Final Market Readiness Proposals Country: Viet Nam Responsible - PowerPoint PPT Presentation

Final Market Readiness Proposals Country: Viet Nam Responsible agency: Department of Meteorology, Hydrology and Climate Change, Ministry of Natural Resources and Environment Viet Nam’s Market Readiness Proposal (MRP) October, 2014

Outline Overview - MRP Objective(s) and Focus - MRP Development Process Market Readiness Proposal  Component 1: Strengthening capacity for carbon pricing approaches  Component 2a : Developing market-based instrument pilot in steel sector  Component 2b : Design of no-regret measures in solid waste sector with analysis of potential MBIs  Component 3 : Program Management and Stakeholder Engagement Facilitation Viet Nam’s Market Readiness Proposal (MRP) 2 October, 2014

Overview Viet Nam’s Market Readiness Proposal (MRP) 3 October, 2014

MRP Objectives and Focus  Overall Objective: Viet Nam’s governmental ministries and selected economic sectors are equipped with policies and instruments to develop a market-based mechanism in Viet Nam  Specific Objectives:  Institutional and policy systems on climate change mitigation with focus on financial instruments are enhanced;  No-regret measures and market-based instruments for steel and solid waste sectors are analysed, developed and tested.  Infrastructure for market mechanism including database, MRV system, registry system, institutional and regulatory framework, is developed Viet Nam’s Market Readiness Proposal (MRP) 4 October, 2014

MRP Development Process Draft Organizing Internal concept Framework Data collection consultation OF Presentation at PA6 Jan-Mar 2011 Mar-Jun 2011 Jun-Dec 2011 Jan-Apr 2012 May 2012 In-depth Engaging Further Consultation consultatio Present NGOs, Intl consultation and revision n with line Drafting Presentation ation at org. ministries the MRP at PA9 PA10 Jun 2012 Jun-Dec Jan-Apr Jun-Sep Oct 2014 Mar-Jun May 2014 -Jun 2013 2013 2014 2014 2013 Viet Nam’s Market Readiness Proposal (MRP) 5 October, 2014

MRP Development Process The process of revising the MRP In-depth Analysis Consultation Final Consultation consultation First Second of with review with LMs and with revision revision feedback stakeholders and donors relevant of MRP of MRP from PA9 & PMR approval LMs Viet Nam’s Market Readiness Proposal (MRP) 6 October, 2014

Responses to general PA feedback (1) PA Feedback Responses Analysis of actual situation of Initial analyses & data management system will • the waste sector before be developed, along with capacity building to developing the MBIs. ensure data reliability and availability. Legal foundation will also be analysed as basis • for MBI development at later stage The importance of the donor A specific note on “Donor Coordination” has • coordination or initiatives been included in the new version of the MRP. Why the carbon intensity of Accelerated electricity generation is mainly • the GDP has increased while based on fossil fuels (primarily coal). Vietnam's economy has Growing transport sector fuelled by oil, • grown. contributing to increasing carbon intensities. The MRP has been amended. • How the tax issue would be The GoV will facilitate future development of • treated in the proposed Fossil carbon pricing policy approaches, evaluating Fuel Pricing Reform Study carbon pricing options and assessing and developing the technical, policy and management tools for MBI implementation. Viet Nam’s Market Readiness Proposal (MRP) 7 October, 2014

Responses to general PA feedback (2) PA Feedback Responses Basis for the proposed Re-directed towards assessing and developing • accreditation standard technical, policy and management tools to guide preparation; the implementation of MBIs in Vietnam. BB3 did not include any Reporting systems and standards have been • verification standard removed and included in the sectoral parts of preparation. steel and waste management. Clarify difference between The role of credited NAMAs and how they could • crediting NAMA and regular be evolved into a domestic ETS shall be NAMA; revealed in the next phase. GoV's view on demand for The MRP includes development of criteria, rules, • credits from the credited and procedures for MBIs and credited NAMAs. NAMAs; Sectoral works provide basis for potential future • How proposed credited NAMA development of a sector-wide ETS. evolves into a domestic ETS. Viet Nam’s Market Readiness Proposal (MRP) 8 October, 2014

