DAY3SLIDES VietnamRBCCFTraining EN

Vietnam Results-Based Carbon and Climate Finance Training
Results-Based
Carbon & Climate
Finance Training
February 27 - March 1, 2023
Hanoi, Vietnam
Session 1:
Global Context and Introduction to
Results-based Carbon and Climate
Finance
Introduction to
Results-based
Carbon and Climate
Finance
Chandra Shekhar Sinha
Erwin De Nys
World Bank Climate Change Group
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Introduction to Results-based
Carbon and Climate Finance
Context and
Outlook of Vietnam’s
Results-Based Experience and
Carbon and Strategic
Climate Finance Engagement
Market Approach
Concepts and Opportunities

Factors for Vietnam in
Influencing Results-based
Results-Based Carbon and
Climate Finance
Market
Climate Finance Levels Must Rise
Current investment
levels are nowhere near
enough to limit global
warming to 1.5 °C
Actual yearly
flows
compared to
average
needs
(billion USD
2015 𝑦𝑟 −1 )
Source: IPCC 2022 - Working Group III (Mitigation of Climate Change)

MDB Climate Finance is Only a Small Part of the Whole Picture

MDB Climate Finance with Mobilized Estimates of Annual Investment
Private Finance for LMICs (2021)* needs to meet developing Country
MDB Total (WBG only) Climate Goals**
Estimate: $2.9 tn
Dedicated climate finance $3.4 ($1.9) bn
+
Development finance with
$47.2 ($26.1) bn
climate co-benefits
+
Mobilized private finance $13.0 ($5.4) bn
=
Total MDB climate finance with
$63.7 ($33.4) bn
mobilized private finance
Current annual MDB climate finance with mobilized private

finance is approx 5% of LMIC capital investment needs
Sources: *2021 Joint Report on Multilateral Development Banks’ Climate Finance;
**New Climate Economy, ‘Unlocking the Inclusive Growth Story of the 21st Century’ 2018; World Bank ,
‘Beyond the Gap: How Countries Can Afford the Infrastructure They Need while Protecting the Planet’
Understanding Different Types of Climate Finance
International Public Climate Finance Other Climate Finance

Finance deployed through MDBs and bilateral Other funding sources that can be catalyzed by international public
systems climate finance
Dedicated Climate Development Private Finance Local Government Carbon Markets

Finance Finance with Budgets
Commercial for- Revenues from
Concessional finance
Climate Benefits profit investment in Domestic selling carbon
with climate focus MDB balance sheet climate assets government spending emission offsets
investment with supporting climate
Example: Grant climate benefits Example: goals Example: Avoided
funding from the Investment in wind deforestation
Global Environment Example: World Bank turbine Example: SOE builds project sells
Facility to consider loan for a climate- manufacturing a solar power plant emission
adaptation resilient port plant reductions to US
technologies company with net-
zero pledge
Carbon Pricing Instruments

Crediting
Carbon Tax Cap-and-Trade Mechanism
Puts an explicit price on each ton of Sets a cap on the total amount of Tradeable emission
GHG emitted. allowed GHG emissions. Covered reduction/removal units are
entities can buy or sell allowances. issued.
• Administratively simple, can rely • Incentivize mitigation in
on existing tax infrastructure sectors or regions not
• Provide more temporal price
• Stable price signal covered by carbon tax or
Benefits • Relatively efficient revenue
flexibility for regulated entities
cap-and-trade
• Certainty on emission levels
source that enables policymakers • Could become critical to
to reduce more distortive taxes meet net-zero targets
• Limited flexibility for firms to • Administratively complex • Ineffective in the absence of
Drawbacks manage compliance costs in the • Less certainty of price levels as a source of demand (e.g.,
short-term carbon price is determined by from tax or cap-and-trade)
• Less certainty of emission levels the market • Administratively complex
Source: Allied Crowds, 2020

Types of Carbon Pricing Instruments to Support Decarbonization

Cap-and- Crediting
Carbon Tax
Trade Mechanism
© 2021 International Bank for Reconstruction and Development/The World Bank

Revised Law on Environmental • Normally levied on the CO2 • Companies required by • Coexist with the
Protection (effective as of 1 Jan content of fossil fuels regulatory bodies to compliance market:
2022) legalizes the
• Can be levied at any point in purchase carbon credits companies committing
establishment of a carbon
the energy supply chain by (allowance & offsets - up to to smaller carbon
market & enabling policies such
as national GHG inventories as the GoV a set volume limit) equal to footprints using offsets
well as the monitoring, their emissions in a credibility &
reporting & verification of • Financial penalty applied by reputation-driven env.
emissions. regulatory bodies if targets • No penalty/internally-
are missed defined/limited
Detailed government decree • The GoV plans to fully open backlash from
(on e.g., targets, timelines, & the carbon market customers or investors if
regulated industries) is targets are missed
underway.
Our
focus
Voluntary Carbon Market has Grown in Recent Years
VCM has been growing in terms of volumes & values This growth is expected to continue
<7.0–13.0
Up to 100x
Commitment to NGFS scenario

date
TSVCM survey NGFS “immediate action”

1.5oC pathway with CO2
removal
~15x
3.0–4.0
~1.5–2.0 2,0
-
1,0
0,1 0,2
- -
2020 2030 2050
Allied Crowds, 2020; Trove Research, UCL; Liebreich Associates, Mckinsey Sustainability.
Compliance Markets Under Article 6 also Expected to Grow
Compliance markets linked

to the Paris Agreement can
result in cost savings of
Financial Flows (Staggered Net-Zero with
around
Cooperative Implementation)
US$300 billion/year
in 2030 and can reduce an
additional
5 GtCO2 /year
in greenhouse gas
emissions
Source: PNNL, University of Maryland, IETA
13
Trends in the Global Carbon Market and Role of the World Bank
Voluntary carbon markets are Paris Agreement will grow Global emissions are rising, and
growing faster than compliance compliance markets by the voluntary carbon markets are not growing fast
markets market enough
• Growth of voluntary markets far • Article 6 can help countries meet • WBG – though scale-up of results-
exceeds compliance markets; they their NDC goals in a quicker and based carbon and climate financing
have funneled more than EUR5 cheaper way with US$300 – can accelerate climate action and
billion over the last 20 years billion/year savings; WBG carbon funds, particularly
• The voluntary market reached its SCALE, can catalyze further growth
• 55+ countries’ NDC confirm their
maximum since 2010 and crossed in supply-constrained carbon
interest in utilizing international markets
US$1 billion in (2022) for the first market mechanisms and there
time and is expected to rapidly • Capacity building, developing
are an increasing number of
grow carbon market infrastructure (e.g.
Article 6 pilots PMI, Climate Warehouse, etc.) is
• Demand is growing - market is
expected to be supply constrained • It is estimated that airlines will critical to creating carbon market
in the coming years need to offset ~0.5 – 3.0 billion at scale
• The demand for carbon credits tons of CO2 from 2021—2035 to
from Nature-based Solutions (NbS) comply with CORSIA
projects is growing fastest
Source: UNEP; IEA; World Bank; Ecosystem Marketplace; Carbon Brief; ecbi; Climate Focus; Refinitiv
14
20+ Years of World Bank Experience in RBCF

First carbon 220m tons of GHG 63 countries
1999 fund launched CO2 emissions reduced supported
Funds managed
$4.5B historically
Private sector
$950m funds managed
Emission reduction
$1.5B payments made
Evolution of the World Bank’s Work in

Results-Based Climate Finance
Context and
Market Approach

Climate Finance
Market
Emission Reductions (“Carbon”) Credits Have Different Values and Prices
Voluntary Carbon Markets Compliance Carbon Market

Result-based Finance
• Corporates use VCM to “pledge • Used to achieve compliance with
Financier/buyer pays for
and comply”, i.e., demonstrate NDC though Article 6 or another
verified outcome (e.g., verified
achievement of their Voluntary compliance requirement (e.g.,
tCO2e) or Emission Reduction
Commitments (e.g., net zero CORSIA, Emission Trading
Credits (ERCs) following agreed
goals). System like Korea)
methodology and MRV (which
• Market for ERCs with or without • Only ERCs with Authorization
can be based on a carbon
seller country Authorization (and associated Corresponding
standard)
(“Corresponding Adjustment”), Adjustment) can be traded
depending on use and applicable
Only Carbon Credits with
independent standard.
Carbon Authorization for
Example: World Bank Carbon Corresponding Adjustment
Credit
carbon funds like FCPF, Credit WITH (called Internationally
WITHOUT Transferred Mitigation
TCAF, SCALE Authorizatio
Authorizatio Outcomes or ITMOs under the
n
n Paris Agreement) can be traded
“Counted”
“Claimed”
18
Demand in VCM is Driven by Companies Committing to Climate Action

(e.g. carbon neutrality/net zero)
>25% of all Fortune 500 companies made
carbon neutral commitments*
Companies purchasing carbon
credits today to support their Latest net-zero commitments from companies
commitments
Net zero by 2050.
Carbon neutral
Total footprint 120m
in 2020
tCO2e
Net zero by 2050.
Total footprint 100m Carbon neutral
tCO2e in 2020
All brands net-zero Carbon neutral by 2030

by 2039. Total including supply chain
footprint 90m tCO2e
Carbon neutral by 2050.

Total footprint 50m Carbon negative by
tCO2e 2030
Carbon neutral by 2030 by

investing to offset 30m Net-zero by 2040
tCO2e
Carbon Neutral: carbon reductions delivered to some level and remaining carbon emissions are being offset somewhere else making the
overall net emissions zero.
Carbon Net Zero: carbon reductions delivered to a 1.5oC pathway level (50% reduction by 2030 and 70% reduction by 2050) and
remaining carbon emissions are being offset somewhere else, making the overall net emissions zero.
Carbon negative: requires company to go beyond “Carbon Net Zero” and to remove more carbon from the atmosphere than it emits. 19
Monthly Volume Weighted Average VER Price – by project type (USD/tCO2e)
VER = Voluntary Emission Reductions; Averages are weighted by volumes of asks and transactions.
Source: Trove Intelligence database
Trove Research Limited
Context and
Market Approach

Climate Finance
Market
Vietnam has been enhancing its political WBG is committed to supporting
commitment for climate mitigation the Government with its ER goals &
carbon financing
Submitted INDC to the UNFCCC Secretariat 2015
Coordinated with MONRE & other

Over the past Signed & approved the Paris Agreement
2016 ministries to prepare for market
6 years, WBG Plan for Implementation of the Paris Agreement readiness to strengthen the
government’s capacity to develop
has been Sep: Submitted updated NDC to the UNFCCC 2020
carbon pricing approaches & market-
based instruments to
supporting reduce emissions
Vietnam to Oct: Issued National Green Growth Strategy 2021-2030,
vision to 2050
achieve a 2021
Nov: Pledged net-zero emissions by 2050 & signed
green and on to the No New Coal Power Compact at COP26 Supported the assessment, development &
implementation of carbon pricing policies &
resilient Nov: Submitted NDC 2022 to the UNFCCC instruments incl. PMI’s support for the
development & operationalization of National
future Dec: Issued Government Decree on GHG reduction & Ozone Crediting Program & domestic ETS
layer protection that sets the target operation of a
carbon trade exchange from 2025 2022
Dec: Signed the G-7-led Just Energy Transition Partnership
(JET-P) committing to 2030 low carbon targets for the
establishment of a pathway towards 2050
Continue supporting the enabling
environment to design & implement the
voluntary & mandatory ETS
Compared to the unconditional target of 9% under NDC 2020, Vietnam is further enhancing its effort
to reduce GHG emissions by setting a higher target of 15.8 % under NDC 2022, with the largest amount
in the energy sector, followed by industry, agriculture and LULUCF
Comparison of emission reduction targets in NDC 2022 and NDC 2020
Unconditional contribution Conditional contribution
+6,8% +62,4mtCO 2
+$3b +16,5% +152,9mtCO 2
+30,8b
Compared to BAU Reduction amount Financial need Compared to BAU Reduction amount Financial need
0,8% 0,9%
Industry process +13,3 mtCO2e Industry process
3% 5,4% +41,8 mtCO2e
1% 3,6%
Waste -0,4 mtCO2e Waste -3,7 mtCO2e
1% 3,2%
1% 2,3%
LULUCF +23,2 mtCO2e LULUCF +25,4 mtCO2e
3,5% 5%
0,7% 3,5%
Agriculture +5,6 mtCO2e Agriculture +18,3 mtCO2e
1,3% 5,5%
5,5% 16,7%
Energy +13,3mtCO2e Energy +71,2 mtCO2e
7% 24,4%
2020 2022 2020 2022
Vietnam has Benefited from Carbon Market and RBC/CF

