Illustrative image (Photo: https://www.eastasiaforum.org/)
On 17 November, Vietnam’s National Assembly passed the revised Law on Environmental Protection legalising an emission trading scheme, it said, noting that the law will take effect on 1 January 2022.
The policy is expected to strengthen Vietnam’s commitment to greenhouse gas emission reductions under the Paris Agreement on climate change. It paves the way for the country to further tap its significant renewable energy potential, and switch to a low-carbon development model in the post-COVID-19 recovery era.
The law stipulates that the Government will establish a carbon emission trading scheme that suits the local context and complies with international climate change treaties. Details such as targets, timelines and regulated industries will be specified later in a government decree, the site said.
The law also legalises enabling policies such as national greenhouse gas emission inventories, and the monitoring, reporting and verification of emissions, it added.
According to the article, by adopting carbon pricing, Vietnam will strengthen its position to reap additional benefits from free trade with the European Union (EU). Carbon pricing has the potential to improve Vietnam’s image internationally, as well as contribute to reducing climate change impacts and environmental pressures.
Vietnam is highly vulnerable to climate change. Extreme weather events are intensifying and becoming more frequent. Rising sea levels risk inundating important economic zones in coastal areas, potentially displacing millions of Vietnamese people.
Carbon pricing is a policy instrument that places a cost on greenhouse gases. With a carbon price in place, a market-based economy will have an incentive to steer itself in a low-emission direction.
By mid-2020, 61 carbon pricing initiatives had been implemented or scheduled for implementation worldwide. Before Vietnam, a handful of developing countries had adopted carbon pricing, including China, South Africa and Kazakhstan.
Vietnam’s adoption of carbon pricing will hopefully encourage other countries to commit to reducing greenhouse gases. The post-COVID-19 period is an ideal time to adopt a carbon price, setting foundations for a green recovery.