Draft Green Growth Strategy as a LEDS and its implications for clean energy development in Vietnam

By Nguyen Manh Hai, Central Institute for Economic Management (CIEM) Hanoi, Vietnam
Asia Clean Energy Forum (ACEF) 4-8 June 2012 Manila, Philippines

Vietnamese Economy:: GDP growth by sectors, 2006–2010

Source: CIEM (2010).

GDP structure by sectors, 2000-2010 (%)

Source: Adopted from Le X.B.(2011).

Why Green Vietnam ?

Growth

Strategy

for

Vietnam has reached relatively impressive socio-economic achievements over the last decades, however, there are signs of slowing-down growths recently. The economic development has become increasingly unsustainable: Environmental pollution, loss of natural resources and their inefficient use, increasing energy demand vs. supply constraints. Economic restructuring toward industrialisation and sustainability. This calls for a Green Growth Strategy (GGS) to be developed in Vietnam. GGS for the period 2011-2020 and vision to 2050: Up to now, 7th draft of GGS. The Strategy is expected to be issued in June, 2012

Concept/definition of green growth in Vietnam’s GGS

“Green growth is the process of restructuring the economic activities and infrastructure to obtain better results from investments in natural, human and financial resources, while reducing greenhouse gas emissions, exploiting and using less natural resources, creating less waste and reducing the social inequality” - Green growth does not conflict to economic growth target. - GGS is an integrated part of Agenda 21 program on sustainable development of Vietnam. - GGS is closely related to the National Strategy for Climate change which was issued in December, 2011

Objectives of GGS: LEDS’s contents

Overall objectives: Green growth as a mean to achieve the low carbon economy will become the dominant trend in sustainable economic development which:

+ Requires mitigation of GHG emissions and
+ Increased capability to capture GHG ---gradually becoming essential indicators in socioeconomic development.

Major targeted indicators

By 2020: i) GDP per capita at least doubled compared to 2010; ii) Energy consumption per GDP unit reduced by 11.5%/year; GHG intensity per unit of GDP reduced by 1015% compared to BAU scenario of 2010.
By 2030: i) Reaches upper-middle income economy status; ii) Natural resources are sustainably used and processed intensively; iii) GHG emissions are reduced by at least 1.5-2% per year; iv) The environment is restored and improved based on basic standards for cleaning and greening By 2050: Green energy and technologies are commonly utilised.

Strategic tasks in GGS

A. Reduce GHG intensity of the economy (per unit of GDP) while promoting the use of clean and renewable energy
B. Greening existing production processes. C. Greening lifestyle consumption patterns and promoting sustainable

----- GGS is in fact largely served as a LEDS in

Vietnam. Clean energy development is supposed to be one of the main sollutions for achieving green growth objectives.

Challenges ahead

Energy consumption per GDP unit of Vietnam is 1.5-1.7 times higher than that of Thailand and Malaysia and about 2 times higher than the world average. (low energy use effciency, energy wasteful utilisation etc…) Energy consumption growth is about double that of economic growth. Increasingly dependent on imported energies (e.g. coal would be imported by 2015). Implementation of the Law on economical and efficient use of energy (June, 2010)

Mobilising resources for GGS

A potential budget line for GGS: 2% of budget expenditure for 2020, of which 1% for improvement of energy and renewable energy use efficiency.
Adequate central and local state budget for GGS. In addition, encourage investment from financial institutions and businesses. Market-based mechanism and financial instruments will also be encouraged: taxes, charges, concessional loans and other incentives. Establish “Green Growth Fund”

Thank you very much for your attention !

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