Hanoi (VNA)🌳 – The effective mobilisation and allocation of financial resources from different sectors is important and urgent for the promotion of green capital serving sustainable development, according to experts.

The Ministry of Natural Resources and Environment, the financial need for emission reduction measures in each sector according to Vietnam's environmental commitments by 2030 is about 68.75 billion USD. The UN Development Programme (UNDP) estimated that Vietnam needs about 330-370 billion USD for the implementation of its net-zero emission commitments by 2050. At a forum themed “Vietnam’s National Strategy on Green Growth: Promoting Green Capital” held on September 10, Do Thi Phuong Lan, Editor-in-Chief of the Economy and Forecast Magazine said that effective allocation of financial resources from domestic and foreign sources is pressing to meet the capital demand for green growth. Under the action plan to implement the green growth strategy to the State budget, the private sector is important (green credit, green corporate bond, carbon credit and exchange of greenhouse gas emission quotas), along with international assistance (ODA) and society by way of public-private partnership and funds, she noted. Meanwhile, Nguyen Thanh Nga, Deputy Director of the Institute for Financial Strategy and Policy, said there are limitations in the green finance policies of Vietnam.

Specifically, the taxes and fees on activities that cause environmental pollution, as well as punishments, are not severe enough and still unable to compensate for the damage caused. The State budget allocated for green growth remains limited, she said, citing statistics of the Ministry of Planning and Investment that it met only around 25% of the capital demand to cope with climate change and promote green growth. A comprehensive review of tax policies should be carried out to expand the tax base for an environmental protection tax and offer bigger incentives to green growth and climate change adaptation projects, Nga said, adding public investment policies should prioritise green growth and create spillover effects to attract resources from other economic sectors. Solutions to promote the development of green stock markets should be implemented concertely, including green bonds and green stocks. The legal framework for green insurance must also be improved. It was also important to improve the legal framework for carbon credit market, including the formation of a carbon credit exchange which would be connected to the regional and world markets, Nga said. Can Van Luc, Senior Economist at BIDV, said that as of the end of June, outstanding green loans were estimated to total nearly 680 trillion VND (27.5 million USD), or 4.5% of the total outstanding loans in the economy. From 2019 to June 2024, Vietnam issued around 1.16 billion USD worth of green bonds, he added. From the perspective of enterprises, Diep Kim Hoon, Director of Sustainable Development at Deep C Industrial Zone, said that companies expected a clear set of criteria to determine whether a project is green or not, together with support policies in terms of interest rates, debt payment extension, and credit guarantee with streamlined procedures. A green investment fund should be set up to provide finance to SME projects, especially in terms of renewable energy, waste management, and nature-based infrastructure, she suggested./.