Climate Finance Needs and Approaches in Viet Nam

Transcription

1 Climate Finance Needs and Approaches in Viet Nam Mr. Nguyen Tuan Anh Deputy Director General Department of Science, Education, Natural Resources and Environment (DSENRE) Vietnam Ministry of Planning and Investment (MPI) COP 21, United Na;ons Climate Summit Paris, France

2 Outline: Vietnam s Green Growth Strategy and Action Plan Climate Finance: Challenges and Opportunities

3 Vietnam Green Growth Strategy (VGGS): Vietnam Green Growth Strategy (VGGS), approved by the Prime Minister in 2012: climate change and green growth important drivers of investment planning and development. Goals: Ø Ø 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 compulsory and important indicators in socio-economic development.

4 Vietnam Green Growth Strategy (VGGS): Target #1: Reduce the intensity of greenhouse gas emissions and promote the use of clean and renewable energy, according to the following targets By 2020: Ø reduce the intensity of GHG emissions by 8-10% compared to Ø reduce energy consumption per unit of GDP by 1% to 1.5% per year. Ø reduce GHG emissions from energy activities by 10% to 20% compared to business as usual (10% voluntary, +10% subject to international support). By 2030: Ø reduce GHG emissions by at least 1.5% to 2%. Ø reduce GHG in energy activities by 20 to 30% compared to business as usual (20% voluntary, +10% subject to international support). By 2050: Ø reduce GHG emission by 1.5-2% per year.

5 Vietnam Green Growth Strategy (VGGS): Target #2: Green production through implementation of clean industrialization to ensure economic and efficient use of natural resources, encourage green industry and green agriculture; enhance investment in natural capital, and proactive prevention and treatment of pollution. By 2020: Ø value of high technology and green technology will make up 42-45% of GDP. Ø rate of commercial manufacturing facilities that meet environment standards will reach 80%. Ø application of clean technology will reach 50%. Ø investment in sectors to protect the environment and enrich natural capital will reach 3-4% of GDP.

6 Vietnam Green Growth Strategy (VGGS): Target #3: Promote green lifestyles, sustainable consumption, and sustainable urbanization. By 2020: Ø 60% of grade III cities have wastewater collection and treatment systems that meet regulatory standards. Ø 40% of grade IV and grade V cities and craft villages have wastewater collection. and treatment systems that meet regulatory standards. Ø 100% of remediation of severely polluted areas 100%. Ø waste is collected and treated in accordance with standards. Ø trees reaching urban standards. Ø share of public transportation in large and medium cities reach 35-45%. Ø large and medium cities promoting green urban standards reach 50%.

7 Vietnam Green Growth Action Plan (GGAP): 12 task groups with 66 ac;vi;es focused on a range of areas: Ø Ins$tu$onal arrangements Ø Revision of Master plans Ø Technological transfer Ø Business promo$on of enterprise development Ø Financial arrangements Provincial Green Growth Ac$on Plans under prepara$on Green City Indicators and Ac$on Plans under development

8 Climate Finance: Needs Less than half of priority actions in the GGAP are funded (~43%). Only 26% of total ODA programmes and projects support green growth priorities of GoV. Vietnam s national climate change response is funded through public resources (64%). Significant gaps to meet investment and technical assistance needs. ~US$30 billion needed by 2020, of which 70% targeted from nonpublic sources. Difficulty mobilizing and tracking climate-relevant foreign and domestic investment, but progress being made.

9 Climate Finance: Approaches Significant scope to move to scale on mitigation and adaptation programmes, by creating incentives to leverage private sector and accelerate public-private partnerships. New 2015 Law on Public Investment: catalyze and crowd-in investment through PPPs for green growth. Recently launched Vietnam s CPEIR, outlining approaches to track budget allocation and public expenditure (roll-out to provinces and ministries in 2016). Plans to embed typology into budget tracking system. Will start tracking private climate finance flows in 2015, with support from UNDP, to promote effective incentives for business investment. In March 2015, the State Bank of Vietnam (SBV) released Directive No. 3 to expand green credit programs and policies in order to raise green finance proportion in credit portfolio.

