Vietnam’s is seeking investment in clean energy as part of its plan to develop a carbon market for the purpose of meeting net zero emissions by 2050.
Speaking at a recent meeting in HCM City, Karl Van den Bossche, Belgian ambassador to Vietnam, said the country has potential to draw investment in clean energy which plays a key role in achieving net zero emissions.
"With the ambition to achieve net-zero emissions, the cost of Vietnam’s decarbonization roadmap by 2040 is estimated at a hefty 368 billion USD," he said.
According to the World Bank, it will cost the country 6.8% of its GDP every year to achieve it. It mainly covers the cost of renewable energy and managing the transition away from coal, which could cost $64 billion for the 2022-2040 period, it said.
Vietnam has approved a national action plan for green growth that tries to reduce greenhouse gas emissions as a ratio of GDP.
These emissions have increased rapidly in the past three decades in direct proportion to the country’s growth, experts said.
Vietnam has a high emission intensity per GDP unit compared to other countries in Southeast Asia of around 0.35kg CO2 per 1 USD.
According to a recent report by the Ministry of Natural Resources and Environment, total emissions will reach 928 million tonnes of CO2 equivalent by 2030 and 1.5 billion tonnes by 2050 in a moderate scenario.
Experts proposed Vietnam promote the use of carbon pricing instruments with a focus on developing a carbon market.
Vietnam has many advantages if it attempts to develop such a market since it has 14.7 million hectares of forests, Le Xuan Nghia said, the former vice chairman of the National Financial Supervisory Commission.
The country has a legal framework and policies ready to set up a carbon market such as the 2020 Law on Environmental Protection.
The Ministry of Natural Resources and Environment will operate a carbon credit trading system to manage and monitor the market.
It will start trialing the carbon credit market in 2025, and then to establish a carbon trade exchange in 2028.
A carbon market allows countries to sell to or buy from countries that emit more or less than their promised target.
Vietnam is estimated to be able to sell 57 million carbon credits to international organizations annually at 5 USD each.