production and consumption, effective use of energy, green growth, waste classification at sources, and reuse and recycling of waste.

Localities are also requested to support enterprises in green transition, and application of high technology and sustainable and circular production models.

“New advantages are to be created for developing ecological industrial parks and clusters, boosting circular production chains, promoting the effective use of natural resources and energy, and developing recycled materials,” the government said in a document.

The Ministry of Agriculture and Environment is assigned to review, build, and improve legal documents on environmental protection and climate change response.

Smarter and more circular models will boost the nation’s economic status, Photo: Shutterstock

Vietnam, a rapidly developing country in Southeast Asia, plays an increasingly pivotal role in the global green growth discourse. The government acknowledges the necessity of balancing economic development with environmental sustainability and makes green growth a high-priority agenda.

The 13th National Congress of the Communist Party of Vietnam has identified green transformation and digital transformation as the two most crucial transitions for Vietnam to become a high-income, strong, prosperous, and happy developed nation by 2045.

Under the National Assembly’s supplemental resolution released in February on Vietnam’s 2025 socioeconomic development with a prime goal to reach an economic growth target of 8 per cent or more, the legislature demanded that for the country to achieve sustainable development coupled with green growth and to attract more resources, it is necessary to urgently build a legal corridor and incentive mechanisms for new issues, high-tech projects, large-scaled projects, new trends, digital transformation, green growth, and circular economy.

“It is needed to promptly promulgate the Law on Science, Technology, and Innovation, and the Law on Atomic Energy; and promptly build a legal framework on developing smart manufacturing, smart factory models, smart governance models, and the National Programme on Strategic Technological and Industrial Development,” the resolution stated.

Pursuing sustainability

Vietnam in 2021 committed to achieve net-zero emissions by mid-century with its own domestic resources, along with the cooperation and support of the international community both in terms of finance and technology transfer. Vietnam also joined the Global Methane Pledge supporting a goal of reducing methane emissions by 30 per cent in 2030 compared to 2020 levels.

The country has also supported the Global Coal to Clean Power Transition Statement, and committed to ceasing issuance of new permits and construction of new unabated coal-fired power generation projects.

Prime Minister Pham Minh Chinh stated that the green and circular economy must be vigorously pursued at all levels, under the general framework of the UN’s Sustainable Development Goals and the Paris Agreement.

“We need to alter the way of thinking and methodology, develop a practical approach, and shift from a passive response to a harmonious and effective combination of active response and transition towards a green economy. By doing so, we will be able to avoid inversion causing shock effects,” he said.

PM Chinh also underlined that green transition requires a suitable roadmap. “It is critical to take into account different conditions and capabilities of countries. Developed countries should continue to take the lead in realising their emission reduction commitments. They are also expected to provide financial, technological, and institutional assistance to developing countries and severely affected nations by climate change.”

He also said that it is necessary to further boost institutional reform to encourage the support and engagement of all stakeholders, particularly the business community and the people. “It is indeed crucial to promote public-private partnership projects for green growth and establish new value chains and sectors through greening industrial and agricultural production, and services.”

In need of assistance

PM Chinh stated that Vietnam looks forward to the continued and effective assistance and cooperation from other countries, international organisations and businesses, especially in the implementation of key and high-quality infrastructure projects, green economy, digital economy, circular economy, climate change response and adaptation, and smart cities for Vietnam’s sustainable development goals.

At present, Vietnam is making major efforts to carry out its commitment to achieve net-zero emissions by 2050, with its resource mobilisation plan for the country’s Just Energy Transition Partnership (JETP) already announced, and being updated.

In 2022, leaders from Vietnam and the International Partners Group (IPG) agreed on the $15.5 billion JETP to support Vietnam’s green transition. Initial contributions to the JETP include $7.75 billion in pledges from the IPG together with the Asian Development Bank (ADB) and the International Finance Corporation.

However, the World Bank has pointed out that one of the biggest challenges to building a low-carbon economy is financial resources. Vietnam needs about $368 billion for climate change actions to develop such an economy that is resilient to climate change in the period up to 2045.

According to economic experts, achieving net-zero emissions would depend on the state budget and private enterprises. Nguyen Ba Hung, principal country economist from the ADB in Vietnam, said that currently the state budget for domestic green transition remains limited. Private sector capital needs to play a larger role in developing a low-carbon economy, including through the application of innovative financial instruments. Public investment must be increased to better serve as a primer to promote private sector investment for the green economic transition.

“The government needs to provide incentives to encourage the private sector to shift from investments that are oriented towards monetary returns to those that have high impacts that create social and environmental values,” Hung said.

“To this end, Vietnam must continue to improve its capacity to develop and implement green transition policies. The legal framework for such transition needs to be ameliorated to serve as a basis for formulating support policies, creating policy breakthroughs for mobilising private investment capital,” Hung added.

In addition, he recommended that Vietnam would also need to further expand international cooperation to both learn from experience and supplement knowledge, and more effectively access external capital sources for green economic development.

“With the public debt rate expected to be controlled below 38 per cent by the end of 2024, Vietnam’s fiscal landscape can add external financial sources for low-carbon economic development, making it more favourable for businesses to access green credit from domestic commercial banks and international financial institutions,” Hung explained.