10 Climate Finance: Approaches Developing a medium-term strategic framework/country programme to prioritize high impact investment and engage sources of international climate finance, including the Green Climate Fund, aligned with INDC, NAMA, and national priorities. Accreditation of Private Sector NIE under the Green Climate Fund: organizations in financial sector exploring accreditation to scale-up onlending for green growth activities. MOF reviewing environmental fiscal instruments: examining environmental fiscal reform (taxes, levies, fees), subsidy framework and feed-in tariffs to stimulate PPPs in renewable energy sector. Policy for feed-in-tariff for solar PV under development, will send strong price signals to private investors.

11 Climate Finance: Approaches Recently, our Prime Minister has approved a US$3.6 million project to help Viet Nam to build its own carbon market. o Set up a database of greenhouse gas emissions throughout the country o Issue policies and State management tools related to the carbon market o Implement the Nationally Appropriate Mitigation Action (NAMA) to create carbon credits. Plans to Development and Establishment of a Climate Change and Green Growth Investment Project and Program Identification and Tracking Framework ; benefits include: o unifying methodology to map current and planned climate change and green growth spending o conduct analyses of budgetary changes in certain response areas by tracking climate change response and green growth allocations over time; o Link climate change response and green growth investments to policy objectives to provide improved appraisal of policy implementation and a feedback mechanism into reform processes; o inform resource mobilization and budget allocation

12 THANK YOU Mr. Nguyen Tuan Anh Deputy Director General Department of Science, Education, Natural Resources and Environment (DSENRE) Vietnam Ministry of Planning and Investment (MPI)

13 Extra Slides

14 Leveraging the Private Sector: Stimulating Investment Examples: Green Investment Fund (GIF): Ministry of Industry and Trade (MOIT) and Ministry of Construction supporting energy efficiency in the brick, ceramics, and food processing sectors through loan guarantees. SME awarded a rebate on the loan (up to 30%) depending on the verified energy savings. Vietnam Climate Innovation Centre (VCIC): providing early-stage financing, training, and business advisory services to growing number of clean energy and climate technology ventures. Supports the integration of large-scale enterprises, medium and small in the relevant networks in the region and around the world to share and learn best practices in green growth.

15 Leveraging the Private Sector: Stimulating Investment Examples: Private Sector Green Growth Networks: Chambers of Commerce in Vietnam forming green sub-groups to stimulate investment in climatecompatible development and green industries, manufacturing and services. Government-Private Sector Green Network (GGGN) to be established in Environmental Performance Index (EPI): Ministry of Environment initiating provincial-level index to rank environmental performance, including business environment for green investment. Green Bonds: working with IFC to access global green bond market as source of new capital flow to finance clean energy projects, energy efficiency, public transport and water.

16 Leveraging the Private Sector: Stimulating Investment Examples: Private Sector Green Growth Networks: Chambers of Commerce in Vietnam forming green sub-groups to stimulate investment in climate-compatible development and green industries, manufacturing and services. Government- Private Sector Green Network (GGGN) to be established in Partnership for Market Readiness (PMR): strengthen capacity for carbon pricing and development of market-based instrument pilots in steel and solid waste sectors. Asia LEDS Partnership: Vietnam serves as Co-Chair of regional partnership to spur private investment, and as Chair of the Finance Committee. Host of LEDS Regional Meeting October 28-30, 2015: Mobilizing Private Investment for Green Growth and Low-Emission Development in the Agriculture Sector in Asia

17 Green Growth Action Plan (GGAP): MPI s Role Ministry of Planning and Investment (MPI) is focal point for promoting green growth, taking the lead in collaboration with line ministries, provinces and cities to implement the VGGS. Track and map public and private financial resources for investment programs/projects according to guidance from National Council on Climate Change (NCCC), chaired by Prime Minister. Guiding, monitoring, assessing, and supervising the implementation process of VGGS with regularly reports to the Prime Minister. Conduct review of progress every 5 years, mid-term review in 2020, and final assessment by 2030.

18 Green Growth Action Plan (GGAP): MPI s Role Sector-based green growth action plans under development by various ministries. ~16 provinces are early adopters, preparing Provincial Green Growth Action Plans (mandatory for all provinces by 2017/18). Support accreditation of National Implementing Entities (NIEs) to directly access climate finance, e.g., Green Climate Fund, GEF, Adaptation Fund. Support national entities to meet accreditation criteria, assess capacity needs, and strengthen environmental and social safeguards to facilitate access to climate finance (with support from Belgium, UNDP, GIZ, KOICA). Developing Investment Guideline for Green Growth to strengthen appraisal and prioritization of public investments (with support from UNDP and Global Green Growth Institute)