Final

Program Document

Climate Change Adaptation and Mitigation

Vietnam

July 2008

Cover sheet

Country / Vietnam
Programme Title / Climate change adaptation and mitigation
National Agencies / Ministry of Natural Resources and Environment (MONRE)
Ministry of Industry and Trade (MOIT)
Starting Date / 1 January 2009
Duration / 5 years
(million DKK) / 2009-2013
CCA and CCM Program / Danida contribution / GoV / Other / Total
Component / program areas / Invest-ment / Recur-rent / Int. TA / Total
DKK / DKK / DKK / DKK / DKK / DKK / DKK
1 / CCA – NTP / 79.2 / 24.4 / 26.4 / 130.0 / 164.4 / 363.3 / 657.5
2 / CCM-VNEEP / 22.3 / 30.4 / 9.3 / 62.0 / 54.1 / 52.0 / 168.1
3 / Program / 0.0 / 0.0 / 0.0 / 8.0 / 0.0 / 0.0 / 8.0
Total / 101.5 / 54.8 / 35.7 / 200.0 / 218.5 / 415.3 / 833.6

Summary

“Greater sustainability in economic and social development and poverty alleviation in Vietnam through increased capacity of the country to adapt to climate change and increase mitigation efforts”

The cooperation program will be arranged as two components that support 2 national programs:

Component / National Program
Climate change adaptation / National Target Program to Respond to Climate Change
Climate change mitigation / Vietnam Energy Efficiency Program

The program will be implemented through the GoV system utilising the GoV systems for financial management. Activities will take place at national level, in two provinces already dealing with the challenges of climate change and in individual enterprises.

The expected outcomes are that Vietnam’s future development will be more resilient against climate change and significant improvements will have been implemented in two provinces that will enhance the future livelihood of the poor under threat of adverse climatic and environmental effects. Vietnam’s use of energy will be more efficient both within enterprises and in large buildings and thereby support the country’s effort of moving toward a low carbon economy. These outcomes will be supported by a combination of funds for recurrent costs, the provision of technical assistance and co-financing of physical investments.

Executive summary

Program context and strategy

After a decade or more of impressive economic advancement, Vietnam is placing increasing priority on environment and sustainable development. Denmark as one of the leading nations in environmental technology and approaches is amongst Vietnam’s key international partners in this area. As well as facing considerable environmental challenges, Vietnam is one of the 5 countries foreseen to be most affected by climate change and the country is starting to consider how best to adapt to and mitigate against climate change. As a result of these emerging priorities Vietnam and Denmark decided in mid 2007 to deepen their already established cooperation within climate change. An identification mission was undertaken in September 2007 to outline a joint concept for cooperation in these areas. A concept note was drafted and proposed support to 3 existing or planned national programs within climate change adaptation, mitigation and pollution control. This was simplified at a late stage in the formulation to support to 2 national programs within Climate Change Adaptation (CCA) and Mitigation (CCM) as shown below.

The concept note outlined a planned cooperation programme that will cover a five year period from early 2009 to 2013 with a total budget of DKK 200 million. A task force led by The Ministry of Natural Resources and Environment (MONRE) composed of participants from all the implementing and lead agencies involved and supported by consultants met some 9 times during a 6 month process in order to formulate a flexible cooperation program. In order to promote as close an alignment as possible to the national systems a thorough assessment of the National Sector Framework (NSF) took place.

One of the main findings of the NSF assessment is that the national sector framework within climate change is still under development; however recent developments have improved the NSF considerably due to the formulation of the National Target Program to Respond to Climate Change and the basis for aligned support to climate change is thereby significantly positively improved from the situation, when the identification and NSF assessment took place. Another key finding was that it would, against various safeguards, be preferable to support the 2 national programs using government systems and strengthening them from within.

The principles of the cooperation can be summed up in the following points:

1.  Danish support efforts will be aligned to national programs.

2.  The support will be nationally implemented and managed by those government agencies that have the mandate in the specific areas.

3.  As the funds will be transferred via national budgetary channels, the planning, reporting and monitoring will follow national systems.

4.  There will be a balanced focus between supporting physical implementation and capacity building and between support directed at the provincial and national levels.

