Green Growth for Vietnam’s Sustainable Development
Vietnam has demonstrated its commitment to green growth through international commitments like the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change.
Agricultural Sector
* The Vietnamese government has increased organic farming areas significantly, with the area increasing by over four times to nearly 495,000 hectares compared to 2016. * The growth rate of green credit has seen positive signs, with the outstanding green credit balance increasing from VND71 trillion ($2.84 billion) in 2015 to VND564 trillion ($22.56 billion) in 2023, accounting for 4.4 per cent of the total outstanding balance of the entire economy.
Industry and Energy
| Elasticity of Electricity/GDP | Years | Value |
|---|---|---|
| 2011-2015 | 1.9 | |
| 2017-2019 | 1.25-1.3 | |
| 2020 | 1.07 |
Services
* Many types of service activities are being promoted in the green transition process, such as green shopping and consumption, green finance, and green tourism. * Green services are increasingly highlighted in environmental conservation and protection of natural landscapes. * Green finance and green credit have seen positive signs, with the outstanding green credit balance increasing from VND71 trillion ($2.84 billion) in 2015 to VND564 trillion ($22.56 billion) in 2023.
Challenges and Solutions
“Green finance and green credit are among the most promising results,” said Deputy Minister of Finance Do Thanh Trung. “However, to achieve positive and substantive results, countries need to consult on policies and coordinate actions more closely in both the short and long term, Trung said. “Repositioning the mission and role of national financial institutions in the global structure needs to be identified as a priority solution,” he added. “Reform the global financial architecture to ensure that capital reaches the right place at the right time, especially in developing countries,” emphasized Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development. Experts analysed capital demand and the development of green financial markets, identifying the main causes of the existing green finance gap and the barriers – technical, legal, and market-related – that hinder capital mobilisation for green projects.
Country-Specific Initiatives
* Ho Chi Minh City has issued a green growth plan, implemented a green financial policy, and attracted green investment through urban green bonds and green public-private partnerships. * The city has proposed many solutions, such as perfecting the legal framework, diversifying capital sources, developing green financial products, and strengthening international cooperation.
Global Context
* Thomas Jacobs, International Finance Corporation country director for Vietnam, Cambodia and Laos, said that Vietnam’s financial needs to implement the roadmap to net-zero emissions by 2040 are estimated at $368 billion. * The global green finance gap remains large due to limited international climate finance flows, especially in developing countries. * Catalytic finance is needed to raise the capacity of small- and medium-sized enterprises and address the gender gap in accessing green finance.
Barriers to Green Finance in Vietnam
* The lack of a clear classification system, limited environmental, social, and governance disclosure, and international standards that are too high compared to market capacity are barriers to the green finance market in Vietnam.
Policy Priorities
* Improving national and global financial institutions, promoting innovation in green financial products, boosting public-private partnerships, and enhancing transparency and supervision of green finance are four policy priorities proposed.
Support for Vietnam’s Green Growth
* The World Bank and the Asian Development Bank will provide loans and grants worth $400 million for three socio-economic development projects in Vietnam.
Achieving Sustainable Development
Vietnam’s green growth strategy is crucial to achieving sustainable development. The country needs to continue its efforts to increase green finance, improve the efficiency of green financial institutions, and enhance transparency and supervision of green finance. With a well-planned green growth strategy, Vietnam can attract more foreign investment, reduce greenhouse gas emissions, and achieve its sustainable development goals.
