IMF: Greener growth could reduce climate change risks

IMF: Greener growth could reduce climate change risks

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While the Vietnamese Government considers the response to climate change a vital issue and has implemented environmental policies to better cope with the risks, the country, which has relied heavily on fossil fuels and the overexploitation of natural resources, needs to further adapt its economy towards a more sustainable and eco-friendly growth model, the International Monetary Fund (IMF) wrote in its latest report.

Every year since 1990, natural disasters have cost Vietnam on average about 1 per cent of GDP and caused some 500 casualties. It was affected by 12 major storms last year, which caused deadly floods and destroyed hundreds of thousands of homes and hectares of crops.

Vietnam’s vulnerability is exacerbated by its 2,150-mile-long coastline and proximity to the tropics. Its 95 million people and the bulk of its economic assets, including a large rural population, are concentrated in the coastal lowlands, which are susceptible to typhoons.

The IMF believes climate change will likely exacerbate pressure on the environment. More frequent and more intense storms could affect crop yields and production, impacting rural incomes, food security, and commodity exports.

Increased rainfall intensity will damage roads and railroad networks. Higher temperatures will raise demand for electricity. Risks will weigh disproportionally on the poor, who could be forced to migrate inland or towards large cities. By 2100, climate change could impact more than 12 per cent of the Vietnamese population and reduce growth by 10 per cent, according to the IMF.

Wanted: More sustainable growth

Vietnam’s strong economic performance has helped reduce poverty over past decades. However, rapid industrialization since the late 1980s has relied on intensive and unsustainable exploitation of forests, fisheries, and other renewable and non-renewable natural resources.

Moreover, Vietnam’s stock of natural capital has declined as mineral and non-mineral resources have been depleted. Agriculture and industry have contributed significantly to the degradation of natural capital. Vietnam’s extensive use of fertilizers largely contributes to polluting land and water and adds to legacy issues related to the war.

It is among the Top 10 countries affected by air pollution. In large cities and industrial zones, levels of fine particulate matter are far above safe levels and comparable to those in China. Greenhouse gas emissions are expected to double between 2010 and 2020 and triple by 2030. Electricity production from coal-fired plants is a major contributor to air pollution, with a quarter of domestic supply produced from coal.

Vietnamese authorities recognize the challenges posed by climate change and a more sustainable, greener growth model is at the core of their development agenda. Vietnam ratified the 2016 Paris Agreement on Climate and committed to reducing greenhouse gas emissions by at least 8 per cent by 2030 and to achieving the United Nations Sustainable Development Goals (SDGs) by 2030.

The recently created National Committee on Climate Change, chaired by the Prime Minister and including key ministers, oversees climate change and green growth programs.

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