Ho Chi Minh City pushed to adopt carbon credit market


Vietnam, which has an economy heavily reliant on coal, has committed to reaching net-zero carbon emissions by 2050. - Photo - The Straits Times/ANN

HO CHI MINH CITY: Ho Chi Minh City needs to adopt policies and channel financial resources to develop a carbon credit market in an effort to cut greenhouse gas emissions and respond to global warming, experts say.

Speaking at a seminar, Dr Su Dinh Thanh, director of the University of Economics Ho Chi Minh City, the event’s organiser, said it was vital for the city to establish a carbon credit market to shape standards and trends for other localities to promote the carbon market.

“The establishment of a carbon credit market will create green financial resources for technological innovation enterprises in the city,” Thanh said.

The city is preparing for a pilot phase of carbon trading, which is set to begin in 2025, with full operations expected to commence in 2028.

The carbon market is expected to attract investment in renewable energy, environmental technology, and international climate finance.

It will also promote a green economy and create new job opportunities while enhancing the city’s international reputation in climate change mitigation efforts.

Within South-East Asia, only Indonesia has implemented a mandatory carbon market for the energy sector.

As a dynamic and fast-growing city, Ho Chi Minh City is facing various environmental challenges, particularly air pollution, with annual carbon emissions exceeding 60 million tonnes, accounting for over 20% of the nation’s emissions.

Dr Nguyen Thi Tuyet Nhung, a research group member on the carbon market at the University of Economics Ho Chi Minh City, said the city needed to exploit specific mechanisms and policies through the National Assembly to reduce greenhouse gas emissions and respond to climate change.

Resolution 98 allows the city to pilot a financial mechanism for measures to reduce greenhouse gas emissions via the use of the city’s budget for carbon credit exchange, according to Nhung.

These mechanisms enable the city to control environmental pollution, attract sustainable investments, generate revenue and funding for environmental projects, and fulfill international commitments on emission reduction. Moreover, voluntary development of the carbon market will help the city generate significant revenue through issuing and selling carbon credits and from emission reduction projects using abundant energy sources such as solar, wind, and waste.

Hoang Le Nam Hai, another research group member on the carbon market at the University of Economics Ho Chi Minh City, said the carbon market would create opportunities to attract investment in renewable energy, environmental technology and international climate finance.It would also promote a green economy and create new jobs while enhancing the city’s international reputation in climate change mitigation efforts.

Ho Chi Minh City has set a target of reducing emissions by 10% by 2030 and moving towards a low-carbon economy, with the possibility of a 30% reduction.

Experts also recommended the city equip businesses and the community with knowledge while enhancing awareness of the carbon market.

It also needs to implement policies to encourage and support businesses in voluntarily setting emission reduction targets, and engaging in carbon credit transactions to offset their emissions.

Vietnam plans to officially run a carbon trade exchange in 2028 under a project conducted by the Natural Resources and Environment Ministry.

Under the scheme, Vietnam will pilot the operation of this carbon credit market in 2025 to connect and exchange carbon credits with regional and international markets. — Viet Nam News/ANN

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