Practical Applications of Carbon Credits in the Economy. Part VI: Driving force for clean industry development

DNHN - Developing clean industry is a crucial goal for many countries worldwide. As Vietnam's economy rises strongly, finding effective solutions for environmental protection and sustainable development is essential.

Motivating investment in environmentally friendly technology

Carbon credits are a form of transaction between businesses and organizations where units with emissions below the standard level are allowed to sell "credits" to units that exceed that standard level. This creates a balanced emission system while providing economic incentives for businesses to improve energy efficiency and reduce their carbon emissions. For Vietnam, the application of carbon credits has brought significant benefits:

Therefore, carbon credits motivate businesses and organizations to invest in and develop environmentally friendly technology. High-emission businesses must seek emission reduction solutions, from utilizing renewable energy to improving energy efficiency in production processes. This promotes a shift from traditional industry to clean and sustainable industry.

The application of carbon credits creates a new market where businesses can buy and sell credits. This supports increased access to investment capital for clean industrial projects. Investors interested in reducing carbon emissions can invest in companies and projects that meet low-emission standards. This not only fosters the development of clean industry but also creates opportunities for economic growth and job creation.

Vietnam has committed to participating in international climate change agreements, and the application of carbon credits is a practical way to fulfill this commitment. By reducing carbon emissions, Vietnam not only contributes to mitigating global climate change but also sets an example for other countries to learn from and apply.

Additionally, promoting the development of clean industry through carbon credits helps build Vietnam's national image and brand. Vietnam becomes a pioneer in promoting clean and sustainable industry, contributing to a positive image in the international community and attracting investment and international cooperation.

However, the application of carbon credits also poses some challenges. A strict management and monitoring system is needed to ensure transparency and fairness in carbon credit transactions. At the same time, it is necessary to increase awareness and training for businesses and organizations about carbon credits and the benefits of clean industry.

Towards a carbon neutral economy

To integrate into the carbon credit market and maximize its benefits, businesses must focus on transparency and market acceptance. Investing in auditing and certifying emission reduction projects by reputable organizations strengthens investor confidence and effectively contributes to environmental protection.

Participating in the carbon market requires sustainable vision, readiness to invest in clean technology, and preparation for a green supply chain transition. The global carbon market could reach a value of $250 billion by 2030, with 196 countries committed to reducing greenhouse gas emissions under the Paris Agreement on climate change, highlighting potential opportunities for sustainable business development in Vietnam.

Mr. Thai Tran, Director of Hanam Carbon Consulting Company (under Caspervandertak Consulting Group for Clean Development Mechanism Consultancy), believes that participating in the carbon market not only drives business development but also provides an opportunity to innovate technology to reduce emissions and move towards a carbon-neutral economy.

According to Mr. Thai Tran, businesses, organizations, and countries participating in the carbon market can achieve dual benefits: reducing greenhouse gas emissions, contributing to sustainable development, and gaining recognition through carbon credits, thereby boosting the economy. Selling carbon credits also helps businesses build brand image and increase consumer trust.

“However, to participate in this promising market, businesses face many challenges. The first challenge is compliance costs; businesses need to invest in measurement systems, emission inventories, monitoring, and greenhouse gas reporting,” Mr. Thai Tran shared.

Meanwhile, Dr. Mai Thanh Dung from the Institute of Strategy, Policy on Natural Resources and Environment (Ministry of Natural Resources and Environment) affirmed that currently, business awareness of environmental protection is increasing, especially in sectors like oil and gas, and textiles. However, there are still some businesses that violate environmental regulations.

According to Ms. Dung, business violations can be categorized into two levels: violations in administrative procedures and violations related to environmental pollution, particularly from businesses using outdated technology and not improving waste treatment processes.

Ms. Dung stated that the Ministry of Natural Resources and Environment will soon submit to the Government the content of the National Action Plan for implementing a circular economy. This is especially important for industrial zones and export processing zones in environmental protection efforts.

Nghe Nhan