Abstract
When it comes to greenhouse gas (GHG) mitigation, both bottom-up and top-down policies have limitations. Bottom-up policies are region-specific and cannot be applied at the national level. Top-down policies may not balance the considerations of economic growth and the environment. Therefore, a combined approach is necessary. This Vietnamese case study investigates optimal GHG mitigation options for both economic development and emission reduction by simulating four scenarios characterized by the different carbon tax and subsidy rates. Interventions, like replacing old buses with low-carbon buses and conventional electricity generation with solar power, are considered in a dynamic input–output framework. The objective function is Green GDP—industries’ total value added reflecting GHG emissions’ social cost. The simulation model comprises four cases: business as usual, low subsidy rate (up to 10%), medium subsidy rate (up to 20%), and high subsidy rate (up to 30%), which are analyzed on parameters, including economic development, GHG emissions, and development of innovative sectors, like transportation and electricity. In three cases with different subsidy rates, the optimal carbon tax is simulated at the rate of USD 1/tCO2 equivalent, the lowest rate among the world’s current carbon prices. In addition, the medium subsidy (up to 20%) option yields the most competent scheme, with the highest GHG emission reduction and economic development effectiveness.
Highlights
Vietnam was the ninth most affected country by climate change in the two decades from 1998 to 2017 and ranked high on indexes such as expected climate change-related deaths and total losses [1]
The rate of this carbon tax scheme for Vietnam is comparative with upper-middle-income countries, including China and Mexico
This optimal carbon tax rate is judicious because Vietnam is still trying to attain its economic ambitions and enhance its prestige and position in the international arena
Summary
Vietnam was the ninth most affected country by climate change in the two decades from 1998 to 2017 and ranked high on indexes such as expected climate change-related deaths and total losses [1]. Tropical storms, typhoons, and flooding destroy thousands of houses, injure and kill people, destroy livelihoods, and damage infrastructure. The Northern Mountain and Central areas have long confronted the risk of frequent and intense flash floods and landslides because of varying rainfall. According to the Central Committee for Flood and Storm. The three innovative technologies considered in the model are low-carbon bus, wind, and solar energy generation, as mentioned in the Introduction section. The model assesses the effects of introducing low-carbon buses and renewable energy generation, partly substituted for the conventional transportation and energy sector.
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