Download Climate Policy in Developing Countries * Drivers, Policy Instruments

What could drive Vietnam to go
“green” and “clean”?
A policy analysis of recent climate- and
environment-related national reforms
Anne Zimmer
with Michael Jakob & Jan Steckel
EntDekEn Project meeting
16 October 2012
2
A game theoretical perspective:
Is unilateral climate policy rational?
• Game theory:
▫ Costs for emissions mitigation are born individually while benefits are
shared globally
▫ Individual contribution to emissions is small compared to global sum
(benefits  0, costs >0)
 Individual mitigation efforts w/o global agreement are irrational
• No new comprehensive global environmental agreement in sight
• Kyoto Protocoll: Developing countries as non-Annex I countries are
exempted from obligations
Why do we nevertheless observe national climate policy activities
in more and more developing countries?
3
What could drive Vietnam to go
“green” and “clean”?
- Outline
1.
2.
3.
4.
Background information on Vietnam
Research question
Details on the recent „green“ policies
Exemplary analysis: potential drivers for
Renewable Energy Policy
5. Challenges
6. Methodology & sources
7. Next steps
4
Background:
About Vietnam
• Political Reform Process “Doi Moi“ (1986)
▫ Transition from centrally planned economy to market
economy
• Transition from low income country to middle-income
country (in 2009)
▫ One of the poorest countries in the world in 1980s
▫ Economic growth rates (2000 -2010) between 5% and 8%
▫ Reduction in poverty rates from 37.8% (1998) to 14.5%
(2008)
[source: HDR – UNDP 2011]
5
Background:
About Vietnam

CO2 emissions have more than doubled over past decade

Power demand expected to grow by 10% to 11% per year
until 2025
[source: UNDP 2012]
 Policy aim:
„Modern Industrialized Nation
by 2020“
6
Background:
Overview on “green” policies in Vietnam
• National Strategy for Climate Change
• Vietnam Green Growth Strategy
• Reform of the Power Sector
▫ Law on economical and efficient use of energy
▫ National Master Plan for Power Development for
2011-2020 (MP VII)
• Environmental Protection Tax
7
Research Question
What motivates a developing country like Vietnam to
introduce national environmental and climate policy
measures?
• Actors:
Who are the different stakeholders and what are their
motivations?
• Determinants:
What are the factors on different policy fields and levels
(international, national and regional)?
• Policy process:
How did the policies evolve? Why does the green policy framework
look the way it does at the moment?
8
Details on policies and main actors:
Vietnam‘s “Green Economy" Framework
Fiscal Policy
Environmental
Protection Tax
[Ministry of
Finance]
Climate Policy
Energy Policy
National Strategy on
Climate Change
[Ministry of Natural
Resources and
Environment]
Economic Policy
Vietnam Green Growth
Strategy
[Ministry of Planning and
Investment]
Reform of the Power Sector
[Ministry of Industry and Trade]
Fossil Fuel Fiscal Policy Reform
9
Details on policies and main actors:
Vietnam‘s “Green Economy" Framework
Fiscal Policy
Environmental
Protection Tax
[Ministry of
Finance]
Climate Policy
Energy Policy
Economic Policy
National Strategy on
Growth
C „designed basedVietnam
on level Green
of environmental
Climate Change
Strategy
pollution and degradation
caused by
[Ministry of Natural
taxable object“[Ministry of Planning and
Resources and
Investment]
Environment]
C Tax revenue dedicated to ecological
purposes only
Law: 2010, tax: Jan 2012
CReform
No exemptions
(e.g.Sector
for kerosene)
of the Power
[Ministry of Industry and Trade]
D Tax rates very low (lower boundary of
range in law)
Taxable subjects:
Fossil Fuel Fiscal Policy Reform
• Gasoline, coal, oil, grease,
D Partially only substitute pre-existing fees
• Others (e.g. plastic bags,
D Low taxation of coal relative to carbon
herbicites, pesticides)
content
10
Details on policies and main actors:
Vietnam‘s “Green Economy" Framework
Fiscal Policy
Climate Policy
Environmental
Protection Tax
[Ministry of
Finance]
National Strategy
on Climate Change
[Ministry of Natural
Resources and
Environment]
Launched in March 2012
Energy Policy

Economic Policy
Vietnam Green Growth
Strategy
[Ministry
Planning and
Policy
shift of
from
Investment]
adaptation
only (NTP-RCC
2008) to adaptation plus
mitigation actions (but still
Reform of the Power Sector
main focus on adaptation)
[Ministry of Industry and Trade]
Announces actions on e.g.
