On June 27, Vietnam Television (VTV) organized the workshop "Net Zero - Green Transition: Opportunities for Leaders". According to VTV , in November 2021, at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), the Prime Minister made a commitment to achieving net zero emissions by 2050, demonstrating Vietnam's determination to implement green transition and sustainable development goals.
Finance Minister Ho Duc Phoc emphasized the need for huge resources when transforming to green growth.
Speaking at the workshop, Ms. Nguyen Thi Bich Ngoc, Deputy Minister of Planning and Investment, said that with the goal of achieving zero net emissions by 2050, in October 2021, the Prime Minister approved the National Strategy on Green Growth with 4 goals: reducing greenhouse gas emissions intensity per GDP; greening economic sectors; greening lifestyles, promoting sustainable consumption; greening the transition process on the principle of equity.
This strategy clearly identifies green growth as an important solution to promote economic restructuring associated with growth model innovation, enhance competitiveness and resilience to external shocks, and reduce greenhouse gas emissions.
According to Ms. Ngoc, the Net Zero target is detailed in 18 thematic groups, 57 groups of operational tasks and 134 specific tasks and activities in the National Action Plan on Green Growth for the period 2021 - 2030. In particular, the challenge of mobilizing financial resources for green transformation, green growth and energy transition is huge.
At the conference, Minister of Finance Ho Duc Phoc emphasized that green transformation for green growth and emission reduction to realize the Net Zero commitment is a long journey with many difficulties and challenges. One of the biggest challenges is the issue of resources.
According to the World Bank's estimates (2022), Vietnam will need about 368 billion USD by 2040, equivalent to 6.8% of GDP per year, when pursuing a development path that combines resilience and net zero emissions. Of which, the decarbonization journey to meet international commitments accounts for about 30% of the resource demand.
"However, the public sector can only meet about one-third of the required resources; while the green financial market is still in its early stages of development, the resources mobilized through the green financial market are very small compared to the demand," said the Minister of Finance.
Resources from international cooperation to develop green finance
According to Mr. Phoc, up to now, the green financial market in Vietnam for green growth has formed a foundation and developed with three components: green credit market; green stock market and green bonds.
Many delegates attended the conference
In recent times, the Ministry of Finance has coordinated with relevant agencies to complete the legal framework for green bonds. In the market, there are government bond products, government-guaranteed bonds and local government bonds serving green projects/works such as irrigation, environmental protection, wind power, solar energy.
To encourage the development of the green bond market, the Ministry of Finance has issued a circular guiding issuers and investors of green bonds to enjoy a 50% reduction in service prices of green bonds on the stock market.
The Minister of Finance stated that international organizations assessed that Vietnam has achieved a capital market scale serving sustainable development that is growing rapidly compared to the region. The total value of Vietnam's green, social and sustainable sectors reached 1.5 billion USD in 2021, nearly 5 times higher than in 2020 and has maintained stable growth for three consecutive years. Vietnam is the second largest green debt issuance market in ASEAN, reaching 1 billion USD, just behind Singapore.
In addition, the green stock market has also made initial developments. The Vietnam Sustainability Index (VNSI) was put into operation in 2017 to determine the sustainable development standards for listed companies and support investors in identifying green businesses to invest in.
The Ministry of Finance is focusing on reforming the tax system, managing public debt and restructuring the State budget to mobilize resources reasonably; improve fiscal space; and create favorable conditions for mobilizing, allocating and effectively using financial resources.
According to Mr. Phoc, in recent times, the Ministry of Finance has also had many policies to encourage environmental protection through two groups: limiting acts that cause environmental pollution (environmental protection tax, resource tax, special consumption tax on goods that cause harm to the environment, etc.); policies to support and encourage environmental protection, reduce pollution, and the impact of climate change (incentives for corporate income tax, tax reduction, tax exemption for industries that protect and are friendly to the environment, etc.).
Regarding budget expenditure, despite the difficult context, it is still ensured that each year is higher than the previous year for environmental protection to create resources, prevent and respond to environmental incidents, and the country... On average, in the past 5 years, budget expenditure for environmental activities has reached over 21,000 billion VND/year.
Mr. Phuc also said that to solve the problem of resource shortage for green growth and climate change response, besides promoting internal resources, Vietnam needs to increase cooperation and support from the international community.
Accordingly, in addition to prioritizing public resources, the Ministry of Finance will actively coordinate with relevant ministries and sectors in researching solutions to mobilize private resources and international organizations for green growth. In particular, developing the green financial market and carbon market are priorities that need to be implemented with focuses such as: developing green and sustainable financial instruments; encouraging localities and enterprises to issue green bonds; attracting institutional and individual investors to invest in green financial instruments, etc.
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