Mechanism # projects # Certified Emission Reductions Average size of
registered project (tons)
UNFCCC Clean Development Mechanism (CDM) 332 31 million tons 93,000
Verified Carbon Standard Program (Verra, Voluntary 33 2.7 million tons CO2/year 81,000
Market)
Gold Standard (Voluntary Market) 67 7.6 million CO2/year 110,000
Joint Crediting Mechanism (JCM), Japan (Bilateral 14 8 projects have issued ~4,415 JCM credits N/A
Crediting)
Results-Based Carbon/Climate Finance - Forest Carbon Partnership Facility (FCPF) program on with anticipated RBCF
payments of US$51.5 M
- TCAF program on rice with anticipated RBC/CF payments of US$30-40M (under
preparation)
Source: Allied Crowds, 2020

Vietnam has been increasingly engaged in VCM transactions in the last

few years, with the largest emission reductions from wind (44), solar
0,3
(19%), and energy efficiency (18%) projects

0,25 0,18 mil
0,07 mil 26
mtCO2e mtCO2e
Million tons of
0,5 mil
0,2mtCO2e 1,86 mil mtCO2e 0,25 mil
mtCO2e
1,96 mil 20
0,15 mtCO2e
1,15 mil >10,3mil

mtCO2e Emissions reduced
0,1
total
4,61 mil
0,05 mtCO2e
0,1 mil 10
6
0 6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
4 4 4
3 3 3 3
2 2
1 1
Average emission reduction added by new projects each year (mtCO2e)

Hydro Solar Wind Methane avoidance Energy efficiency Renewable energy Others
Total number of projects stating their crediting period each year

Context and
Market Approach

Climate Finance
Market
Fully Unlocking RB/CF Opportunities for

Vietnam: A Dynamic Approach
Meet NDC Raise

targets revenue
Benefits of
Enhance RBC/CF Reduce
international mitigation
cooperation costs
Increase
innovation &
investment
Upstream Technical Assistance and
World Bank Capacity Building
Instruments Support country in building ecosystem
needed to access and utilize RBCF
to Unlock
RBC/CF
Generation of high integrity/high
quality emission reduction
Conduct actual RBCF transactions
while contributing to the eco-system
improvement if needed
Enhanced access to RBCF

Crowd in private participation
Seven Key Factors Influencing Vietnam’s RBC/CF Opportunities:

NDC targets Certainty, cost, sector attribution in meeting & exceeding targets
Sector-specific factors Cross-cutting factors

Political Economy Establishment of RBC/CF governance framework, institutionalization into domestic
ecosystem
Economic Impact Internalization of macroeconomic impacts of emission reductions credits
Financial Cost competitiveness of credits across sectors/types of policy interventions

Implications
Technical Challenges Availability of carbon quantification system, including methodologies, registries, MRV
Public Awareness Incentivize participation & maintain sustainability of emission reductions credit generations
Market Options Quality, credibility of emission reductions credits

Common but Differentiated Sector Approaches for Vietnam:
Priorities and Actions Needed by Sectors
NDC Political Economic Financial Technical Public Market Options
Targets Economy Impact Implications Challenges Awareness
Agriculture Increased Governance Macro-economic Requires public Costly MRV & Farmers and Quality & creditability
Collaboration
contributions to framework impacts of ag investments in extensive data value chain of credits to determine with World Bank
VN’s NDCs needed emissions infrastructure/ requirements will play key market options TCAF/SCALE to
substantial policy while roles enhance the
sector readiness
crowding in
through piloting
private transactions
investments
Forestry Potential to Experience in Need to generate Uncertain prices MRV depends Collaborative National guidelines
supply REDD+; legal additional in market; high on carbon action needed needed, lack of Sector
more ERs framework for financial sources project standards; for ERs & domestic market foundation
through ER title transfer development, Benefit removals established
improved forest being worked MRV costs Sharing Plan through World
Bank FCPF
management out to be transaction
implemented
Energy Funding Harmonization Mandatory Need clear 3rd party Baseline emission
available for of PDP8 with targets & institutional certification & sources available – to
sector GHG NDC and compliance roles & MRV systems be enhanced for Built upon
successful
inventory, but approval - mechanisms responsibilities needed industries, funding experiences,
not yet review ongoing needed for budget available incl. World Bank
established planning/ CPF transaction,
benefit sharing opportunities for
innovations and
scaling up
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Results-Based
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Session 2:
Overview of Sectors’ Readiness,
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RBC/CF
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Emission Reductions from Forests – Readiness, Challenges & Opportunities
Policies, Regulations & Capacity Supply of ERCs in Forests Trading of ERCs
• Env. Protection Law 2020 Vietnam’s Forestry: 2021 Statistics Options of market
• Vietnam’s commitment in COP26: 14.7 Mha – 42% cover • Unavailable national guidelines for joining
net 0 emission target by 2050; stop 2.2 Mha (15%) for biodiversity international market-based market (i.e. VCM)
deforestation by 2030 conservation • Lack of domestic carbon market
• Climate change strategy (2022), 4.6 Mha (32%) for environment protection
NDC (2022) aiming to achieve net 7.8 Mha (53%) for timber & NTFPs Pilot RB program: North Central region ER-P
0 emission and CC adaptation production • Estimated ER: 25 Mt CO2e
• Glasgow Action Plan submitted for 30.5 Mt CO2e – annual emissions, 2010- • Signed ERPA to transfer 10.3 Mt CO2e (95% is
approval to reverse deforestation 2020 owned by Vietnam, accounted for NDC)
• NDC National: 84,5 MtCO2; Int’s -69.8 Mt CO2e – annual removals, 2010- • Estimated payment of 51.5 M$
support: 21,8 MtCO2 (additional) 2020
• Investment costs: National: 3,9 B$; 612 Mt C stored in the forests (2020), 80% Financial Implications
Int’s support: 1,6 B$; 28-33 $/tCO2 in natural forests • Low and uncertain carbon prices in the volunteer
• PM’s Decree 107 piloting tittle • Potential to increase ER through carbon market
transfer (ERPA) improved forest management (natural • High costs of project development and MRV
• MARD’s approved BSP & planed forests) • Unclear national investment in forestry for ER
• MRV/REL capacity targets
• Data accessibility Forest Carbon
• Experience in payment for forest Stock Distribution Economic Impacts:
environmental services • Mobilizing investment in forestry
• Generate additional financial sources and
improved forest-based product quality
Vietnam Low Carbon Rice Sector Transformation

Policies and Regulations Supply of ERCS Trading of ERCs
• Own NDCs: balancing least cost • Financial Implication: up to US$100M • Options of market: with the support of TCAF
and carbon constraints through additional revenues anticipated from and SCALE technical assistance, enhance the
Cross-cutting work
sector planning, fully aligned RBCF from TCAF and SCALE to tradability of carbon credits under different
with NDC address the financial gaps voluntary and compliance standards
• Financial implication: pricing • Public awareness: benefits sharing to • Political Economy: Using TCAF and SCALE
carbon credits by taking account incentivize participation of interested transactions to test and prove the credibility
of sector and NDC abatement public and private parties and ensure and reliability of the domestic eco-system
costs, opportunity costs, etc. sustainability needed by international carbon trading
• Political Economy: following a Adoption of “1M5R” at 1M ha rice Own NDCs: generation of carbon credits which
dynamic process to enhance ERCs areas: can be used by Vietnam’s NDC targets (50% of
regulation, generation, 1. Seed use: 29 - 50% lower TCAF credits + 100% SCALE credits )
authorization, tracking, etc.
Sector-specific work
2. Inorganic fertilizer use: 22 - 50%

lower Financial implication: Marketing “high quality”
3. Water use: 30 - 50% lower “reduced delivery risk” carbon credits to attract
4. Pesticide applications: 20- 33% lower higher price offers from both voluntary and
5. Production cost: 22% lower; compliance buyers
Benefits:
1. Rice yields: 5.2–7.9% increase
2. Profits: 29–67% increase
3. GHG emissions:4-9 M tons per year
Lack of sectoral Power Sector Readiness for Carbon Finance & Trading
data infrastructure
Minimum Enablers Status
prevents sector
Sector-Wide GHG Inventory: Data aggregation Not yet established – funding available*
from benefitting from sector stakeholders, including private
from carbon sector
Harmonization of PDP8 with NDC and approval PDP8 review ongoing – not yet approved
markets
Mandatory targets (e.g., energy efficiency, Lack of mandatory targets in the energy
industrial decarbonization) and compliance efficiency and low-carbon industries;
mechanisms Designated Energy Users to report to MOIT on
energy consumption every 3 tears, but no
institutional/technical infrastructure or annual
reporting
Clear institutional roles and responsibilities (e.g., To be established
MOIT/MONRE/MOF) including for budget
sharing/benefit sharing
Third party certification Recommendations for national registry and
MRV system crediting program database available – not yet
implemented
Baseline emission sources Available – to be enhanced for industries,
funding available*
*Vietnam Decarbonization and Energy Transition project
Market
potential:
10 largest cities
in Vietnam Energy efficiency retrofits Rooftop solar Upgrade to LED Upgrade to
for buildings installment streetlights e-motorbikes
15 years for individual driver
Duration 15 years 25 years 15 years 10 years for ride-hailing driver
Capital costs $1.4 bn $40 bn $67 mn $937 per e-motorbike
Energy savings 142%* for individual driver

