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PROGRAM INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: 62317
Operation Name
Region
Sector
Project ID
Borrower(s)
Implementing Agency
Date PID Prepared
Estimated Date of
Appraisal
Authorization
Estimated Date of
Board Approval
Vietnam Climate Change Development Policy Credit
East Asia and Pacific Region
Water Resources Management, Energy Efficiency, DRM, Institutional
Capacity Building, Financing
P122667
The Socialist Republic of Vietnam
Ministry of Natural Resources and Environment
Ministry of Natural Resources and Environment
83 Nguyen Chi Thanh - Dong Da - Ha Noi
* Tel: (84-4) 8 343 911
* FAX: (84-4) 8 359 211
Email: [email protected]
Vietnam
February 10, 2011
April 1, 2011
July 14, 2011
1. Country and Sector Background
Vietnam is one of the most vulnerable countries to the effects of climate change. Impacts from
climate change in Vietnam are already being felt, and are expected to increase in the future putting
a heavy toll on public finance and human and social development. Water resource management
stresses arising from climate change further add to the problems that exist today. There are serious
concerns about meeting future projected water uses, particularly in the dry season.1 Hydrological
changes and sea-level rise will affect the availability of fresh water (saline intrusion) or even
physically change the agricultural landscape. Climate related natural disasters cause an average of
750 deaths and result in annual economic losses equivalent to 1.5 percent of gross domestic
product (GDP). The possibility that climate change could worsen flooding, prolong droughts, and
increase the strength and frequency of typhoons associated with strong sea surges calls for
preventive and adaptive action.
Vietnam’s CO2 emissions have more than doubled over the past decade and are projected to reach
101.5 million tons of CO2-equivalent from energy-related sources in 2010. Under a business as
usual scenario, Vietnam’s primary energy demand will more than double and total energy-related
greenhouse gas (GHG) emissions triple by 2030. The industrial, transport and power sectors are
projected to account for the bulk of the increase in GHG emissions.
2. Operation objectives
The PDO of the proposed operation is to support the GoV in its efforts to address climate change
by adopting policies and strengthening institutional capacity to promote climate resilient and lower
carbon intensity development.
1
See Government/ADB water sector review (ADB 2009)
3. Rationale for Bank Involvement
The GoV has identified climate change action as a policy priority and demonstrated its
commitment to further scale-up, complement and strengthen its climate change response with the
adoption of a national policy development program, the Support Program to Respond to Climate
Change (SP-RCC) in 2009. The SP-RCC complements and reinforces the actions initiated under
the NTP-RCC. The main objective of SP-RCC is to promote policy and institutional development
that is conducive to scale-up and mainstream climate change adaptation activities and GHG
reduction.
The operation is guided by strategic thematic importance and expected impacts of climate change
and the related policy actions. The rationale to engage is supported by a shared vision with the
Government, a strategic complementarily with Bank lending and non lending portfolio, clear cobenefits, strong inter-linkages across the four goals and an assessed comparative advantage of the
Bank in these areas.
The policy and institutional development program under the proposed DPO aims at increasing the
GoV’s capacity to respond to climate change and at enhancing Vietnam’s preparedness to engage
in international climate partnerships. This includes the development of a low carbon development
study, which will support the GoV in formulating Nationally Appropriate Mitigation Actions
(NAMAs), and the completion of adaptation studies that could form the basis of a National
Adaptation Plan (NAP) under the UNFCCC.
4. Financing
Source:
Borrower
International Development Association (IDA)
Total
5.
($ million.)
0
70
70
Institutional and Implementation Arrangements
The overall management of the DPO will be fully aligned with existing integrated Vietnamese
government structures under the NTP-RCC and the SP-RCC. The National Steering Committee for
NTP-RCC (SC), and the Executive Board of the NTP-RCC (EB) are the governing bodies of the
SP-RCC. The progress under the DPO will be reported to the SC and EB in alignment with the
NTP-RCC’s reporting procedure.
MoNRE is the counterpart agency and collaborates with relevant line agencies to coordinate the
policy dialogue and provide overall accountability under the DPO. A SP-RCC coordination unit
was created within MoNRE and is assigned to be the focal point for the implementation of the
DPO. It reports to the Executive Board on the progress on the policy matrix after each meeting and
to the Prime Minister at least once per year to report on the achievement of previous cycle and
request commitment of the following cycle. MoNRE co-chairs Technical Meetings, held with
development partners three times a year, and monitors the implementation of actions collecting
information on progress towards the results committed with development partners.
Line ministries, agencies, and provinces are responsible to develop and implement selected policy
actions under the DPO and participate to Technical Meetings in collaboration with MoNRE. They
update and report on achievements and progress of policy actions to MoNRE.
6. Benefits and Risks
The operation will help the GoV to develop enabling institutional and policy actions
considered key to address climate change.

The policy actions under the adaptation pillar will lay the basis to improve the climate
resilience of water resources.

The policy actions under the mitigation pillar will facilitate lower carbon intensity
development and improve the potential for energy efficiency.

The policy actions under the cross-cutting pillar, will strengthen the GoV’s preparedness
and capacity to formulate, prioritize and implement climate change policies. In particular,
the policy actions will build up the analytical and scientific basis for climate policy
formulation and implementation, and integrate climate change considerations into
development planning. This will help the GoV to identify and address the need to develop
more specific priorities and targets for climate action. The DPO will also strengthen the
financing framework for climate action. The actions under this goal target both
international funding and state budget planning, allocation, monitoring and reporting
processes and the regulatory and policy environment for private carbon finance flows
enabling the GoV to better plan, access and monitor climate finance.
Five risks to the program’s outcomes have been identified:
 Implementation of the proposed operation may be affected by a challenging
macroeconomic setting.
Mitigation: Macroeconomic policy lies in the domain of the GoV. However, the
macroeconomic framework and the GoV’s efforts to address the situation will be closely
monitored.

