Dr. Nguyen Tien Nguyen Dr. Nguyen Duc Minh Reseach Centre for Energy and Environment GHG MARKET OPPORTUNITIES OF VIETNAM AND CAPACITY DEVELOPMENT REQUIREMENT

ASSESSMENT OF GHG REDUCTION POTENTIAL Sector Options EnergyAgricultureForest Saving & Efficiencyx Renewable energyx Fuel switchingx Avoid leakagex Irrigation of rice fieldsx Animal foodx Residue Agriculture - biogasx Afforestationx Reforestationx Sectors: Energy, Agriculture and Foresty GHG mitigation options in Vietnam

EVALUATION OF GHG REDUCTION POTENTIAL GHG reduction potential (or also referred as GHG Natural resources) is evaluated by reduced amount and reducing cost. This ostentation is performed in curve: Marginal Abatement Cost (MAC). Amount of GHG mitigation and costs is expressed by this curve

MAC of some countries MAC Reduction amount mtC Abatement cost $/tC USJapanChina India

MAC APPLYING Potential demand can be estimated by MAC total from countries included Annex I while MAC total from non Annex I countries provides supply potential. As a result, carbon price of the World will be determined in different circumstance of market If we know carbon price and MAC curve of one country we can calculate exporting capacity and its benefit. An example is presented below:

MAC APPLYING A1 + A2 + B: Exporting turn-over. B: Benefit A1: Transaction cost

MAC ESTABLISHING FOR VIETNAM Bottom – up method: From each option (15 energy options, 3 agriculture options) MAC curve is developed This method give us bottom value because do not calculate all options ( for example, at present we lack transportation options) Top - down method: Using assessments and macro projection to estimate GHG reduction amount, then multiply with possible coefficients to obtain the top value. Vietname MAC Curve in 2010 is presented in the following figure

Vietnamese MAC LINE

VIETNAME MARKET POTENTIAL Carbon Price in the World: (In case of selling and purchasing are not limited) : + With United States (US) participation: 5.26/ t CO2 + Without US participation: O$ / t CO2 + Vietnamese potential (Table 2)

VIETNAME MARKET POTENTIAl ScenarioVietnamTrung QuocAnnex I Countries USExportTurnover (mtC) ProfitExportTurnover (mtC) ProfitExportTurnov er (mtC) Profit With US participation Without US participation

CAPACITY DEVELOPMENT REQUIREMENT From above presented contents we realize that the needs for capacity development are: 1.Potential survey is also limited because of lacking manpower, experience and finance. GHG mitigation options is not sufficient. Transportation sector is not taking into account when surveying. Baseline, reduction costs under several options need calculating in more detail... 2.To strengthen competition we need to have rules, procedures, agencies and staffs to reduce project cost and progress to implement project. Benefit is directly proportional with progress of project

CAPACITY DEVELOPMENT REQUIREMENT 3. National coordination in effective manner has good effects to: + Project implementation progress + Integration of small projects that not attract CDM into large project (bundle) with higher competition + Formulation strategy and guidance in negotiation of project conditions such as: (technology transfer, Carbon price), and avoidance of bad condition.

CAPACITY DEVELOPMENT REQUIREMENT + Having sensibly coordination to protect GHG resources to avoid sale all with cheap carbon price. (low hang fruit ) 4. Above requirements can be implemented in case of: + Having National CDM strategies and policies + Having strong coordinating agencies + Having senior experts and experienced consultants + Having officers, staffs with CDM basic knowledge at sectoral level