$6.8 bn $57 bn $301.5 mn 942%* for ride-hailing driver
(NPV)
CO2 savings 73 mn for individual driver
98.3 mn 546 mn (for 10 years) 3.9 mn 9.6 mn for ride-hailing
(tons)
8%* for individual driver
Offsets (NPV) $1.4 bn $9.2 bn (for 10 years) $56.1 mn 43%* for ride-hailing driver
56.2mn m2 public buildings 50,418 MWp in the 1st year for
15 mn individual motorbikes
Market size 223.3mn m2 commercial public, commercial & residential 670,955 streetlights 0.4 mn ride-hailing motorbikes
buildings buildings
Assumptions: 8% discount rate; US$25 Carbon price; $0.09 electricity cost (per kWh); 0.52 kg/kWh CO2 emission * % of capital cost per unit
from electricity production
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Expectations of Participants
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Day 1: February 27
Timing Topic
Part I: Vietnam policy priorities, overview of results-based carbon and climate finance, and linkages
between domestic carbon pricing instruments, Article 6, and voluntary and compliance carbon markets
2:00 - 3:30 pm Session 3: Group discussions on sector priorities and lessons
Group A: Low-carbon rice and forestry (room: Fansipan 2 + 3)
Group B: Energy (room: Fansipan 1)
Group C: Low-carbon cities (room: Thiền Quang)
3:30 – 3:45 pm BREAK
3:45 - 4:45 pm Breakout groups report back to plenary: Moderated discussion, Q&A
4:45 - 5:00 pm Closing Remarks: Summary of day and expectations for tomorrow
Day 2: February 28
Timing Topic and Discussion Points
Part II: Key building blocks of high quality, high integrity results-based carbon and climate finance programs
9:00 - 9:15 am Welcome and Opening Remarks
9:15 - 9:45 am Session 4: Emission reductions crediting approaches and methodologies relevant to priority
sectors; Q&A and discussion
9:45 - 11:00 am Session 5: Key processes and requirements for RBC/CF
11:00 -11:15 am BREAK
11:15 -12:30 pm Session 6: Legal and institutional frameworks
12:30 - 1:30 pm LUNCH
Part III: Sector deep dives on applications of results-based carbon and climate finance in Vietnam context
1:30 - 1:50 pm Session 7: Overview of Vietnam’s experience with RBC/CF
1:50 - 3:00 pm Case Study 1: Vietnam Forest Carbon Project
 Part 1: Overview of Vietnam’s FCPF project
 Part 2: MARD’s experience gained from the FCPF project
3:00 - 3:15 pm BREAK
3:15 - 4:30 pm Case Study 2: Vietnam Renewable Energy Project
 Part 1: Overview of Vietnam’s CPF project
 Part 2: MOIT’s experience gained from the CPF project
4:30 - 5:00 pm Summary and Closing Remarks
Day 3: March 1
Timing Topic and Discussion Points
Part III (cont.): Sector deep dives on applications of results-based carbon and climate finance in Vietnam
9:00 - 9:15 am Welcome and Opening Remarks
9:15 - 10:45 am Case Study 3: Vietnam Low Carbon City Project
 Part 1: Overview of Vietnam’s Low Carbon City Project Design
 Part 2: HCMC’s plans on the Low Carbon City Project
10:45 - 11:00 am BREAK
11:00 - 12:00 pm Case Study 4: Vietnam Low Carbon Rice Project
 Part 1: Overview of Vietnam’s Low Carbon Rice Project
 Part 2: MARD’s plans on the Low Carbon Rice Project
12:00 - 1:00 pm LUNCH
Part IV: Interactive discussion on next steps priorities for accessing results-based climate and carbon finance
1:00 - 1:30 pm Session 8: Assessment of Vietnam’s policy landscape for RBC/CF
1:30 - 2:45 pm Session 9: Group discussions on priority next steps for RBC/CF
2:45 - 3:00 pm BREAK

3:00 - 4:00 pm Plenary report-out: Results of group work, priority next steps
4:00 - 4:30 pm Summary and Closing Remarks

Session 3:
Sector Priorities & Lessons from
Participation in Carbon Markets
Breakout Sessions
Group Topic Room Name
A Low-Carbon Rice and Fansipan 2 + 3 (stay

Forestry in main room)
B Energy Fansipan 1
C Low-Carbon Cities Thiền Quang

Discussion Questions
• What lessons have you learned from early
interactions with RBCF and/or carbon markets in this
sector?
• What opportunities do you see for engagement with
RBC/CF and/or carbon markets going forward?
• How can this engagement help this sector achieve its
climate and/or development goals?
• What challenges do you foresee? How can these
challenges be mitigated?
Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
Plenary Report
Out
• What lessons have you learned from early
interactions with RBCF and/or carbon markets in this
sector?
• What opportunities do you see for engagement with
RBC/CF and/or carbon markets going forward?
• How can this engagement help this sector achieve its
climate and/or development goals?
• What challenges do you foresee? How can these
challenges be mitigated?
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Results-Based
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Day 1 Survey
Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
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Session 4:
Emission Reductions Crediting
Approaches and Methodologies
Helping Clients Access Climate

Finance with Emission Reductions
• As developing countries undertake more low-carbon projects and policies as part of NDC
implementation, they have an opportunity to monetize the emission reductions that result.
• Emission reductions can occur when low-carbon projects (e.g., solar plant) or policies (subsidy
removal) create less emissions than a business-as-usual alternative (e.g., coal plant).
• Once properly verified, emission reductions can be sold and transferred to countries and
companies looking to ‘offset’ their own emissions, or be compensated for directly by donor
governments that support climate action with no transfer of an offset. Additionally, emission
reductions paid for with RBC/CF remain with the host country to be used for NDC compliance.
• With some estimates projecting it to reach $100 billion by 2030 – this is a large and growing
opportunity and a crucial finance source for developing countries to achieve their climate
goals.
• World Bank developed more than 50 methodologies for the markets under the CDM and JI
• World Bank’s SCCFE and SCCFM provides expertise and direct financing at scale to help client
countries achieve their NDC targets and navigate this growing market to maximize the value of
their emission reductions – including and especially in the context of the Glasgow Climate
Pact.
Emission Reduction Methodologies Rely on

Appropriate Crediting Approaches and the
Methodological Framework
• In order to design an emission reduction crediting program,
two elements need to be considered and selected:
• The type of crediting approach used depends on the
nature of the supported mitigation activity
• The methodological framework used will determine
how ERCs are calculated
• The methodological framework selected should also
support additional considerations to ensure
environmental integrity (e.g., that an emission reduction
has actually occurred) and to avoid double
counting/claiming (e.g., where two entities both
count/claim the ERCs that are generated)
Developing Different and Innovative Approaches

to Cater to Different Types of Programs
Crediting
Objective Methodological Requirements Examples
Approach
Project-by- Support individual investment Baselines and MRV based on technology Standalone renewable energy (RE) plant
Project projects or large-scale landfill
Support a larger number of similar Baselines and MRV typically based on technology Cookstoves, mini-hydro, mini-grids,
projects often small and micro vehicle fleet upgrades to electric
Programmatic Often accompanied by an incentive program that
scale within a program vehicles
transforms ER revenues into other incentive payments
Support a policy intervention such Baselines and MRV typically based on economic Subsidy (energy, agriculture, etc.)
as an energy efficiency standard or modeling reform, carbon tax, energy efficiency
Policy
energy/carbon pricing policies standards (buildings, appliances, etc.)
Support overachievement of Sectoral baseline and MRV Solid waste sector reform
Sectoral sectoral mitigation
Crediting on an aggregate sub-sector/sector level Industrial sector (cement, steel, etc.)
benchmarks/targets
energy efficiency
Support overachievement of Jurisdictional baseline and MRV Multisectoral emission reductions
Jurisdictional jurisdictional mitigation program for a city or group of cities, or
Crediting on an aggregate level
benchmarks/reference levels for landscapes across a set jurisdiction
BAU and Crediting Threshold are Key Elements

of the Methodological Framework
• A methodological framework is a set of technical components
integrated into a program to help quantify emission reductions to
support environmental integrity and avoid double
counting/claiming.
• In order to design the program, the methodological framework
should set out one or both of the following:
• The business as usual (BAU) emissions comprise the emissions
trajectory for the economy or sector in the absence of the
activity(ies). This BAU trajectory can be used to form the baseline.
A country’s NDC targets can also be used to form the baseline.
• The crediting threshold is the trajectory (usually with emissions
below the baseline) against which emission reductions would be
generated in a particular program.
Considerations of NDCs are Critical for the

Methodology’s Development
• A country’s nationally determined contribution
(NDC) should also be integrated into the
methodological framework.
• An NDC is a country’s plan submitted to show its
goals for and contributions to climate mitigation and
adaptation action under the Paris Agreement.
• The type of target set in the NDC and applicable to
the emission reduction activity can help determine
the crediting threshold.
• Unconditional targets are those that a country commits
to achieving without international support.
• Conditional targets are those that are contingent on
receiving international support.
Unconditional and Conditional Targets Help Refine the

Crediting Thresholds
The nature of a host country’s NDC – including its conditional and unconditional targets – can help refine how
crediting thresholds are determined, which in turn affects whether and how environmental integrity is delivered
and double counting/claiming is avoided. Under-estimated BAU
Generation of ERCs based on these BAU Actual BAU Generation of

& NDC settings would likely suffer from
ERCs with level
lower levels of environment integrity.
Unconditional NDC of environment
integrity to
Conditional NDC be assessed
tCO2e
Actual emissions More ambitious NDC
Generation of ERCs within this range Net-zero emissions

would likely benefit from higher levels
of environment integrity
Time (years)
Example: RBCF may support ERCs generated below the red line and
carbon finance may support ERCs generated below yellow line *NDC targets set above actual BAU
Other Aspects to Consider for the Methodology’s Development

Avoidance of Double
Additionality Permanence WBG Considerations
Counting
• Ensuring that ERCs • Ensuring that activities • Ensuring that only one • ERCs can be made to
represent activities and/or policies leading to party uses the ERC for adhere to additional social
beyond BAU and/or the ERCs are not stopped compliance (e.g., and environmental
unconditional NDC target or reversed in the future. corresponding standards.
• Emission reductions that adjustments). • ERC programs should be
are already paid for by • Comparing the consistent with the WB’s
other international climate performance of programs Country Partnership
finance provided to the in relation to their baseline Framework and the
program benefiting from and that emission country’s SDG
SCALE support, if any, will reductions verified can implementation plans and
be excluded from receiving only be used once for will follow the WB
SCALE payments. In other mitigation. Operational Policies and
words, SCALE will aim to Procedures, including
only pay for reductions social inclusion, gender
that are supported by the equity, and environmental
SCALE payment itself. and social safeguard
policies.
64
Methodologies Under Development

• Supporting early and accelerated coal power plant(s)
decommissioning
• Certifying green hydrogen credentials and calculating
emission reductions from its value chain
• Solar PV with battery storage (in collaboration with
Global Carbon Council,
https://www.globalcarboncouncil.com/)
• Urban crediting methodology
(https://openknowledge.worldbank.org/handle/10986/3
3823)
• Modelling based methodologies and tools for energy
pricing reform, transport sector policy interventions, and
green financial sector interventions
For more details,

please contact:
Harikumar Gadde:
hgadde@worldbank.org
Klaus Oppermann:
koppermann@worldbank.org
leave a comment.
We will review and

Session 5:
Key Processes and Requirements
What is a Carbon Credit?

• Certificate representing the mitigation or removal of 1 t CO2e from the atmosphere
• Carbon allowances represents the right to emit 1 t CO2e (Emission Trading Schemes – ETS)
• Carbon credits are referred to as offsets when purchased to help close the gap between an entity’s
emission reduction obligations/or voluntary commitments—and its actual emissions, to be added to
carbon allowances and thereby reduce liability for tax/penalty.
Revenue from Investment in
carbon credit sale carbon projects
Baseline
GHG emissions under a BAU scenario
(e.g., projected historical RL) Design and
Implementation of a
Issuance of carbon project
carbon credits
Actual GHG emissions

Voluntary Carbon Markets Carbon
GHG emissions under project Finance
implementation scenario
Compliance Markets (ETS…)
offsets
Types of Carbon Credits

Carbon Credits
Mitigation Credits Removal Credits

Emissions reduced or avoided Emissions captured and permanently
compared to a baseline stored
Reductions Avoidances Nature-based Technology-

Low-carbon Preventing GHG
removals based removals
technologies/ emissions in absence of (negative emissions
Afforestation/
Carbon-efficient the project technologies)
implementation (e.g., Reforestation activities,
resources Soil organic carbon Direct-Air Capture
Reducing (DAC) and Bioenergy
Deforestation) with Carbon Capture
and Storage (BECCS)
How is
Titlea Carbon Credit Issued? Crediting approaches: project, program,
policy, sectoral/jurisdictional
12-24 months 3-6 months 1-6 months 3-6 months 1-2 months
Project External Project External Credit Issuance
Document Validation Registration Verification
Development (MR)
• Carbon • Third party • National • Third party • Carbon

standard auditor Registry auditor standard
(MF): VCS, (VVB) • Carbon (VVB) (National)
Gold standard Transaction
Standard…) Registry Registry
E.g., VCS E.g., VCS E.g., VCS

Methodology Review Account opening fee Methodology
• Time and costs fee USD 15,000 USD 500 compensation rebate E.g., VCS
Limiting factor for Module and Tool Registration fee USD USD 0.02 / t CO2e –1 M Issuance levy var USD
market development Review fee USD 7,500 0.10 / t CO2e VVB 2,500/year 0.05 / t CO2e – 10,000
and access to carbon
finance
Project Document Development

