Vietnam pioneers post-pandemic carbon pricing

Published onNovember 19, 2020

On 17 November, Vietnam’s National Assembly passed the revised Law on Environmental Protection legalising an emission trading scheme. The law will take effect on 1 January 2022. This policy is expected to strengthen Vietnam’s commitment to greenhouse gas emission reductions under the Paris Agreement on climate change. It paves the way for the country to further tap its significant renewable energy potential, and switch to a low-carbon development model in the post-COVID-19 recovery era. The law stipulates that the government will establish a carbon emission trading scheme that suits the local context and complies with international climate change treaties. Details such as targets, timelines and regulated industries will be specified later in a government decree. The law also legalises enabling policies such as national greenhouse gas emission inventories, and the monitoring, reporting and verification of emissions. By adopting carbon pricing, Vietnam will strengthen its position to reap additional benefits from free trade with the European Union. Carbon pricing has the potential to improve Vietnam’s image internationally. It will also contribute to ongoing social harmony by reducing climate change impacts and environmental pressures.