A decoupling analysis of transport CO2 emissions from economic growth: Evidence from Vietnam

Abstract

Since economic reforms in the late 1980s, Vietnam’s economy has grown rapidly, but transport activity has grown faster presenting a significant challenge for reducing transport related CO2 emissions. This paper explores this challenge by comprehensively evaluating decoupling in Vietnam’s transport sector over the period 1995 to 2017. Decoupling elasticities reveal that there is no decoupling of transport volumes from GDP, but between 2011 and 2017, CO2 emissions from transport were decoupling from GDP. Digging deeper reveals that the income driver is in an expansive coupling state, and this is mostly due to the structure of the economy. Different drivers of carbon intensity were important at different times. The importance of the drivers fit a hypothesis of economic restructuring and household income growth. Energy intensity constrained emissions growth, especially from 2011, and was the key driver aiding the decoupling process. The analysis suggests that reducing transport intensity together with modal switching offers the most scope for future decoupling. Barriers that limit the decoupling process include cheap fuel prices and a lack of modal alternatives to private road transport as such appropriate policy responses should target these areas. Highlights Comprehensive analysis of decoupling in the transport sector of Vietnam. Vietnamese transport volumes are not decoupling from GDP, but transport CO2 emissions are. Transport intensity, incomes and economic structure hampered decoupling while energy intensity aided decoupling. The decoupling effort model suggests emissions are reducible. Policy responses include removing market inefficiencies and increasing modal choices.