• Scale and ambition
Project • Analysis of drivers of emissions and removals
design • Project activities and financial plan
•Scope, data (categories, gases and carbon pools)
•Systems and methods for Monitoring, Measurement and
Carbon Reporting on ERs (MRV systems)
accounting •Accounting for Displacement (Leakage) and Reversals
MRV •Baseline and ERs calculation (uncertainty and reversal
mitigation risks mechanisms)
•Social and environmental safeguards (monitoring systems

Safeguards and methods, grievance mechanisms)
and BSP •Non-Carbon benefits (monitoring system and methods)
• Benefit sharing mechanisms and plans
Legal and •Resource/Carbon rights and ER Program Entity’s ability to
institutional transfer Title to ERs
framework
Registries •Data Management Systems (carbon registry) and ER

Transaction Registries
MRV (AFOLU – LULUCF)

Activity data: quantitative measures of a level of
Earth Observation
activity that results in GHG Emissions (E.g area • Manually operated
Data (RS)
deforested (ha); rice crop area transformed to a • High uncertainties and biases
low CH4 emissions system) • High costs (0.2 -1.6 €/credit)
• Slow (12-24 months per cycle)
• Non-integrated transaction logs
R V
Reporting Verification Issuance
Limiting factor for market
M development and access
to carbon/climate finance
Field Data Emission factors: coefficients - vol. of GHGs emitted or sequestered per unit of activity (E.g
(e.g., NFI, CH4 rice inv) tCO2e/ha deforested; cropping season EFs CH4 from rice growing areas (field measurements
using closed chamber technique)
MRV (AFOLU – Enteric Fermentation and Manure Management)

Activity data: livestock inventory (livestock numbers – heads)
Earth Observation
Data (RS)
• Manually operated
• High uncertainties and biases
• High costs (0.2 -1.6 €/credit)
• Slow (12-24 months per cycle)
• Non-integrated transaction logs
R V
M
Limiting factor for

market development
and access to
carbon/climate
Field Data Emission factors: Enteric CH4 EFs (based on live weight, finance
production/age-group and diet): kg CH4/head
MRV (Energy renewables – Solar Photovoltaic -PV- Power Plant )
e.g., Project activity generating renewable electricity without generating any GHG emissions, displacing part of the electricity supplied by
grid connected fossil fuel fired power plants (e.g., Plant with a peak capacity of 48 MW and net annual generated electricity of 91,142 MWh)
Electricity Calculation of net electricity by project activity EGPJ,y== EGfacility,y = EGexport,y - EGimport,y
supplied to the
grid by the project
• Easier to implement a dMRV (compared
with AFOLU MRVs) throughout the metering
and data collection system
R V
BEy = EGfacility,y * EFgrid,CM,y = 91,142 x 0.8492 = 77,400 tCO2e

PEy= 0
Grid emission E.g., HONG PHONG 4 VCS Project

factor
EFgrid,CM,y (t CO2/MWh): weighted average of the operating margin EF (EFgrid,OM,y) and the build
margin EF (EFgrid,BM,y): e.g., 0.8492
MRV (AFOLU – LUC)

Earth Observation • Barriers for the implementation of a digital
Data (RS) MRV solution, i.e., institutional, regulatory,
initial financing.
Digital MRV (smart sensors, drones, satellites,

cloud computing, ML, AI, and blockchain encryption)
• WB has launched a proof of concept (POC)

for a Next Generation MRV system (ASA)
to report to the WB-managed GHG
Programs (FCPF and BioCF ISFL)
Field Data • Mozambique and Colombia
(e.g. NFI) • Prototype to be concluded by September
2023
• Cloud computing 4. Processing and production

• Machine learning of carbon maps
• Privacy Enhancement
Technologies
• RADAR Band – L critical for carbon mapping

• SAOCOM (Argentina) / ALOS-2 (Japan)
3. EO Data Collection
• New sensors 2023 (ALOS-4, NISAR, BIOMASS)
(RADAR L-Band)
2. Aerial Laser Scanning

Sampling (Aerial LiDAR)
1. Terrestrial Laser Scanning

(Terrestrial LiDAR)
By ESA (2020)
• Regular monitoring of carbon stocks by satellite using a combination of LiDAR

and RADAR L-Band
40 weeks average (FCPF)
Validation and Verification MR, annex IV and all supporting documents to the FMT
week
0
FMT performs a completeness check 3

Validation:
• Assess the integrity of the reference level, scope and Kick-off meeting and desk review by VVB 5
methodologies, GHG and carbon pools, monitoring 8
Issuance of sampling plan and audit plans
and reporting system, data availability, uncertainty
analysis. Review and approval of the sampling and audit plans 10
Verification: Office meetings and country visit occurs 13
• Periodic assessment of the volume of ERs generated
by the ER Program since the last Verification Report VVB prepares a list of findings 14
or, in the case of the first Verification, since the 18
Country Program resolves the findings
Crediting Period Start Date.
• Asses the calculation of the ERs, analysis of The VVB reviews the responses to the findings 20
uncertainty, monitoring and reporting system,
VVB prepares a Draft Validation and a Verification Report 22
consistency of monitored estimates with RL,
displacement, reversals, registries. Technical Reviewer revises the draft VV Reports 23
The FMT reviews the advanced draft of the VV Report 24
Final Validation and Verification Reports are issued 25

Social inclusion is key to ensure effective,

efficient and sustainable RBCF
Ethical rationale
• Climate change impacts disproportionally local
communities who have been contributing to the
preservation and management of natural
resources and contributed little or none to its
adverse effects
• Lack of inclusion can exacerbate existing inequities
Pragmatic rationale
• Enhanced social inclusion increases the
effectiveness and utility of RBCF programs
• Inclusion ensures the community buy-in necessary
for the success and sustainability of natural
resources management and mitigation measures
This Photo by Unknown Author is licensed under CC BY-NC

Opportunities to promote social

inclusion in RBCF
• The World Bank’s Environment and Social Framework (ESF) enhances the
Bank’s commitment to sustainable development through risk management
to avoid, minimize, compensate or offset impacts. Through stakeholder
engagement the ESF’s Environmental and Social Standards support
opportunities to reduce poverty and increase prosperity in a sustainable
manner for the benefit of citizens and the environment
https://www.worldbank.org/en/projects-operations/environmental-and-
social-framework
• Benefit-sharing arrangements are employed in Nature-Based Solutions
RBCF to reward, provide incentives, and enhance social and development
outcomes for local communities, groups, and individuals
• EnABLE is an associated trust fund of SCALE supporting social inclusion in
Bank-supported RBCF
World Bank Environmental and Social

Framework (ESF)
Designed to help Borrowers manage project risks and impacts, and improve
environmental and social performance, consistent with good international
practice and national and international obligations
Include objectives that Include requirements that

define the environmental help Borrowers achieve ESS
and social outcomes to be objectives through means
achieved appropriate to nature, scale
and risks of the project
Environmental & Social Framework Provides:

• Analysis of E&S risks, impacts and opportunities (e.g., Strategic
Environmental and Social Assessment, input to project design)
• Stakeholder analysis and engagement process to strengthen design
and seek support (E.g., Stakeholder Engagement Plan)
• Risk management measures for various Environmental and Social
Standards (e.g., through Environmental and Social Management
Framework)
o Protection of natural habitats
o Protection of local communities and households (e.g., avoidance or
management of involuntary land acquisition and restrictions of
access to land and natural resource, meaningful consultation and
engagement with ethnic minorities
Benefit Sharing Mechanisms

• For governments, benefit sharing provides a framework for embedding
social equity, human development, and sustainability objectives into
investments and maximizing development benefits
• For both the public and private sector, benefit sharing is important for risk
mitigation and supporting sustainable outcomes
• For local communities, in turn, it can provide empowerment and agency,
strengthen institutions, build capacities, expand opportunities, ensure
access to resources, and improve local infrastructure and services
Social Inclusion and Gender Equality in RBC/CF

Emission reductions Verification and payment
activities for results
Benefit sharing
Generating non-carbon benefits arrangements
Compensation and incentives for

emission reductions activities
• It is critical to engage disadvantaged and marginalized community stakeholders upfront, and at
every stage of the process—including the design of emission reductions measures, funding
strategies, and the governance of funding mechanisms to access and benefit from the revolving flow
of result-based payments
• Appropriate and effective tools and approaches must be put in place (languages, cultural norms,
continuity, feedback mechanisms)
Enhancing Access to Benefits while Lowering

Emissions (EnABLE) Program: Priority Areas
OPPORTUNITIES FOR ENGAGEMENT
Strengthen the capabilities of the target beneficiaries to engage in RBC/CF programs
and benefit from them through capacity and skills building, voice and empowerment
ENHANCED ENABLING ENVIRONMENT

by supporting target beneficiaries’ collaboration and partnerships with key
stakeholders and ensuring that target beneficiaries lead and benefit from Emission
Reductions Programs (ERPs) through appropriately designed pilot activities
KNOWLEDGE GENERATION AND TRANSFER

Integrate social inclusion and gender equity in the design and
implementation of ERPs through knowledge transfer and the
sharing of best practices.
Types of EnABLE Support

Provision of financial and technical assistance
• Preparation of awareness-raising materials (IEC)
• Planning and roll-out of awareness raising and capacity building
activities for various stakeholders
• Pilot activities, such as on livelihood, sustainable natural
resource management, climate-smart agriculture
• Planning and implementation of land and natural resource
management
• Support to community-level groups such as farmers’ groups,
cooperatives, women’s enterprise and forest management
groups
• Development and sharing of information and lessons learned
Registries
Title
Two different systems (rarely country connected) with different functions
Project Registration Credit Issuance
• Carbon standard • Carbon standard

Registry (/National) Transaction
Registry
Carbon Registry • National • Transactions: issuance, ER Transaction
(Project Database Registry buffer allocation, Registry
Management System) • Regulation and transfer, cancellation,
Guidelines retirement
• Nesting • Connections: Meta-
(multiple registry, Auction
combinations) platforms, Tokenization
engine
Registries
• National Regulation: Sectoral/Multisectoral
• Nesting guidelines (multiple combinations)
• Crediting approaches: project, program, policy, jurisdictional,
Project Registration sectoral
• Carbon standard
Registry
Carbon Registry • National

(Project DMS) Registry
• Regulation and
Guidelines
Sectoral/Multisectoral
• Nesting
(multiple
combinations) • E.g., Nesting
combination
for REDD+
Emerging Article 6 Reporting & Registry Infrastructure

Infrastructure needed for the implementation of cooperative approaches under article 6 (PA)
Countries need to establish a registry (accessible and transparent) to track the transfer and cancellation of
mitigation outcomes.
As key outcome from COP27:
• To ensure “robust accounting” required by Article 6.2 and to avoid double counting of ITMOs, COP27 agreed what
information* Parties need to report when trading ITMOs, subject to further testing and refinement in 2023
• Deferred to COP28, links and infrastructure needed to trade carbon credits through a “Centralized Accounting and
Reporting Platform” (CARP). CARP will host both the Article 6 database and the international registry (by
2024/interim solution for reporting on ITMOS in 2023).
*(FCCC/PA/CMA/2022/L.15 Guidance on cooperative approaches referred to in Article 6, paragraph 2,

of the Paris Agreement and in decision 2/CMA.3 Annex I* Guidance relating to decision 2/CMA.3,
annex, chapter VI(Tracking))
Title
(so far…) Centralized Accounting and Reporting Platform (CARP)
UNFCCC Secretariat
Article 6 Database Unique

identifiers for
Web based ITMOs from the
platform party’s registry
Records Info submitted by Mechanism Registry International Registry

