HCMC should become greenest place to do business in ASEAN: WB exec

A Ho Chi Minh City-World Bank working group created two years ago aims to make the city “the greenest place to do business in ASEAN,” said Carolyn Turk, the World Bank’s Vietnam country director.

Turk said Wednesday that to overcome complex challenges to growth and prosperity, “we are embarking on the first phase of an investment program to accelerate green and resilient growth.” She was speaking at an investment promotion conference for green growth in HCMC.

Turk said Vietnam in general and HCMC in particular faced stiff economic challenges. Investors and manufacturers were in search of areas of production that offered a green environment, particularly a low-carbon environment, she explained.

She noted that in Thailand, the Eastern Economic Corridor Office has hired the WB to support decarbonization in order to fit their FDI strategy of being the greenest area to manufacture in ASEAN.

In Vietnam, textile and garment exports were declining due to global economic influences and the industry's green initiatives in other countries. Global brands were shifting orders to countries like Bangladesh that have committed to sustainability and green practices as part of efforts to reduce their carbon footprints.

“We are here to discuss HCMC’s ambitious, yet feasible, strategy and approach to accelerate the green transition to help make this city the greenest place to do business in ASEAN," Turk said.

She stressed that Vietnam's foremost economic hub faced ongoing risks from climate change and chronic flooding. About 65% of the city is less than 1.5 meters above sea level, and rapid urbanization, industrialization and population expansion have led to encroachment of crucial water retention spaces such as canals, green areas, and floodplains.

The average annual economic loss due to flooding is about $250 million, which is projected to escalate to over $350 million by 2050 due to urban expansion and sea level rise.

“Addressing these vulnerabilities is paramount to safeguarding the city's economic trajectory and facilitating its evolution into a sustainable, climate-resilient urban hub,” she said.

“While it is a critical moment for the green supply chain and resilient urban development commitments under a whole-city approach, securing upfront capital for medium-term savings is difficult,” Turk added.

Therefore, urgent action was needed to prevent further departures of foreign businesses and job losses, and to attract new industries and jobs.

Turk said that HCMC was building a system-wide approach to upgrading existing assets to achieve cost efficiencies, committing to a whole-of-city approach rather than the usual fragmented efforts by different agencies and departments that achieve little.

Incentives for private sector investment in the supply chain's greening process were crucial, and the city was putting these in place, she noted.

Turk acknowledged that while developed countries use tax incentives to drive the private sector’s adoption of green practices and low-carbon initiatives, budget constraints in developing nations made such incentives challenging.

However, she saw opportunities in the face of challenges.

Turk said the investment program to accelerate green and resilient growth initiated by the HCMC-World Bank working group included a first-phase package of over $650 million for a 10-year program.

“To accelerate the green transition, the cooperation includes an investment program to upgrade public assets and access the international carbon finance markets to monetize the emission reductions achieved as public and private asset owners make their assets more efficient.

“To adapt to climate change, the cooperation includes a first-phase integrated flood risk management investment program as part of a medium-term effort to substantially reduce flood risk,” she said.

The World Bank has been working with HCMC to prioritize flood risk management investments with high returns and impact, she stressed.

“The investment program uses an integrated approach, leveraging digital technologies and establishing a coordinated and efficient approach based on data and analytics to reduce existing risks and avoid the creation of new ones,” Turk added.

Heavily affected

Speaking at the conference, HCMC Chairman Phan Van Mai said that the city has been identified as one of 10 cities in the world that are heavily affected by climate change.

The latest research results published by the Institute of Environment and Natural Resources (National University of HCMC) show that, on average, each year, the total greenhouse gas emissions in the city exceed 60 million tons of CO2, he noted.

“There are three major sources of waste, including industrial activities (about 20 million tons), traffic (more than 13 million tons), household activities, and others. At the same time, the city is grappling with the negative consequences of climate change, environmental pollution, resource scarcity, and economic turmoil,” Mai said.

In order to provide a convenient, safe and sustainable living and working environment, HCMC has set the aim of cutting emissions by 10% by 2030 in its 10-year (2021-2030) Action Plan to Respond to Climate Change, he added.