WB: Reducing carbon intensity is a must to achieve Vietnam's goal of becoming a high-income country

WVR - Vietnam is suffering from negative impacts of climate change, especially on the country's development. The country is currently facing important questions on how to combat climate change.

On July 14, in Hanoi, the World Bank (WB) held an event to announce the Vietnam Country Climate and Development Report.

Vietnam is one of the most vulnerable country to climate change. (Photo: Trung Duong)
Vietnam is among the most vulnerable nations to climate change impacts. (Photo: Trung Duong)

Vietnam is the most vulnerable to climate change impacts

The World Bank reported that after more than two decades of steady growth, Vietnam has set an ambitious goal of reaching high-income status by 2045.

According to theSocio-Economic Development Strategy in the 2021-2030 period, the country's economic transformation will greatly depend on better management of natural capital - the extensive stocks of agricultural, forest, and mineral resources that have helped drive development in Vietnam.

However, with a coastline stretching over 3,200 km, low-lying cities, and river delta regions, Vietnam is one of the most vulnerable countries in the world to climate change.

According to the WB, these risks will severely affect urban areas and industrial zones, especially in and around the economic center of Ho Chi Minh City. Thus, large parts of Vietnam’s economy will also face uncertainty.

The Mekong Delta is home to 18 million people, which has been and is still being affected by climate change; over 70% of the Mekong Delta could be underwater within the next 80 years.

Climate change impacts – mainly higher and more variable temperatures and sea level rise – are already disrupting economic activity and undermining growth.

Initial calculations show that Vietnam lost 10 billion USD in 2020, equivalent to 3.2% of gross domestic product (GDP) due to the impacts of climate change. Without proper adaptation and mitigation measures, it is estimated that climate change will cost Vietnam about 12-14.5% of GDP per year by 2050, and approximately 1 million people could be driven into extreme poverty by 2030.

WB believes that, as the fast-growing economy is gradually making Vietnam into a high-income country, Vietnam also needs to reduce its carbon intensity. Vietnam’s contribution to total global greenhouse gas (GHG) emissions is relatively small, at only 0.8%, and the country’s emissions per capita are less than half of the emissions per capita of countries in the Organization for Economic Cooperation and Development (OECD).

However, Vietnam's rapid economic growth has quadrupled the GHG emissions per capita this century, from 0.79 tons of carbon dioxide (CO2) in 2000 to 3.81 tons in 2018, and emissions are increasing at the highest rate in the world.

The pollution related to this type of emission affects health and reduces productivity; resource depletion and the effects of climate change have hurt trade and investment.

WB Vice President for East Asia and Pacific, Manuela V. Ferro said that Vietnam must mobilize a large number of resources to protect Ho Chi Minh City - the largest city in the country, as well as the low-lying coastal area, and the Mekong Delta from the impacts of climate change.

"Vietnam is also a country that is contributing more and more to GHG emissions. Realizing Vietnam's ambitious international commitments will require action in key emission sectors such as energy, transport, agriculture and processing, manufacturing and using carbon pricing to encourage investment,” she stressed.

Clear priorities

To help Vietnam achieve its development goals while also fulfilling its climate commitments, the WB’s report proposed many solutions on two important issues: increasing resilience to climate impacts, and pursuing a growth strategy that directs the economy to reduce carbon-intensive energy sources.

At the launch event of Vietnam Report on Climate and National Development
At the launch event of the Vietnam Country Climate and Development Report. (Photo: N.N)

These two paths will help Vietnam achieve its climate goals as well as increase GDP per capita to more than 5% per year - the average rate needed for the country to become a high-income country by 2045. Without comprehensive adaptation measures, the impact of climate change will plunge 400,000 to 1 million people into extreme poverty by 2030.

At the same time, to protect the most vulnerable households from rising energy prices and job disruptions during the transition to a low-carbon economy, Vietnam will need to step up programs that encourage the private sector to adopt cleaner technologies and facilitate labor mobility.

Alfonso Garcia Mora, Vice President for Asia and Pacific of International Finance Corporation, commented: "In order to become a high-income and net-zero-emissions country in the next 30 years, Vietnam will have to mobilize large amounts of private capital. If this is to happen, it is important for Vietnam to design and implement the right policies and reforms.

Greening the financial sector, promoting green growth projects across multiple sectors, and enacting transparent and predictable procedures for energy projects are clear priorities.”

In addition, the WB also proposed 5 priority policy packages including:

Firstly, a coordinated regional program for the vulnerable Mekong Delta. The region contributes 50% of rice production and a third of the country's agricultural GDP. The region is facing many risks such as coastal and riverbank erosion, rise in sea level, and saline intrusion.

This program will limit sand mining and groundwater extraction, invest in more infrastructure and strengthen regional coordination, as well as support the livelihoods of farmers who are looking for ways to adapt to the challenges of climate change.

Secondly, an integrated coastal resilience investment program for main urban centers and connecting infrastructure. This program includes road and energy system upgrades, as well as improving climate risk and early warning systems.

Thirdly, an air pollution reduction program in Hanoi, where poor air quality exceeded at least 5 times the World Health Organization guideline limit for more than half of the period from 2018 to 2021, and dust concentrations are predicted to continue to increase.

Fourthly, acceleration of the clean energy transition by improving the regulatory framework to encourage the participation of the private sector in increasing grid capacity and implementing energy efficiency plans.

Lastly, a new social contract to protect the people most vulnerable to the economic impacts of the solutions to climate change. Funding social programs with carbon tax revenues will help support the poor from the impacts of rising travel and energy costs.

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Translated by Dao Quang