“I think there are big opportunities for Vietnam with the climate finance coming available for both adaptation and also for mitigation, by which I mean cleaner energy technologies “

Fast-industrialising Vietnam is urgently seeking ways to mitigate its CO2 emissions to build a low-carbon economy and cope with looming climate change aftermaths.

Nguyen Van Mui was once afraid each time he used coal-fired kilns to bake ceramic products.

The kilns emitted dust and smoke which cause skin and respiratory problems.

“My parents died of pneumonia three years ago, after nearly 40 years of working with the kilns,” said the 42 year-old ceramist, who manages a ceramics workshop in Hanoi’s Bat Trang village, an ancient centre for export-oriented ceramic products.

Fortunately his kiln was replaced by a gas-fired facility two years ago, to help churn out high-quality products for export to South Korea and Japan.

“Previously I employed five workers with the old kiln. The number is 20 now. Our workshop has been expanded. We no longer have to suffer from such diseases,” Mui said.

The facility is among the 131 kilns installed in the village with the help of a five-year project with $5.5 million funded by the United Nations Development Programme’s (UNDP) Global Environment Facility and $23.5 million financed by the Vietnam’s government. The project, kicked-off in 2006 in Bat Trang, provides financial support for medium-income workshops to renew their production in an environmental friendly manner. It is part of a wider UNDP-backed initiative to green Vietnamese small- and medium-sized enterprises and help Vietnam build a low-carbon economy.

The kilns have reportedly helped reduce the overall energy consumption in Bat Trang by 10-15 per cent and ameliorated product quality by 15-20 per cent. Since 2007, the energy saved has reached 25,000 tonnes of oil equivalent (TOE) and about 134,000 tonnes of carbon dioxide (CO2) emissions have been avoided, according to a UNDP report.

So far, more than 400 businesses nationwide have been given access to energy-efficient technology under the project, helping them to reduce their energy consumption and increase profits, both through the direct energy savings and through an improvement in product quality.

“I think there are big opportunities for Vietnam with the climate finance coming available for both adaptation and also for mitigation, by which I mean cleaner energy technologies. It is very exciting and it needs to be happening on a very large scale right across Vietnam,” said UNDP administrator Helen Clark, during her official visit to Vietnam in June, this year.

She added that having clean technology was good for the community’s health and “in this case it is also cheaper”.

“Bat Trang’s gas-fired kilns are in line with Vietnam’s strategic pursuit of a low-carbon economy for the next decade. They do not only help the firms become more profitable but also reduce greenhouse gas (GHGs) emissions,” said Nguyen Dinh Hau, director of the Ministry of Science and Technology’s Promotion of Energy Conservation in Small- and Medium-sized Enterprises (PECSME) project. The project has helped Vietnam save 180,000 TOEs and reduce 740,000 tonnes of CO2 between 2006-2010.

Why a low-carbon economy?

The story of Bat Trang is typical of the ongoing efforts exerted in Vietnam to limit GHG emissions and build a low-carbon economy.

After more than two decades of successfully exercising its doi moi policy, the Southeast Asian country has reaped big achievements which have lifted the nation out of a low-development status.

Since 1990, Vietnam’s economy has annually grown by an average 7.56 per cent. Its gross domestic product (GDP) in 2010 doubles that of 2000 at constant price and is 3.4 higher than that of 2000 at actual price.

Now the country is preparing for its 2011-2020 socio-economic development strategy and the 2011-2015 socio-economic development plan. It is pursuing an economic modernisation dream with the aim of becoming a major regional player.

The Ministry of Planning and Investment (MPI) reported that over the past 20 years, Vietnam’s consumption of primary energies such as fossil fuelsand hydropower increased 2.56 times. Consumption of secondary energies like refined fuels had grown 2.43 times and power consumption had augmented by 10.7 times.

The MoIT reported that Vietnam’s energy demand was forecasted to reach 47.63 million TOEs in 2010, 83.99 million TOEs in 2020 and 97.3 million TOEs in 2025. Energy consumption demand during 2010-2025 is estimated to grow an average 8.6-9.7 per cent per year.

