The Unassuming Economist

A new IMF report says that: “By 2100, climate change could impact more than 12 percent of the Vietnamese population and reduce growth by 10 percent. The Vietnamese government considers the response to climate change a vital issue and has implemented environmental policies to better cope with these risks.”

“But the country—which has relied heavily on fossil fuels and overexploitation of natural resources—needs to further adapt its economy toward a more sustainable and ecofriendly growth model.”

“Policies that can better prepare Vietnam for the future impact of climate change should focus on:

• Lowering the intensity of fossil fuels in Vietnam’s GDP: raising the contribution of renewable energy would help to break the link between greenhouse gas emissions and output.
• Providing stronger incentives for households, firms, and government to pursue green growth: taxation of fossil fuels that fully prices environmental and health externalities would nudge energy demand toward renewables and generate revenue to finance adaptation and mitigation plans.
• Investing in climate resilient infrastructure would help households and firms cope with storms. The expected cost of natural disasters could be usefully included in public debt sustainability analyses.
• Promoting research and development and other innovation policies can provide further incentives to investment in existing clean energy sources and improvements in clean technologies.
• Shifting to autonomous, electric, shared vehicles, as already planned in Singapore, would help reduce congestion and pollution in cities. Improved government capacity to coordinate technological change and promote innovation and green growth would be key.”