Addressing Climate Change: Addressing Climate Change: The World Bank Platform in Vietnam Newsletter Date The World Bank Platform in Vietnam Climate Change The Need for Mitigation and Adaptation Action in Vietnam & Vietnam Vietnam is considered to be one of the world’s most vulnerable countries to the effects of climate change... ...at the same time, Vietnam is a growing GHG emitter. Vietnam already Vietnam is one of the most vulnerable experiences: countries to the impacts of climate  20 cm rise in sea change. Climate change is expected to level in last 50 intensify existing risks to natural years resources, agriculture, food security,  0.5oC increase in infrastructure and health and to pose a average significant threat to economic and human temperature in last development and the environment. Poor 50 yrs people and communities with less  Annual economic losses from Natural adaptive capacity will likely be harder hit. Disasters In light of Vietnam's high vulnerability to equivalent to 1.5% the impacts of climate change, the of GDP Government of Vietnam states that By 2100, climate adapting to climate change will be a change scenarios priority during the first decades of the 21st Climate Change Vulnerability Index predict (baseline 1980- century, but Greenhouse Gas mitigation 90): and low carbon economy development will  A 2.3oC mean also be supported with appropriate temperature rise policies and programs and in line with  A 75 cm sea level international commitments. rise  5% increase in Recognizing the challenges posed by annual rainfall climate change and the opportunity to decouple growth and carbon intensity to GHG emissions are shift to sustainable and low carbon increasing in Vietnam: growth, the Government has made good  2010 estimated progress in establishing a stronger policy total emissions: 1.6 and institutional framework to respond to Mt CO2e climate change. The World Bank is  GHG emissions expected to triple by 2030 relative to 2010  Energy predicted as largest source of increase in emissions Vulnerability Map: Francisco & Yusuf 2009 Impact statistics: MONRE 2009 Emissions ’Projections: Vietnam 2nd Submission to UNFCC 1 30 October 2012 Page 2 Newsletter Title Government Response to Climate Change The Government’s re- of the National Climate culture and Rural Devel- sponse to climate change Change Committee, alt- opment (MARD) MARD continues to evolve with a hough each line ministry is responsible for disaster stronger emphasis on stra- is responsible for sectoral risk management (DRM), tegic directions and priori- action. The Ministry of including preparedness, ties, as well improved inter- Planning and Investment mitigation, emergency sector coordination and (MPI) led the develop- response and recovery. stakeholder consultations. ment of a new national Together, these actions The Ministry of Natural Green Growth Strategy, demonstrate the GoV’s Resources and the Envi- which focuses on low car- growing emphasis on de- ronment (MONRE) has bon development and veloping a more effective, the mandate for coordinat- complements the Nation- comprehensive, and in- ing climate change re- al Climate Change Strate- clusive response to cli- sponse under the direction gy. The Ministry of Agri- mate change. Table 1: Recent Progress in Support of Climate Change Action. Initiative Year Period Description National Strategy for 2007 2007- This strategy signaled a shift in the Government’s approach to DRM from a strictly Disaster Prevention, Re- 2020 ex-post approach towards promote preparedness, response, and recovery to natural sponse & Mitigation disasters National Target Program 2008 2009-15 Platform to integrate climate change action into sector strategies, programs, and to Respond to Climate plans; directed primarily at research, analyses, and capacity-building to inform prior- Change ities; emphasis on adaptation; possibility of extension through 2020 Support Program to Re- 2009 2009-12 Partnership between GoV & donors to support climate change actions consistent spond to Climate Change with NTP-RCC; Preparation begun on an SP-RCC policy matrix for 2013-15 National Climate Change 2011 2011-20 Establishes guiding principles, strategic tasks, and specific objectives for climate Strategy vision to change action; emphasizes both adaptation and mitigation as well as the roles of 2050 public and private sector and civil society (NCCS adoption is a DPO2 prior action) National Committee on 2012 2012+ Committee chaired by Prime Minister to lead, coordinate, and