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November 2008

Country Profile Vietnam

Vietnam Flag Vietnam is highly vulnerable to the impacts of climate change. In one of the mostly densely populated countries in the world (245 people/km²), tropical cyclones, floods and droughts have had disastrous effects. Sea-level rise threatens the mangrove forests – nature’s coastal defences – and rising temperatures promote forest fires and the spread of tropical disease.

Another environmental risk stems from the legacies of the Vietnam war: numerous ecosystems have still not recovered from the effects of Napalm and Agent Orange, and the number of miscarriages and children born with deformities is high.

Thanks to the economic (Doi Moi) reforms introduced in 1986, Vietnam is now one of the most promising countries in South-East Asia. Structural reforms aimed at modernising the country, the establishment of a competitive export industry and membership of ASEAN (1995), APEC (1998) and the WTO (2007), have resulted in economic growth of 8.5 percent in 2007. Poverty has been reduced to 14.8 percent and the country looks set to achieve the UN Millennium Development Goals by 2015.

With bilateral cooperation and the EU-Asia Pro Eco programme as a regional instrument designed to foster environmental sustainability, the European Commission aims to support Vietnam in meetings these goals.

German development cooperation efforts are well represented in Hanoi, with GIZ, KfW, DED, CIM, DED and InWent. The work done by these organisations is rounded off by that of state-run foundations, NGOs and church organisations. The main areas of focus are environmental protection and resource conservation, economic reform and healthcare.

Vietnam is rich in fossil fuels (oil and gas), industrial metals (bauxite, chrome and manganese), renewables (timber and water) and agricultural produce (rice, rubber, fish and coffee). The problem is that economic growth, industrialisation and a population boom all increase demand on available resources. Thus, in its Agenda 21 (2002) and its National Environment Protection Strategy (2010-2020), the Vietnamese government has stipulated that economic growth and environmental protection cannot be separated and a balance must be found between the two.
A broad-based afforestation programme serves in the fight against poverty and is designed to promote sustainable forestry, farming and water management. This prevents rural exodus and avoids further exacerbation of the environmental and social problems already faced in megacities like Hanoi and Ho Chi Minh City.

The Ministry of Natural Resources and Environment (MONRE) is Vietnam’s leading environmental body and also serves as the national DNA. It has province-level outposts (DONREs) and an executive body in the form of the Vietnam Environment Protection Agency (VEPA). A number of environmental funds, including the CDM Cleaner Production Fund, supplement the institutional and legal framework. There are currently 38 projects in the CDM pipeline, although only two have been registered so far: a small-scale hydropower project and a project to capture and use gas produced in oil extraction. The latter will generate 677 kCERs, which is more than 99 percent of national CERs. Two projects are close to registration, one to improve energy efficiency in a brewery and the other involving landfill gas in Ho Chi Minh City.

As has been seen in China, the leader in the CDM stakes, a dynamic CDM market has less to do with the prevailing political system and more to do with the economic and structural situation in a host country. Parallels for Vietnam can be drawn regarding its theoretical CDM potential.
The transition from a centralised to socialist-based market economy provides ideal conditions for CDM use: on account of the outdated infrastructure, the baselines in industry, the energy sector and agriculture are extremely high. Technology transfer thus offers broad scope in which to achieve significant emission reductions.

By participating in the first phase of the UNEP Capacity Development for the CDM programme, Vietnam already has methodologies and guidelines in place for landfill gas, renewable energy and small-scale LULUCF projects. Project developers can also draw on technical support provided by the Asian Technology Institute.