Vietnam’s Green Growth Pathway: Taking Stock and Setting Future Directions L aunch of the MPI-USAID-UNDP Initiative on “Strengthening Capacity and Institutional Reform for Green Growth and Sustainable Development in Vietnam (CIGG)” January 21, 2015 Dr. Pham Hoang Mai Director General Department of Science, Education, Natural Resources and Environment (DSENRE) Ministry of Planning and Investment

Outline: Key achievements in Green Growth Challenges and Opportunities Mobilizing and Allocating Resources for Green Growth Future Directions

Key Achievements in Green Growth Viet Nam has moved green growth from being a Strategy to an important driver forces for Sustainable Growth. National Green Growth Strategy (VGGS) approved by the Prime Minister in 2012, followed by the national Green Growth Action Plan (VGGAP) in Over three years, Viet Nam has turned strategy into reality.

Key Achievements in Green Growth Additional work is needed on the policy framework, but Viet Nam is ready to move from policy to implementation. Under the National Climate Change Committee, established the Inter-ministerial Coordinating Board (ICB) to guide VGGS implementation. Many partners have joined Viet Nam’s ‘green coalition’, such as UNDP, KOICA, GIZ, Belgium, the EU, ADB, USAID, and the World Bank.

Key Achievements in Green Growth Under national Green Growth Action Plan, 12 task groups with 66 activities are advancing on several fronts: Examining institutional arrangements for green growth Revision of master plans such as the SEDP Promotion of technology transfer Business promotion, enterprise development, PPPs Reviewing fiscal and financial arrangements

Key Achievements in Green Growth 16 provinces are preparing their own Provincial GGAPs (PGGAPs) to integrate green investment. MPI, in consultation with other ministries, is formulating templates and guidelines to support the PGGAPs. MoIT, MARD, MoC, MoT, MoF, MoNRE are preparing sectoral GGAPs. MPI continues to mobilize domestic and international resources for VGGS implementation (CFTF, REDD+, Green Climate Fund).

Key Achievements in Green Growth With Global Green Growth Institute (GGGI) and UNDP, are working on Guideline for Green Growth Investment, ready by April. With World Bank and UNDP, conducting first Climate Public Expenditure and Investment Review (CPEIR) to map resources and strengthen implementation of VGGS, ready for release about two months.

Challenges and Opportunities To implement VGGS, about $30 billion will be needed by 2020, of which 70% targeted from non-public sources. To recover from climate change damages, 2-6% of GDP. Shortage of policies to mobilize financial sources, particularly international climate funds. A work in progress. Difficulty mobilizing foreign and domestic investors: need to strengthen policy incentives. Catalyze and crowd-in investment by leveraging public funds and create PPPs supportive of green growth (e.g., transport, energy).

Mobilizing and Allocating Resources for Green Growth Public: Government investment for climate change programs and projects, including green growth, total around $1 billion annually: National Targeted Programs (NTP-RCC, Energy Efficiency, Reforestation); Projects and programs directly link to climate change and green growth. Current expenditure: for research, capacity building projects. ODA: from 1993, about $11 billion under the form of CC related projects & programs and budget support. Other sources: REDD+, Vietnam Environment Protection Fund, CDM, Green Climate Fund, other climate finance.

Mobilizing and Allocating Resources for Green Growth Non-Public: Private investment in the form of FDI and equity, local investment, guarantees, and specialized on-lending by state and commercial banks. Government investment and ODA will be used as a catalyst to create and attract favorable environment for private investment in climate change and green growth (technology transfer; pilot projects, good practice). Introducing on PPP modalities (infrastructure, power generation).

Mobilizing and Allocating Resources for Green Growth Public Expenditure & Investment for 5 Ministries and 2 NTPs from

Mobilizing and Allocating Resources for Green Growth Of total finance, domestic sources accounted for 64%

Mobilizing and Allocating Resources for Green Growth 177 programs, projects (USD 10.8 bill) related to 36 actions of the VGGS 48 programs and projects related to 10 priority actions of VGGS 129 programs, projects related to 26 actions of VGGS 30 actions in the VGGS do not receive ODA supports

Future Directions Initiative on “Strengthening Capacity and Institutional Reform for Green Growth and Sustainable Development in Vietnam (CIGG)” Jointly designed by MPI, UNDP, USAid in consultation with line ministries. Builds on UN, UNDP, USAid significant technical assistance during the development of the VGGS and VGGAP. Complements existing green growth initiatives by other development partners.

Future Directions Specific Objectives (SOs) SO1:To build capacities of MPI, MOF, MOT and provinces for effective implementation and monitoring of the VGGS and VGGAP and mainstreaming of green growth into the Socio-Economic Development Plan. SO2:To develop policies and regulations to promote green growth investments and sustainable development. SO3:To improve access to green growth financing and pilot green projects with the private sector.

Future Directions Overview of activities: Strengthen measurement, reporting and verification (MRV) mechanism for mitigation actions and GHG emission targets under the VGGS. Support a M&E mechanism for the VGGS to report to the Inter- ministerial Coordinating Board (ICB) under the National Climate Change Committee. A well functioning Standing Office for VGGS/AP coordination, and coordination actions implemented.

Future Directions Overview of activities: Support the preparation of policies and guidelines to assist ministries, sectors and provinces to integrate green growth into planning, budgeting and spending. Undertake policy analysis to provide inputs and support stakeholder consultations (especially private sector) to MPI’s Department of Local Economy to integrate green growth into the next SEDP ( ).

Future Directions Overview of activities: Provide technical training and support to undertake marginal cost curve studies and relevant research to define GHG emission targets and policy options for preparation of GG action plans of transportation sectors and target provinces. Design a joint training of trainers (TOT) programme on climate change and green growth. Review investment policies and barriers to identify gaps for new policies to stimulate green investments, including renewable and clean energy.

Future Directions Overview of activities: Revised/new public green procurement and expenditure investments policies introduced. Provide technical advice and inputs for the formulation of feasible fiscal policy frameworks and fiscal tools (e.g., environment and resources taxes, levies) to advance green growth in Viet Nam. Improve Viet Nam’s climate finance architecture for green growth, as well as reporting on effective planning, budgeting, and tracking of climate finance spending.

Future Directions Overview of activities: Introduce a green growth investment network to facilitate dialogue and information-sharing and best practices between private sector investors and government. Provide training and technical support for project developers, private sector and investors to get access to green financial mechanisms and develop green projects.

THANK YOU FOR YOUR COOPERATION & SUPPORT! Dr. Pham Hoang Mai Director General Dept. of Science, Education, Natural Resources and Environment Ministry of Planning and Investment of Vietnam