Slow progress in broadening and deepening ownership of Vietnam’s climate change
agenda and difficulty to maintain momentum.
Mitigation: Awareness support, active multi-sector engagement process, robust strategic
dialogue and M&E highlighting progress made, together with capacity building - including
for participation in international negotiations. In addition, technical assistance for
analytical work to increase the understanding of climate change.

Complexity and novelty of the climate change agenda which requires trade-off,
understanding of long term processes and “learning by doing”.
Mitigation: A targeted TA and advisory services package is being developed in support of
the implementation of the policy reform agenda. Selection of policy areas corresponds to
Government’s priorities; policy development will foster co-benefits and no-regret
solutions.

Weak capacity to formulate innovative policy and mobilize inter-ministerial coordination,
including weak capacity of MoNRE to leverage and monitor a dialogue with other
ministries.
Mitigation: Capacity development and TA will target gaps analysis for policy development
needs in each of the 5 ministries involved. The establishment of focal points within
involved ministries is being supported, and role of the Standing Office in MoNRE as
coordinating entity is being strengthened. Special attention will be put on M&E and
reporting capacity.

Weak perception of short term benefits as well as of outcomes of the reform progress by
line agencies. Implementation of policies and financing of investments perceived as delinked from support from SP-RCC.
Mitigation: The development of a financing mechanism that links budget allocation to
progress on the climate policy reform agenda is being supported. Interlinkages between the
DPO and the Bank’s lending portfolio are designed to link implementation and policy
dialogue. Planned technical assistance and capacity building will contribute to the
incentive framework.
7. Poverty and Social Impacts and Environment Aspects
Vietnam’s vulnerability to the effects of climate change is socially differentiated. Although the
general direction of most changes is known, there is no certainty about their magnitude and speed
and therefore about their eventual impacts. The current models, however, suggest that some
impacts will have important economic or human welfare effects over the coming decades. It is also
recognized that certain social groups or communities are inherently more vulnerable or likely to be
more affected and therefore need special consideration.
Given the strong linkages between the proposed policy areas and issues of poverty, DPO has a
potential to help the poor mitigate some impacts of climate change, and contribute to poverty
reduction efforts. Poverty impacts the access to resources and entitlements, and therefore increases
vulnerability and sensitivity of livelihoods to risks. If properly crafted, climate change related
policy reforms in water resource management and energy efficiency could have an aptitude to
decrease vulnerability of the poor and increase their resilience to climate induced shocks.
Poverty and social impact analysis (PSIA) will therefore be undertaken to assess: (i) poverty and
social impacts of climate change in select sub-sectors; (ii) the capacity of the key policy reforms
under the DPO to address the climate change impacts on the poor and vulnerable groups; and (iii)
the general poverty and social impacts of proposed policy reforms on the well-being or welfare of
different stakeholder groups. The PSIA will aim to improve the Government’s understanding of
how the proposed policy reforms could contribute to building climate resilience of the poor, and
what adjustments need to be made to ensure that the reforms do not further exacerbate the climate
change related issues for the vulnerable groups. It will also contribute to transparent and informed
development process through policy dialogue, consultations, and collaboration with local scientific
community. It will make recommendations for appropriate policy options and mitigation measures
which are practical to implement and cost-effective.
The proposed program is not considered to have any adverse effects on the environment, forests,
and other natural resources of Vietnam. Climate change itself will have negative impacts on forests
and other environmental resources over the long-term so the enhanced climate resilience that is the
objective of this operation represents a significant positive environmental effect.
A few areas of policy intervention to be supported under this project are expected to have specific
positive impacts on natural resources or potentially negative impacts. Some policy reforms might
theoretically generate negative environmental impacts. These include the following:

The intention of the irrigation policy reforms is not to increase irrigated agriculture per se
but rather to better manage water resources for irrigation. It could however result in more
intense irrigated agriculture in some areas and result in more use of pesticides and localized
adverse environmental impacts. A two-pronged approach is necessary to mitigate any
potential environment concerns. On the one hand, as water management reforms are
prepared, consideration of environmental issues and impacts needs to be part of the policy
development; the Bank is supporting the Government in this area through the current
Mekong Water Resources Development Project and this is also a focus of the DPO1.
Secondly, the national EIA regulations and processes need strengthening; as noted above,
this is a focus of World Bank technical support to the Government under the PIR Project as
well as in other related TA activities.

Salinization control policy measures will be supported under the operation. Salinization
control must include a wide range of responses including in some cases physical
infrastructure such as dykes or water control structures. An adequate policy response of the
Government might include indirectly a stimulus for such investments. These physical
investments, while positive for salinization control, could in and of themselves have other
environmental impacts. The best mitigation measures are similar to those above: thorough
consideration of environmental issues as part of the development of integrated water
resource management strategies and adequate EIA regulations and processes.
8. Contact point
Contact: Christophe Crepin
Title: Sector Leader, Environment & Natural Resources
Tel: +1 202-473-9727
Fax: +1 202-614-0893
Email: [email protected]
Location: Washington, DC (IBRD)
9. For more information contact:
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The World Bank
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Telephone: (202) 458-4500
Fax: (202) 522-1500
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