Oliver Jacquet, representative of Vietnam-based Schneider Electric Company, said during the past five years, Vietnam’s annual average electricity consumption had grown by over 15 per cent, while electricity production had risen by 13 per cent.

“The country’s increasing consumption of energy means that it has been emitting more and more CO2, one of the major factors that have warmed the earth and caused climate change,” Jacquet said.

Meanwhile, Vietnam is one of a few countries in the world to have been the most heavily hit by climate change, which could cost the country 6.7 per cent of its GDP by 2100, twice the world’s average loss. Sea level rises, caused by global ice melting, is anticipated to result in a loss of 12.2 per cent of the country’s area and threaten the living areas of 17 million people.

Therefore, Vietnam needs to find economic growth models that do not only continue to support development, but also helped mitigate the adverse impacts of climate change. The low-carbon model should be choice, as Vietnam could mitigate up to 40 per cent of its combined energy-related CO2 emissions per year by 2020, the MPI said.

“This is the right time for Vietnam to select the low-carbon growth model because the country needs to simultaneously develop its economy sustainably and join the international community’s efforts to fight against climate change,” said Nguyen Van Duc, deputy minister of the Ministry of Natural Resources and Environment (MoNRE).

Douglas J. Graham, World Bank environment sector coordinator in Vietnam, said that mitigation of climate change referred to reduction of GHGs emissions and sequestration of excess atmospheric carbon, and in common with emerging positions of other major developing countries, Vietnam needed to commit to a lower carbon growth path.

“The World Bank contends that a lower carbon trajectory in Vietnam does not need to constrain development, but support it through the ancillary economic and environment benefits that can be reaped,” he said.

Pham Chi Lan, senior economist and former member of the Prime Minister’s Research Committee, said Vietnam’s economic growth remained unstable as it used far more energy than other countries.

“The growth has led to serious exploitation of the country’s natural resources and destroyed environment. Pursuit of a low-carbon economy will be a good input for the country’s new socio-economic development strategy,” she said.

Development’s side effects

According to the MPI, fast-industrialising Vietnam’s economy is small-scaled, so its CO2 emissions remain low. In 2006, the amount of CO2 emitted in Vietnam comprised just 0.35 per cent of the world and 0.92 per cent of Asia, and it was equal to 1.85 per cent of the emission in the US and 1.7 per cent of China.

ADETEF Vietnam, a non-governmental organisation, reported that at present Vietnam’s per capita CO2 emissions were 1.4 tonnes per year, while the figure was six tonnes in France, 10 tonnes in Germany and 20 tonnes in the US.

The organisation said Vietnam was not responsible for global warming and its current priorities were to develop a low-carbon economy with robust and sustainable growth, while finding ways to cope with climate change caused by developed countries.

However, many local and foreign experts have warned that Vietnam’s speedy urbanisation and industrialisation could slow down its efforts to build a low-carbon economy with sustainable development, due to the country’s increasingly ineffective consumption of traditional energy via backward technologies.

A Ministry of Industry and Trade (MoIT) report said Vietnam’s energy usage effectiveness remained 2.4-3.6 times lower than in many regional countries. For example, in most of the country’s buildings, the average electricity consumption per square metre of floorspace is 30-50 per cent higher than in the same buildings in many Asian nations that are applied with energy saving measures.

Vietnam’s technologies for exploiting, transforming and using energy remains backward, with many produced in the 1970s and 1980s.

As a result, the MPI reported that Vietnam’s CO2 emissions had augmented five times during 1990-2006.

The United Nations in Vietnam said in a report on Vietnam and climate change that the country’s 2009 census estimated a total population of 85.8 million. At present, the ratio of working-age people to dependents is high, and it is estimated that this situation would last for the next 30 years and then level off.

“Vietnam is, therefore, likely to experience rapid consumption growth and associated GHG emissions growth in the coming years and decades,” said Koos Neefjes, a United Nations climate change expert.

“Vietnam has not contributed significantly to the historical build-up of atmospheric GHGs that are causing global climate change and per capita emissions are not yet comparable to those of rich countries. However, Vietnam is now adding to the cause of global climate change with steadily increasing emissions,” said Neefjes.

