Attracting private investment for green growth

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According to Dr. Ho Cong Hoa, Deputy Director of the Social Affairs Research Department, Central Institute for Economic Management (CIEM), the private sector’s role in green growth has become increasingly important. In the 2010-2019 period, private investment in the energy and environment sectors, especially in renewable energy, water and waste treatment, increased. However, the total investment fund and revenue of private companies were not as significant as the number of private enterprises in these sectors, particularly the energy industry.

Mr. Michael Krakowski, Director and Chief Technical Advisor of the Macroeconomic Reform Green Growth Program, said that Vietnam’s rapid economic growth is challenged by climate change and environmental pollution. Therefore, in the coming time, Vietnam should proliferate and support large-scale clean production and investment in clean and renewable energy.

Sharing the same viewpoint, many economic experts said some shortcomings and limit ations presently exist in Vietnam, including a high share of coal-fired power plants which easily cause environmental pollution; slow and difficult site clearance for project construction; insufficient seed capital and support from the government. Besides, shortcomings in formulation and implementation of solid waste treatment planning, purchasing and selling policies and unstable electricity prices are affecting the access, investment and carry-out of private projects for green growth.

To attract private investment resources for green growth in the 2021-2030 period, including renewable energy and environmental services, Vietnam will apply solutions to create an attractive investment environment, and improve the quality of the legal framework and effective policy enforcement, he added. In particular, priority should be given to some solutions. First of all, it is necessary to accelerate institutionalization of the Party's views on strategic directions of socio-economic development coupled with environmental protection, climate change adaptation and private economic development.

Second, it is important to improve the business investment climate for energy and environment sectors, gradually create a full energy market, and ensure openness, transparency and fairness for all economic sectors; apply economic tools such as green banking development and green credit for businesses to access green financial resources; implement green public procurement policy; study the possibility of applying a carbon tax according to an appropriate roadmap to direct social production, business and consumption in the future.

In addition, it is necessary to agree on the view of building a legal corridor, mechanism and policy that both oblige and encourage businesses to invest in green growth, enforce social responsibility to the environment, and enhance green growth and sustainable development.

According to Dr. Ho Cong Hoa, Vietnam may consider studying and applying pilot mechanisms on PPP projects (such as waste collection and treatment and water supply) with an investment value of less than VND200 billion in rural areas, small urban areas as the basis for additional adjustments to the Law on Public-Private Partnership (PPP); speed up the administrative reform program, accelerate SOE equitization program, and soon issue guidelines on debt trading mechanism.

Dr. Dinh Van Nguyen, Trinity College Dublin of Ireland said, Vietnam's economy is recovering from the COVID-19 pandemic and moving to ensure employment for businesses. To pursue sustainable green growth, more research is needed in energy transmission, distribution, regulation and use. Besides, the country will need to expand the concept of green growth because, in addition to reducing emissions and avoiding environmental pollution, green growth also means increasing the quality of worker life.