Development, Environment & energy, Trade and industry | Asia, Southeast Asia

26 November 2018

Vietnam is facing a number of environmental pitfalls and policy hurdles on its path towards a sustainable energy sector, Frauke Urban, Giuseppina Siciliano, Linda Wallbott, Markus Lederer and Anh Nguyen Dang write.

Vietnam has experienced rapid economic growth over the past two decades, making it one of the strongest and fastest growing economies in Southeast Asia. At the same time, the country has experienced increasing levels of urbanisation, industrialisation and high population growth.

While millions of people have been lifted out of poverty, Vietnam’s recent development trajectory has also resulted in increasing environmental pressures.

The country has seen a steady growth in demand for energy on account of this development, resulting in a steep increase in carbon dioxide emissions among other environmental pressures, such as air, water, and soil pollution, deforestation, the destruction of natural habitats, and biodiversity loss.

To combat these environmental risks, Vietnam is among a number of countries that have put in place green transformation policies.

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The concept of ‘green transformations’ refers to the process of re-structuring economies and societies within sustainable planetary boundaries. Green transformations can, therefore, be interpreted as practices of radical economic, societal and institutional change.

Vietnam took its first steps in a greener direction by introducing its Strategy for Sustainable Development 2011-2020, which was followed by the National Strategy on Climate Change in 2011, and the Green Growth Strategy in 2012. These strategies accompany a range of policies and programs to increase energy efficiency, promote renewable energy, introduce carbon trading and reduce emissions. They also form part of Vietnam’s Nationally Determined Contributions under the Paris Agreement on climate change.

Vietnam already benefits from various energy-related Clean Development Mechanism projects and has reduced its greenhouse gas emission intensity over the last few years. It also invests heavily in renewable energy, most importantly wind power and hydropower, which accounts for nearly seven per cent of the country’s total primary energy supply. Energy, therefore, plays a central role in Vietnam’s green transformation strategy.

Vietnam is actively pursuing opportunities for green transformations in the energy sector to achieve three key goals: green growth, sustainable development, and progress on tackling climate change.

This pursuit is motivated by multiple domestic policy goals, including restructuring the economy, enhancing employment opportunities, improving energy security, accessing international finance to overcome the phasing-out of conventional development aid, and accessing climate-relevant technology.

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However, there are several major barriers to green transformation in the country.

First, Vietnam has no overall integration when it comes to its overlapping strategies for green growth, sustainable development and climate change.

Second, the country has competing implementation strategies and ambivalent policy approaches. It’s not clear, for instance, how the country intends to balance between policies that favour industrial development and economic growth, policies that favour environmental protection, and policies that favour a reduction of greenhouse gas emissions.

There is also the issue of energy justice, particularly when it comes to land use and the implementation of energy projects. There have been cases where the government has seized land for hydropower projects, as it remains the owner of land in Socialist Vietnam and may withdraw land certificates rather easily. However, it should be noted that authorities are apparently making an effort to follow due processes, to be transparent and accountable and to reduce these negative impacts.

Other trade-offs are related to deforestation, as forests sometimes need to be cleared for energy projects. For example, the construction of dams often requires forested areas to be flooded to create a reservoir. Down-stream flooding, erosion, sedimentation, loss of biodiversity, habitat destruction, and harm to fish and other aquatic species can be some of the direct impacts of large hydropower facilities, particularly large dams.

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In the future, it would be useful for the Vietnamese government to develop better-coordinated policies that span across its green transformation goals.

Adopting a more ambitious renewable energy strategy to increase the country’s share of renewable energy, particularly wind and solar, would be another way to further promote green transformations. This could be linked to technology transfer and cooperation from developed countries under the Paris Agreement.

The ‘Nationally Determined Contributions for Vietnam’ plan aims to reduce greenhouse gas emissions by eight per cent by 2030 compared to 2010 levels. However, if the international community provides financial and technical support, this aim could be increased to 25 per cent by 2030.

International support could be further negotiated to gain access to climate-relevant technology and financial support in exchange for further increasing the share of renewable energy.

Vietnam is well on its way to promoting a green transformation in its energy sector. However, there’s a long path ahead when it comes to resolving the various trade-offs and energy justice concerns that come with this transformation – and it’s one the country has only just begun.

This piece is based on the authors’ article in the Asia & the Pacific Policy Studies journal, Green transformations in Vietnam’s energy sector. All papers in the journal are free to read and download.

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