(baosonla.org.vn) - Editor's note: Developing a carbon market aims to achieve the goal of reducing greenhouse gas emissions, raising awareness and responsibility of businesses and production units in participating in the fight against climate change. At the same time, creating financial resources to support forest protection and development, helping people have more income, reducing forest encroachment and protecting sustainable forest ecosystems. Son La Newspaper reporter had an interview with Mr. Tran Duc Thuan, Director of the Provincial Forest Protection and Development Fund on this issue, which we would like to introduce to readers.
Conference to review the plan to develop and implement regulations on management and use of forest environmental service fees.
PV: Could you tell us about forest carbon credits and carbon market development?
Mr. Tran Duc Thuan:According to the Vietnam Forestry Department, Vietnam is currently implementing only one program to transfer emission reduction results/forest carbon credits. That is the North Central Region Emission Reduction Payment Agreement (ERPA) signed on October 22, 2020 between the Ministry of Agriculture and Rural Development and the International Bank for Reconstruction and Development of the World Bank Group (WB). According to the ERPA, Vietnam transfers to the WB 10.3 million tons of CO2 (can increase by up to 5 million tons of CO2), with a unit price of 5 USD/ton of CO2, the total payment value is 51.5 million USD; of which, 95% of the transfer amount will be included in Vietnam's nationally determined contribution (NDC). To implement the ERPA, on December 28, 2022, the Government issued Decree No. 107/2022/ND-CP regulating the pilot transfer of emission reduction results and ERPA financial management.
In addition, the Ministry of Agriculture and Rural Development and the Forest Finance Enhancement Organization (Emergent), the Executive Agency of the Emissions Reduction through Enhanced Forest Finance Alliance (LEAF), are preparing to negotiate, sign and implement an emission reduction purchase agreement for the Central Highlands and South Central regions according to the Letter of Intent (LoI) signed on October 31, 2021. Accordingly, it is expected that Vietnam will transfer to LEAF/Emergent 5.15 million tons of CO2 from the Central Highlands and South Central regions in the period of 2021-2025. The entire amount of credits transferred to LEAF/Emergent will be included in Vietnam's NDC commitment.
Recently, a number of provinces have proposed to develop and implement a pilot project on investment and trading in forest carbon credits, including Son La province. However, to date, the provinces have not been able to implement it due to the lack of legal regulations and detailed instructions.
PV: What is the potential for carbon market development in Son La province, sir?
Mr. Tran Duc Thuan:On March 9, 2022, the Prime Minister issued Decision No. 326/QD-TTg allocating national land use planning targets for the 2021-2030 period, with a vision to 2050, and the 5-year national land use plan for 2021-2025. Accordingly, the forestry land area of Son La province is 694,741 hectares; of which, there are 334,100 hectares of protective forest land, 87,831 hectares of special-use forest land and 272,810 hectares of production forest land. By the end of 2023, the forest cover rate of the whole province will reach 47.5% and by the end of 2024, it will increase to 48%. Thus, along with the policy of payment for forest environmental services, Son La province has great potential to mobilize financial resources through participation in domestic and international carbon markets when it has full conditions for the system of legal documents, detailed instructions, as well as fully implementing NDC commitment obligations. This financial source will directly contribute to the protection and sustainable development of forests, improve the lives of forest workers, remove difficulties for forest management boards, enterprises and reduce investment from the state budget for the forestry sector.
PV: Could you please tell us the legal basis for Son La province to implement forest carbon credit business?
Mr. Tran Duc Thuan:On June 17, 2022, the Government Office issued Notice No. 176/TB-VPCP concluding that Prime Minister Pham Minh Chinh agreed in principle to allow Son La province to develop and implement the Project "Piloting forest carbon credit trading". This is a proposal to allow the implementation of one of the components of the carbon credit market (carbon sequestration from forests), with a pilot mechanism, creating a legal basis for implementation and allowing assessment of effectiveness before the State issues an official regulation for the entire carbon credit market. The development and pilot implementation of the Project allows the implementation process to be placed under the management of local state agencies, ensuring feasibility as well as trust for the subjects participating in the forest carbon credit market.
PV: What is the province's goal of developing the carbon market, sir?
Mr. Tran Duc Thuan:With the goal of generating over 7 million forest carbon credits during the entire period, on average each year our province will earn over 100 billion VND, which will be a huge non-budgetary resource for the management, protection and development of the province's forests. At the same time, effectively exploit the potential and advantages of the province; encourage businesses to invest in innovation of low carbon emission technology, closed production, use waste from previous products as raw materials for subsequent products, reduce negative impacts on the environment, ecosystems and human health.
The Provincial Forest Protection and Development Fund is the unit assigned by the Provincial People's Committee to advise on the development and implementation of the Project "Piloting forest carbon credit trading in Son La province until 2030". The project is built on the basis of the orientations, strategies, planning, plans, and socio-economic development programs of the province. The goal is to establish a payment relationship between the CO2 emitter and the carbon absorber and storage party according to the principle that money collected from the service user must be paid to the service provider; create a mechanism to mobilize stable financial resources, contribute to forest protection and development, and increase income for forest workers. At the same time, gradually form carbon credits that meet the standards and liquidity in the domestic and international carbon market. Promote investment transition for low-emission economic development; promote state resources; Attract resources from organizations, businesses, individuals, international resources, promote public-private partnership on the basis of equality, cooperation, and mutual benefit. In particular, have additional funding for planting new protective forests and special-use forests with native tree species to increase carbon absorption capacity.
The development and implementation of the Project "Piloting forest carbon credit trading in Son La province until 2030" is of great significance, contributing positively to the implementation of the national strategy on climate change in the province; contributing to realizing the commitment of the Prime Minister at the COP 26 conference "Vietnam commits to reducing the country's greenhouse gas emissions to "0" by 2050". The benefits of the carbon credit market will create new sources of income for projects and activities to reduce emissions, promote sustainable development and encourage international cooperation in combating climate change and reducing greenhouse gas emissions.
PV: Thank you sir.
According to: Son La Newspaper