Parties: CAs, Emissions (Art. 6.4) (incl. Art. 6.2)
balances and information on
ITMOs transferred, acquired,
held, cancelled, cancelled for Tracks A6.4ERs
Submission
overall mitigation in global and CERs
portal for
emissions, if any, and/or transferred to Country A registry Country B
participating
used by participating Parties the mechanism section registry section
Parties
registry
Country A Country B
National Carbon Registries = registry registry
Registries
Title
WB CCG Initiatives
Credit Issuance
• Carbon standard
(National) Transaction
Registry
• Transactions: issuance, ER Transaction
buffer allocation, Registry
transfer, cancellation,
retirement
• Connections: Meta-
registry, Auction
platforms, Tokenization
engine…
CATS (Carbon Assets Tracking System – WB ER Transaction Registry)

https://cats.worldbank.org
CATS (Carbon Assets Tracking System – WB ER Transaction Registry)

The WB designed CATS – Carbon Assets Tracking System as a central platform to support the operations under the WB ER
Programs (initially FCPF CF and the BioCF ISFL ER Programs).
CATS is a web-based platform (https://cats.worldbank.org/ ), to record and issue serialized ER units (WB ER Programs) and
transfer them between registry’s accounts holders. CATS is a key piece to safeguard environmental integrity of WB ER
Programs by mitigating the risks of double counting, double selling and double claiming, and allow the WB to issue ER units
on behalf of the host countries (ERP) with their consent and approval, providing a secure and transparent transactional
platform minimizing risks.
• CATS is fully operational as a Central Transaction Registry managed by the AMU (Assets Management Unit).
• CATS is ICAO/CORSIA compliant (attestation submitted for the FCPF and ISFL).
• Operational guidelines, User manual (26 detailed videos explaining step by step all the transactions in CATS) and Terms &
Conditions are available under the Knowledge Center section of https://cats.worldbank.org/ .
• Ongoing CATS Training plan and continuous support on registries to host countries.
Enhancements under CATS 2.0. (under design):

• Accommodation of existing WB programs and projects and new requirements under the Paris Agreement.
• Incorporation of a MRV data integration interface (geodatabase by GHG category).
• Connection to the Climate Action Data Trust (pilot Tokenization Engine)
Climate Action Data Trust

C Global public good that aims to empower a new global
carbon market infrastructure.
Metadata platform that aims to link, aggregate and
harmonize underlying registry data to enable transparent
accounting as per Article 6.
Designed as an open shared infrastructure with a common
taxonomy of data that facilitates connection and communication
between entities enabled by blockchain technology.
Registry service providers and countries

share data to the platform and public and
private sector market players can host a
node and build out the service layer.
Provide visibility into corresponding adjustment procedures and
the lifecycle of carbon offsets from issuances to retirement,
which will safeguard against double counting and ease reporting
requirements.
Climate Action Data Trust

• Designed as an open shared
infrastructure layer
• Common taxonomy of data
facilitates communication
between entities
• Registry service providers
and countries share data to
the Climate Action Data
Trust (CADT)
• Public and private sector
market players can host a
node and build out the
service layer
Climate Project Location
Action Warehouse Project ID* (FK)

Project Location ID (PK)
∞
Projects
Warehouse Project ID* (FK)
Related Projects
∞ Units Governance (Picklist
Values)
Data
Warehouse Project ID* (FK) Issuance ID* (FK)
Country*
∞
Current Registry* Registry values
Related Project ID (PK) Warehouse Unit ID* (PK)
In-Country Region
Project ID* Project Sector values
Relationship Type Unit Issuance Location*
Geographic Identifier*
Registry of Origin*
Trust: Registry Project Status values

(FK to project loc ID)
Program Project Type values
Project Rating Label ID* (FK)
Project Name* Methodology values
Warehouse Project ID* (FK) Issuances Unit Owner
Data ∞
Project Description Unit Metric values
Project Rating ID (PK) Country Jurisdiction of
∞
Project Link* Validation Body values
Rating Type* Issuance ID (PK) Owner*
Project Developer* Country values
Model ∞
Rating Range Lowest* Issuance Start Date* In-Country Jurisdiction of
Sector* Rating Type values
Rating Range Highest* Issuance End Date* Owner
Project Type* Unit Type values
Rating* Verification Approach* Unit Block Start*
Project Tags
∞
Unit Status values
Rating Link* Verification Report Date* Unit Block End*
Covered by NDC*
Fields with an * are Verification Body* Unit Count*
Corresponding Adjustment
Co-Benefits NDC Information
required from fields Vintage Year*
Declaration values
Project Status* Corresponding Adjustment
Warehouse Project ID* (FK) Unit Type*
PK denotes primary
key for a specific
Co-Benefits ID (PK)
Co-Benefit
∞ Project Status Date*
Unit Metric*
Labels
Marketplace
Marketplace Link
Status values
Related Project Relationship
Methodology* type values
table Marketplace Identifier
∞
Estimations Validation Body Label ID (PK)
Label Type values
Unit Tags
Warehouse Project ID* (FK) Validation Date Label Type*
Verification Body values
FK denotes foreign Unit Status*
∞
Estimations ID (PK) Label*
Tag values
∞
key which links Crediting Period Start* Crediting Period Start Date*
Unit Status Reason
Co-benefit values
tables together Crediting Period End* Crediting Period End Date*
Unit Registry Link*
Corresponding Adjustment
Unit Count* Validity Start Date*
Declaration* Each ID is globally unique,
Validity End Date*
Corresponding Adjustment meaning no organizations
Unit Quantity
Status* will generate the same ID
Label Link*
for any table
Tokenization of ERCs
Solution Process under analysis
Tokenization Engine Climate Explorer Climate Wallet
Issues carbon credits Provides transparency of token View/transact/retire carbon
as digital assets issuance, detokenization, and tokens and supporting
(tokens) retirement events carbon data
1 2 3
STEP STEP STEP
Issuance of tokens (request) Issuance of tokens (approval) Issuance of tokens (issued)
DESCRIPTION DESCRIPTION DESCRIPTION
CATS account holder requests CATS approves tokenization Credits are tokenized into
tokenization of active credits and communicates with designated wallet.
into designated wallet. tokenization engine.
CARBON CREDIT CARBON CREDIT CARBON CREDIT

Active Tokenized Tokenized
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We will review and

Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
Session 6:
Legal and Institutional Frameworks
Country Assessment is one component of the World Bank's Emissions

Reduction Program (ERP)
The Emissions Reduction Program is set up to support countries in East Asia and the Pacific to understand the evolving Emissions
Reduction Credit (ERC) markets, prepare transactions and mobilize finance for such transactions
Workstreams Market needs to address Key activities within the Market Development workstream:
• Knowledge of global markets and Provide knowledge on latest policy

financing sources for high-value and The Knowledge
and market developments relating
ERC Market quality ERC programs Hub
to ERCs
Development • Guidance and assistance for countries
Support to undertake assessments to improve Enable Governments to build the
legal regulatory and institutional Capacity Building technical expertise to engage with
frameworks through reforms the global markets
Organize an annual seminar to share
• Guidance for project selection & Ecosystem Builder learnings gathered from the ERP &
preparation to deliver high quality foster engagement
ERC Generation ERCs and implementation assistance
Support • Mobilize financing against future ERC Develop practical, implementable
Country
generation, including using different guidelines on assessing a country's
Assessment
financing mechanisms legal and institutional frameworks
Our focus for today

• Introduce our understanding of the context of the global

ERC markets and the implications for the role of
government
• Share our preliminary view of the general legal and

Objectives for this institutional frameworks for countries wishing to enable
presentation an environment conducive to ERC projects, including the
specific policy objectives and the sequencing thereof
• Share our summary view of Viet Nam's policy landscape

based against the overall framework
Global ERC1 demand set to grow 5-20x Hence, four emerging policy objectives for
by 2030; higher bars for supply seen governments in creating an environment
Global ERC demand set to grow 5-20x by 2030 conducive to ERC projects:
driven by both volume and price
Projected scale of the voluntary ERC demand • Supply creation: Incentivize investments in high-
0.5 - 1.5 volume by 2030 (up to ~3x vs 2021) with growth
quality and globally-aligned ERC projects to stimulate
GtCO2e driven by corporate commitments
the supply growth needed to meet demand
Projected market size of the voluntary ERC
10-40 markets by 2030 or at least 5x bigger than 2021
value of ~$2bn and implying price ranges of
• Supply verification: Build integrity in ERCs issued to
USDbn local projects to address global buyers' quality
~$20-40/tCO2e
concerns
But buyers are expected to be increasingly selective
about the quality of the ERCs purchased • Institutional arrangements: Foster trust in the local
Corporates surveyed ranking MRV2 framework ERC project space to attract both developers and
as one of top 3 most important criteria for their buyers
91% purchases, driven by need to manage risks
associated with buying ineffective credits
• Demand creation: Facilitate access to international
Corporates surveyed expecting removal credits markets to further unlock financing potential
52% to make up most of their portfolio by 2030
driven by quality concerns
1. ERC = Emission reduction credits; 2. MRV = Monitoring, Reporting, and Verification
Source: Shell-BCG report: "The voluntary carbon market: 2022 insights and trends"
Policy and institutions conducive to the generation, monitoring, monetization

of ERCs internationally
Overall Supply creation:
Incentivizes investments in
Supply verification: Builds
the integrity of local ERC
Demand creation:
Facilitates market access
framework: high-quality ERC projects
S1
projects
V1 D1
Robust integrity Defined Corresponding
Eleven S2
Well-defined asset rights
V2
mechanisms
D2
Adjustments mechanism
Robust and efficient Defined verification Actively develops
elements S3
permitting & standards capabilities markets
across four S4
Clear roles & incentives
for stakeholders
over-arching Investable demand

signals
policy Institutional arrangements: Fosters trust in ERCs issued to local projects
objectives I1
Strong legal mandate for
I2
Capabilities developed
I3
Transparency and
accountability
execution
mechanisms set-up
Proposed | Overall policy & institution framework for ERCs
Policy and institutions conducive to the generation, monitoring, monetization of ERCs internationally
Supply creation support: Incentivizes investments in high- Supply verification: Builds the integrity Demand creation: Facilitates
quality ERC projects of local ERC projects market access
S1 Well-defined asset rights: Assigns clear legal definition to ERCs along with V1 Robust integrity mechanisms: Identifies the D1 Defined Corresponding Adjustments
the transactions that may be conducted therewith; Defines the activities complementary activities and mechanisms to be mechanism: Creates mechanisms and
and assets from which the ERCs may be produced and creates the security undertaken by the state to ensure the integrity processes to facilitate transactions
of tenure to ERC project stakeholders for such activities and assets of the ERCs generated by local projects relating to Corresponding Adjustments
throughout their lifecycle while ensuring clear benefit accrual for
S2 Robust and efficient permitting & standards: Standards for ERCs parties involved; Also ensures the
generated locally are aligned to global markets and are contextualized to V2 Defined verification capabilities: Identifies the proper tracking of such transactions for
the country's NDCs; Permitting processes for developers and projects are qualifications/requirements for state and/or the purpose of NDC calculations
efficient and stream-lined to enable focus on project delivery licensed third-party verification resources to
conduct the relevant activities within the D2 Actively develops markets: Creates
S3 Clear roles & incentives for key stakeholders: Adopts appropriate integrity mechanisms, including ongoing reviews capacity development geared towards
definitions aligned with the local context regarding co-benefits and trade in ERCs for activities such as the
and audits of the capabilities thereof
stakeholder incentives to secure project revenue creation of exchanges and trade
relationships with states and/or
S4 Investable demand signals: Provides for potential demand sources for
ERCs including for the state, compliance markets, voluntary markets as well corporate buyers
as international buyers
Institutional arrangements: Fosters trust in ERCs issued to local projects

