Bringing carbon pricing towards the design table

Carbon pricing instruments are receiving increasing market support and attention as the world grapples with how to reduce greenhouse gas (GHG) emissions, 

but the choice and design of a carbon pricing instrument should always be driven by national circumstances.

bringing carbon pricing towards the design table
Vietnam is committed under various agreements to curb the increase of GHG emissions

This was one of the main factors pored over at a workshop last week in Hanoi on the role of carbon pricing and market instruments in nationally determined contribution (NDC) implementation and the potential for application in Vietnam, hosted by the Ministry of Natural Resources and Environment and the World Bank.

The workshop aimed to build a carbon pricing approach including support to develop market-based instruments and raise awareness, knowledge, and capacity of related ministries, businesses, and industry associations on carbon pricing tools.

“Around the world, a growing number of businesses are leading the transition toward a low-carbon future. A well-designed carbon is indispensable to reduce GHG emissions in a cost-efficient way, but carbon pricing alone is insufficient to address it,” said Rahuh Kitchlu, energy sector co-ordinator at the World Bank in Vietnam.

Carbon pricing is a market-based strategy for lowering GHG emissions. The aim is to put an actual monetary value on carbon emissions so that the costs of climate impacts and the opportunities for low-carbon energy options are better reflected in production and consumption choice.

There are two main types of carbon pricing – carbon taxes and emission trade schemes. Gasoline taxes, taxes for coal mining and natural gas or oil drilling feed-in tariffs, and reduction of fossil fuel subsidies are other examples of indirectly reflecting a price on carbon into consumer or business decisions, according to the World Bank.

Truong Duc Tri, director of the Vietnam Partnership for Market Readiness Project, said that carbon pricing has played an important long-term role in helping jurisdictions and companies achieve zero emissions. He added that 30 countries and territories have been applying carbon taxes and thirty-one countries and territories have been applying emission trading system.

Selecting a national appropriate carbon pricing instrument is an important element, affecting the sustainable development of the country, business, and communities as well as ensuring the complacence with international commitments.

Thus, Tri said that carbon pricing requires a complete database on GHG emissions and other related matters such as transparency and accuracy of activity dates, business dates, GHG inventories, and also a registration system that falls under international criteria.

Besides that, researching carbon pricing requires comprehensive assessment on economic and social impacts as well as consensus among stakeholders including government, the economic sector, enterprises, and communities.

A representative of the Ministry and Planning and Investment said that a growing number of private sector players, particularly investors, are also driving the climate agenda forward by using carbon pricing tools to understand and manage climate risks. Many developing countries are looking to identify effective options to engage the private sector, including working with international partners.

He gave recommendations on carbon pricing tools that need a transparent legal framework to encourage the private sector, increase reliability, and share information as well as take advantage of international support.

 

Vietnam’s Green Growth Strategy provides a pathway to achieve its NDC goals. Private investment will play a significant role in meeting Vietnam’s demand for green finance, with 70 per cent of the $21 billion in total investment expected to come from the private sector.

In addition to supporting the achievement of the country’s mitigation and adaptation goals, the participation of the private sector will help advance the country’s sustainable development objectives, including promoting the more efficient use of natural resources, cutting costs for households and firms, and improving the competitiveness of the economy, according to the Center for Clean Air Policy, a global non-profit climate research and development group.

The NDC strategy highlights the key role that private sector finance will need to play beyond more traditional sectors for green investment, such as renewable energy. For example, $12 billion in international support will be needed in the agricultural sector to meet Vietnam’s NDC target, more than twice the amount needed in the energy sector.

“It is necessary to have a solid database and ensure data quality before the market can officially trade in carbon pricing,” said Hoang Van Tam, from the Energy Efficiency and Sustainable Development Department under the Ministry of Industry and Trade at the workshop.

“The participation of stakeholders in the design and pilot stage is an important factor to ensure the success of the programme. Besides that, incentives and penalties should be clearly stated in carbon pricing and market instruments,” Tam said.

So far, solid waste and steel are the two piloted fields for Vietnam joining the carbon market. The potential for facilities in two sectors in the coming time can be achieved at a level seen within groups of low-emission countries through improving process performance, managing raw materials, and upgrading technology.

Much more action will be needed going forward to meet the Paris Agreement commitments. In that, Vietnam commits to reducing at least 8 per cent of GHG emissions by 2030, and up to 25 per cent if it receives effective support from the international community.

bringing carbon pricing towards the design table

Nguyen Thi Huyen - Deputy head, Environmental and Sustainable Development Institute of Energy

bringing carbon pricing towards the design table

Currently, Vietnam does not had a specific sanction, price, or market for CO2 so we do not have a basis for selling it. We can use market price of the clean development mechanism (CDM) but it is very cheap. Therefore, although we have pointed out different scenarios for fuel field, we have troubles with price.

