Green finance: A solution towards green growth in Vietnam

Abstract

Vietnam is making efforts and commitments to sustainable development and minimizing the impacts of climate change. However, Vietnam's National Green Growth Strategy for the period 2011-2020 had not achieve the expected results. One of the reasons that can be seen is financial limitations for implementing projects, especially green projects. Green finance has been applied by many countries around the world. In Vietnam, the legal framework on green finance has also begun to be built, such as the "Scheme for pilot issuance of green bonds by local governments", "Scheme for developing green banks in Vietnam", Law on Environmental Protection 2020. However, this tool still seems not to be well considered, and there are still some barriers in Vietnam to promoting the role of green finance. Based on the analysis of several national and international literatures on green finance, this study has summarized and proposed some recommendations to support the development of the green financial system in Vietnam. The main solutions proposed to the Vietnamese Government (especially the role of the State Bank) include policies related to the legal framework, risk assessment, financial mobilization, and reasonable monetary and fiscal policies combined with new capital mobilization models and new technology (such as blockchain). The article also identifies challenges in implementing green finance in Vietnam in the coming time.