Promoting role of private sector in green growth

Renewable energy power complex invested by Trung Nam Group in Thuan Bac district (Ninh Thuan) (Photo: VNA)

Hanoi (VNA) - The role of non-state enterprises in green growth is increasingly important, but its current scale in Vietnam is still modest.

Within the framework of the programme “Macro-Economic Reform, Green Growth" implemented by the German Agency for International Cooperation in Vietnam, the Central Institute for Economic Management has carried out a research project titled “Enhancing the role of private investment in green growth for the 2021-2030 period.”

The content of the study focuses on two aspects, including the role of private investment in two specific areas, namely renewable energy and policy of mobilizing resources for green growth in Vietnam.

Dr. Ho Cong Hoa, Deputy Head of the Social Affairs Research Department under the Central Institute for Economic Management, said that in during 2010-2019, the number of non-state enterprises investing in the field of energy and environment sectors increased sharply, especially investment in renewable energy production, clean water, wastewater and solid waste collection and treatment services.

Specifically, the number of non-state enterprises doing business in the energy sector increased from 69 companies (accounting for 59% of the total) in 2010 to 777 companies (accounting for 94.8%) in 2019. Besides, the number of non-state enterprises doing business in the environment field increased from 693 companies (accounting for 81.5%) in 2010 to 2,713 companies (accounting for 95.8%) in 2019.

According to Dr. Hoa, businesses are both subject and partner of global warming and environmental pollution as well as natural resource degradation.

However, in fact, revenues from non-state enterprises are not commensurate with the number of enterprises in the industry, especially in the energy sector.

Specifically, the revenue of non-state enterprises in the energy sector reached more than 37,000 billion VND (accounting for 20% of the whole industry's revenue) in 2010 and 171,000 billion VNA (accounting for 29% of the whole industry's revenue) in 2019.

Therefore, in order to attract investment from the private sector in green growth for the 2021-2030 period in general and in the field of renewable energy and environmental services in particular, Hoa said it is necessary to carry out a set of solutions to create an attractive investment environment, improve quality of laws and enhance policy implementation capacity.

Within the framework of the project, CIEM's research team has proposed a number of policy solutions to promote participation of the private sector in green growth.

Among others, the research team suggests relevant quarters strengthen the institutionalization of the Party’s viewpoint on socio-economic development strategies associated with environmental protection, climate change adaptation and private sector development.

The proposal also suggests that it is necessary to build a legal corridor, mechanisms and policies which are "both mandatory and encouraging" for businesses to invest in green growth, implement social responsibility towards environment, green growth and sustainable development.

In addition, authorities should study and issue pilot mechanisms to deploy investment projects in the form of public-private partnership (PPP) in areas such as waste collection and treatment and clean water supply, with a scale of less than 200 billion VND in rural areas and small urban areas as the basis for additional adjustment of the PPP Law.

Besides, sanctions are also an effective tool. Dr. Hoa believes that it is necessary to increase the penalties for polluters, such as raising the current environmental protection fee for wastewater (now at 10% of the price of clean water), speeding up the collection of domestic waste fees by quantity in accordance with the spirit of the Law on Environmental Protection./.