Hanoi, September 11, 2024, The Europe Today: At a conference held by Economy and Forecast Magazine in Hanoi on Tuesday, experts emphasized the need for Việt Nam to develop effective strategies for mobilizing and allocating green financial resources to meet its green growth targets and move towards sustainable development. The country requires significant financial investment to achieve these goals, with the United Nations Development Programme (UNDP) estimating that Việt Nam will need between US$330 billion and US$370 billion to reach Net Zero emissions by 2050.
The Ministry of Natural Resources and Environment has indicated that approximately US$68.75 billion is required to meet the country’s emission reduction commitments. Đỗ Thị Phương Lan, Editor-in-Chief of Economy and Forecast Magazine, stressed that the mobilization of resources from both domestic and international sources, as well as across various economic sectors, is critical to meeting the financial demands of green growth.
Under Việt Nam’s action plan to implement its green growth strategy, funding sources include the State budget, private sector contributions (through green credit, green corporate bonds, carbon credits, and greenhouse gas emission quota exchanges), international assistance (ODA), and public-private partnerships.
However, Nguyễn Thanh Nga, Deputy Director of the Institute for Financial Strategy and Policy, pointed out several limitations in the country’s green finance policies. Taxes and fees on environmentally harmful activities, as well as penalties for violations, are insufficient to compensate for the environmental damage caused. Additionally, the State budget allocated for green growth only covers about 25% of the capital needed to address climate change and promote green growth.
Việt Nam also lags behind regional counterparts such as Indonesia, Thailand, and Malaysia in developing a green stock market. Investor awareness of corporate sustainability and social responsibility remains low, further slowing progress. The absence of a green taxonomy and limited participation from professional institutional investors are also hindering the development of this market.
Green insurance development is another area where Việt Nam is falling behind, despite the increasing demand for rapid and sustainable economic growth.
To support its transition to a green economy, experts at the conference called for a focus on improving the country’s capacity to raise and effectively use green financial tools.
