Vietnam is facing a massive opportunity for green growth

Green growth - the key to overcoming "multi-crisis"

Speaking at the Conference on Promoting Green Growth in Vietnam: Roadmap to Success, taking place on April 18 in Hanoi, Minister of Planning and Investment Nguyen Chi Dung said the world economy 2023 is facing a situation of "multi-crisis" from increasing public debt, inflation of energy and food prices, to the impact of the conflict in Ukraine and the complicated evolution of climate change.

The current "multi-crisis" situation requires all countries to renew their growth models to take advantage of opportunities, overcome challenges, and move towards sustainable and inclusive development, in which green growth is increasingly becoming the top priority of economies in the face of complex, unpredictable fluctuations and intertwined challenges.

More and more countries have been, are and will be participating in "green alliances" to transition to a green economy through regional and global commitments. According to a recent assessment by the European Commission, the current global market size for green products and services is estimated at over 5 trillion USD and has a much higher growth rate than traditional markets. It is forecasted that by 2030, the green economy will create about 24 million new jobs globally.

In the US, the green economy creates jobs for about 9.5 million workers, contributing equivalent to 1.3 trillion USD/year; with OECD countries, this number is 17.5 million workers, equivalent to $2.9 trillion annually. The green economy also creates opportunities to attract investors in many new fields, such as renewable energy, smart transportation, smart agriculture, urban-green building, and green finance.

In Vietnam, green growth towards economic prosperity, environmental sustainability and social justice is not only an inevitable choice but also an opportunity for Vietnam to become a pioneer in the region, catching up with the development trend of the world towards the goal of realizing Vietnam's landmark historic commitment to bring net emissions to "zero" by 2050.

Green growth is increasingly becoming the top priority of economies in the face of complex fluctuations. Illustration: TL

Leapfrog

Research results of the Boston Consulting Group (BCG) show that to accelerate green growth, specifically for the transition of the wind and solar power industries, the potential contribution to GDP is up to 70-80 billion USD, creating about 90-105,000 direct jobs. In addition, the clean hydrogen ecosystem based on renewable energy can contribute 40-45 billion USD to GDP annually, and create about 40-50,000 jobs, benefiting the whole domestic market and export potential to developed countries in the world.

The research results also show that Vietnam, with its potential and geo-economic position in the global supply chain, is facing great opportunities in green growth to be able to transform, catch up, move along, surpass, go ahead to take the lead and create momentum for a leap forward in economic, social and environmental development.

With such an opportunity, the National Green Growth Strategy for the 2021-2030 period, the vision to 2050 and the National Green Growth Action Plan for the 2021-2030 period have identified that green growth is an important solution to promote green growth opportunities, restructuring the economy in association with renovating the growth model, improving competitiveness and resilience to external shocks, directly contributing to the reduction of greenhouse gas emissions towards the carbon neutral economy in the long run. Green growth must be human-centred, rely on modern institutions and governance, advanced science and technology, high-quality human resources, and orient investment in advanced technology, digital transformation, and smart and sustainable infrastructure; create an impetus for private investment to play an increasingly important role in the green economy.

However, to achieve the green growth target set out in the Strategy, Vietnam needs to take more drastic and breakthrough steps to bring the green economy from 6.7 billion USD in 2020 to 300 billion USD. USD will contribute each year to the total national GDP by 2050. Therefore, it is necessary to focus on the essential industries and fields to help Vietnam activate its natural advantages and rise to become a developed country in all three areas, including environmental, economic and social factors, by 2045.

According to Jaime Ruiz-Cabrero, General Director of BCG Southeast Asia, the world's leading countries are accelerating the development of solution technologies to transition to a green, clean and low-carbon economy. This opens up opportunities for Vietnam to catch up with the trend and become a leader in clean technology in the region and possibly globally. Four main recommendations are given to the Government of Vietnam to realize the opportunity, which is to perfect the green strategic institution and strengthen the foundation of the legal framework; strengthening the construction of a stable green financial system, helping to reduce investment capital costs; develop the grid infrastructure system, create the foundation for the development of clean and renewable energy sources and accelerate the development of the clean hydrogen ecosystem.