Transcript Progress on the Viet Nam Green Growth Strategy

Progress on the Viet Nam
Green Growth Strategy
Presentation for the G20 Development Working Group
Workshop on Inclusive Green Growth
Ms. Nguyen Thi Dieu Trinh (DSENRE – Vietnam Ministry of Planning and Investment)
Ms. Ngo Thi Nhung (Vietnam Ministry of Finance)
Moscow - July 2013
Content
• Overview of the Vietnam National Green Growth Strategy (VGGS)
• Institutional framework
• Key Challenges
• Green growth financing
• Tools and Instruments
• Next Steps
Overview of the Vietnam National Green Growth Strategy
(VGGS)
•
Approved on September 25th 2012 by the Prime Minister (decision 1393/QD-TTG)
•
Overall objective of the VGGS – (Low carbon Development Strategy)
• Green growth, as a means to achieve a low carbon economy and to enrich natural capital, will become the
principal direction in sustainable economic development; reduction of greenhouse gas emissions and increased
capability to absorb greenhouse gas are gradually becoming essential indicators in social-economic development.
•
3 strategic tasks outlining the scope of the strategy
• Low Carbon Growth
• Greening of Production
• Greening of Lifestyles
•
17 solutions addressing specific Green Growth policy directions for sectors and provinces
•
10 priority actions to initiate immediate Green Growth action
•
Overall supervision through the National Committee on Climate Change which is headed by the Prime Minister
Participatory Process
Prime Minister assigns the Ministry of Planning and Investment to formulate and implement the Vietnam National
Green Growth Strategy (Notice 38/TB-VPCP dated 03/03/2011 and Decision 1393/QD-TTg dated 25/9/2012)
Phase 1
Establish Drafting Board and Editing Board including Ministerial Leaders and Directors from relevant sectors
(Finance, Industry and Trade, Natural Resources and Environment, Agriculture and Rural Development,
Transportation, Science and Technology and Construction)
Formulate the Green Growth Framework for Vietnam with consultation with international community on 24
November 2011
Phase 2: Building the Vietnam National Green Growth strategy
Consultation with stakeholders (twice with business community, 3 times with local authorities, research institutes
and social society organization and international community in 5, 2012)
Receiving directions from Country Top Leaders through thematic reports and comments from members of the
National Council for Climate Change; getting recommendations from Drafting Board and Editing Board
Assessments on low carbon development options
Gaining experiences through site visits: South Korea, Mexico, Germany and the Netherlands
International Expert consultations (with support from UNDP, WB, KOICA and GGGI).
Targets
The VGGS sets the following targets for GDP growth and GHG emission reductions:
•
For the year 2020:
• GDP per capita is doubled compared to 2010
• Reduce energy consumption per unit of GDP by 1.5 to 2% per year
• Reduce intensity of greenhouse gas emissions per unit of GDP by 8-10% or double the target with
international support
•
For the year 2030:
• Reduce total GHG emissions by at least 1% per year without and 2% with international support.
• Environmental degradation is addressed and natural capital stocks have been improved while the
access and use of clean and green technology is significantly enhanced.
•
In 2050, Viet Nam has mainstreamed Green Economic Development
Implementation
• Establish an Inter-ministerial Coordinating Board for implementation of the Green
Growth Strategy under the National Committee on Climate Change to direct the
implementation of the green growth strategy.
• The Board will have the Deputy Prime Minister as its Head. The Minister of
Planning and Investment will be the standing vice Head of the Inter-ministerial
Coordinating Board and four other vice-Heads are leaders of ministries: Finance,
Industry and Trade, Agriculture and Rural Development, Natural Resources and
Environment. Inter-ministerial Coordinating Board members include representatives
of some ministries, sectors and local authorities and representative of some
associations.
• The supporting office for the ICB is located in the Ministry of Planning and
Investment.
• Establishment of Climate Finance Task Force to advise Government on policies and
mechanisms;
Key Challenges
•
Moving from strategy development towards implementation:
• Developing mechanisms for provincial and sectoral target setting requires tools/mechanisms
• Criteria for green growth projects/ programs.
•
Assess investment requirements
• Sources of finance (domestic vs. external)
• Assessing what market based mechanisms are appropriate
• Promote private sector involvement
•
Work on development partner coordination:
• A coordination framework has been developed but needs to be rolled out
• Development partners have converging approaches which hampers coordination
•
Limited understanding at local level.
•
Despite significant identified win-win potential the upfront investment costs remain significant for private sectors which
demands new financing mechanism.
•
Uncertainty on climate finance and green climate funds limits mid – to longer term commitments.
Climate Finance in Viet Nam
•
Government investment for Climate Change projects and program of around $1 annually.
•
Viet Nam has received International Climate Finance support under the form of ODA from 1993 of about $2 billion;
•
Almost all CFs are for adaptation purpose;
•
Funding channels: SPRCC, REDD+, VEPF, CDM.
•
Assessing existing expenditures on climate and green growth [will provide more detail and accurate data]
• UNDP and WB supported Climate Public Expenditure and Investment Review (has been initiated).