• Increasing forest coverage
Fossil Fuel Fiscal Policy Reform
• Promoting renewable energy
• Early warning & monitoring network
11
Details on policies and main actors:
Vietnam‘s “Green Economy" Framework
Climate
Policy
Fiscal Policy
Submitted
to government
in June
2012
National Strategy
on Climate Change
Protection Tax
Restructure
economy (reduce GHG intensity
[Ministry of Natural
of[Ministry
GDP) of
Resources and
Finance]
Promote the use of clean and
renewable
Environment]
energy
Objectives:
Environmental
•
•
•
Energy Policy
Economic Policy
Vietnam Green Growth
Strategy
[Ministry of Planning and
Investment]
Promote sustainable lifestyle & consumption
Reform of the Power Sector
[Ministry of Industry and Trade]
[preliminary] climate policy targets:
by 2020:  reduce energy consumption per capita by 2.5 - 3% per year
FossilGHG
Fuel emissions
Fiscal Policy
Reform
 reduce
intensity
by 10-15 %
by 2030:  reduce total GHG emissions 2-3 % per year
by 2050:  green energy and technology will be widely used
[source: Presentation of Ministry of Planning and Investment, May 2012]
12
Details on policies and main actors:
Vietnam‘s “Green Economy" Framework
Fiscal Policy
Climate Policy
Energy Policy
Economic Policy
National Strategy
National
Master Plan for
Policy Instruments:
Environmental
Vietnam Green Growth
on Climate Change
Protection
Tax
Power Development
• Feed-in tariff for windStrategy
power: 7.8 US$
[Ministry of Natural
[Ministry
of
[Ministry
of Planning and
(July 2011)
Resources andcents/kWh
Finance]
• Develop competitive
electricity market
• targets for renewable
Energy (RE):
Environment]
Investment]
Reform of the Power Sector
[Ministry of Industry and Trade]
 Increase RE as % of total
electricity produced
from
Fossil
Fuel Fiscal Policy Reform
3.5% (2010) to 4,5%
(2020) and to 6% (2030)
13
Details on policies and main actors:
Vietnam‘s “Green Economy" Framework
Fiscal Policy
Climate Policy
Energy Policy
Economic Policy
Status Quo:
National Strategy on  impacts of cut in fossil fuel subsidies:
Environmental
Vietnam Green Growth
Climate
Change
several
studies
recommend
Vietnam‘s
Central
Protection
Tax Government
Strategy cuts in
[Ministry of Natural
subsidies[Ministry
+ levy taxof Planning and
[Ministry
of
• caps
electricity
and fossil
fuel
Resources and
(e.g. UNDP 2012)
Finance]
Investment]
prices at low level
Environment]
 Vietnam‘s government seems to seek
• compensates (state-owned)
policy advice concerning this topic
energy enterprises for losses
 (indirect) fossil fuel
Reform of
Power
Sector
the
Plans
for
reform not yet
[Ministry
of
Industry
and
Trade]
subsidies
officially
announced
Fossil Fuel Fiscal Policy Reform
14
An exemplary analysis of drivers:
Renewable Energy Policy as cross-cutting issue
National Strategy
on Climate Change
[MoNRE]
Vietnam Green
Growth Strategy
[MoPI]
National Master
Plan on Power
Development
(MPVII)
[MoIT]
New and Renewable Energy Policy of Vietnam:
Targets and Measures
15
Potential motivation for
Renewable Energy Policy
Underlying Policy objective
Level
• Fossil fuel price volatility
• Threat of becoming coal
importing country
• Energy security and
National
independence
• Exploiting high potential for RE
• International competitiveness
• Studies on high climate change
vulnerability
• Increase in climate-related
desasters
• Control growth in own
emissions
• Signal to animate international