5.  As the funds are limited the focus should be on a few provinces which can act as a demonstration for others.

6.  Funding of implementation and capacity building should involve a significant element of co-financing.

7.  The provinces for CCA are representative of the Mekong delta (Ben Tre) and the central coastal zone (Quang Nam) and will build on existing cooperation between Danida and the provinces.

As a result of these strategies and discussions with the key national partners from identification to formulation stage a cooperation program has emerged that supports 2 national programs within two components: i) climate change adaptation and ii) climate change mitigation.

Objectives and components

“Greater sustainability in economic and social development and poverty alleviation in Vietnam through increased capacity of the country to adapt to climate change and increase mitigation efforts”.

This objective is adapted from the National Strategy for Environmental Protection until 2010 and vision towards 2020”, “National Target Programme to Respond to Climate Change, 2008” and “Vietnam Energy Efficiency Program vision 2006”.

The first component will support the implementation of the National Target Programme to Respond to Climate Change (NTP-RCC) both overall and specifically in the two climate vulnerable provinces Ben Tre and Quang Nam. The focus of the NTP-RCC is on climate change adaptation and the component will therefore focus on this. The lead agency for the NTP-RCC is Ministry of Natural Resources and Environment (MONRE). The component is named CCA-NTP.

The second component will support climate change mitigation through the Vietnam Energy Efficiency Program (CCM – VNEEP) under the lead agency mandate of the Ministry of Industry and Trade (MOIT). The component is named CCM-VNEEP.

At component level, the more specific objectives which are linked to the 2 national programs are:

·  Enhance Vietnam’s capacity and efficiency in response to climate change in order to ensure sustainable development, protect people from harmful impacts of climate change, prevent and reduce risks posed by climate change; join the international community’s efforts to mitigate climate change impacts and protect the global climatic system” NTP-RCC

·  Improved energy efficiency in Vietnamese enterprises contributes to sustainable development and a low carbon economy. VNEEP

The table below summarizes the main outputs of each component.

Component / national program / Main outputs /
CCA / National Target Program to respond to climate change / ·  Implementation of NTP-RCC supported and strengthened at national level and overall (scenarios, impacts, solutions, actions plans, capacity building, awareness raising)
·  Implementation of NTP-RCC supported in two provinces (Quang Nam and Ben Tre) through specific CC pilot projects
CCM / Vietnam National Energy Efficiency Program / ·  Completed legal framework on EEC
·  Public awareness enhancement on EEC
·  Integrate EEC into the national education system
·  Developed EEC management models in enterprises
·  Support industrial enterprises to improve, upgrade and optimize technology aiming at energy saving and efficiency
·  Develop pilot models and disseminate EEC management activities in building operation

Contribution to poverty alleviation

Climate change adaptation interventions are considered very promising in terms of their potential poverty reduction impact. The poor and marginalized parts of the population are the most vulnerable to disasters caused by climate change and the least able to recover. The rural poor are particularly dependent on the direct use of natural resources and therefore severely affected when the environment is degraded, as e.g. salt water intrusion to the agriculture land. With limited capacities and resources at their disposal to respond to climate induced stresses such as droughts and floods, the poor’s ability to meet basic needs and move out of poverty is constrained. The Poverty Reduction Strategy Credit (PRSC) has for the first time incorporated climate change as one of its agreed policy triggers. The Comprehensive Poverty Reduction and Growth Strategy (CPRGS) puts a strong emphasis on growth and the competitiveness of Vietnamese industry. That will be served by energy efficiency interventions.

Contribution to cross cutting issues

Environmental issues are highly relevant for climate change adaptation and mitigation as the main part of the programme focus relates to areas of intervention that will increase resilience, within urban and rural areas, against climate change impacts such as floods and droughts and mitigating climate change by increasing energy efficiency, whereby air pollution is reduced.

Governance issues are relevant due to several reasons: i) the overall modality of the programme is to provide support through existing government structures, while ensuring an adequate level of public participation; ii) the support is expected to strengthen the implementation of decentralised interventions at the local level; and iii) programme components relate to the overall aim of ensuring access to natural resources.

