Vietnam’s Updated Climate Goals Aim at Maximizing the Co-Benefits of Climate Action

The term ‘co-benefits’ refers to simultaneously meeting several interests or objectives resulting from a political intervention, private-sector investment, or a mix thereof. 

Sebastian Helgenberger, Martin Jänicke, & Konrad Gürtler (2019): Co-benefits of Climate Change Mitigation. Encyclopedia of the UN Sustainable Development Goals

A first official cost-benefit analysis has highlighted a list of co-benefits that can help Vietnam meet its socio-economic development goals as well as its SDG commitments.

Results of the cost-benefit analysis of implementing mitigation measures in the updated NDC show that the socio-economic impact of implementing the updated NDC is generally positive. [...] Investment capital (at 2014 values) will increase compared to the BAU [business-as-usual] scenario, while employment opportunities may be even greater. [...] Economic inequality is likely to increase. The consumer price index (CPI) and inflation rate will slightly rise compared to the BAU scenario.

Government of Vietnam (2020): Updated Nationally Determined Contribution (NDC), submitted to UNFCCC on 11.09.2020

Vietnam submitted its updated Nationally Determined Contribution (NDC) to the UNFCCC on September 11^th, 2020, becoming the thirteenth country to do so up to now. The updated NDC now takes the entire economy into account, including industrial processes (IP) for the period from 2021 to 2030 – an improvement on the previous NDC, where only four sectors were considered: agriculture, energy, waste, and LULUCF (land use, land use change and forestry).

This was the culmination of a comprehensive three-year process led by the Ministry of Natural Resources and Environment (MONRE) with the active participation of all related line ministries, and by research institutes, think tanks and experts, development partners, non-governmental organizations, as well as other non-state actors. 

By 2030: up to 27% in relative emission reductions but only minor improvement in absolute terms

Using 2014 as a new base year with and an updated national emissions inventory, Vietnam has committed to reducing its GHG emissions by about 7.3% compared to the business-as-usual (BAU) scenario by 2025, and has slightly increased its relative mitigation target for 2030 from 8% in its previous NDC to 9%. The NDC now suggests that this percentage could be increased to 27% by 2030 with international support, a moderate rise compared to the 25% target set in the previous NDC.

However, compared to the previous NDC, in the updated version greenhouse gas (GHG) the ambition level is only seemingly raised: According to a recent analysis by the Climate Action Tracker (CAT), in terms of absolute emissions Vietnam’s NDC update only represents a minor improvement on the previous NDC. This criticism is based on the fact that in its update Vietnam assumes business-as-usual emissions by 2030 that CAT considers to be way above current policy projections. With an overinflated BAU scenario, CAT argues that it will be easier for Vietnam to achieve its envisaged emissions reductions without making any additional effort. For this reason, CAT judges the emission reduction targets in Vietnam’s updated NDC to be “critically insufficient” as they are thought to be consistent with global warming of over 4°C.

Updated NDC suggests multiple co-benefits of decarbonizing the energy sector

The synergies between climate change adaptation, mitigation and socio-economic development are highlighted in the text of the updated NDC and also informed the process of setting targets and prioritizing actions in the NDC review:

Actions taken in different potential sectors can enhance synergy with socio- economic development in different ways. For example, in the energy sector, mitigation measures that can provide synergy with socio-economic development at high to very high levels include wind power, solar power, power-saving lighting, and efficient cooling.

Government of Vietnam (2020): Updated Nationally Determined Contribution (NDC), submitted to UNFCCC on 11.09.2020

All sectors in Vietnam’s updated NDC are thought to provide socio-economic benefits in one way or another. Mitigation measures within the energy sector are considered very promising with a rating of high to very high in terms of synergies with socio-economic development. In particular, wind power, solar power, and other energy efficiency measures are expected to yield potential socio-economic co-benefits. The decline in coal imports will help increase Vietnam’s energy independence as well as encouraging a turn to previously untapped domestic sources of energy like solar and wind and enhancing the country’s energy security.

The energy mitigation measures proposed in this NDC are also expected to contribute to socio-economic development by supporting the development of new industries, creating favorable conditions for investment, strengthening assembly and maintenance services, etc. Significantly, developing mitigation technologies in the power sector, including renewable energies, will lead to more green jobs, higher incomes, and greater economic prosperity.

Investing in climate action, investing in Vietnam’s future

According to the updated NDC, the investment costs of achieving the unconditional commitment (a 9% emissions reduction compared to BAU by 2030) are estimated at about USD 24.7 billion. According to a recent communication by MONRE, these investments would need to be more than doubled, to USD 56 billion, to meet the conditional target of a 27% emissions reduction compared to BAU by 2030. This is a tall order for a lower middle-income country, especially given the recent negative effects of the COVID-19 pandemic.

However, given the multiple co-benefits addressed by the updated NDC, these investments can be considered as an investment in a future-oriented economy for the Vietnamese people. According to a study conducted by the IASS COBENEFITS project, replacing coal-powered plants with solar or wind will more than double the number of jobs per average megawatt (MW) power generation capacity. In the 15-year period from 2015 to 2030, solar and wind are expected to create 3.5 jobs and 2.8 jobs respectively per average installed MW capacity, compared to just 1.4 jobs/MW in coal-based power generation. Similar studies have been recently published on the positive impacts on people’s health and rural development. 

Such a transformational investment in a low-carbon economy will not only contribute to staying within the temperature limit set by the Paris Agreement and advancing the various SDGs, but will also ensure a green recovery post COVID-19 in the medium term. Furthermore, by identifying strategic tasks aimed at improving adaptive capacity, enhancing resilience, and reducing climate-induced risks, the adaptation component in the updated NDC can also contribute to achieving Vietnam’s sustainable development strategy.

Given the scope of the required initial investments, international climate partnerships like the International Climate Initiative (IKI) of Germany and international climate finance can serve as a catalyst, helping Vietnam to seize the identified opportunities and make the Paris Agreement a success for the planet and people.

NDC Co-Benefits Communication: Rallying domestic support and creating global momentum for climate action

By including a chapter on the socio-economic co-benefits of climate policies in its updated NDC, the Government of Vietnam has highlighted the multiple benefits of ambitious climate action. To ensure that Vietnam’s progress will be assessed for the next national reporting on the NDCs, monitoring and reporting structures and processes in relation to socio-economic co-benefits should be established. This would lay the foundation for evaluating and, if needed, broadening the activities necessary to realize ambitious renewable energy targets and create an enabling environment for the range of available co-benefits.

Apart from revealing potential opportunities and rallying domestic support for climate action, addressing co-benefits in NDC-related communications can spark imitation and contribute to creating a global momentum for building strong alliances for ambitious and early climate action.

The opinions expressed are those of the authors and do not necessarily reflect the views of FES