Special edition  » Green development

The Asian Development Bank (ADB) congratulates Vietnam for its progression to a middle income country.

As one of the largest providers of development assistance to Vietnam with the total assistance from 1993 to March 2010 of more than $8.4 billion through 90 loans and over $300 million in grant assistance, ADB renews its commitment in working closely with Vietnam in building a low-carbon climate-resilient economy.

It comes as Vietnam becomes a new middle income country which is also one of the world's most vulnerable countries to the adverse impacts of climate change. As Vietnam prepares its new Socio Economic Development Strategy 2011-2020 and the new Socio Economic Development Plan 2011-2015, we welcome that Vietnam is trying to uphold the vision of environmental sustainability and intends to respond most responsibly not only in adaptation but also in mitigation.

It may be noted that actually, many of the ADB's past investments in Vietnam have already been either in highly vulnerable locations to climate change, such as coastal areas, or in climate-sensitive sectors such as water resources and agriculture.

And we are also developing our new Country Partnership Strategy 2011-2015 to help Vietnam implement its Socio Economic Development Plan 2011-2015, a number of ADB investments in energy, transport and forestry sectors are expected to contribute greatly to greenhouse gas (GHG) mitigation leading to a low-carbon economy.

ADB's long term strategic framework, Strategy 2020, envisages mainstreaming climate change concerns into planning of our current and future investments at the country level. In Vietnam, it will be a key pillar of our future assistance. The ADB is also committed to incorporating climate proofing for all of its future investments in Vietnam.

Even though Vietnam 's historical contribution to global GHG emissions is low, as Vietnam accelerates the pace of its growth, GHG emissions and other air pollutants are rapidly rising, particularly in energy and transport sectors. Making these sectors more energy-efficient and less carbon-intensive is economically profitable, environmentally sustainable and socially beneficial in terms of air quality and health improvement.

Vietnam has a long history of coping with climate-related disasters along the coastal regions, and flashfloods in highland areas. Such capacity is, however, inadequate to cope with future impacts of climate change. Strengthening this capacity through effective integration of climate risk and resilience at all levels of planning and budgeting is crucial, particularly as Vietnam is becoming a middle income country.

The ADB intends to help its developing member countries address climate change mitigation and adaptation challenges in an integrated manner, facilitated by financing, knowledge generation and partnerships.

Five operational priorities for ADB support towards building a low-carbon climate-resilient economy in Vietnam include (i) strengthening climate change policies, governance and capacities (ii) scaling up the generation and use of clean energy, (iii) promoting climate-friendly urban development and sustainable transport, (iv) managing land use and forests for carbon sequestration, and (v) promoting climate-resilient development.

The ADB also provides climate change assistance through regional cooperation efforts of the Greater Mekong sub-region with the recognition that many efforts towards mitigation and adaptation can be better coordinated at a regional level in order for them to be most effective. Examples of activities under each priority are briefly mentioned below.

Strengthening climate change policies, governance and capacities

The ADB has been providing targeted assistance in creating a legislative framework to address climate change in Vietnam, including the preparation of the renewable energy law, the energy efficiency law, and water resources law. Recent ADB studies on the possible impact of climate change on Ho Chi Minh City, conducted in cooperation with the World Bank and Japan Bank for International Cooperation and the South East Asia Regional Review of the Economics of Climate Change were welcomed as they have contributed to better understanding of impacts and adaptation strategies relevant to Vietnam.

A number of capacity building initiatives (e.g. geo-information technology for hazard risk management, promoting energy efficiency and diversification) are also in progress. A technical assistance project to develop sectoral (e.g. energy and transport), provincial (e.g. Thanh Hoa), and city-wide (e.g. Danang, Ho Chi Minh City) action plans for implementation of the National Target Programme to respond to climate change is about to be launched in collaboration with the Nordic Development Fund. Also, a regional study is being planned to examine the prospects for carbon capture and storage, and develop policy tools for low carbon scenario planning.

Scaling-up the generation and use of clean energy

The ADB recognises the importance of adopting a multi-pronged clean energy agenda in Vietnam to improve its energy security while significantly reducing GHG emissions as compared with business as usual scenario.

Our clean energy programme seeks to (i) enhance energy efficiency in all our investments, (ii) enable energy diversification through promotion of renewable energy sources and expanded use of renewable energy technologies and (iii) improve access to energy for the poor and remote regions consistent with a transition to low-carbon energy development.

The ADB, in collaboration with the World Bank, has recently assisted Vietnam to successfully prepare a Clean Technology Fund (CTF) investment plan of $250 million, of which the ADB plans to manage $150 million for the improvement of industrial energy efficiency, high voltage transmission technology and urban transport by providing additional co-financing of $800 million.

In addition, ADB plans to assist the government in rehabilitating and improving efficiency of the Haiphong thermal power plant. The ADB's ongoing investments in Song Bung 4 hydropower plant, northern power transmission expansion, and several projects on renewable energy development are also expected to help lowering the GHG emissions trajectory of Vietnam. It is also supporting projects aimed at providing energy to rural poor by supporting biomass and waste to energy conversion (e.g. biogas) projects.

Promoting climate-friendly urban development and sustainable transport

Vietnam's cities are rapidly growing. Such rapid growth is associated with not only increasing energy consumption especially in the buildings and transport sectors but also air pollution. The ADB, through its sustainable transport initiative, assists Vietnam in designing low carbon transport systems such as mass rapid transit in Hanoi and Ho Chi Minh City.

The ADB's Cities Development Initiative for Asia also helps in sustainable waste management by promoting conversion of waste to energy thereby reducing emissions of methane, which can be as much as 21 times more damaging to global warming potential than carbon dioxide. These interventions are expected to significantly reduce emissions of both GHG and other air pollutants thereby leading to improvements in air quality and health.

Managing land use and forests for carbon sequestration

Vietnam aims to increase its forest cover to 41 per cent of its geographical area in the near future. Indeed, enhancing the capacity of agricultural and forest ecosystems to absorb GHG is as important as reducing emissions in other sectors.

The ADB promotes Vietnam's carbon sequestration efforts through projects such as FLICH (Forestry for Livelihoods Improvement in the Central Highlands) and Greater Mekong Sub-Region [GMS] Biodiversity Conservation Corridors Initiative. The ADB is now assisting Vietnam to be part of a regional pilot project under Forest Investment Programme aiming at "reducing emissions from deforestation and forest degradation (REDD)."

Promoting climate-resilient development

As Vietnam is highly vulnerable to impacts of climate change including sea level rise, the ADB has already started and is also planning to launch a number of projects focusing on climate resilience. For example, it supported a community-based adaptation initiative in Thua Thien-Hue province in 2006.

A technical assistance project supported by the Global Environmental Facility's Special Climate Change Fund is looking at piloting options to enhance climate resilience of rural infrastructure in the northern mountainous provinces. Another project in Ca Mau and Kien Giang provinces, in collaboration with AusAID, is examining adaptation options for agriculture, energy and transport sectors. In addition a sub-regional project to manage flood and drought risks in the GMS is in pipeline.

Vietnam alone cannot address climate change. It needs strong support from the international community in the form of low carbon technologies and financing to both mitigate GHG and adapt to impacts of climate change. The ADB hopes that Vietnam can rapidly transform itself into a low carbon climate-resilient economy and becomes a model to neighbouring economies in South East Asia and is committed to remain to be a trusted partner in enabling this transition.