Viet Nam lacks environmental financing

Feb 2, 2020 | News

The capital of Viet Nam, Hanoi, regularly experiences periods of extreme air pollution and haze. It may be the matter of adequate air quality control but some believe that it is crucial to address the problem economically. During his speech at a policy dialogue on January 14, President of Viet Nam Clean Air Network Hoang Duong Tung warned that the country did not have capable air quality tracking systems and lacks appropriate financing.

Indeed, Viet Nam state budget provides only 1% for environmental protection while air pollution alone costs the country more than 5% of its GDP ($10.8-13.6 billion), found National University of Economics (NEU) in Ha Noi in its research. 30%-50% of air pollution in urban areas comes from vehicles and even newly introduced fuel tax will hardly solve the problem: the tax will bring around $2,4 billion to the State budget but there has been no ruling that this money will go directly to environmental protection.

Academia cautions that the intensifying air pollution problem is a market failure. NEU lecturer Dinh Duc Truong says, “Air pollution is an externally negative phenomenon affecting buyer decision process and at the same time increasing production costs. Instead of consuming goods which will improve their living quality, people have to spend more on gadgets to protect themselves from unhealthy air”.

According to Truong, as air is a public good, meaning all individuals can use it without paying for it, many companies avoid investing into emission treatment to reduce expenses, which leads to people not gaining enough insight into air quality, emerging hazards and how human health is impacted because of exposure to air pollution.

“Only when information is provided in a timely and accurate manner can people perform their supervisory roles and better understand risks,” he said. The professor recommended accelerating green finance, investing in innovative start-ups and enhancing economic reforms to reduce air pollution.

The 2018 Environmental Performance Index published by Yale University put Viet Nam at 132nd place out of 180 countries. In terms of air quality, the country stood on the 159th.



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