I1 Strong legal mandate for execution: High level of mandate provided to the executing body to implement and maintain the policies relating to ERCs, along with explicit
mandates and resources provided to core institutions to fulfill their roles in implementation (e.g. in Finance, Securities, Land, Trade, etc.,)
I2 Capabilities developed: Executing institution/s are well resourced against their mandate and the private ecosystem is supported to build and invest in capabilities
I3 Transparency and accountability mechanisms set-up: Implementation of regular public reporting of ERC activities and results as they relate to the state; conduct of
stakeholder engagement for key policy developments; mechanisms are in place to provide accountability to the public and ERC market participants
Sequencing : Elements are proposed to be sequenced based on impact and/or materiality to

the overall ERC objectives as well as the relative ease of implementation
Three broad Phase 1: Foundational Phase 2: Critical elements Phase 3: Key elements in
phases defined elements in establishing an
ERC supply market
in building high-integrity
ERC supply markets
creating sustainable ERC
markets
in the S1
V1 Robust integrity S4Investable demand
evolution of S2 Robust and efficient

mechanisms
S3 Clear roles & incentives
signals
D2Actively develops
the ERC permitting & standards for key stakeholders
Transparency and
markets
D1Defined
V2 Defined verification I3 Corresponding
policies & capabilities accountability
mechanisms set-up
institutions I1 Strong legal mandate for

execution
*Sequencing for any market will be contextualized to I2
the baseline as well as actual progress made for each Capabilities developed
element, resulting to an assessment of size of the gap
to be addressed and the current capacity to address
the gap
Process | Four key steps to conducting assessments of a country's ERC policies and
institutional arrangements
1
Define country 2
Assessment against 3
Propose policy 4
Finalize
context guidelines actions recommendations
Engagements throughout with key stakeholders to gather feedback regarding the inputs used, the analyses being conducted,
as well as the recommendations being developed (today's engagement)
Create a baseline understanding of Conduct analyses on the policies Identify the policy Finalize assessments and overall
the country's participation in and institutions landscape of the recommendations based on the recommendations, taking into
emissions reduction credit (ERC) country across the 13 components assessments and considering the account the feedback received from
activities, including: and based on the suggested country context; propose the the touch-points as well as further
• Role of ERCs in broader analysis for each of the sequencing of the policy actions refinements suggested
decarbonization objectives components; assign initial taking into consideration two
• Historical supply and demand of assessments of the policy factors:
ERCs components as follows:
• High-level timeline of policy and 1. Impact or the materiality of
institutional developments in • Best practice in place the gap to address in so that
relation to ERCs • Good design in place the overall policy landscape
• Some elements in place achieve its objectives
• Pending development 2. Current capacity to address
the gap considering resources
and capabilities
Preliminary assessment | Significant progress made along most elements; Vietnam can build on
her deep experience in the carbon markets to address remaining areas in the adoption of
standards, integrity mechanisms, and capabilities development
Policy & frameworks: Responsive and credibility-building policies that enable ERC project effectiveness throughout the project lifecycle Remaining areas for
Supply creation support: Incentivizes investments in high-quality ERC projects Supply verification: Supports the Demand creation: development:
Well-defined asset rights credibility of local ERC projects Facilitates market access
• Legal definition of ERCs as tradeable instrument under Decree 06/2022 Robust integrity mechanisms: Defined corresponding
• Some existing asset regulations (e.g., Law on Forestry, Land registration) but • Self-reporting requirements adjustment mechanisms: 1 Permitting and
pending clear provisions assigning ownership of carbon avoided/ removed to the standards: Pending
prescribed in Decree 06/2022 • Corresponding identification
ERC project developer • Pending integrity mechanisms adjustments Mechanism
Robust and efficient permitting & standards: such as audit guidelines, used and developed of methodologies to be
• Broad guidelines on project application available (e.g., Form 03 in validation and verification in JI scheme; learnings used aligned with
Decree 06/2022) processes & capabilities, can be leveraged in priority supply sources
• Pending identification of methodologies to be used aligned with adoption of transparent record- relation to Carbon Trade
priority supply sources and coordinated with NDC commitments of sector 1 keeping mechanisms to ensure Exchange and meeting 2 Integrity and
Clear roles & incentives for key stakeholders traceability of ERCs issued Vietnam's NDC transparency
• Pending regulations and structured frameworks for flow of funds to unlock 2 commitments mechanisms: Pending
value from co-benefits and stakeholder incentives in relation to ERCs (can Defined verification capabilities: Actively develops markets: integrity mechanisms
leverage Benefit Sharing Mechanism in REDD+ program) • Pending identification of • Proactive effort in governing offset project
Investable demand signals: independent, properly recent years to promote development such as
• Clear potential demand from sub-national context - Carbon Trade Exchange accredited verifiers (gov't or 3rd CDM and JI carbon audit guidelines,
(voluntary) and cap-and-trade offsetting scheme (compliance) party) for implementation of credits in trade validation and
• Ambiguous mechanisms for use of ERC in the international (e.g., Article 6.2 & 6.4) verification activities 2 relationships verification processes
and national (e.g., use of offsets to meet NDC) context & capabilities, adoption
Institutional arrangements: Institutions designed to enable trust in ERCs generated locally of transparent records
• Strong legal mandate for execution: High-level carbon market mandates along with appointment of MOF and MONRE to implement ERC policies stated 3 Capability
in Decree 06/2022; However, pending promulgation of detailed operational mechanisms (to be released before 2025 pilot) and Decision from Prime development:
Minister Continuous capacity
• Capabilities developed: Technical capabilities developed from previous engagement win CDM and JCM; Further developments expected from building required to
MONRE and MOF to resource carbon market activities before 2028 3
align with the global
• Transparency and accountability mechanisms set-up: Mechanisms and implementation of regular public reporting of ERC activities yet to be VCM markets &
established; MONRE expected to operate national MRV database for GHG inventory mitigation 2 standards
Policy/institution design fully addresses objective Policy/institution design mostly addresses objective Policy/institution design partly addresses objective Policy/institution design to be developed
Source: Decree 06/2022 on Mitigation Of Green House Gas Emissions And Protection Of Ozone Layer, BCG analysis
Emission Reductions
Purchase Agreements
What is an Emission Reductions

Purchase Agreement (ERPA)?
• Results-based climate finance (RBCF) agreement (forward or ‘over-the-
counter’) between ERC Seller (Vietnam) and ERC Buyer (private or
public entity)
• Results = Emission Reduction Credits (ERC) - generated, monitored,
verified, transferred
• Results to be monitored, reported and verified against/under certain
methodology and crediting framework
• Payment is only made when results have been achieved
• If ERPA is signed by a city or municipality (as ERC Seller), a Host Country
Agreement may need to supplement the ERPA to ensure ERC Buyer
that Vietnam supports the Program, authorizes the ERC transfer and
conducts Corresponding Adjustment (as per Art.6 of the Paris
Agreement)
ERPA Legal Agreement: Key Content

ERPA
Seller: Buyer:
Government of Vietnam Private or Public Entity
ERPA Legal Agreement

• Contract ERC Volume • Corresponding Adjustment
• Unit Price (Art.6 Paris Agreement)
• Conditions to Sale and Purchase • Call Option for Additional ERCs / Exercise Price
• Reporting Periods • Representations & Warranties
• Monitoring, Reporting & Verification • Events of Default / Remedies
• ERC Transfer / Payment process • Cost Allocation (incl. fees, charges and taxes)
• Governing Law / Dispute Settlement
ERPA Term Sheet often used to simplify ERPA negotiations – summarizes key commercial terms
Institutional Framework for RBCF

Designed to be fit for purpose in attracting different kind of ERC Buyers (private/public)
ERC Buyers seek:
• Legal and regulatory certainty
• High quality/environmental integrity of ERCs (linked to willingness to pay higher price)
• Usability of ERC results (under voluntary or compliance regimes)
• Transfer of legal title to ERCs / Corresponding Adjustment
• Reliable and timely ERC delivery
Institutional Framework:
• Clarify ministerial responsibilities and (inter-)ministerial decision making
• Provide transparent process for ERC generation, monitoring, reporting, verification
• Provide clarity on applicable methodologies and crediting framework(s)
• Clarify ERC ownership and authority to transfer ERC title
• Provide for approval, authorization and Corresponding Adjustment processes
• Provide clarity on how ERPA revenue will be used (e.g., re-investment, benefit sharing)
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Session 7:
Vietnam’s Experience in Results-Based
Compared to the unconditional target of 9% under NDC 2020, Vietnam is further enhancing its effort
to reduce GHG emissions by setting a higher target of 15.8 % under NDC 2022, with the largest amount
in the energy sector, followed by industry, agriculture and LULUCF
Comparison of emission reduction targets in NDC 2022 and NDC 2020
Unconditional contribution Conditional contribution
+6,8% +62,4mtCO 2
+$3b +16,5% +152,9mtCO 2
+30,8b
Compared to BAU Reduction amount Financial need Compared to BAU Reduction amount Financial need
0,8% 0,9%
Industry process +13,3 mtCO2e Industry process
3% 5,4% +41,8 mtCO2e
1% 3,6%
Waste -0,4 mtCO2e Waste -3,7 mtCO2e
1% 3,2%
1% 2,3%
LULUCF +23,2 mtCO2e LULUCF +25,4 mtCO2e
3,5% 5%
0,7% 3,5%
Agriculture +5,6 mtCO2e Agriculture +18,3 mtCO2e
1,3% 5,5%
5,5% 16,7%
Energy +13,3mtCO2e Energy +71,2 mtCO2e
7% 24,4%
2020 2022 2020 2022
Seven Key Factors Influencing Vietnam’s RBC/CF Opportunities:

NDC targets Certainty, cost, sector attribution in meeting & exceeding targets
Sector-specific factors Cross-cutting factors

Political Economy Establishment of RBC/CF governance framework, institutionalization into domestic
ecosystem
Economic Impact Internationalization of macroeconomic impacts of emission reductions credits
Financial Cost competitiveness of credits across sectors/types of policy interventions

Implications
Technical Challenges Availability of carbon quantification system, including methodologies, registries, MRV
Public Awareness Incentivize participation & maintain sustainability of emission reductions credit generations
Market Options Quality, creditability, tradability of emission reductions credits

Common but Differentiated Sector Approaches for Vietnam:
Priorities and Actions Needed by Sectors
NDC Political Economic Financial Technical Public Market Options
Targets Economy Impact Implications Challenges Awareness
Agriculture Increased Governance Macroeconomic Requires public Costly MRV & Farmers and Quality & creditability
Collaboration
contributions to framework impacts of ag investments in extensive data value chain of credits to determine with World Bank
VN’s NDCs needed emissions infrastructure/ requirements will play key market options TCAF/SCALE to
substantial policy while roles enhance the
sector readiness
crowding in
through piloting
private transactions
investments
Forestry Potential to Experience in Need to generate Uncertain prices MRV depends Collaborative National guidelines
supply REDD+; legal additional in market; high on carbon action needed needed, lack of Sector
more ERs framework for financial sources project standards; for ERs & domestic market foundation
through ER title transfer development, Benefit removals established
improved forest being worked MRV costs Sharing Plan through World
Bank FCPF
management out to be transaction
implemented
Energy Funding Harmonization Mandatory Need clear 3rd party Baseline emission
available for of PDP8 with targets & institutional certification & sources available – to
sector GHG NDC and compliance roles & MRV systems be enhanced for Built upon
successful
inventory, but approval - mechanisms responsibilities needed industries, funding experiences,
not yet review ongoing needed for budget available incl. World Bank
established planning/ CPF transaction,
benefit sharing opportunities for
innovations and
scaling up
Case Study 1: FCPF North Central Region Emission

Reduction Program
OVERVIEW
World Bank Task Team

Result-based Carbon/Climate Financing Training
Hanoi, February 28, 2023
REDD+ Readiness and ER-Program

