Promoting green economy

14:44 | 07/07/2015 Economy- Society

(VEN) - Vietnam Economic News’ Thanh Thanh spoke with Scott Corfe, Economic Advisor at the Institute of Chartered Accountants in England and Wales (ICAEW) and Deputy Director of the Center for Economics and Business Research (CEBR), about Vietnam’s efforts to promote green economic growth.

Promoting green economy

What do you think Vietnam should do to achieve its sustainable development goals?

Vietnam should consider what other countries are doing and use these “success stories” domestically. For example, all countries in Southeast Asia can learn from Singapore in terms of how the country has been extremely successful in attracting international services firms through offering a well-skilled labor force as well as competitive taxation and a pro-business environment. This has enabled Singapore to reduce its reliance on manufacturing.

There may also be lessons to be learned from Thailand, which is working to become a leader in both domestic use and export of electrical vehicles.

Educating consumers and businesses on green matters will be important, as will taking advantage of renewable energy sources that are set to see dramatic falls in price over the coming years. Solar panels in particular have seen a sharp fall in price in recent years and forecasts suggest that the cost of solar will fall a further 40 percent over the next two years. With costs on the decline, Vietnam could be a leader in ensuring widespread adoption of these technologies.

The growth of the Vietnamese economy partially depends on the utilization of natural resources, creating a harmful impact on the environment and increasing climate change. What should be done to change this growth model?

The growth model needs to shift towards greener industries. This need not be bad for growth, indeed this could lead to greater living standards. Higher value-added manufacturing (such as electrical product production) and skilled services jobs command higher wages, leading to higher living standards.

Making this transition will require the right skills being in place in the workforce. Businesses and the government need to ensure that the education system is equipping inpiduals with the right skills to work in the greener sectors of skilled manufacturing and services. Tourism is another sector which Vietnam should be looking to develop further, given that it has many sights of beauty including Ha Long Bay. Reduced levels of pollution could help the tourism sector expand further over the coming years.

What roles should the government and businesses play in promoting green economic growth?

Governments need to have the right systems of taxes, subsidies and incentives in place to encourage consumers and businesses to cut back on polluting activities and shift towards greener activities. Pollution is not properly priced in the “free market” so the government needs to step in to ensure that those who wish to pollute pay a price. The Vietnamese government already has some taxes and subsidies in place but there is scope to build on these to continue nudging businesses and consumers into making greener decisions.

Businesses across the world should do more to show that they are socially responsible, including demonstrating that they are environmentally friendly. This need not harm business performance. Many consumers, particularly in the developed world, are increasingly interested in whether the products they purchase are “green”. If businesses can demonstrate to these consumers that they are acting in a green and ethical way, there is potential for them to increase sales.

Thanh Thanh