VietNamNet Bridge – Vietnam has been implementing a lot of CDM (clean development mechanism) projects with 164 projects recognized by the international community, ranking the fourth in the world.
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The carbon market
The carbon market is seen as the major tool reducing CO2 emissions, one of the
four kinds of gas that cause greenhouse effects. The market has been supported
by the four main mechanisms stipulated in the Kyoto Protocol – the clean
development mechanism (CDM), the joint implementation (JI) and Reducing
Emissions from Deforestation and Forest Degradation (REDD).
In principle, the carbon project would bring developing countries the
opportunities to have budgets for their environment protection, and receive
modern technology to be transferred through CDM projects. Especially, they would
be able to earn money by selling carbon certificates to developed countries.
Despite the heavy criticism, the carbon market has been growing day by day. In
2011, the carbon market value reached 176 billion dollars with the total carbon
trading volume of 10.3 billion tons.
Vietnam has been implementing 164 internationally recognized projects, ranking
the fourth in the world in terms of the number CDM projects. With 7 million tons
of CO2 receiving CERs (certified emissions reduction). Vietnam ranks the ninth
in the world in terms of the number of certificates.
RCEE, an energy and environment company, is believed to be the pioneer in
Vietnam which implements CDM projects. Until 2008, RCEE had built up 10 projects
of this kind. Meanwhile, in 2008 alone, it had 20 more projects. To date, the
company has developed 54 CDM projects.
Le Thi Bao Ngoc, Director of the Carbon Center of RCEE estimates that Vietnam
can earn 24 million dollars every year from the projects. The great potentials
of the market have caught the special attention from foreign investors,
especially after scientific research works found out that tropical forests can
restore 50 percent more carbon than any other types of forests.
This has prompted foreign investors to jump into the carbon market in Vietnam,
developing a series of afforestation projects.
These include the one initiated by Voluntary Finance Company from Australia
which has been implemented with the cooperation with Vietnam Carbon Exchange in
the Tam Dao National Park in Vinh Phuc province. The project was kicked off in
last August.
It is expected that the project would absorb 40,000-50,000 tons of carbon every
year. When obtaining CERs, investors would be able to sell the certificates to
Australian companies, or on the international market.
A senior executive of Vietnam Carbon Exchange has revealed that besides the
project in Tam Dao, it would invite foreign investors to the carbon projects in
the Bach Ma National Park in Thua Thien – Hue province, Xuan Son in Phu Tho and
Ba Be in Bac Kan province.
“We hope that we can sell CERs after five years,” he said.
The forest research and development programming institute, an arm of the
Ministry of Agriculture and Rural Development has started the project on
calculating the carbon reserves and assessing the forest changes.
Nguyen Phu Hung, Deputy Head of the institute, has affirmed that a lot of
Japanese enterprises are seeking to buy CERs from Vietnam. However, since there
has been no reliable research work about the carbon reserves, Vietnam still
cannot give the answer about how many CERs it can sell.
However, the prices of CERs in CDM projects have been falling dramatically. In
2008, a certificate was traded at 20 euro, while it is now just one euro. The
Kyoto protocol would be expired this year, while involved parties have expressed
the worry that some of the industrial economies would not respect the provisions
of the protocol.
Compiled by Kim Chi