Gender issues are relevant due to: i) the overriding aim of poverty alleviation, recognizing that women represent some of the most vulnerable groups affected by water pollution and disasters caused by weather related events; and ii) the importance of ensuring women’s participation and influence in local and central decision making processes.

Budget and resources

The overall budget for the Danida contribution, the estimated contribution by the Government of Vietnam and by others such as the private sector is shown in the table below.

(million DKK) / 2009-2013
CCA and CCM Program / Danida contribution / GoV / Other / Total
Component / program areas / Invest-ment / Recur-rent / Int. TA / Total
DKK / DKK / DKK / Dkk / DKK / DKK / DKK
1 / CCA – NTP / 79.2 / 24.4 / 26.4 / 130.0 / 164.4 / 363.3 / 657.5
2 / CCM-VNEEP / 22.3 / 30.4 / 9.3 / 62.0 / 54.1 / 52.0 / 168.1
3 / Program / 0.0 / 0.0 / 0.0 / 8.0 / 0.0 / 0.0 / 8.0
Total / 101.5 / 54.8 / 35.7 / 200.0 / 218.5 / 415.3 / 833.6
Annual budget (million DKK)) / Contributions
CCA and CCM Program / 2009 / 2010 / 2011 / 2012 / 2013 / Total
Component / program areas / DKK / DKK / DKK / DKK / DKK / DKK
1 / CCA - NTP / 8.4 / 27.7 / 29.4 / 34.0 / 30.5 / 130.0
2 / VNEEP / 9.3 / 14.5 / 13.8 / 12.4 / 12.0 / 62.0
3 / Program / 1.1 / 2.3 / 1.6 / 2.0 / 1.1 / 8.0
Total Danida contribution / 18.8 / 44.5 / 44.8 / 48.3 / 43.6 / 200.0
1 / CCA - NTP / 32.9 / 32.9 / 32.9 / 32.9 / 32.9 / 164.4
2 / VNEEP / 9.4 / 9.3 / 10.5 / 11.8 / 13.1 / 54.1
Total GoV contribution / 42.3 / 42.2 / 43.3 / 44.7 / 46.0 / 218.5
1 / CCA - NTP / 32.9 / 32.9 / 32.9 / 32.9 / 32.9 / 164.4
2 / VNEEP / 0.0 / 2.2 / 12.3 / 15.9 / 21.6 / 52.0
Total other Viet sources / 32.9 / 35.1 / 45.2 / 48.8 / 54.5 / 216.3
Other Donors / 39.8 / 39.8 / 39.8 / 39.8 / 39.8 / 198.8
Total all sources / 133.7 / 161.5 / 173.1 / 181.5 / 183.8 / 833.6

Implementation arrangements

The core principle is that to the extent possible the support will be fully aligned to the Vietnamese national systems. Thus management and decision making responsibility will be placed with the Vietnamese organization that has the lead agency mandate for the area of work involved and that has under it the implementing agency; in Vietnamese terminology the “project owner”. Where an area of work of high national priority requires extensive cross institutional funding and cooperation, the Vietnamese system is to set up a national steering committee and standing office that is hosted by the lead agency. This is the case for national programs like NTP-RCC and VNEEP. Within state management, the lowest decision-making and budget holding entity is the department within a ministry or provincial structure. Guiding principles for the implementation arrangements are that:

·  Component implementation responsibility and operational decision making is placed with the individual relevant national program.

·  The national steering Committee for each of the two national programs will be overall responsible for the implementation.

·  There will be no separate component steering committees.

·  The Danish Embassy will be member of the national steering committees[1]

·  The national steering committees are supported by a standing office placed in the lead agency – MONRE for NTP-RCC and MOIT for VNEEP.

·  There will be no Danish program steering committee, but there will be periodic dialogue between Denmark and Vietnam in the form of a policy dialogue committee within climate change adaptation and mitigation primarily in order to assess development of indicators and GoV contribution. This will be supported among others through technical reviews and supervision missions.

·  If more donors join the financing of the national programs then it might be that a broader multi-donor coordination and dialogue mechanism is found worthwhile to develop for the particular programs.

These principles lead to the following choice of partners for the Danish assistance.