supervise implemen- Climate Change tation of all climate-change actions, and to guide international negotiations and raise climate-action funds National Action Plan to 2012 2012-20 Outlines key tasks for climate-change mitigation and adaptation (NAP-RCC adop- Respond to Climate tion is a proposed DPO3 Trigger) Change Green The Growthto Bank’s Commitment Strategy 2012 Support the Government 2012-30 Sets goals for sustainable economic growth; based on 3 pillars: (i) GHG Emission vision to Reduction, (ii)Greening Production, (iii)Greening Lifestyle & Consumption 2050 According to the 2011-20 Socioeconomic Development Strategy (SEDS), Vietnam is laying the foundations for a modern, industrialized society by 2020. The SEDS emphasizes: environmental sustainability, social equity and higher development. It also prioritizes economic restructuring & growth model transformation. The 2012-16 World Bank Country Partnership Strategy supports the SEDS and commits t h e Bank to 2 Page 3 Newsletter Title World Bank Vietnam Climate Change Response Engagement The World Bank’s engagement in Vietnam rests on past analytical work on Climate Change such as the Economics of Adaptation to Climate Change Vietnam Case Study and the World Bank Strategy for Climate Resilient Development in Vietnam, which provides recommendations for adaptation and mitigation actions. The World Bank’s Engagement in Vietnam is focused on three pillars: adaptation, mitigation, and cross-cutting policy and institutional framework. The pillars span various sectors which have been chosen to support the GoV’s priorities and build on the World Bank’s comparative advantages and existing portfolio in Vietnam. This platform relies on three modalities for action: lending, budget support, and research. In addition to mainstreaming climate change in projects and research, the Bank is focusing on climate change through two major initiatives: the Vietnam Climate Change Partnership and the Vietnam Climate Change Development Policy Operation. The World Bank’s Climate Change engagement is also closely linked to the Bank’s Disaster Risk Management work. 3 26 March 2012 Addressing Climate Change: The World Bank Platform in Vietnam Table 1: Analytical work under the VNCLIP Bank-Executed The Vietnam Climate Change Partnership Trust Fund The Vietnam Climate Change Partnership (VNCLIP) is a $4.4 million Adaptation Prioritization Tool Pillar I: trust fund of the UK Department for International Development. The Adaptation Mainstreaming climate change adaptation into national World Bank acts as the administrator of the Trust Fund, which is legal framework for water resources organized into a Recipient-executed component and a Bank-executed Pillar II: Low Carbon Development Study Mitigation component. Wealth Accounting and Valuation of Ecosystem Pillar III: Services (WAVES) The objective of the Bank-executed component (about US$3.5 million) Cross- is to provide analytical and advisory support on climate change cutting Climate Finance response to the Government and to enhance mainstreaming of climate change into the lending and advisory products of the World Bank. The analytical work financed under this component is outlined in Table 1. It supports the mainstreaming of climate change into the Government’s overall and sectoral policy reform, and strengthens capacity to prioritize related actio ns and tap into financing sources. The medium-term objective of the analytical work and its associated policy dialogue is to support mainstreaming of climate change into operations financed by the Bank and identify possible new Bank lending, as well as entry points for the private sector, to support the low-carbon, green growth transformation in Vietnam. This work is now underway and expected to conclude in FY 14. The objective of the recipient-executed component (about US$1 million, to be mobilized shortly) is to promote capacity building and coordination on climate change policy formulation, implementation, monitoring, and evaluation in five key ministries (MONRE, MARD, MPI, MOIT, and MOF). The recipient-executed trust fund will be administered by MONRE . The Vietnam Climate Change Development Policy Operation The Vietnam Climate Change Development Policy Operation (CC DPO) is a programmatic series of three annual $70 million budget support operations. The objective of the CC DPO is to support the Government in its efforts to address climate change by adopting policies and strengthening institutional capacity to promote climate