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Carbon Border Adjustment Mechanism Impact Assessment Report for Vietnam


Michaelowa, Axel; Chu, Long; Do, Thang; Nguyen, Quang H; Nguyen, Minh H; Nguyen, Loan; Pham, Linh P (2023). Carbon Border Adjustment Mechanism Impact Assessment Report for Vietnam. Hanoi: VnLawFind, NHQuang&Associates.

Abstract

The EU’s Carbon Border Adjustment Mechanism (CBAM) is evolving rapidly, with many uncertainties remaining regarding its long-term scope, embedded emissions calculation, and reactions of EU-trade partners. In its current form, the CBAM can affect Vietnamese enterprises exporting to EU although its direct impacts on Vietnam’s GDP are unlikely significant. If the CBAM is expanded to other trade-intensive sectors of Vietnam or taken up by other key trading partners of Vietnam, the impacts may grow quickly. Therefore, Vietnam should engage proactively with the CBAM and prepare for mitigation of potential impacts. One of the pro-active approaches is to accelerate and deepen the adoption of carbon pricing. This will facilitate energy transition, support achievement of Vietnam’s climate change mitigation target (NDC) under the Paris Agreement and long-term net-zero targets and would allow to harness co-benefits. It is also advisable for Vietnam to engage in constructive dialogues with the EU in order to negotiate a fair implementation of CBAM that takes into account Vietnam’s efforts. A key demand here should be the use of emissions credits instead of having to buy CBAM certificates.

Abstract

The EU’s Carbon Border Adjustment Mechanism (CBAM) is evolving rapidly, with many uncertainties remaining regarding its long-term scope, embedded emissions calculation, and reactions of EU-trade partners. In its current form, the CBAM can affect Vietnamese enterprises exporting to EU although its direct impacts on Vietnam’s GDP are unlikely significant. If the CBAM is expanded to other trade-intensive sectors of Vietnam or taken up by other key trading partners of Vietnam, the impacts may grow quickly. Therefore, Vietnam should engage proactively with the CBAM and prepare for mitigation of potential impacts. One of the pro-active approaches is to accelerate and deepen the adoption of carbon pricing. This will facilitate energy transition, support achievement of Vietnam’s climate change mitigation target (NDC) under the Paris Agreement and long-term net-zero targets and would allow to harness co-benefits. It is also advisable for Vietnam to engage in constructive dialogues with the EU in order to negotiate a fair implementation of CBAM that takes into account Vietnam’s efforts. A key demand here should be the use of emissions credits instead of having to buy CBAM certificates.

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Contributors:AEMDA: Quoc Anh Ho; Lien Le; Khoi Dang; Thai Nguyen; Minh Anh Ta, NHQuang&Associates: Huyen T.T. Tran, Trang T.T. Dinh, Dang T.Luu, Mai T.T. Nguyen, Trinh Kieu T. Nguyen, GreenCIC: Can Nguyen, Dung Duong, Linh T. Pham
Item Type:Published Research Report
Communities & Collections:06 Faculty of Arts > Institute of Political Science
06 Faculty of Arts > Center for Comparative and International Studies
Dewey Decimal Classification:320 Political science
Uncontrolled Keywords:CBAM, energy transition, carbon, carbon tax
Language:English
Date:3 May 2023
Deposited On:15 Feb 2024 13:36
Last Modified:07 Mar 2024 10:17
Publisher:VnLawFind, NHQuang&Associates
Number of Pages:198
OA Status:Green
Free access at:Official URL. An embargo period may apply.
Official URL:https://vnlawfind.com.vn/carbon-border-adjustment-mechanism-impact-assessment-report-for-vietnam/
  • Content: Published Version
  • Language: English