The current CDM is applied for all industries in the whole country but it should be made based on electric and energy so that we can have an orientation to follow. Moreover, the coefficient of CO2 is now different from the ones in the past.

Now the energy industry is importing a large amount of coal and using types of mixed coal at different rates with different emission coefficients, so giving out clear indicators for each type and sector is very important and convenient.

Regulations should also outline benefits and duty of enterprises from carbon pricing and market-based instruments so that they can implement it voluntarily, and contribute towards sustainable development.

Le Thu - Environmental specialist, World Bank

bringing carbon pricing towards the design table

Currently the Vietnamese government is striving to reduce GHG emissions. This is one of the highest commitments of Vietnam.

Besides carbon pricing, there should be additional policies such as policy on reducing GHG emissions or promoting production of clean electricity. In the long term, building a carbon market will bring us a lot of benefits in the future.

To do that, the government should help enterprises strengthen their ability and accompany them during implementation of carbon pricing.

The carbon market has great impacts on the economy, and it is a chance for competition between enterprises. The carbon market also relates to all people so it should be understood by not only enterprises but also all citizens.

We should let enterprises steadily get ready by changing technology or input material. There is a positive signal that the draft of the amended Law of environmental Protection is mentioning implementation of a carbon credit market in Vietnam.

Luong Quang Huy - Deputy head of Climate Change and Ozone Protection, Ministry of Natural Resources and Environment

bringing carbon pricing towards the design table

In the Law of Environmental Protection 2014 and the Party’s Resolution No.24-NQ/TW of June 03, 2013, on active response to climate change, regulations on reducing GHG emissions have been mentioned. However the ability of policy, technical, building, and implementing carbon pricing in Vietnam is still limited and not strong enough to join the global market. Along with lacking in experience, Vietnam’s budget for these activities is also limited. To reach targets, we must invest tens of billions of US dollars, change policies and orientation of economic development, and even alter the mindset of the political and socio-economic system.

Besides these, challenges include human resources and a responsive ability that requires us to mobilise different resources, particularly in the private sector, to participate. Carbon pricing is necessary for sustainable development, and all market-based instruments like tax and credit need a synchronised action programme. VIR

Hao Thu

Can Tho unveils low-carbon transformation project in energy sector

Can Tho unveils low-carbon transformation project in energy sector

The Mekong Delta city of Can Tho on April 21 launched a project on promoting low-carbon transformation in the energy sector for the 2020-2030 period and with a vision to 2050.

VN needs to become low-carbon economy to serve Paris Agreement: experts

VN needs to become low-carbon economy to serve Paris Agreement: experts

Vietnam must continue to take “concrete climate actions” to become a low-carbon economy and comply with the global Paris Agreement, a workshop heard in HCM City yesterday.

 
 

Other News

.
Hanoi residents ask for long-term solution over waste collection
Hanoi residents ask for long-term solution over waste collection
SCI-TECH & ENVIRONMENTicon  17/07/2020 

Big heaps of waste that have appeared beside roads in Hanoi’s inner districts for several days are expected to be cleared up by Friday, as people living around the Nam Son landfill agreed to stop blocking the way to the city’s biggest dump.

Fierce battle for Southeast Asia’s over-the-top crown
Fierce battle for Southeast Asia’s over-the-top crown
SCI-TECH & ENVIRONMENTicon  18/07/2020 

Southeast Asia’s over-the-top media market remains a tough arena for both foreign and Vietnamese players due to fierce competition and the sheer number of companies involved.

Three ivory traffickers sentenced to 32 years in jail
Three ivory traffickers sentenced to 32 years in jail
SCI-TECH & ENVIRONMENTicon  17/07/2020 

Hanoi People’s Court on Thursday sentenced three men to a total of 32 years in jail for trading over 200kg of ivory from African elephants – an endangered species.

Climate change: Summers could become 'too hot for humans'
Climate change: Summers could become 'too hot for humans'
SCI-TECH & ENVIRONMENTicon  17/07/2020 

Rising global temperatures could see summers that are too hot to work in.

Coronavirus: Russian spies target Covid-19 vaccine research
Coronavirus: Russian spies target Covid-19 vaccine research
SCI-TECH & ENVIRONMENTicon  17/07/2020 

Russian spies are targeting organisations trying to develop a coronavirus vaccine in the UK, US and Canada, security services have warned.

Twitter hack: FBI investigates major attack
Twitter hack: FBI investigates major attack
SCI-TECH & ENVIRONMENTicon  17/07/2020 

Hackers managed to hijack official accounts of high-profile US figures in an apparent Bitcoin scam.

