Ha Noi, 11 March 2022 – The Ministry of Planning and Investment and the United Nations Development Programme (UNDP) in Viet Nam have launched a report on Climate Public Expenditure and Investment Review of Viet Nam (or CPEIR). The report shows that over 70% of ministries climate budget and over 90% of climate budget in provinces was for climate change adaptation expenditure, which is aligned with government policy priorities for public expenditure during 2016 - 2020. The Ministry of Agriculture and Rural Development and the Ministry of Transportation accounts for 80% of the total climate change budget with spending on large infrastructure projects such as irrigation and roads.

The CPEIR provides a review of climate change expenditures and budgets of 6 ministries including Ministry of Agriculture and Rural Development, Ministry of Natural Resources and Environment, Ministry of Transport, Ministry of Industry and Trade, Ministry of Construction, and Ministry of Science and Technology) 28 provinces, and Can Tho city. It covers investment and recurrent expenditure with domestic resources and ODA for the period of 2016-2020.

The report shows that Viet Nam has increasingly allocated its financial resources for climate change response. A total budget and expenditure of the 6 ministries and 29 provinces and city was almost 6.5 billion USD, or an average of 1.3 billion USD per year during 2016-2020.  

At the provincial level, the average climate budget of the 28 provinces and 1 centrally managed city also increased steadily by about 53%, from about 700 million USD in 2016 to almost 1.1 billion USD in 2020. The climate change budget represented a relatively stable proportion of the total provincial budget, varying between 16 – 21% of the total budget. While the domestic budget allocation was stable, ODA tended to increase. The provinces' climate expenditure was focused on concrete interventions, such as food and water security, response actions to sea level rise, and forest development.

The report also assessed the linkages between the climate-related investment budgets and key climate change-related policies, namely, the National Climate Change Strategy 2011-2020 (NCCS), Green Growth Strategy 2012-2020 (GGS) and Plan for Implementation of the Paris Agreement (PIPA), as well as related provincial action plans. Ministries and provinces can use the report as an instrument to assess their recurrent expenditure and investment baseline against key climate change and green growth priorities in order to improve policies and allocations for climate change.

The report noted that there are also opportunities for better alignment of climate budget with climate change and green growth policies, solutions and actions.  As not all of the actual climate expenditures could be linked to these policies. For instance, 77% of the ministry investment budget could be tracked into National Climate Change Strategy actions. In comparison, over 50% of the climate budget to the National Climate Change Strategy was linked to food and water.

Some key recommendations were that the National Climate Change Strategy and the Green Growth strategies and their action plans should be reflected more in the objectives and targets of many sector policies and in the overall Socio-Economic Development Plan. Furthermore, it would be most effective to move away from retrospective-CPEIR style reports and move towards systematic climate expenditure tracking which is built into the planning and budgeting system. To do so, comprehensive monitoring and reporting system should be developed to improve climate change budgeting, monitoring, reporting, and inform climate change policy and planning.

In the opening speech, Ms. Nguyen Thi Bich Ngoc, Vice Minister of the Ministry of Planning and Investment stated “The Ministry of Planning and Investment, as the focal state agency which provides advise the Government on climate finance sources, fully recognises that the budget preparation and planning to implement and realize strategies, programmes and goals in response to climate change are extremely important. The results of this report will be very useful in enhancing the climate change responsiveness of the public financial management system, promoting the transition from input-based budgets to output-based budgets, and creating more favorable conditions for climate-related interventions by ministries and provinces. This contributes to the successful implementation of Viet Nam's international commitments to climate change response, as well as identifying the needs for investment in climate change, improving efficiency, and establishing a basis for mobilization and diversification of domestic and international resources for climate change.”

UNDP Resident Representative in Viet Nam, Ms. Caitlin Wiesen, highlighted that the analysis contained in the CPEIR could be used to inform policy formulation and adjustment to raise finance from different sources and promote climate-related interventions. “We appreciate that Viet Nam have already and continue to increase their own budget for climate change adaptation and mitigation. However, the climate change adaptation budget has not yet been sufficient to address Viet Nam’s needs and climate risks. Greater efforts and support are required to scale up investment in adaption, especially from international sources and the private sector." she stated.

Participating in the workshop were representatives from the Ministry of Planning and Investment, Ministry of Agriculture and Rural Development, Ministries of Industry and Trade, Science and Technology, Natural Resources and Environment, Transport, Construction, provincial government representatives, Can Tho City representatives, development partners and international organisations, university representatives, as well as international and national experts in environment and finance sectors.

At the launch, the participants also discussed challenges and the opportunities to mobilise new financial resources, solutions for effective budget allocation and expenditure, monitoring the results of budget allocation, and improving investment efficiency for climate change response.

The full study report can be accessed at https://www.vn.undp.org/content/vietnam/en/home/library/environment_climate/climate-public-expenditure-and-investment-review-of-viet-nam.html

For more information, please contact:

Phan Huong Giang
Media and Communications Analyst, Climate Change and Environment
United Nations Development Programme
Mob: +84 0948466688
Email: phan.huong.giang@undp.org