Circular Economy: A solution for sustainable development

The concept of a circular economy, which remains relatively new in Vietnam, is rapidly gaining strength as a trend, and is also seen as a key measure for the country to innovate sustainable growth paradigms and achieve net-zero emissions by 2050.

Transitioning to a circular economy presents a significant opportunity for sustainable development, aiming at not only meeting economic and social goals but also addressing climate change challenges.

However, the process faces numerous difficulties and challenges, particularly when it requires changes in mindsets, perceptions, and strategies to gradually transition the economic structure and institutionalise related policies and legal frameworks.

Inevitable trend

Well aware of the importance of the circular economy in the progress of the nation toward sustainability, the 13th National Party Congress’s Resolution affirms the resolve to build an environmentally friendly green and circular economy along with a roadmap, mechanisms and policies to form a circular economy paradigm.

According to Nguyen Dinh Tho, Director of the Institute of Strategy and Policy on Natural Resources and Environment (ISPONRE), Vietnam incorporated the circular economy into the 2020 environmental protection law and related guidelines, making it among the trailblazers in ASEAN.

Government Decree No. 08/2022/ND-CP issued on January 10, 2022, identifies three pillars representing three groups of common criteria for the circular economy, which are:

  • Reducing the exploitation and use of non-renewable resources and water resources, and leveraging the efficient use of resources and saving energy.
  • Extending the lifespan of materials, equipment, products, and components.
  • Limiting waste and minimising adverse environmental impacts – which covers the reduction of solid waste, wastewater, and emissions; reducing the use of hazardous chemicals; recycling waste, recovering energy; reducing single-use products; and practicing green procurement.

The decree also outlines mechanisms to encourage circular economy implementation. The state prioritises investing in circular economy development for scientific research activities, applications development, technology transfer, and equipment manufacturing. It also emphasises the development of human resources training for circular economy implementation, and providing a platform for sharing information and data on a circular economy.

The Ministry of Natural Resources and Environment (MoNRE) has drafted a national action plan for the circular economy, defining the main viewpoints, general and specific objectives from now to 2025 and 2030.

Realisation of Green Growth Goals 

For the conduction of the promising economic model, Minister of Natural Resources and Environment Dang Quoc Khanh suggested the business community as well as production, business, and service facilities set up management systems and apply measures to efficiently and effectively exploit resources, cut emissions, increase recycling, and reuse waste across all stage of a project from development and design to goods production and distribution.

Assisting in building the national action plan for the circular economy, the United Nations Development Programme (UNDP) has offered many initiatives and recommendations for Vietnam.

UNDP Resident Representative in the country Ramla Khalidi stated that the organisation supports the plan in various aspects, combining policy planning expertise, practical experience in innovation and creativity, and coordination of participation by stakeholders.

Initiated in 2022, the Vietnam Circular Economy Hub, a collaborative initiative between the UNDP and MoNRE, acts as a platform for interaction among government agencies, businesses, communities, development partners, and research institutes, connecting technical and financial resources to facilitate the model.

The central province of Thua Thien – Hue has emerged as a pioneer in launching directions, policies, and step-by-step deployment of green transition and circular development.

A UNDP research has proposed 14 key interventions for the locality to help reduce its emissions by 17% by 2030 and 38% by 2050 compared to the baseline scenario. This is an effort to measure the climate impact of circular economy policy implementation.

Khalidi said she believes that Vietnam’s commitment to the economic paradigm is to address environmental protection challenges and meet climate and sustainable development goals. Such commitment is based on three main principles as defined in the 2020 environmental protection law, namely efficiently using resources, extending product life cycles, and minimising environmental impact.

Vietnam joined the Global Plastic Action Partnership (GPAP) in 2020. GPAP Director Christian Kaufholz said the Southeast Asian nation’s National Plastic Action Partnership (NPAP) sees the participation of over 200 organisations from government agencies and the private sector. The partnership has provided a roadmap for Vietnam, helping it mobilise related resources.

Meanwhile, the Vietnamese investment organisation Dragon Capital VietFund Management (DCVFM) is collaborating with ISPONRE to study biodiversity credits. According to the World Economic Forum, biodiversity credits are a verifiable, quantifiable and tradable financial instrument that rewards positive nature and biodiversity outcomes (e.g. species, ecosystems and natural habitats) through the creation and sale of either land or ocean-based biodiversity units over a fixed period.

DCVFM Chairman Dominic Scriven said about 100 countries are studying and building them as a tool to mobilise financial support serving biodiversity protection efforts, with countries in tropical regions like Vietnam among those who will benefit the most./.


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