As published in Viet Nam Investment Review on 5 February 2022

More people worldwide are beginning to understand the climate catastrophe on our doorsteps, and governments and businesses are attempting to set goals to help avert it. Caitlin Wiesen, resident representative of the United Nations Development Programme in Vietnam, looks at the need for a robust system of climate governance in order to meet the targets.

The UN Secretary-General António Guterres’s statement at the conclusion of COP26 in Glasgow stressed that while the world “reaffirms resolve towards the 1.5-degree goal, we are still knocking on the door of a climate catastrophe”.

The United Nations Development Programme (UNDP) commends the Vietnamese government and Prime Minister Pham Minh Chinh for the highly commendable commitments made in Glasgow that include setting the national target of net zero emissions by 2050 and joining a global pledge to halt and reverse forest loss and land degradation by 2030.

These targets are ambitious and achievable with the continued strong leadership of the Party and the government combined with support and contributions from the business community and the people of Vietnam. The country’s success in meeting its climate targets in the years ahead will require a robust system of climate governance, streamlined policies, effective planning, and budgeting processes, as well as catalysing the climate finance needed for transformation. First and foremost, high impact and transformational outcomes will require effective horizontal and vertical coordination at all levels of the government with active participation and clearly delineated targets and responsibilities distributed among key ministries, sectors, and local authorities.

We welcome the most recent establishment of the new National Steering Committee on Climate Change chaired by the prime minister with the key mandates to implement Vietnam’s commitments announced at COP26 and which consists of all key ministers in planning and investment, finance, and foreign affairs as well as from sectors of major contributors to greenhouse gas emissions such as energy, transport, industry, agriculture, and construction, along with the sectors of climate change adaptation. It is very encouraging that the National Steering Committee has met and requested all ministries, cities and provinces to formulate action plans to deliver their new climate targets.

Equally important is that all key strategies and plans must be updated so that they are aligned with the newly-announced climate targets, especially the commitment of net zero emissions by 2050. The Ministry of Natural Resources and Environment has been updating to include the new targets in the new Climate Change Strategy for the 2021-2030 period, with a vision until 2050, and the Ministry of Industry and Trade is revising drafts of the Power Development Plan VIII.

Engaging the business community

Businesses and the private sector must also be engaged to play an active role in expanding green investments. As the prime minister highlighted at the Annual Summit on Industrial Revolution 4.0 in early December, Vietnam needs to simultaneously achieve the dual goals of becoming an upper middle-income country while ensuring green, inclusive, and sustainable growth.

This will only be possible if private sector investment shifts away from extractive and polluting sectors and moves towards carbon-neutral opportunities that will also accelerate climate resilience, biodiversity protection, nature-based solutions, and sustainable development.

Export growth is vitally important to sustaining economic growth, especially among middle- income countries like Vietnam. Vietnamese businesses and their products are likely to face new environmental barriers for exporting such as border carbon taxes.

It is therefore critical that the government assess and analyse potential impacts and support domestic businesses to better understand, prepare for, and restructure their investments towards green, resilient development to reduce future risks and seize the opportunities of market access for sustainably produced products.

Equally, research by the UNDP and others show that businesses and the private sector have tens of billions of US dollars available and ready to invest in renewable energy and energy efficiency in Vietnam. Further government reforms and extension of the national grid are needed to further unleash such investment. The government plays a vital role in creating policy frameworks and attractive markets to direct capital towards green business and products.

Leveraging climate finance

Next, Vietnam would do well to adopt a climate finance plan and strategic programmes that will enable more effective coordination for mobilising large-scale climate finance and delivering impactful outcomes. Such plans and programmes would enable an effective combination of public finance, private investment, official development assistance, and loans to support strategic areas that require large upfront investments, such as infrastructure for renewable energy that is needed for the energy sector’s transition away from dependence on coal and fossil fuels, and for the electrification of transport.

Developing and translating plans into effective budgets for action is critical to delivering Vietnam’s climate commitments. The Second Climate Public Expenditure and Investment Review for the 2016-2020 period, by the Ministry of Planning and Investment and the UNDP, provided a review of climate change expenditures and budgets of six ministries, 28 provinces and one centrally-managed city, and shows the link between budget allocation and actual expenditures set by policy frameworks such as climate change and green growth strategies.

Such systematic tracking and reporting on climate change expenditure is useful for the strengthening of climate change responsiveness of public finance management, adjusting climate change policies, promoting climate-related interventions, and raising climate finance from different resources. It is vitally important that estimated financial needs for transitioning to a green future are embedded in the direction of the state budget allocation and integrated into the 5-year socioeconomic development plans of all levels in cities and provinces.

Obtaining expertise

Finally, international support in terms of know-how, technology transfer, and climate finance is essential for catalysing change and transformation. The international community has made strong commitments and stands ready to support the government in mobilising international resources to obtain the expertise, knowledge, and technology needed to accelerate Vietnam’s green transition.

The Informal Ambassador Group on Development and Cooperation (IAGDC) has been discussing priorities and aligning their countries’ support to Vietnam for reaching its climate ambitions from COP26. In December, the group sent a joint letter to the prime minister to commit with an improved offer of financial and technical assistance to support Vietnam in delivering its new climate targets. The UNDP, together with the embassies of the United Kingdom and Italy, is facilitating a technical working group to provide technical support to this IAGDC.

Vietnam’s ambitions announced at COP26 once again reaffirms its pivotal and exemplary contribution to multilateral cooperation and climate action. Despite all the challenges Vietnam has faced as an emerging economy, and the extraordinary impacts of COVID-19 and climate change, Vietnam stands firm in adopting ambitious targets and climate action to keep the global climate goal of maintaining warming within 1.5 degrees Celsius by the end of the century.

The UNDP looks forward to working closely with the government and all partners to strengthen and synergise our cooperation for building a green, sustainable, and resilient Vietnam where no-one is left behind.