Trade Liberalisation for Environmental Goods and Services: Motivation for Green Growth

Dr Minh said in the current context of globalisation, trade liberalisation for goods and environmental services is becoming an increasingly important content in bilateral and multilateral trade negotiations, as well as frameworks for international cooperation, particularly in the fields of technology and equipment for renewable energy, low carbon and environmental technologies. Global trade for goods and services in the environmental sector reached about US$4 trillion in 2014 and is estimated to be US$10 trillion in 2020. The United States is taking the lead in investment, production and trade of environmental goods, followed by the EU, China and India. In Vietnam, the market of environmental goods and services valued some US$20 billion in 2014, accounting for 0.5 percent of the global market share and ranking No. 33 worldwide by environmental goods and services market.

 

Seeing the importance of developing the market of environmental goods and services, the Vietnamese Government passed many policies to enhance the market development for environmental goods and services, including the Law on Environmental Protection in 2014, the National Action Plan for Green Growth in the 2014 - 2020 period, and the environment industry development project to 2015, with a vision to 2025. However, in general, the development of environmental goods and services in Vietnam remains very weak and incommensurate with the domestic market and demand. Imports of machines and technologies account for over 80 percent of the market value. While the environmental services industry treats 30 - 35 percent of waste, the production of environmental goods for this activity is yet to be developed. There were only 15 environmental companies serving 1,016 companies in Vietnam.

 

Mr Duong Dinh Giam, representative of the Vietnam Environmental Industry Association (VEIA), added that Vietnam has so few companies providing urban and industrial wastewater treatment services. Only eight out of 63 provinces and cities across the country have concentrated urban wastewater treatment plants, mostly operated by public utility firms. Wastewater treatment in industrial parks only meets about 40 percent of the demand and solid waste treatment can serve only 15 percent of the demand. Although hazardous waste sector is more developed than other sectors with around 90 companies, most of them have small or very small scale and use outdated and polluting technologies. Although environmental equipment manufacturing sector has improved in recent years (like manufacturing incinerators and sorting lines, etc.), it is yet to reach a sizeable scale because of companies' financial limitations.

Mr Nguyen The Chinh, Director of the Institute of Strategy and Policy on Natural Resources and Environment (ISPONRE) under the Ministry of Natural Resources and Environment, said that although Vietnam's guidelines and policies on development of environmental services are quite comprehensive and complete, the development of environmental services is still fledgling and limited to waste treatment and waste collection services rather than manufacture environmental technological equipment because of backward machinery and technologies in use and limited development investment. To remove bottlenecks, he suggested the Government should focus on creating a legal environment as well as increasing investment resources for development of environmental services, enhance the competitiveness of domestic environmental services enterprises while issuing policies to attract foreign direct investment (FDI) for this potential economic field.

 

Mr Chu Van Giap from the Department of Science and Technology under the Ministry of Industry and Trade said the ministry has taken many action plans to accelerate trade liberalisation for environmental goods and services towards green growth like reducing the intensity of greenhouse gas emissions, promoting the use of clean energy and renewable energy, and adopting green production, green lifestyle and sustainable consumption. These activities have helped form the market of environmental products and services. He believed that, from this foundation of success, the ministry is currently accelerating the enforcement of the bio-fuel development scheme to 2015, with a vision to 2025, chairing the implementation of cleaner production strategy for the processing industry to 2020, and developing a national action plan on sustainable production and consumption.