Vietnam has been one of the world’s fastest-growing economies over the past three decades. Along with that growth has come the expansion of energy-intensive sectors such as manufacturing, transport and power generation. Given the country’s dependence on fossil fuels, Vietnam’s total greenhouse gas emissions have more than doubled over the past decade, and are expected to triple by 2030. Although per capita CO2 emissions are still low, Vietnam has the 20th highest carbon intensity in the world.Vietnam is also highly exposed to the effects of climate change, in particular to floods, storms, and sea-level rises. Climate-related natural disasters result in economic losses equivalent to 1.5 percent of GDP, and these losses are expected to increase. At the same time, the recent low growth of total factor productivity has raised questions about the quality and sustainability of the country’s rapid economic growth.
"We are trying to transfer knowledge built up from several years of cross-sectoral low carbon development planning. What is especially important, and especially valuable to our counterparts in Vietnam, is using this knowledge to build consensus around specific innovative policies and initiatives." | Pierre Audinet, Clean Energy Program Team Leader at the World Bank’s Energy Sector Management Assistance Program (ESMAP)
Taken together, these factors have made finding a more sustainable pathway to development a top priority in Vietnam. The government is finalizing a National Green Growth Strategy that highlights the need for emission reduction targets, industrial and consumer energy efficiency, and ecosystem restoration.
To support this process, a Vietnam Low Carbon Development Forum in Hanoi July 12-17 enabled policymakers from Vietnam’s Ministry of Planning and Investment, among others, to discuss elements of the strategy with experts from the World Bank, Asian Development Bank (ADB) and UNDP, other government ministries, and a wide range of donors.
The World Bank is expanding its longstanding support to Vietnam to help meet the country’s emerging low carbon development objectives. Among other initiatives, the Bank’s Board of Directors in February 2012 approved a $70 million project to support the Government of Vietnam in adopting policies and strengthening institutional capacity to promote climate resilience and lower carbon intensity development.
The Bank’s Energy Sector Management Assistance Program (ESMAP), with support from the United Kingdom’s Department for International Development (DFID), is providing technical assistance to help Vietnam review its green growth options. A scoping study completed in March 2011 looks at low carbon development potential in transport, agriculture and power. It also includes a macroeconomic assessment that gauges the impact of possible mitigation efforts on Vietnam’s economic and social development.
That scoping study is now being used as a reference document by multiple donors, and ESMAP’s work in Vietnam now focuses on achieving consensus about feasible low carbon development measures through consultations and capacity building.
One of the highlights of the forum was training on low carbon growth models and the Energy Forecasting Framework and Emissions Consensus Tool (EFFECT), a modeling tool developed by ESMAP.
Many countries in Eastern Europe, South Asia, Latin America and Africa are already using low carbon development planning tools such as EFFECT to build consensus on greenhouse gas mitigation scenarios. In India, EFFECT brought together disparate government departments, and highlighted the importance of regional transmission and of hydropower – both areas where the World Bank has subsequently scaled up lending.
“We are trying to transfer knowledge built up from several years of cross-sectoral low carbon development planning,” said Pierre Audinet, Clean Energy Program Task Leader at ESMAP. “What is especially important, and especially valuable to our counterparts in Vietnam, is using this knowledge to build consensus around specific innovative policies and initiatives.”
Many international agencies are now supporting Vietnam in its low carbon development efforts. The July forum included experts from DFID, the Japan International Cooperation Agency, the Korean International Cooperation Agency, the governments of Switzerland and the UK, local foundations and universities, and Vietnam’s ministries of Industry and Trade, Transport, and others. The hosts of the event, the Ministry of Planning and Investment, expressed satisfaction in seeing so many development organizations working together to address low carbon development challenges.
Following the forum, teams from the Central Institute for Economic Management, under the Ministry of Planning and Investment, the Institute of Energy, under the Ministry of Industry and Trade, and the Transport Development and Strategy Institute, under the Ministry of Transport, will work with the ESMAP team to model further low carbon development options focused on transport and power generation. These more detailed options will be presented at the next Low Carbon Development Forum, to be held in November 2012.