Photo: VNA

Prime Minister Nguyen Tan Dung has approved a project worth US$3.6 million to help Vietnam build its own carbon market following an application from the Ministry of Planning and Investment.

Created under the Kyoto Protocol, the carbon market enables the trading of carbon emission allowances between developed countries, which have higher levels of greenhouse gas emissions than permitted, and developing countries, which have lower levels than permitted. The ostensible purpose of this initiative is to encourage countries and companies to limit their carbon dioxide emissions.

The project, with US$3 million funded by the World Bank and US$600,000 from the Vietnamese Government, would help to set up a database of greenhouse gas emissions throughout the country; issue policies and State management tools related to the carbon market; and implement the Nationally Appropriate Mitigation Action (NAMA) to create carbon credits.

NAMA refers to a set of policies and actions that countries in the world undertake as part of a commitment to reduce greenhouse gas emissions. Carbon credit is known as a permit that allows a country or organisation to produce a certain amount of carbon emissions that can be traded if the full allowance is not used.

The project is also expected to give assistance to Vietnam in building a roadmap to participate in the global carbon market.

Under the project, over US$1.2 million will be allocated to the Ministry of Natural Resources and Environment; US$760,000 to the Ministry of Industry and Trade; US$700,000 to the Ministry of Construction; US$140,000 to the Ministry Of Planning And Investment; and US$140,000 to the Ministry of Finance.

The environment ministry has been assigned to cooperate with relevant agencies to run the 36-month project.

Vietnam ratified the Kyoto Protocol to the United Nations Convention on Climate Change in 2002.

Source: VNA