The paper emphasised Vietnam’s constant efforts in achieving targets set in its green growth strategy for broader and more sustainable development.

UNDP Policy Advisor (Economics) Michaela Prokop spoke highly of the Vietnamese government’s commitments to promoting green growth and restructuring the local energy industry.

In Vietnam, she said, most fossil fuel subsidies are provided for coal and other fuel sources for national development. In the 2007-2012 period, fossil fuel aid was valued at around US$1.2-4.49 billion, most of which was granted to State-owned energy producers and distributors via preferential loans and low-cost input, she revealed.

She stressed the need to reform fossil fuel fiscal policy to increase energy efficiency, protect the environment, ensure national energy security, and promote GDP growth in both medium and long-term periods.

However, the UNDP report noted that the reform of fossil fuel fiscal policy requires an overall reform of the energy industry and a communication strategy. It is essential to have measures in place to protect the poor and vulnerable businesses against rising fuel prices.

The UNDP report was based on research of Central Institute for Economic Management (CIEM), the Vietnam Academy of Social Sciences (VASS), the Institute for Energy, the Financial Strategy Institute, the Energy Alliance programme, the Global Subsidies Initiative (GSI), and the International Institute for Sustainable Development (IISD).