Illustrative photo (Photo: VNA)The World Bank Group's Country Report on Climate and Developmentfor Vietnam in 2022 highlights that the effects of climate change cost thecountry roughly 10 billion USD in 2020, approximately 3.2% of GDP. By 2050, theentire economic expense associated with climate change could reach 523 billion.
The carbon market has been identified as a key solution for Vietnam to reachits net zero goal in the near future, according to Pham Viet Bien Cuong,Director of the Centre for Environmental Protection and Response to Climate Change.
Global trade and investment are driving the development and acceleration ofgreen standards, incorporating new requirements related to labour, theenvironment, sustainable development and the reduction of carbon emissions.
In addition, there is an increasing need for bilateral and internationalcooperation, as well as efforts related to green fields. Vietnam has a greatchance to achieve its green transformation objectives and establish its placein the world's green value chains at this pivotal juncture.
Cuong also said that the basic principle of the market's operation was thatpolluters should compensate for their emissions into the atmosphere byexchanging and trading carbon credits.
Factories and manufacturing companies emit a certain amount of CO2. If theyexceed the allowed level, they must buy more carbon credits. On the flip side,businesses emitting less than the limit can sell their extra carbon credits tothose exceeding the limit, according to Cuong.
The carbon credit market plays a vital role in helping enterprises and thecountry's economy shift from brown to green, lowering greenhouse gas emissionsand boosting national GDP and company profits.
At a seminar last week about developing the carbon market, Nguyen Minh Vu,Deputy Foreign Minister, affirmed that green transformation was a new drivingforce for sustainable growth and a key strategy for Vietnam to establish its positionin the global green value chain.
The Organisation for Economic Cooperation and Development (OECD)highlighted the Vietnamese Government's efforts to promote green growth andsustainable development and expressed their impression of the country's commitmentto net-zero emissions made at the 26th UN Climate Change Conference (COP26).They maintained that Vietnam had enormous potential for creating a vibrant,effective, and high-quality carbon market.
To date, Vietnam is one of the four nations with the highest number ofinvestment projects registered under the clean development mechanism, havingreceived 40.2 million carbon credits to date for 150 projects.
However, Vietnam is facing many challenges in the carbon marketconstruction and development process, such as a lack of legal framework,international cooperation, and limited awareness.
To deal with these problems, Vietnam has issued a number of significantstrategic initiatives on sustainable development and green growth, one of whichis a development plan for instruments related to carbon pricing, particularly amarket for compliant carbon.
Vietnam intends to guide the implementation of domestic and internationalcarbon credit exchange and offsetting mechanisms in accordance with theprovisions of law and international treaties, accelerate the development ofregulations on carbon credit management and greenhouse gas emission quotaexchange activities, and pilot a carbon credit trading floor starting in 2025./.
VNA