• 2014: Program Idea Note (PIN)
• 2015-2018: Readiness preparation and Emission Reduction Program Document (ERPD)
development, supported by FCPF readiness grant. 1/2018 ERPD approved by FCPF
• 10/2020: Emission Reduction Payment Agreement (ERPA) signed
• 10.3 MtCO2e (contract volume) @$US5/tCO2e = $US51.5M
• 5 million Additional ERs under a call option
• 95% of ERs will be retransferred for use towards NDC
• ER-P effectiveness conditions: i) Prime Minister’s Decree; ii) MARD’s approved Benefit Sharing
Plan
• ER-P implementation: 2018-2025
• MMR1 2018-2019 period: being validated and verified by auditor – nearing completion
ER-Program fits into WB’s Support Strategy

WB’s Twin
Goals
ER-Program
Country Partnership
Framework
CPF’s Focus Area 3: ENSURE ENVIRONMENTAL
SUSTAINABILITY AND RESILIENCE
Objective 9: Promote Low Carbon Energy Generation, including

renewables and Energy Efficiency and reduce GHG emissions
Objective 10: Increase Climate Resilience and Strengthen Disaster Risk
Management
Objective 11: Strengthen Natural Resource Management and Improve
Water Security
ER-Program fits into GoV’s Strategy and Priorities

USE NATURAL ASSETS FOR INCLUSIVE AND RESILIENT GROWTH
• SEDP calls for renewed focus on sustainable development and the Green Growth Strategy
• Target Program on Sustainable Forest Development and Forestry Law: Use of forests for
goods and services (e.g., carbon sequestration)
• Vietnam National REDD Action Program
RISK MANAGEMENT
• Vietnam pledged own domestic resources of $3.2 billion to reduce GHG emissions by 8% by 2030,
willing to go up to 25% with international support
• Vietnam’s NDC commitments span mitigation and adaptation to climate change
• Target Program for Climate Change and Green Growth approved (10/2017)
• SEDP directs Government to pursue a “greener” approach to development
• Net 0 carbon commitment by 2050 at COP26
• Stop deforestation by 2030
ER Program Area
• North Central Region covering 6 provinces:
• 5.1 Mha total land area
• 2.8 Mha forest cover (2.1 Mha natural forests)
• 10.5 M. people (13 ethinic minority groups – 11.5%)
• High biodiversity area
• 5 internationally recognized conservation corridors
• 17 protected areas
• 19 important international biodiversity areas
• 1 UNESCO Man and Biosphere Reserve
• 1 UNESCO World Heritage Site
• Populations of 14 globally endangered species
• Annamese Lowlands Endemic Bird Area
• Area most vulnerable to climate change
Deforestation & Degradation Drivers

KEY DRIVERS UNDERLYING CAUSES
Planned conversion of poor

natural forests to rubber/other
agricultural land uses Conversion of depleted
forest land to higher-
Planned conversion of poor value land uses
natural forests to timber
plantations Lack of support for
Sustainable Forest
Unplanned conversion of Management
forests due to encroachment
Impacts from hydropower and Inadequate

infrastructure development implementation of
policies to protect
Unsustainable forest natural forests
management/(il)legal logging
2005-2015 (Reference Level Period):

318,218 ha deforested
292,469 ha degraded
ER-Program Addressing D&D Drivers

DRIVERS
Planned conversion of mainly poor Strengthening Enabling Strengthening policies Strengthening forest
natural forests to rubber and other Conditions for Emission controlling conversion governance and law
agricultural land uses Reductions of natural forests enforcement
Planned conversion of mostly poor

Promoting sustainable Conservation of Enhancement of Enhancement and
natural forests to timber
plantations management of forests and existing natural carbon stock of restoration of
carbon stock enhancement forests plantation natural forests
Unplanned conversion of forests
due to encroachment Promotion of climate smart
agriculture and sustainable Improve climate Diversifying and
livelihoods for forest dependent smart sustaining
Impacts from hydropower and agriculture livelihoods
people
infrastructure development
Program Monitoring &

Illegal and legal logging Program Management and Program
coordination & evaluation
Emission Monitoring communication
management (M&E)
MRV plan
2018 2019 2020 2021 2022 2023 2024 2025
ER-Program implementation Enablers

• PM’s Decree 107 of Dec. 28, 2022 (ERPA Decree)
allowing MARD to transfer ERCs title to WB on
behalf of forest owners of natural forests in NCR
(10.3 Mt CO2e and additional 5 Mt CO2e if
available and agreed)
• 95% is owned by Vietnam, accounted for NDC
• Established methodology for carbon accounting:
MRV, REL and non-carbon benefits identified
• Benefit Sharing Plan approved by MARD on Feb.
21, 2023
• Social and Environmental Safeguards framework
and instruments
• Consultations with stakeholders, including local
people/beneficiaries and civil society, throughout
ER-P preparation and BSP development
ERs 2018-2019 period

TABLE OF CONTENTS
1 Implementation and operation of the ER Program during the Reporting Period ...........................1
1st
Measurement, Monitoring and Reporting 1.1
1.2
Implementation status of the ER Program and changes compared to the ER-PD ..................... 1
Update on major drivers and lessons learned ....................................................................... 2
(MMR1) 2 System for measurement, monitoring and reporting emissions and removals occurring within the
monitoring period ..............................................................................................................................3
• Covering 1/2018-12/2019 period 2.1

2.2
Forest Monitoring System ............................................................................................................. 3
Measurement, monitoring and reporting approach .................................................................. 10
3 Data and parameters ............................................................................................................... 12
• Country-self reporting 3.1
3.2
Fixed Data and Parameters ......................................................................................................... 12
Monitored Data and Parameters ................................................................................................ 16
• ERs validation and verification (VV) process: 4

4.1
Quantification of emission reductions ...................................................................................... 18
ER Program Reference level for the Monitoring / Reporting Period covered in this report ...... 23
ongoing by WB and VV Body –Aster Global 4.2

4.3
Estimation of emissions by sources & removals by sinks included in the ER Program’s scope . 24
Calculation of emission reductions ............................................................................................. 24
E.S. 5
5.1
Uncertainty of the estimate of Emission Reductions ................................................................. 25
Identification, assessment and addressing sources of uncertainty ............................................ 26
• MMR1 includes carbon accounting and non

5.2 Uncertainty of the estimate of Emission Reductions.................................................................. 30
5.3 Sensitivity analysis and identification of areas of improvement of MRV system ....................... 31
6 Transfer of Title to ERs ............................................................................................................. 32
carbon accounting aspects on social and 6.1 Ability to transfer title ................................................................................................................. 32
6.2 Implementation and operation of Program and Projects Data Management System ............... 33
environmental safeguards, non-carbon 6.3 Implementation and operation of ER transaction registry ......................................................... 36
6.4 ERs transferred to other entities or other schemes ................................................................... 37
benefits and benefit sharing 7 Reversals ................................................................................................................................. 37
7.1 Occurrence of major events or changes in ER Program circumstances that might have led to
the Reversals during the Reporting Period compared to the previous Reporting Period(s) ................. 37
7.2 Quantification of Reversals during the Reporting Period ........................................................... 37
7.3 Reversal risk assessment............................................................................................................. 38
8 Emission Reductions available for transfer to the Carbon Fund ................................................. 40

Baseline emissions/removals from the reference level (2005-2015), monitored and reported
emission/removals (2018-2019).
9.5
MtCO2e

Monitored and reported emission reductions available for
transfer to FCPF - SUBJECT TO VERIFICATION
1. ERs monitored and reported 2018-2019 period
Emissions (tCO2e) 16,104,489

Removals (tCO2e) -6,064,940
Total (tCO2e) 22,169,429
2. ERs allocated to uncertainty set-aside (tCO2e) 2,016,152
3. ERs after uncertainty deduction (tCO2e) 20,153,277
4. ERs set aside for reversal buffer (21%, tCO2e) 4,232,188

5. Available ERs for transfer (tCO2e) 15,921,089
Concluding Remarks
• EP-Program is an example of well-coordinated donor support, stakeholder
participation, consultations, civil society engagement and strong Gov. Commitment.
• Initial results demonstrate achievement of significant ERs (substantial ER payment)
exceeding the original amount in ERPA, subject to the conclusion of the VV process.
• Results reflect Vietnam’s effort to protect and restore forests and demonstrates that
such programs can leverage significant international climate finance to support VN in
meeting national climate change goals.
• Tangible shift in emission trends across the jurisdiction, VV and WB due diligence
expected to conclude in the coming months, and the potential for excess ERs for use
towards NDC or sale to third party buyers.
• Gov.’s plan to replicate in other regions - central highland or northern regions, joining
voluntary or involuntary market, but requiring strengthened legal framework,
promoting participation of multi stakeholders incl. private sector, enabling
environment for ER transfer and carbon credit trading, data accessibility and
transparency and capacity building.
LESSON LEARNT
IMPLEMENTATION OF THE ERPA
Vũ Tấn Phương and Phạm Văn Trung

THE ERP IMPLEMENTATION PROCESS

Reviewed and
ERP concept ERP approval for approved ER
was endorsed implementation results for the
1st payment
2014 2015 -2017 2018 2023
• Prepared for readiness • Implementation arrangements

(capacity, policy, guidelines) • Measurement and reporting results
• Drafted ERP document • Verification of ER results (3rd party)
• Drafted policy for payment of ER results
•Secured the readiness
•ERD was approved
•ER title transfer and BSP
ERP DOCUMENT DRAFTING

• New approach, new area, inter-nations, leading to addressing
deforestation and forest degradation drivers
• High technical requirements (measurement, reporting, etc.), social and
environmental safeguards
• ER result-based payment (based on the reference level)
• Monitoring, tracking, reporting (spatial data), investment resources
• Data different between data sources, data gaps, etc.
• Understanding and relevant experience
• Quality of human resource, e.g. consultants

• Use the most relevant available data source (national forest inventory
data, data from projects) with supplementary data collection
• Broad consultation (village: 29; 3,060 hhs; commune: 12; district: 8;
province: 18; national, regional: 9; NGOs, forest program: 17)
• Cooperation, experience sharing; mobilize international supports
ERP IMPLEMENTATION
• Coordination, instruction from central to local levels
• Finalized mechanism, policy, BSP, inter-sectoral coordination
• Integrated with other forest related programs, projects on forest
development, environmental services, etc.
• Promoted participation of community
• Current regulations are not clear (type of project: ODA, investment,

etc.);
• Lack of guidance, regulations on integrating into the ER targets, etc.
• Engagement of the private sector
• Capacity of relevant agencies and localities
• Steering, instruction and coordination among agencies;
• Effectiveness of integration into relevant programs, projects
• Mobilized resources for investment, particularly those from the private
sector
MONITORING, MEASUREMENT AND REPORTING ER RESULTS (MMR1)

• Drafted MMR1 following the given template
• Complied with requirements for reporting ER results (sufficient, consistent, reliable,
transparent);
• Implemented social and environmental safeguards
• New method on analysis, assessment of the uncertainty, sensitivity, accuracy applied for
identifying forest changes; consultants have no relevant experience;
• Limited resources for forest inventory, supplementary data, map verification; ER factors
• Maximized use of available data, particularly data from the national forest inventory data
programs, remote sensing data, research results
• Ensured sufficiency, consistency, transparency on web of all relevant information on the ER
result measurement, carbon sequestration, etc.
• Learnt and exchanged vinformation with international experts (assessment of errors in
determining forest and land changes; on-demand uncertainty analysis (tier 3)…
VERIFICATION OF ER RESULTS
• Verified by 3rd party (Aster Global), end of 2021 based on CF’s criteria set
• Reviewed ER result report (reference level period, reporting period), used data
and information; field verification
• Feedback (online), supplemented and finalized the report
• Took longer time, affected by COVID 19 pandemic, limited connection between

experts
• Reviewed, supplemented information, etc.
• Provided sufficient information, data, digital map; ensured that verification body is
accessible to all information and data sources in timely and sufficient manners
• Prepared well the feedback, provided additional information and data required; open
and pro-active discussion
ERPA POLICY DEVELOPMENT

13 May 2021-08 March 19 August 2022
22 Oct. 2020 2022
MARD submitted dossier
MARD consulted
MARD and IBRD/WB stakeholders: 3 rounds of
to GoV after
signed ERPA consultation with ministries incorporating comments
and provinces from stakeholders
02 conditions 16 Nov. 2020 28/12/2022