climate negotiations
National
• Bad air quality
• local pollution
• Improve local environment
• Reduce health impacts
National &
regional
• Decentralized energy access for
remote areas
• Raise living standards in rural
areas / reduce migration to city
Regional
• Negative headlines about
Vietnam in the press
• Politcal action in neighbor
countries
• Reconstitute „green“ reputation International
• Policy transfer via development
aid
• Gain funding and expertise
International
Internat./
regional
16
Challenges
▫ Recency of most policies:
Subject to frequent changes
Instruments and way of implementation not clear yet
Enforcement not clear
▫ Complexity of „green“ policy framework
Overlapping responsibilities of ministries and resorts
Different levels of policy making: international, national & regional
level
Interactions between different policy instruments and targets
▫ Transparency and availability of information (in
English) is low
17
Methodology and Sources
Country Case Study based on synthesis of literature
and qualitative Interviews
• Literature
▫ journal articles, IO/NGO reports, newspapers, VN government
homepages, legal texts
• Qualitative interviews with stakeholders
▫ Vietnamese ministries & institutions (MoF, MoNRE, MPI, VEA,
ISPONRE)
▫ IOs and NGOs (e.g. UNDP)
▫ National Development Agencies (GIZ, Danida)
• Cooperation with expert from BMU and GIZ local
office Vietnam
18
Next Steps
• Until end of this year:
▫ Prepare interviews and background for study
▫ Further define research design and structure /
work on theoretical background
• February / March 2013:
▫ Conduct interviews in Vietnam together with Kai
Schlegelmilch
19
Cám ơn
Thank you !
Looking forward to your comments!
20
Sources used for Presentation
• NCCS (2011): National Climate Change Strategy,
Challenges and Opportunities of Climate Change, Prime
Minister of Vietnam.
• UNDP (2012): Fossil Fuel Fiscal Policies and
Greenhouse Gas Emissions in Vietnam, United Nations
Development Program, May 2012.
• HDR- UNPD (2011): Human Development Report 2011.
• National Master Plan for Power Development for 2011 –
2020 period with vision to 2030, Vietnemese Prime
Minister, July 2011.
21
Back-up:
Climate Change Vulnerability
• Rise in frequency of local climate related extreme
events
• Climate related shocks & disasters have resulted in
9500 dead or missing people and have cost 1.5 %
of GDP annually over last decade (2001-2011)
• International and national studies on future
Climate Change impacts for Vietnam
▫ One of the most vulnerable countries to Climate
Change worldwide
▫ E.g.: Sea level rise of 1 m 40% of Mekong Delta
flooded
[source: NCCS 2011]
22
BACK-UP:
more environment-related policies
▫ 2002: foundation of Vietnam Environment
Protection Fund (VEPF)
▫ 2004: establishment of National Sustainable
Development Council
▫ Taxes on purchase of cars and motorcycles
▫ national strategy for environmental protection by
2020
▫ 2008: National Target Program to Respond to
Climate Change (NTP-RCC)
23
Back-up:
Other potential drivers
• Influence from abroad through development aid
and consulting
▫ GIZ, Danida, Sida, …(policy transfer)
▫ World Bank, UNDP
• Influence of individual politicians
• Increase in (social and political) awareness for
environmental and climate issues
▫ Signing of Kyoto Protocoll (Non-Annex I-country )
▫ IPCC Reports, Stern Review
▫ Higher local media coverage