After four days of attending the COP28 Conference, Vietnam has proposed several solutions to implement energy transition.
Below are the insights shared by Mr. Dao Xuan Lai, Head of Climate Change, Environment, and Energy at UNDP, from COP28 UAE regarding Vietnam's initial results after four days at the conference. Notably, Prime Minister Pham Minh Chinh committed to investors that policies for renewable energy development, including the standardization of direct power purchase agreements between renewable energy producers and large electricity consumers, will soon be concretized.
By the end of December 3rd, the fourth day of COP28, Vietnam had achieved four main outcomes.
Firstly, Vietnam, together with a group of countries including the European Union (EU), the United Kingdom and Northern Ireland, the United States, Japan, Germany, France, Italy, Canada, Denmark, and Norway (IPG), approved a plan to mobilize $15.5 billion over the next 3-5 years to address urgent needs and catalyze a just energy transition in Vietnam. This capital is committed by the IPG with attractive loan conditions and private sector support through investments. This milestone is essential for Vietnam to negotiate specific loans and contributions to use the $15.5 billion as leverage to mobilize private resources in energy transition, contributing to the circular economy, digital economy, and green economy.
Secondly, Prime Minister Pham Minh Chinh delivered a crucial speech at COP28 on December 2nd, reaffirming Vietnam's commitment to achieving net-zero emissions by 2050. He called for better coordination and emphasized that developed countries must continue supporting developing nations, particularly in finance and technology transfer, to help them adapt to climate change and transition to renewable energy. The Prime Minister also highlighted Vietnam's efforts and achievements since its commitment at COP26. He announced that in the future, Vietnam would introduce a legal framework and specific policies, such as smart power transmission systems and standardized direct renewable energy power purchase agreements. These clear and direct actions aim to assure foreign investors of Vietnam's commitment and determination, creating favorable conditions and reducing risks for investors. Vietnam seeks to attract larger and higher-quality investments in green development and energy transition.
Thirdly, Prime Minister Pham Minh Chinh and the Minister of Natural Resources and Environment held several bilateral and multilateral meetings with developed countries and international corporations to expand partnerships with renowned renewable energy and offshore wind power companies. This opportunity aims to promote a new economic sector—renewable energy—and develop offshore wind power for export to countries like Singapore and ASEAN nations. Vietnam's 3,000km coastline presents a significant potential to increase state revenue, create jobs, and boost local economic development.
Fourthly, this year, Vietnam had a dedicated meeting room at the Conference, where it organized over 10 side events to share experiences and lessons in climate change adaptation and solutions to reduce greenhouse gas emissions, contributing to global efforts. Vietnam also seeks to learn from other countries and experts about solutions for climate change response and energy transition.
So far, COP28 has seen initial successes, especially with the consensus to operationalize the Loss and Damage Fund, backed by significant financial commitments. Approximately $600 million has been mobilized to date. However, much work remains to define the fund's operational principles and determine how much poorer countries will need to contribute in the future. I hope that Vietnam will actively participate in forming and managing this fund to benefit coastal communities, northern mountainous provinces, and remote areas in enhancing their resilience to natural disasters.
Regarding Vietnam's announcement of the resource mobilization plan for implementing the JETP at COP28, how do you assess this event?This is a significant milestone marking Vietnam's efforts and international partnerships. In just one year (12/2022-12/2023), Vietnam has outlined a specific roadmap. Compared to other countries, Vietnam has made faster and stronger progress, serving as a model for others. To invest in renewable energy development by 2030, Vietnam requires about $135 billion, so the $15.5 billion figure is not large compared to Vietnam's needs. However, it is an initial amount to activate and attract further international and private sector resources to develop Vietnam's new energy sector, reducing dependence on fossil fuels.
The plan also facilitates Vietnam's efforts to connect and promote the development of a new economic sector, requiring institutional and legal strengthening to lay the foundation for attracting higher-quality FDI in the green economy. It also enables Vietnam to invest in research and collaborate with other countries in technology transfer in this field.
Notably, in the JETP resource mobilization plan, Vietnam emphasized that fairness and equity are core values for a successful energy transition in the country. The statement also outlined clear perspectives on ensuring the provision of affordable and reliable electricity for the population, particularly low-income groups.
Regarding social policies, it is crucial to ensure that workers and social groups currently employed in the energy sector (coal power, coal mines) acquire the skills needed to transition to new economic sectors. Simultaneously, it is essential to maximize benefits for all stakeholders—local communities, businesses, and the government—ensuring equitable distribution.
How do you perceive Vietnam's efforts over the past two years?The Vietnamese government committed to achieving net-zero greenhouse gas emissions by 2050 at COP26. The government has updated the 2022 NDC to elevate Vietnam's targets for achieving net-zero emissions and introduced various strategies and policies: the National Strategy on Climate Change until 2050; the National Green Growth Strategy for 2021-2030, with a vision to 2050; sectoral planning such as the National Plan for implementing the Glasgow Declaration on Forests and Land Use by 2030; and the Prime Minister’s recent Decision No. 876/QĐ-TTg approving the Action Program on Green Energy Transition, Carbon Emission Reduction, and Methane Reduction in the Transport Sector; the National Power Development Plan for 2021-2030, with a vision to 2050 (Power Plan VIII). Particularly, in December 2022, along with IPG partners, Vietnam approved the Just Energy Transition Partnership (JETP) declaration.
Regarding the challenges Vietnam faces in fulfilling its net-zero emissions commitment by 2050, as a developing country with a transitioning economy, Vietnam encounters several challenges, such as poverty reduction, a small economic scale, high market openness, and a relatively low level of human resources. Vietnam needs to stabilize its macroeconomy and transform the entire economy to reduce emissions, which requires significant investment. In the power sector alone, developing renewable energy by 2030 will require approximately $135 billion. Therefore, Vietnam will need substantial funding from international organizations and the private sector in the coming years.
Additionally, technological issues and workforce transitions from sectors like coal power and mining will be essential for Vietnam. Furthermore, the new energy economy—renewable energy, offshore wind power, and climate change adaptation technologies—requires a skilled workforce, technical expertise, and capable managers for successful implementation.
What recommendations do you have for the Vietnamese government to address these challenges?Vietnam has been promoting institutional reforms to create a more responsible, transparent, safe, and attractive investment environment to attract high-quality foreign investment. Both domestic and foreign investments require a more transparent and less risky environment. This is the first crucial step Vietnam needs to take.
In recent days, during bilateral and multilateral meetings, the Prime Minister has made commitments on related policies, such as direct renewable energy power purchase agreements. This is a highly significant commitment that businesses and corporations have long awaited.
In addition to investing in workforce development for energy transition and renewable energy, Vietnam must also invest in the development of science and technology, promote international cooperation, and leverage technology transfer from more advanced countries.
At the same time, it is essential to ensure fairness among all participants, including investors and those involved in the energy and green economy supply chains. Special attention should be given to vulnerable groups, such as workers and women employed in coal and coal-fired power plants, ensuring stable incomes and facilitating their participation in social insurance funds as they transition to new sectors..
I am confident that with the policies, efforts, and unity of the Party, Government, and National Assembly, Vietnam can achieve net-zero emissions and overcome the middle-income trap to become a high-income developed country by 2045.
Thank you!Author: Thu Huong
Source: congthuong.vn