Vietnam, WB sign emissions reduction purchase agreement hinh anh 1Vietnam and WB sign the Emissions Reduction Purchase Agreement (Photo: VNA)

Hanoi (VNA) - The Ministry of Agriculture and Rural Development (MARD) and the World Bank (WB) - the trustee agency of the Forest Carbon Partnership Facility (FCPF) - signed an Emissions Reduction Purchase Agreement (ERPA) at a ceremony on October 22. 

Under the terms, the FCPF will pay Vietnam 51.5 million USD if Vietnam fully implements its commitments, under which the north-central and central provinces of Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, and Thua Thien-Hue are to reduce CO2 emissions by 10.3 million tonnes in the 2018-2024 period.

Carolyn Turk, WB Country Director in Vietnam, said this is a results-based payment and the basic indicators underpinning it are to reduce greenhouse gases in these provinces.

MARD must periodically report on the volume of reduced emissions after it is confirmed by an independent international agency, and will then receive the payment for investing in developing sustainable forests and forestry land.

Carolyn Turk said there has never been a deal of this size in Vietnam or in Asia-Pacific, adding that it not only creates a strategic source of finance to invest in agriculture but also represents an important contribution to achieving the goals of climate change mitigation in Vietnam.

The agreement also opens up other future forms of international carbon finance, including those for the private sector, and this is only the first source of financing to be introduced in Vietnam, she noted. 

To sign the agreement, Vietnam had to meet high technical requirements, including the capacity to measure and report on emissions in line with international standards and the ability to distribute and pay funds to local beneficiaries, she said.

Standing Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said the payment for results-based emissions reduction is part of efforts to implement the reduction of greenhouse gas emissions in line with the “Reducing Emissions from Deforestation and Forest Degradation” (REDD+) international framework.

The agreement is the result of cooperation between Vietnam, the FCPF, and the WB in joint efforts to implement the Paris Agreement on climate change, he added. 

Implementing the ERPA will create a new additional source of finance, contributing to investing in activities to reduce deforestation and forest degradation, and increase incomes for forest owners, towards a domestic and international carbon credit market, contributing to forest protection and sustainable development in the north-central and central region, Tuan said.

Vietnam is the fifth partner in the FCPF and the first in Asia-Pacific to sign an ERPA. 

Agreements on emission reduction are a new tool to promote sustainable land management at large scale and help connect countries with other climate finance sources. To date, the committed funding for the FCPF to pay for forest emission reduction services has reached 1.3 billion USD.

In 2018, the FCPF recognised that Vietnam had basically completed the preparatory phase to reduce greenhouse gas emissions in line with the REDD+  international framework, which is an international initiative aimed at providing financial and technical assistance for developing countries, to help reduce greenhouse gas emissions and mitigate the impact of climate change via efforts against deforestation and forest degradation.

Vietnam has participated in REDD+  since 2008 and more than 45 related projects have been implemented in the country to date./.