•
Improving access to climate finance:
• Establish the Vietnam Climate Finance Options Framework (inception workshop March 26 );
• In collaboration with UNEP and Frankfurt School of Finance and Business develop green growth/climate financing
mechanisms;
• MPI DSENRE is a member of the Steering Committee for the Asia Low Emission Development Strategies Partnership
Forum – a partner network of the LEDS Global Partnership.
•
Work with sectors and provinces to set targets and identify policy actions and investments:
• Work on developing the MACC (Marginal Abatement Cost Curve) findings into investments and policy actions.
• Develop synergies between existing work at sectoral level (agriculture and rural development, renewable energy, green
industry strategy)
8
VGGS requires a broad based funding strategy
-
Engagement of private sector, as investor and as recipient:
 Building on PPP modalities work on blending CF/Green finance sources in private
sector investments in infrastructure, power generation;
 Develop new modalities to facilitate innovation through subsidizing promising R & D
which engage private and public sector partners.
- Use the Budget as entry point enlarging fiscal space to allow public investments in green
growth.
- Develop market based mechanism to generate financing for green growth (with PMR
support):
 NAMA development (credited/performance based);
 A future cap and trade system (probably initiated through sector based CO2 based
emission allocations).
Proposed Roadmap
Phases: Learning main-streaming- Green Growth towards a GE “green Viet Nam”
2012------------------2015------------------2020-------------------2025-----------------------2030--- 2050
Learning
On GG,
identify winwins
Mainstream GG in
(SEDP 2015-2020
Gradual sharpen targets through cap
and trade, increased and targeted env
taxes,
Establish national REDD +Program
Develop
MRV
CDM
Initiate innovation in Green Supply Chains
Develop financial infrastructure and market based mechanism (new
mechanism/NAMA)s
Climate finance master
Green public Procurement
plan
Public awareness campaigns
IEC
Develop Human resources and technology for GG
GGS tasks:
1. Low carbon
growth
2. Greening of
production
3. Green
lifestyles
PMR support area
Green Viet Nam: high Green GDP and low
GHG/unit GDP
GGS
Tools and Instruments
TAX POLICIES
FINANCIAL POLICIES ON LAND
CDM POLICIES
TAX POLICIES
CIT: PROMOTE GREEN ENTERPRISES
Enterprises in
the domains of
high
technology,
scientific
research and
technological
development
and Enterprises
operating in
environmental
domains
are entitled to
the tax rate of
10% (general
tax rate is 25%)
for 15 years
since enterprise
has turnover.
are entitled to
tax exemption
for no more
than four years
and a 50%
reduction of
payable tax
amounts for no
more than nine
subsequent
years.
TAX POLICIES
IMPORT TAX: Encourage enterprises
to invest in waste treatment sector
machines, equipment,
means, tools and
materials for exclusive
use in collection,
storage, transportation,
recycling and treatment
of wastes are entitled to
tax exemption.
machines, equipment,
means, tools and
materials for exclusive
use in environmental
observation and
analysis; generation of
clean or renewable
energy are entitled to tax
exemption
ROYALTIES: Limit wasteful resource
use, especially water resources
Tax rate for
exploiting
surface water is
from 1% to 3%:
prevent the
depletion of
water resources
Tax rate for
exploiting
groundwater is from
3% to 8%: prevent
environmental
pollution caused by
exploiting and
processing minerals
Financial policies on land
List of domains are entitled to special
investment preferences:
Treatment of pollution and protection of
environment; production of equipment
for pollution treatment and equipment
for observation and analysis of the
environment;. Collection and treatment
of wastewater, waste gas and solid
waste; recycling or reuse of waste...
List of domains are entitled to special
investment preferences:
Manufacture of equipment for
responding to and dealing with oil spills;
Manufacture of equipment for waste
treatment….
1
located in geographical
areas with exceptionally
difficult socio-economic
conditions.
located in geographical
areas with difficult
socio-economic
conditions
1
3
are exempted
from land use
levy and land
rents
Are reduced 50%
of land use levy,
land rents
amounts payable
into the state
budget
CDM (Clean Development Mechanism) policies
•
Invest in producing certain goods in "clean production - environmental protection” way requires large
capital investments and its profit will be lower than invest in producing other goods. So, there should
be an appropriate mechanisms and policies to encourage investment in this sector.
•
To encourage investment, support enterprises, the Prime Minister issued Decision dated 02/7/2007
No.130/2007/QD-TTg on a number of mechanisms and fiscal policies for projects under the clean
development mechanism (CDM). Investors that build and implement CDM projects in Vietnam are:
•
+) Exempt or reduce CIT
•
+) Exempt or reduce land use levy, land rents in special investment preferences domain (highest
preference)
•
+) Consider subsidies for products of CDM projects in Vietnam
Next steps
•
Roll out the 10 priority programs (including the financing)
•
Design the VGGS Implementation Plan, obtain approval and roll out of the priority actions (second
half of 2013) which includes low carbon policy instruments.
•
Coordinate interested Development partners based on aid effectiveness principles.
•
Building capacity for Climate Finance Fask Force
•
At provincial – and sectoral level, awareness and understanding remains limited requires additional
capacity building investments.
•
Develop an overall climate/green growth finance mechanism to start working towards directly
assessing the Green Climate Fund.
Thank you for your attention!