The country’s total emissions is estimated to double during 2000-2020, especially emissions from the energy sector due to energy consumption and power production.

According to the MoNRE, the total GHG emission volume of Vietnam’s energy, agriculture and land use, land-use change and forestry (LULUCF) sectors would be 169,200 metric tonnes of CO2 equivalent in 2010, 300,400 tonnes in 2020 and 515,800 tonnes in 2030.

“If Vietnam fails to pay attention to controlling GHG emissions, its per capita CO2 emissions may increase to 7.7 tonnes of CO2 per year by 2040 and 10 tonnes by 2050, which is equivalent to 1,300 million tonnes of CO2 per year for the whole country’s expected population of 130 million people,” said Henri Prévot, an ADETEF Vietnam advisor.

“We need to act immediately before being stressed by bigger aftermaths,” senior economist Pham Chi Lan said.

Actions taken

The United Kingdom’s former ambassador to Vietnam Mark Kent said that actions taken to reduce energy use and GHG emissions could have clear financial benefits through reduced energy bills and operating costs.

“Vietnam has done good work in implementing the Vietnam National Energy Efficiency Programme (VNEEP), which is a good example of cost cutting while at the same time reducing GHG emissions. Such “small little things”, when combined, can lead to much bigger results than anyone could imagine,” he said.

The VNEEP, approved by the prime minister on April 14, 2006, is a set of activities to encourage, promote and disseminate energy efficiency throughout society.

The VNEEP is the first-ever long-term comprehensive plan to institute measures for improving energy efficiency and conservation in all sectors of Vietnam’s economy. The programme’s energy savings goal is 3-5 per cent of total energy consumption during 2006-2010 and 5-8 per cent of the total energy consumption during 2011-2015. The programme contains a comprehensive set of measures covering six government sectors including institutions, education and information, industry, equipment and appliances, buildings and transport.

Vietnam’s Law on Energy Efficiency and Conservation was passed by the National Assembly in June, 2010, stipulating the use of energy and makes all individuals and organisations aware of the need to contribute to environmental protection in order to ensure sustainable development. It also specifies what activities should be encouraged and what activities are compulsory to ensure energy conservation.

“The law will act an important legislative framework on energy use efficiency and consumption in industrial production, construction site management, domestic activities, and energy consumed equipment, and also ensure the targets of national energy security and environmental protection will be met,” Hoang said.

Also, the Law on Environmental Protection Tax was passed by the National Assembly in November 2010 and is highly valued by the international community.

The German embassy in Hanoi said Vietnam had been the first country in Asia to approve such an important law. It imposes taxes on products made from fossil fuels and coal, and environmental toxic products like pesticides and chemicals.

“This law is expected to help Vietnam build its low-carbon economy in general and achieve its target of reducing 7.5 per cent of CO2 every year in particular,” the embassy said in a statement.

The government said to join the world’s efforts in controlling GHG emissions and build a low-carbon economy to cope with climate change, Vietnam had revised its energy policies to effectively use and save energy, as well as attract more and more project using clean energy.

“In the coming time, Vietnam’s new energy development strategy will focus on developing small-scaled hydroelectricity plants, wind-electricity plants, projects using rubbish and agricultural by-products to make electricity and solar-powered projects,” said Deputy Prime Minister Hoang Trung Hai.

But small business owners like Nguyen Van Mui do not necessarily have to wait for such legal frameworks, notable policies and other major steps to be taken. Everyday, the stories of gas-fired kilns continue contributing to reducing GHGs emissions in their homeland, although sometimes the primary objective is just to earn a higher profit.

Bat Trang Ceramic Design and Production Joint Stock Company’s director Le Duc Trong, who invented the gas-fired kilns in Vietnam in 2001, said the kilns could help the company cut 30 per cent of its production costs, reduce more than 12,000 tonnes of CO2 and save about 3,000 TOE annually.

“The new kilns could also help triple our profits. They have also boosted production efficiency up to six times,” Trong said.

He said the kiln had been installed in eight provinces and cities nationwide. “They will continue being multiplied throughout the country’s enterprises and craft villages as one of the most effective ways to reduce GHG emissions,” he said.

Source: VIR