Responses to general PA feedback (3) PA Feedback Responses Relationship between Steel The focus of UNDP is on an appropriate MRV • sector’s Credited NAMA and system and does not intend to develop a the UNDP project, credited NAMA. How pilot program would be Based on experience of pilot program, • developed into a nationwide necessary components to establish ETS / Cap- program. And-Trade in the steel sector shall be developed. Why waste sector had been Transportation sector lacks a comprehensive • chosen as while transport and dataset and no CDM transport projects have EE in building sectors have been registered in Vietnam. been dropped EE in building sector has very poor data • availability and limited efforts are underway to improve the situation. Waste sector has well established management • system, data collection while NAMAs for this sectors have been developed. Viet Nam’s Market Readiness Proposal (MRP) 9 October, 2014

COMPONENT 1 Strengthening capacity for developing carbon pricing approaches Viet Nam’s Market Readiness Proposal (MRP) 10 October, 2014

I. Strengthening capacity for developing carbon pricing approaches Readiness for NAMA/MRV formulation and implementation NAMA readiness Institutional Advisory GHG Inventory Framework Mechanism BAU formulation Monitoring Reporting Verification Negotiation National MRV Financial & Technical system support Crediting NAMA Training, Education Pilot case studies & capacity building Viet Nam’s Market Readiness Proposal (MRP) 11 October, 2014

I. Strengthening capacity for developing carbon pricing approaches Gaps in establishing the institutional market readiness 1. Development of an overall strategic direction and positioning of the GoV in the usage of NAMAs and eventually credited NAMAs 2. Identification and application of appropriate MBIs in the context of Viet Nam. 3. Assessment of the role of MBIs in NAMAs with a special focus on credited NAMAs. 4. Identification and analyses of relationship between MBIs and domestic and international financial mechanisms. 5. Development of a coherent approach and a consistent strategy for the components such as MRV, baselines, data collection, registry etc. Viet Nam’s Market Readiness Proposal (MRP) 12 October, 2014

I. Strengthening capacity for developing carbon pricing approaches Component 1’s Objectives Facilitate future development of carbon pricing policy approaches, including MBIs through a focus on evaluating carbon pricing options for Vietnam and assessing and developing the technical, policy and management tools available to the GoV for MBI implementation. Specifically:  Evaluate carbon pricing approaches and assess requirements for introducing MBI(s) in Vietnam  Assess the institutional and regulatory framework for implementation of MBIs in Vietnam Viet Nam’s Market Readiness Proposal (MRP) 13 October, 2014

I. Strengthening capacity for developing carbon pricing approaches Activities proposed for support PA9 PA10 1. Carbon pricing 1. Evaluation of market based instruments (MBI) for the in the power formulation and implementation activities of NAMA, sector especially credited NAMA in Vietnam 2. Fossil fuel 2. Research and formulation of mechanisms and financial pricing reform policies and measures to employ MBIs and Green 3. Research and development of data collection and Finance management systems Readiness 4. Stakeholder training and awareness raising on carbon pricing 3. Institutional approaches and trading mechanism and green growth structure for 5. Research and develop roadmap for implementing carbon MRV system market and application of MBI(s) in Vietnam 4. Accreditation 6. Development of strategies to address potential barriers that standards may hinder the application of MBIs 5. Registry 7. Study and development of criteria and crediting process for MBIs’ application in Vietnam Viet Nam’s Market Readiness Proposal (MRP) 14 October, 2014

I. Strengthening capacity for developing carbon pricing approaches Activities Budget Implementing (US$) agency Activity 1. Evaluation of market based instruments (MBI) for the 120,000 MONRE formulation and implementation activities of NAMA, especially credited NAMA in Vietnam Activity 2. Research and formulation of mechanisms and financial 150,000 MPI policies and measures to employ MBIs Activity 3. Research and development of data collection and 100,000 MONRE management systems Activity 4. Stakeholder training and awareness raising on carbon 250,000 MONRE pricing approaches and trading mechanism and green growth Activity 5. Research and develop roadmap for implementing 50,000 MONRE carbon market and application of MBI(s) in Vietnam Activity 6. Development of strategies to address potential 210,000 MONRE barriers that may hinder the application of MBIs Activity 7. Study and development of criteria and crediting 220,000 MONRE process for MBIs’ application in Vietnam Subtotal 1,100,000 Viet Nam’s Market Readiness Proposal (MRP) 15 October, 2014