THE country needs to invest approximately US$368bil (RM1.6 trillion) from now until 2040 to build a climate resilient and low-carbon economy, according to the Vietnam Country Climate and Development Report (CCDR) released by the World Bank.
The Vietnam Country Climate and Development Report is one of the first in a series of reports on climate and development of the World Bank.
Carolyn Turk, Country Director of the World Bank in Vietnam, said that Vietnam is increasingly seeing its development affected by climate change and now faces critical questions about how to respond.
The Vietnam Country Climate and Development Report is about how the country can maintain its economic growth in the time of climate change, and how it can balance its development goals with increasing climate risks, Turk added.
Climate change costs up to 14.5% of gross domestic product (GDP).
After more than two decades of steady growth, Vietnam has set a target of becoming a high-income economy by 2045.
To reach this goal, Vietnam needs to shift its economic model and has initiated actions to cope better with climate change and combat rising greenhouse gas emissions.
With a coastline of 3,260km that includes major cities and production sites, Vietnam is among the world’s very vulnerable countries and is highly exposed to sea-level rise, extreme weather and temperature rise.
Initial studies show that the country lost about US$10bil (RM44bil) in 2020, equivalent to 3.2% of GDP due to the impact of climate change.
Without appropriate mitigation and adaptation measures, it is estimated that Vietnam will lose up to 15% of GDP per year by 2050, resulting in one million people falling into poverty again by 2030.
“The country’s rapid economic growth, urbanisation and industrialisation have been powered by coal-dependent energy creating significant greenhouse gas (GHG) emissions,” she said.
Vietnam is not a major contributor of greenhouse gas globally, with 0.8% of the world’s emissions.
But over the past two decades, the country has emerged as one of the fastest-growing per capita GHG emitters in the world.
Moreover, Vietnam’s GHG emissions are also associated with the toxic air pollution that plagues many of its cities, especially Hanoi, with implications for human health and labour productivity.
She said there is a path for Vietnam to address the climate risks while sustaining robust economic growth – a combination of adapting to climate change by taking decisive measures to protect people, assets and sectors, and mitigating climate change by steering the economy away from carbon-intensive energy.
If well designed, the country would expand its GDP per capita by more than 5% a year — the average rate needed to become high-income by 2045 while achieving its climate objectives.
According to the report, a series of urgent and impact interventions should be focused on, including a coordinated regional programme for the Mekong Delta, an integrated coastal resilience investment programme for urban centres and connecting infrastructure, a targeted air pollution reduction programme for Hanoi, accelerated clean energy transition and a new social contract to protect vulnerable people.
To become a climate-resilient and net-zero emissions economy, the country will allocate additional investments of about 6.8% of GDP annually, or US$368bil (RM1.6 trillion) cumulatively by 2040.
It recommends that the amount be funded by both the public and private sectors as well as a combination of domestic and international financial sources. — Vietnam News/ANN