Strategies for promoting green growth in Vietnam

Guided by the principle of "not sacrificing social progress, equity, and the environment for mere economic growth," Vietnam is committed to green growth as a catalyst for economic restructuring and innovative growth models. The overarching goal is to achieve economic prosperity, environmental sustainability, and social equity, paving the way for a carbon-neutral green economy and contributing to global efforts to limit temperature rise.

Green Economy -  A Foundation for Sustainable Development

A green economy, as defined by the United Nations Environment Programme (UNEP), is one that enhances human well-being and social equity while significantly reducing environmental risks and ecological scarcities. It is characterized by 1  low carbon emissions, efficient resource utilization, and social inclusiveness.

In essence, a green economy minimizes environmental impact and conserves natural resources while driving economic growth. Its core objective is to simultaneously foster economic development and safeguard a clean, sustainable environment.

The green economy offers significant financial and environmental benefits:

• Promotes sustainable development.

• Aids in combating climate change.

• Enhances ecosystems and fosters equity.

Vietnam's Green Growth Policies

To realize its green growth vision, the Vietnamese government has implemented numerous strategic initiatives, notably the National Green Growth Strategy for 2011-2020, with a vision to 2050. This strategy underscores that "Green growth is a crucial component of sustainable development, ensuring rapid, efficient, and sustainable economic growth and significantly contributing to the National Climate Change Strategy."

Vietnam's overarching green economy objective is to "Make green growth, leading to a low-carbon economy and natural capital enrichment, the mainstream trend in sustainable economic development; gradually making greenhouse gas emission reduction and absorption enhancement mandatory and critical indicators in socio-economic development".

To achieve this goal, Vietnam focuses on three strategic tasks:

• Task 1: Reducing greenhouse gas emission intensity and promoting clean and renewable energy.

• Task 2: Green production.

• Task 3: Green lifestyle and sustainable consumption.

Legal Framework and Practical Actions

Vietnam has established a comprehensive legal framework and action plans to advance the green economy, sustainable growth, and environmental protection, including:

• Directive No. 13/CT-TTg dated May 2, 2024 on strengthening carbon credit management;

• Decree No. 06/2022/ND-CP dated January 7, 2022 of the Government on regulations on greenhouse gas emission reduction and ozone layer protection;

• Decision No. 01/2022/QD-TTg dated January 18, 2022 of the Prime Minister on promulgating the list of sectors and facilities emitting greenhouse gases that must conduct greenhouse gas inventories;

• Circular No. 01/2022/TT-BTNMT dated January 7, 2022 of the Ministry of Natural Resources and Environment on detailing the implementation of the Law on Environmental Protection on climate change response;

• Decision No. 1658/QD-TTg dated October 1, 2021 approving the National Strategy on Green Growth for the 2021-2030 period, with a vision to 2050;

• Decision No. 1670/QD-TTg dated October 31, 2017 approving the Target Program on Climate Change Response and Green Growth for the 2016-2020 period;

• Decision No. 622/QD-TTg dated May 10, 2017 promulgating the National Action Plan to implement the 2030 Agenda for Sustainable Development.

Vietnamese businesses facing the "Green Transformation" challenge

In new-generation Free Trade Agreements (FTAs), environmental protection and low emissions are established as binding commitments. Consequently, products and brands face more stringent evaluations regarding sustainable development, based on companies' adherence to requirements encompassing environmental, social, labor, and global consumer responsibilities.

Importing nations are implementing a range of new regulations concerning import standards, such as the EU's Carbon Border Adjustment Mechanism (CBAM). This mechanism aims to control greenhouse gas emissions from goods imported into EU countries. CBAM directly imposes a carbon tax on a selection of high-emission products.

The readiness of Vietnamese businesses for green transition remains low. According to a recent survey of 2,734 companies, 64% have made no preparations for green transformation. 48.7% of businesses consider emission reduction and green transformation merely 'necessary.' Among the surveyed companies, only 5.5% have implemented 'emission reduction activities in key areas.'

However, 17.4% consider it unnecessary or highly unnecessary. Businesses operating solely domestically exhibit lower readiness compared to those focused on exports.

The transition from traditional to green production models is not just a trend but a mandatory requirement, demanding significant effort and posing numerous challenges for businesses."