Many rivers in northern provinces still polluted: Environment administration
Many rivers in northern provinces still polluted: Environment administration
SCI-TECH & ENVIRONMENTicon  17/07/2020 

Rivers in northern provinces are severely polluted, according to the Vietnam Environment Administration's report released recently.

Extreme natural calamities cause big concerns for Vietnam
Extreme natural calamities cause big concerns for Vietnam
SCI-TECH & ENVIRONMENTicon  19/07/2020 

Natural disasters in the first six months of the year killed 47 people and caused damages worth VND3.4 trillion.

No Tokyo, but flame still burns brightly in athletes’ dreams
No Tokyo, but flame still burns brightly in athletes’ dreams
SCI-TECH & ENVIRONMENTicon  16/07/2020 

The Olympic Games, one of the most-anticipated sporting events on the planet, was originally scheduled to start later this month in Tokyo but was postponed to July 2021 because of the coronavirus pandemic.

A gaur killed at Cat Tien National Park
A gaur killed at Cat Tien National Park
SCI-TECH & ENVIRONMENTicon  16/07/2020 

Cat Tien National Park Management and police in Dong Nai province, southern Vietnam, are hunting for four poachers suspected of killing a gaur, a rare and precious species of animals in Vietnam.

How should wind power be developed in Vietnam?
How should wind power be developed in Vietnam?
SCI-TECH & ENVIRONMENTicon  17/07/2020 

Around 12,000 MW of wind power has been added to the national power development plan, which has raised concern about the overloading of the transmission grid.

Endangered sea turtle returns to the sea after rescue
Endangered sea turtle returns to the sea after rescue
SCI-TECH & ENVIRONMENTicon  15/07/2020 

The Cham Island’s Marine Protected Area (MPA) management board has released a female Olive Ridley sea turtle (Lepidochelys Olivacea) – an endangered species – after five months of care at the Da Nang-based SaSa Marine animal rescue team.

Hanoi faces rubbish pile-up following compensation dispute
Hanoi faces rubbish pile-up following compensation dispute
SCI-TECH & ENVIRONMENTicon  15/07/2020 

Rubbish has piled up on Hanoi streets after local people living near a local dumping site gathered to block trucks from entering the waste treatment complex.

Crowd blocks way to Nam Son landfill for land clearance and compensation
Crowd blocks way to Nam Son landfill for land clearance and compensation
SCI-TECH & ENVIRONMENTicon  15/07/2020 

A crowd of 15-20 people in two communes of Nam Son and Hong Ki in Hanoi’s Soc Son District on Monday night made makeshift tents, blocking the way to the Nam Son Waste Treatment Complex or Nam Son dumping ground.

Smart City Asia 2020 slated for September 3-5
Smart City Asia 2020 slated for September 3-5
SCI-TECH & ENVIRONMENTicon  15/07/2020 

The 2020 edition of the international forum and exhibition Smart City Asia will take place in HCM City from September 3 to 5, heard a press conference held by the Vietnam Digital Communications Association (VDCA) in Hanoi on July 14.

UNESCO launches programme seeking innovative ideas for ocean without plastic in Vietnam
UNESCO launches programme seeking innovative ideas for ocean without plastic in Vietnam
SCI-TECH & ENVIRONMENTicon  14/07/2020 

The United Nations Educational, Scientific and Cultural Organisation (UNESCO) in cooperation with the Cu Lao Cham - Hoi An World Biosphere Reserve officially launched in Hanoi on July 14 a call for Youth Innovative Ideas for an Ocean without Plastic.

‘Make in Vietnam’ Vsmart Aris 5G mobile phone in international press
‘Make in Vietnam’ Vsmart Aris 5G mobile phone in international press
SCI-TECH & ENVIRONMENTicon  15/07/2020 

News about the launch of Vsmart Aris 5G smartphone made in Vietnam by VinSmart has appeared in Forbes, The New York Times, Reuters and The Star.

‘Queen of primates’ through the lens
‘Queen of primates’ through the lens
SCI-TECH & ENVIRONMENTicon  14/07/2020 

The red-shanked douc langurs, recognized as ‘queen’ of the primate species, have always been the inexhaustible inspiration of photography and wildlife lovers.

HCM City's many flood-prevention programs still not solving problems
HCM City's many flood-prevention programs still not solving problems
SCI-TECH & ENVIRONMENTicon  14/07/2020 

Tens of trillions of dong have been spent to develop the flood control system on HCM City, but the situation appears to be getting worse.

Ministry to conduct a large-scale inspection on junk SIM cards
Ministry to conduct a large-scale inspection on junk SIM cards
SCI-TECH & ENVIRONMENTicon  13/07/2020 

The Ministry of Information and Communications (MIC) has said it plans to deal with telecom waste and continue large-scale inspections of junk SIM cards.

 
 
 
Leave your comment on an article

OR QUICK LOGIN