resilient and lower carbon intensity development. This is a achieved through a series of key policy actions (Table 2) agreed upon jointly with the Government and donors. The World Bank CC DPO forms a part of the Government’s Support Program to Respond to Climate Change (SP -RCC), which is also supported by the Japanese International Cooperation Agency, the Agence francaise de Developpment, the Canadian International Development Agency, Australian Aid, and the Export-Import Bank of Korea. The total value of the 2012 SP-RCC annual contribution is estimated to reach $250 million. Table 2: Policy Actions Supported under the Climate Change Development Policy Operation DPO 1 Triggers Delivered (2011) DPO 2 Triggers (2012) DPO 3 Triggers Proposed (2013) Pillar I: Goal 1: Water Adaptation Mitigation Submission of National Target Program for Water Develop New Law on Water Resources Approval of the National Action Plan on Water Resources Management. Resources Management Pillar II: Goal 2: Energy Prime Minister issued implementation decree for Adopt regulations establishing the qualifica- Adopt regulations for energy efficiency Law on Energy Efficiency and Conservation, and re- tion and certification requirement for energy measures and operationalize in key energy- ceived draft Decree on Administrative Sanctions auditors and energy managers intensive industrial sectors Pillar III: Cross-Cutting Goal 3: Climate policy -MONRE finalized Report on Updated Climate Change -Develop National Climate Change Strategy -Develop National Action Plan for Climate Scenarios -Authorize the establishment of the National Change -Prime Minister endorsed implementation plan of Coordination Platform for Disaster Risk -Finalize Adaptation Prioritization Tool National Strategy for Natural Disaster Prevention, Reduction and Climate Change Adaptation -Finalize the Law on Natural Disaster Preven- Response, and Mitigation to 2020 tion & Mitigation for adoption Goal 4: Climate Finance Prime Minister issued Official Instruction outlining Develop institutional mechanism to promote Establish implementation guidelines for alloca- guiding principles relating to use of ODA to respond potential climate financing sources tion and reporting of financial resources di- to climate change through budget support rected at climate change action 4 Addressing Climate Change: The World Bank Platform in Vietnam 26 March 2012 Pillar I: Adaptation to Climate Change Given Vietnam’s vulnerability to climate change, adaptation has been identified by the Government as a priority area for climate change response in the 2011 National Climate Change Strategy. World Bank support to adaptation is focused along 4 key sectors: 1.Disaster Risk Management (DRM) & Urban Resilience: The GoV is moving towards a comprehensive and integrated approach to disaster risk management. World Bank support has focused on (i) strengthening DRM legal framework; (ii) investments in climate resilient transport, infrastructure and cities; (iii) early warning systems and hydro-met modernization; (iv) disaster risk financing and (v) mainstreaming the “build -back-better” approach. 2.Water: With the aim of promoting more adaptive management, the World Bank is supporting the implementation of Integrated Water Resources Management through investments, policy dialogue, and research. The World Bank is also supporting investments and research into solutions for adaption to sea level rise. 3.Agriculture: In the Agriculture sector, the World Bank supports the Government with research, policy dialogue, and investments to facilitate take up of adaptation action (such as use of saline-tolerant rice) and to increase water productivity and delivery flexibility in irrigated agriculture, preparing farmers for more variability in water availability. The World Bank also support investments to improve the sustainability of Vietnam’s aquaculture sector. 4.Natural Resources Management: The World Bank is active in protecting and valuing ecosystems through investments, policy dialogue, budget support and analytical work. The World Bank supports sustainable fisheries through investment projects. Pillar II: Mitigation of Greenhouse Gas Emissions Vietnam has also recognized the need for mitigation of Greenhouse Gas (GHG) Emissions in parallel to adaptation. The World Bank is active in supporting mitigation action, especially in the following sectors: 1.Energy: As energy is projected to be the largest source of GHG emission increases, the World Bank has a comprehensive program of investments, policy dialogue, and research to support the enhancement of energy efficiency and renewable energy development. 