Investment, growth and development in Viet Nam

This case study examines whether implementing an enhanced Nationally Determined Contribution (NDC) in Viet Nam can be reconciled with economic growth and energy security priorities. Using the National Institute Global Econometric Model (NiGEM) macroeconomic model, it compares a Current Policies scenario with an Enhanced Policies scenario aligned with Viet Nam's net zero pathway, and accounts for spillovers from potential accelerated global policies. Results indicate positive GDP gains (1.23% by 2045), driven by energy investment and stronger exports, alongside contained inflation, additional carbon pricing revenues of 0.65% of GDP, reduced fossil fuel import dependence and avoided climate damages. Drawing on stakeholder consultations, the paper sets out potential policy options to be considered to support implementation of Viet Nam's latest NDC which include revising the current Environmental Protection Tax to complement the on-going rollout of the emissions trading scheme, strengthening institutional co-ordination, streamlining administrative procedures, and aligning climate, energy and industrial policies to unlock private investment.