VIETNAM MINISTRY OF PLANNING AND INVESTMENT

Paris, 19 May, 2015

Tracking international climate-related finance in Vietnam

Ma. Nguyen Thi Dieu Trinh, Senior Official Department of Science, Education, Natural Resources and

Environment, Vietnam Ministry of Planning and Investment

Outline:

•Background: VGGS and GGAP

•Demand for Climate Finance

•Efforts in tracking resources for CC and GG •Recommendations

INVESTMENT NEEDS FOR CLIMAGE CHANGE

•Over the past decade, climate related disasters (particularly storms and floods) have caused an annual average cost in damages of 2-6 percent of GDP. •Viet Nam’s rate of emissions growth currently outstrips that of its GDP growth and committed to reduce the emissions.

Vietnam Green Growth Strategy

• Green Growth Strategy in Viet Nam: A strategy to promote the process of restructuring and improving economic institutions towards more efficient use of natural resources, improved competitiveness of the economy which will be achieved through increased investments in technological innovation, natural capital and economic instruments. This will contribute to respond to climate change, reducing poverty and ensuring sustainable economic development.

Vietnam Green Growth Strategy

• Strategic Task 1 of Low Carbon Growth: by 2020 to reduce voluntarily the intensity of greenhouse gas emissions by 8-10% as compared to the 2010 level and 20% with additional international support;

• Strategic Task 2: Greening Production with the aim to encourage the development of green industry and green agriculture based on environmentally friendly structures, technologies and equipment;

• Strategic 3: the Greening of Lifestyles and promoting sustainable consumption.

VGGS Action Plan

Total: 12 task groups with 66 activities dealing with several aspects:

- Institutional arrangements - Revision of Master plans - Technological transfer - Business promotion of enterprise development - Financial arrangements

DEMAND FOR GREEN/CLIMATE FINANCE

Sub-sector No. of options

Total capital cost (mil.

US$)

Total annual CO2 emission

saved (MtCO2)

Average MAC (US$/ton

CO2)

Building 3 3.33 0.17 -69.46

Construction materials 1 17.54 0.49 -14.39

Cement 3 725.00 2.61 -45.27 Textile 2 0.00 0.08 -60.28 Household 10 2,279.19 16.54 -32.32 Pulp and paper 2 0.00 0.19 -93.46

Electricity Generation 10 27,625.00 61.37 16.11

Iron and steel 3 79.50 0.22 -44.60

Road transportation 1 0.00 3.45 0.00

Total 35 30,729.56 85.12

List of GHG emission options and the result of MACC, 2020 (discount rate = 12%)

Situation of climate finance

Efforts in tracking Climate Finance Conduct a Climate Public Expenditure and Institutional

Review to assess current climate costs and development investment guidelines

Develop the Vietnam version of the Climate Option Framework to increase access to climate change.

Do mapping exercises Rio markers pilot at some provinces MPI lead national efforts to mobilized

Green Growth and Climate Financing. development partner input.

10

Data Analysis (Different Sources)

Gaps!!!

Categorizing Projects

/Programs

Overview of mapping exercise

11

Key information

152 on-going projects/programs in line with 21 ACTIONS in the VGGAP

26 on-going projects/programs contributing to 5 PRIORITIZED ACTIONS out of 23 in the VGGAP

45 ACTIONS remained blank 57 projects/programs on of 152 are

not directly in line with VGGAP ACTIONS (Code Z)

Climate Public Expenditure & Investment Review:

Objectives: 1. Review the state of spending on climate change / green growth (CC / GG) under the

national budget, including alignment with Government priorities and policies such as Green Growth Strategy, National Action Plan on Climate Change.

2. Assess options for tracking climate change / green growth expenditures (direct and indirect) in the budget against existing national policy frameworks, and in reference to international standard typologies.

3. Develop analytical framework to assess trends in climate change / green growth expenditure through selected channels and over a selected period.

4. Address institutional gaps at national and local levels and recommend steps to integrate climate change / green growth objectives in government planning, budgeting, monitoring and review processes.

5. Strengthen climate finance architecture to help improve existing capacity, systems, and

fiduciary procedures to: a) improve access to sources of international climate finance, b) strengthen harmonization of policies, and targets, c) scale up impact on the ground of climate change mitigation and adaptation programming.

SOURCES OF CLIMATE FINANCE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MARD MOC MOIT MONRE MOT NTPEE NTPRCC

ODA Domestic

Of the total, domestic sources accounted for 64%

ODA & CLIMATE FINANCE

21-May

-2015

CLIMATE FINANCE NEEDS TO BE LINK TO POLICY

Technical Services

Government

To be def ined

Government agencies, private sector, academia and indigenous groups

Umbrella fundSteering

committee (SC)reviews and

approves projects

SecretariatForwards project

concept notes forreview & approval to SC

Benef iciaries/implementing ent it ies

Private sectorPublic sector

Communit ies and States

Disbursefundingaf ter approvalof SC

Let ter of approval

Submitconcept notes

Tax incent ives

Loan, Grant funding,

guarantees

Technicalassistance

Technical committeefor dif ferent windows:

Incent ives/f inancial

mechanism

RE/RE Adaptat ion Conservat ionTrustee (TBD)

Ensures transparencyand accountability,

releases funding

Capitalisation (hybrid)Nat ional: Polluter-pay principle

Voluntary carbon cert if icatesPayment for ecosystem services

Internat ional: bilateral, mult ilateral

16

Thank you for attention!