2.Transport & Urban Planning: In the transport sector, the World Bank support investment, policy dialogue, and research into energy-efficient, integrated urban Mitigation in the Private Sector The International Finance Corporation transport, specifically in Hanoi, Danang, and Ho Chi Minh City. The World Bank also (IFC), a member of the World Bank Group, invests and researches in reductions in GHG emissions through improved trade supports complementary mitigation action logistics and transport efficiency in the Mekong Delta and Northern Delta. in the private sector. IFC supports the development of energy efficiency and 3.Forestry: The World Bank actively supports Vietnam’s capacity for implementing renewable energy lending capacity by the UN Reducing Emissions from Deforestation providing dedicated capital lines and and Forest Degradation Program (REDD) though advisory services in the banking sector. IFC technical assistance and research. The World also mobilizes Clean Technology Fund Bank also invests in sustainable management of funding for direct investments in plantation forests to reduce emissions. renewable energy beyond hydropower. IFC is also active in promoting Green Building. 4.Agriculture: In the agriculture sector, the World Bank brings global knowledge on climate-smart The Bank also supports innovation in the agriculture through research and technical private sector through the development of a Vietnam Climate Innovation Center for assistance. The World Bank also invests and domestic development, deployment and researches GHG emissions reductions in transfer of climate technology solution s agriculture. 5 Pillar III: Cross-Cutting Climate Change Policy, Institutions, and Finance The third pillar focuses on cross-cutting climate change response. Some highlights are listed below: 1.Climate Policy and Institutions: The World Bank is Cross-Cutting Climate supporting the GoV’s ability to prioritize and integrate climate Response: Green Cities -change actions into development planning, especially under “Rapid urbanization presents a the CC DPO and the VNCLIP. The Bank is also supporting the unique opportunity to plan, GoV to implement Natural Capital Accounting in key sectors develop, build, and manage and to link climate change to the Green Growth agenda. ecologically and economically sustainable cities. In addition to 2.Climate Finance: The World Bank and the IFC work with the GoV on establishing a mainstreaming green more conducive environment for climate financing by supporting the GoV in leveraging development into urban climate finance to fund climate action through research, policy dialogue, and technical projects, the World Bank also assistance. In addition to policy actions supported under the CC DPO and TA from the supports Green Urban VNCLIP, the World Bank supports a Climate Public Expenditure and Institutional Development research and two Review and Vietnam’s membership in the Partnership for Market Readiness, which proposed Green City projects: provides funding and technical assistance to support the design and implementation Danang Sustainable City of market-based mechanisms for GHG mitigation. Development ($173m) & Ho Chi Minh City Green Transport 3.Social Resilience: The Bank has conducted assessments of ($224m).” social impacts of climate change and climate policies. The World Bank is also integrating consideration for climate change response for vulnerable communities into investments. For example, the World Bank invests in commune DRM infrastructure and planning. Vision Going Forward: Towards Green Growth The World Bank Group The Bank is already supporting Green Growth in Working for a World Free of Poverty Vietnam through the CCDPO policy dialogue and through TA for development of the Green Growth Hanoi, Vietnam: Strategy and key concepts like Natural Capital 8th Floor, 63 Ly Thai To, Accounting. Green Growth is also being integrated Hanoi, Vietnam into upcoming lending projects. Phone: +844 3934-6600 Email: Vietnam@worldbank.org Please visit our website to learn more about the World Washington, DC, USA: Bank Climate Change Platform, including information 1818 H Street NW, about the specific activities mentioned in this Washington, DC, USA pamphlet. 20433 Phone: +1 202-473-4709 Email: eastasiapacific@worldbank.org Find out more on our website: http://www.worldbank.org/en/country/vietnam 6