In booming Vietnam, climate-smart transport is the obvious choice

Vietnam’s transport system is at a critical juncture. Vehicle ownership, freight movement, and daily commutes are all growing exponentially. At the same time, Vietnam is on the front lines of climate change, facing a growing number of floods, landslides, and typhoons.

In that context, the case for climate-smart transport has never been stronger. Investment in low-carbon, resilient transport can go a long way in propelling the country toward a sustainable and prosperous future. Conversely, if transport policy does not integrate the climate factor, the combined effects of soaring emissions and extreme weather events would make it all but impossible for the country to keep up the current pace of economic growth and social development.

Our team, with the support of the Ministry of Transport of Vietnam and other international partners including GIZ, embarked on an ambitious analytical work to demonstrate the urgent need for the transport system to adapt, and propose specific pathways toward a climate-smart transport system.

The first volume of the report, launched on September 16th, features the country’s first full-scale, bottom-up GHG emissions inventory, along with future emission scenarios developed through a consultative process. These tools will be instrumental in identifying the right policy and investment options to meet the country’s NDC targets.

Volume 2 focuses on enhancing resilience: it assesses the criticality and climate vulnerability of the multi-modal transport system to apply a decision-making under uncertainty (DMU) framework, identifies priority adaptation investments, and estimates their potential economic returns. Here are some of our main findings.

Pathway to low-carbon transport

• Vietnam can make significant headway in reducing GHG emissions from the transport sector: up to 9 percent (or 53 million tons in 2030) with domestic resources only, and 15-20 percent (or 87-117 million tons in 2030) by mobilizing international support and private sector participation. Under the most ambitious scenario, Vietnam would achieve a reduction in cumulative emissions from the transport sector of up to 1 billion tons between 2014 and 2050.
• The most effective measures include improving the fuel economy of vehicles, shifting freight transport from road to waterborne transport, and introducing electric vehicles of various kinds, including motorbikes, cars, and buses.
• The Vietnamese transport system has real potential for electrification. There are already some electric motorbikes on Vietnamese streets, but, as in many other countries, a lot more can be done to boost the market for electric vehicles.
• Climate change mitigation measures bring substantial economic co-benefits, including reduction of local pollution and health benefits, and lower transport costs by switching to more cost-effective modes such as waterborne transport or railways.  

Pathway to resilient transport

• Vietnam needs significant investment in upgrading its transport infrastructure to enhance its climate resilience. Since public resources are limited, the country needs to prioritize critical links, the disruption of which would cause the highest economic losses.
• On some parts of the national highway network, climate-related disruptions could lead to economic losses of up to US$1.9M/day. The cost of climate disruptions on some segments of the national railways could reach up to US$2.6M/day due to limited rerouting options.
• Our analysis shows that about 10 percent of the network are most critical in terms of their exposure to the future climate and disaster risks, without considering future climate change. The number goes up to 20 percent considering climate change. In other words, in the event of a major climate event, preserving those transport links would be essential in maintaining overall transport connectivity. That means that, while the cost of improving the resilience of these key corridors would be significant, their importance to the country and the economy makes it well worth the high price tag.
• We also found that, given the vulnerability of the road network, further modal shift to rail or waterborne transport, including inland waterways and coastal transport, is a good resilience strategy. In fact, our estimates show that moving 10 percent of traffic from road to other modes of transport would reduce climate risks by 25 percent.

Climate change is a reality for people in Vietnam and the national government is committed to tackling the issue, as shown by their strong push toward ambitious NDCs. This report makes it very clear that transport is one of the sectors that will have a key part to play in solving the climate crisis, both by mitigating the causes and by adapting to the impacts.

By creating greener, cleaner transport, not only can we improve people’s lives by reducing air pollution and congestion, but we also can reduce greenhouse gas emissions contributing to climate change. By creating resilient transport, we can better protect the infrastructure and livelihood of Vietnamese people against these current and future risks.

These specific pathways will guarantee a “climate-smart” transport system for Vietnam. The proposed solutions, however, are not easy or cheap to implement: both public and private sector need to make concerted efforts and mobilize adequate resources to support these goals.

This report is one more example that demonstrates how the World Bank can help client countries combat climate change through data-driven advice and robust analytics. The study was prepared in collaboration with the Ministry of Transport of Vietnam and GIZ, with funding from the Australia-World Bank Partnership for Vietnam, the NDC Partnership Support Facility, and the German government.

If you want to learn more about this work and other green and resilient transport initiatives, make sure to join our session at the upcoming Transport Forum on Thursday, October 3rd (technical training #10).