Promoting a circular economy will bring dual benefits for Vietnam’s economy and its environment. What does this mean, especially with Vietnam having committed to strive for net-zero emissions by 2050 at COP26?

Vietnam’s commitment to building a circular economy is not only a smart way to deal with environmental problems but is also a key means for the country to achieve its COP26 ambitions. This promise is in line with the three main ideas in the Law on Environmental Protection 2022 that are important to the circular economy: using resources wisely, making products last longer, and causing as little damage to the environment as possible.

By promoting a circular economy, Vietnam is actively reducing and making the best use of the resources it has at its disposal. Recycling, reusing, and refurbishing programs make sure that fewer resources are needed, which lowers the emissions that come from extracting and handling natural resources. This directly helps reach the net-zero goal, since using fewer raw materials inherently results in a smaller carbon footprint.

Vietnam’s move away from its current reliance on fossil fuels will also be critical. As part of the Power Development Plan VIII (PDP8), the country plans to establish 6 GW of offshore wind power, an important contribution to the transition away from fossil fuels towards green energy. Renewables that will enable it to become less dependent on harmful energy sources such as coal and will further lower emissions and move closer to net-zero.

The UNDP has supported Vietnam’s efforts in this regard by identifying interventions that could significantly reduce greenhouse gas emissions. In Hue, UNDP research has led to 14 tailored solutions that, if implemented, are projected to reduce provincial emissions by 17 per cent by 2030 and by up to 38 per cent by 2050 compared to the baseline scenario. This shows us the tangible impacts that can be achieved by approaching circular economy policies strategically.

What policies are needed to encourage businesses to participate in the circular economy model in Vietnam?

Vietnam needs to improve its policy framework in order to incentivize businesses to apply circular principles to their own business models.

Firstly, the preparation of the National Action Plan on the Circular Economy is very timely, since the 28^th Conference of the Parties to the UNFCCC (COP28) will convene on November 30. The UNDP is honored to have supported the Ministry of Natural Resources and Environment (MoNRE) with technical input during the preparation of this landmark policy.

Following the National Action Plan, clear technical standards will need to be developed in order to address current operational problems, such as guidance on how to implement more circular wastewater treatment models, and regulations will need to be put in place for goods that contain recycled materials.

Creating markets and certification systems for products that follow the principles of the circular economy is also a critical step. This would not only encourage people to buy recycled and used goods, but would also inspire confidence in their quality and durability.

Both fiscal and financial strategies will be essential to achieving all of this. Incentivizing businesses to make the switch to circular production models would require putting in place tax benefits, financial support, and low-interest loans. Businesses will be more likely to invest in recycling and upcycling facilities, the research and development of new sustainable materials, and new circular economy services if sustainable practices become more economically viable and they can lower their financial risk.

What advantages will businesses that manufacture under the circular economy model have when participating in the global supply chain?

Businesses that adopt a circular economy model stand to gain significant advantages in the global supply chain. By prioritizing resource efficiency and innovation, these enterprises can optimize costs and reduce their reliance on traditional raw materials, which often fluctuate in price and availability due to market and geopolitical influences. Instead, they can diversify their input materials and lower production costs over time by reusing materials, reducing waste, and aligning with the growing consumer demand for environmentally-responsible products.

Furthermore, the circular economy model positions businesses well ahead of the sustainability curve, which is increasingly a prerequisite for entering and expanding within the global marketplace.

Through the adoption of renewable energy, eco-design, cleaner production, energy efficiency, environmental certification for products and services, and the establishment of green supply chains, companies are not only contributing to the sustainability agenda but also enhancing their own market competitiveness. This comprehensive approach allows them to adapt to new trends and consumer demands swiftly, ensuring their relevance and resilience in a market that is increasingly leaning towards sustainability.

The circular economy encourages innovation in product design and manufacturing processes. Enterprises applying circular practices may discover new opportunities for innovation, leading to the development of more sustainable and efficient products and services.

In essence, the circular economy model enables companies to build robust, innovative, and responsible solutions and a brand image that appeals to global consumers and partners, thereby increasing their competitive edge and potential for growth in the worldwide supply chain.

How is the UNDP in Vietnam supporting the development of the National Action Plan, fostering innovation and engaging with local businesses, communities, and international partners to promote circular economy practices?

The UNDP’s support for the National Action Plan is multifaceted, providing a mixture of expertise in policymaking, innovative practices, and stakeholder engagement and ensuring that prioritized tasks, such as building capacity, strengthening institutions, applying circular interventions, managing waste, and forging partnerships, are clearly identified for ministries, cities and provinces, and relevant agencies within the set timelines and expected budget.

The Vietnam Circular Economy Hub, which was developed with support from the UNDP and launched by MoNRE in 2022, plays a central role throughout this work as a platform to engage with government agencies, enterprises, communities, development partners, and academia in order to integrate technical and financial resources for accelerating the circular economy in Vietnam.

Innovation is at the forefront of the UNDP’s mission. We are facilitating technology transfer, supporting the development of new business models, and promoting the development of plans and regulations to enable the circular economy at all levels, from cities and provinces to industrial parks and individual enterprises. Our engagement also extends beyond businesses to include local communities, empowering them through education and participation in circular initiatives. International partnerships amplify our efforts, bringing in global expertise and funding that further accelerate progress.

What message does the UNDP wish to convey to forum participants and the broader public regarding the importance and impact of a circular economy in Vietnam?

Firstly, I would like to emphasize that the circular transition is not an end in and of itself, but a means to embody a whole-of-society approach in the implementation of the 2030 Agenda for Sustainable Development.

Secondly, the circular economy is not just an environmental imperative but an economic opportunity. It has significant potential to spur innovation, enhance competitiveness, and promote sustainable development. The UNDP encourages partnerships among stakeholders, especially with the private sector, to embrace this transformative journey for the benefit of current and future generations.

We have only six years left until 2030, and I want to reiterate that the circular economy can generate benefits across the 2030 Agenda. To do so, we must ensure that climate and circular policies are implemented alongside socio-economic strategies and plans in a coordinated effort to meet Vietnam’s sustainable development trajectory. The UNDP stands ready to continue delivering its support to the government in this transition.