18 March 2022
of MARD set up an GoV issued Decree
MARD submitted dossier to 107/2022/NĐ-CP on piloting
effectiveness: Editorial Board to draft
MoJ for appraisal ER results and financial
2 conditions
the PM’s decision
(1) Final BSP for management of ERPA ERPA of
ERPA effectiveness
(2) Evidence
demonstrating
of ERPA
01 Sept. 2021 17 Feb. 2022 21 Feb. 2023
PE’s ability to MARD reported PM and got MARD issued decision
fulfilled
MARD drafted the PM
transfer title to decision on ERPA
approval for drafting decree 641/QĐ-BNN-TCLN on BSP
instead of decision for ERPA
ERs
MARD drafted to submit for approval of Decree; MARD issued BSP based on PFES provisions stipulated in the Forestry Law 2017
and guiding Decree 156/2018/NĐ-CP and going through different rounds of consultations with stakaholders
Key contents of Decree 107/2022/NĐ-CP:

Draft ERP document
• MARD, on behalf of GoV and forest owners, transfers ER
results from natural forests in 6 NCR provinces to FCPF
Other docs.: Decree
through IBRD with a volume of 10.3 mil. tCO2e and the
168/2016/NĐ-CP; Draft BSP prior to supplementary volume of 5 mil.tCO2e (if available); IBRD
Decision 419/QĐ-TTg… signing ERPA shall re-transfer 95% of the transferred volume for
contribution to NDC of Vietnam;
legal basis • ERPA proceeds are PFES revenues collected from forest
carbon sequestration and storage as prescribed in clause
Use the existing
organizational 3 Article 61 of the Law on Forestry;
arrangements of the
ERPA signed on 22
Forest protection and
Oct. 2020 • The ERs under ERPA are measured during 2018 -2024, and
development fund
be entitled to transfer until 31 Dec. 2025
Forestry law 2017; • Spending norms: for forest contract with community,
Decree 156/2018/NĐ-
CP
shall not exceed 02 times of the budget support; support
livelihoods: 50 mil. VND/community/year for those
holding forest protection contract with the forest owner
as organization

FCPF (IBRD)
BSP
Limitations/ Experience/
VNFF (100%)
difficulties advantages
National-level Operational costs
costs (3%) ofVNFF (0.5%)
Got due attention, high
New service; no legal basis
Provincial- consensus of all levels,
for ER title transfer
from different ministries
Operational costs PFPDF (96.5%)
(10%)
Proceeds made to service providers Use the on-going effective

Still different opinions on
(86.9% of total proceeds, after deducting the operational costs) financial management
FPDF system; apply the
PFES mechanism and
faced during drafting
regulations in Forestry Law
process
and decree 156
Forest owner as 10%
Forest owners: managem
hhs, inviduals, organization ent costs
communities CPC (11,5%) (58.4%) (5.8%)
(16.9%)
Require broad consultation Strong support of
at different levels, sectors programs, projects,
and over different rounds, international partners and
forest contracts with Support hence time consuming experts
communities; silviculture community
interventions livelihoods CPC (1.1%)
51.5% of total proceeds
RECOMMENDATIONS FOR NDC AND NZ OF FORESTRY SECTOR
Perfect institutions, policies to implement and promote

ER in forestry sector, land use: comprehensively,
promote engagement of stakeholders (including
private), ER, carbon credit trade and exchange • Law (environment protection,
forestry)
mechanisms
• Decree 06/2022/NĐ-CP
• CC strategy
Guidelines, tools for MRV implementation to meet • NDC 2022
domestic and international requirements; capacity • Glasgow
building at all levels, domestic verification bodies; set • …
up and disclose ER monitoring database
Diversify investment sources, improve investment

efficiency through integration of programs, projects;
mobilize investment sources (green/ blue investments,
private investments)
All information on ERPA is available at www.vnff.vn
MANY THANKS!
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Results-Based
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Sharing experiences in
implementing CPF PoA REDP
project financed by the World Bank
Renewable Energy Division

Electricity and Renewable Energy Authority
Ministry of Industry and Trade
Outline
 Overview of CPF PoA REDP project

 Organizational structure
 Outcomes
 Experience sharing
Overview of CPF PoA REDP

project
 Lead agency: Ministry of Industry and Trade

 Donor: The World Bank
 Duration: 2009 - 2021
 Budget: EUR 12 million
 Registration for CDM PoA REDP: June 2013
 13 CPAs participate with a total installed capacity of 220 MW
 1 CPA was removed from PoA after 5 years of CERs issuance and 01 CPA was
removed from PoA because it did not meet the conditions to participate in
REDP
Overview of CPF PoA REDP project
Implementation milestones Program Idea Note: Approved by the

Designated Authority
Appraisal, Issuance POA-DD/CPA-DD: Submission to
Evaluation with the highest
and Recurring Payment responsibility of the World Bank UNFCCC/DNA
: Completed and effective
Coordinating/Managing/En
tity (C/ME):
Established under MOIT
Agreement with the Seller: Signed: 12/2009
First payment for Approval: Complete a field
ERPA CPA: visit, receive a drafted
01/2014 ERPA: Negotiation CADF GA: 06/2010 portfolio, and await feedback.
& signing 03/2011
CFD:
10/2010
First CPA Assessment:
06/2013 Registration:
Submission: 10/2010
First commissioning of CPA Addition of CPA:

First appraisal: 01/2012
06/2012
Organizational structure
Coordinating/Mana
The
Buyer
ging/Entity (C/ME) World
MOIT via the Project Bank
Management Unit
Developer CDM-POA-DD Appraisal

Project/Consultant Include DOE
CDM-CPA-DD
Verification
Vietna Review and
mese Registration and Issuance of CERs
DNA issuance of Letter
UNFCCC
of Approval
CDM Executive
Board
Outcomes
Volume of CERs issued annually

500.000
463.678
CERs Ban hành (net)
400.000
313.161
300.000
325.809
298.018
200.000 168.143
141.236
100.000 78.807
30.509
-
2013 2014 2015 2016 2017 2018 2019 2020
Experience sharing
 With the support from the World Bank’s eminent experts throughout the
entire project implementation process from preparation, development of
documents, approval, contract negotiation, negotiation of selling price of
CERs, issuance of CERs, etc.
 Training and capacity building on CDM, carbon finance, carbon market, etc.
funded by the World Bank’s Carbon Asset Development Fund (CADF)
 Access to the most up-to-date information on regulations/policy

mechanisms, etc. related to climate change
Experience sharing
 Share and learn from international colleagues participating in CPF

 Improve project management and proactive problem solving skills in the
process of project management and implementation
 Specific experience from the CPF PoA REDP project
 Project management: Project cash flow management due to project
uncertainty CDM
Experience sharing
 Quickly build a project implementation manual

 Organize training and capacity-building for CPAs on
inspection, reporting, monitoring, etc.
 Quickly handle related issues when there is a change in the
organizational structures of the parties:
MOIT/WB/investors/DOE/consultants, etc.
Experience sharing
 Regularly monitor, update, and handle issues related to

changes in regulations/mechanisms during implementation:
relevant legal documents, UNFCCC guidelines, etc.
 Manage safeguard compliance of CPAs
 Fully implement stakeholders’ reporting requirements, such as
DNA, WB, buyer, UNFCCC, etc.
Experience Sharing
 Professional expertise
- Recruit qualified and experienced consultants
- Improve negotiations skills – contract negotiations
- Find out carbon market trends during price negotiations
- Minimize risks
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Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
Day 2 Survey
Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
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Generation of High quality ERCs
ERC
• creditability, tradability
• Generation of ERC and integrity of ERCs
Provision of
supported by green investment and technical
decide the market
support for climate
investments and mitigation activities
value of ERCs
revenues from ERC
monetization Goal #1: achieve NDCs Support to the
generation of high-
Goal #2: green investments quality ERCs
Benefit sharing Goal #3: ERC monetization

Use of ERC
• NDC achievement
Incentivize
Facilitation of
• inclusive benefit
sharing
• Trade for RBCF,
interested parties or/and compliance
arrangements to
• Ensure incentivize and/or voluntary
sustainability of further climate
action
carbon revenues
ERCs generation • Use for domestic
• inclusive and equal Access to RBCF and ETS
access to benefits facilitate access to
carbon markets
• Hold under the
national scheme for
future usage
Responsibl Support from
Category Objective Actions anticipated support from the WB e ministry other ministries
TCAF/SCALE program to purchase
1 M ha rice sector transformation ERCs achieved by low carbon rice
generation development plan and development from 2022-2027 as
of ERCs mobilize private investment consultations additional fund source MARD MONRE
1 M ha rice sector transformation
introduce right government development plan and WB TA support for sector plan
policies consultations development MARD
institutionalize NDC, RBCF and GHG quantification system

high carbon market following international standards
quality requirments/opportunities into and balanced by Vietnam's sector
ERCs the sector plan practice and cost considerations WB TCAF/SCALE TA support MARD MONRE
enhance access to RBCF and
carbon market build Art. 6.2 readiness WB TCAF/SCALE TA support MARD MONRE
understand the
Use of requirments/terms of different majority of the generated ERCs will
ERCs market market outreaching be retained by VN MARD MONRE
mainsteam use of ERCs into small part of the generated ERCs will
national and sector plan workshops/consultations be transferred to TCAF MARD MONRE
identify the incentive needs and

benefit financial gaps along the low rice increase the net profit of farmers use TCAF revenue to support the low FCPF experience
164
sharing value chain by producing low carbon rice carbon rice value chain development MARD and so on
WBG Low Carbon
City Program
1 MARCH 2023
Decarbonizing cities is critical for achieving zero-emission targets
by 2050 as cities account for 70-75% of global CO2 emissions
Transport
Decarbonizing Accounts for
buildings & 1/3 of GHG emissions in
Accounts for up to transport in cities major cities,
70% of energy-related
forms the cornerstone
of realistic strategies
two-wheelers account for
carbon emissions for achieving net zero ~20% of CO2 emissions
in large cities by 2050
Buildings
166
However, cities
have long Small & fragmented interventions
on increasing energy efficiency & greening
underplayed their energy use of buildings & vehicles in cities,
part in catalyzing with high transaction costs & limited emission
reductions on an individual basis
climate action,
as they face
difficulties in
developing &
Difficulties in developing institutional
executing mechanisms & financially viable models
decarbonization to aggregate such interventions at scale,
initiatives especially in middle- & low-income countries
at scale
167
3 recent developments provide a unique opportunity to catalyze
decarbonization in cities
A growing number of cities are developing city climate action plans & undertaking city-
level initiatives towards net zero commitments
• Following the lead of cities in the global north, low- & middle-income cities are developing innovative
decarbonization solutions, such as incentive programs for energy efficiency, renewable energy & electric vehicles
Rapid cost reductions for EE, RE & EV investments due to technological innovation &
economies of scale
• Electricity costs of solar photovoltaic and Li-ion batteries fell by 82-87% between 2010-2020
• In turn, renewable energy has become market competitive: in recent years, wind & solar have undercut even the
cheapest fossil fuel options for new electricity generation
An unprecedented boom in the voluntary carbon market towards US$2 billion in 2021,
quadrupling in market value from 2020
• The demand for high-quality carbon offsets has grown exponentially in recent years as the corporate sector has
made net zero emissions strategies a priority, but has not been met with increasing supply
• The voluntary carbon market is maturing, becoming increasingly formalized through concerted international
efforts to increase transparency, credibility & quality
168
Capitalizing on these
market opportunities,
our Low Carbon City
Program provides a
financially attractive
& easily replicable
approach to scale
decarbonization efforts
in middle- & low-
income cities
169
1 Retrofitting simple,
buildings verifiable,
replicable,
& scalable
2 Installing rooftop
4 solar panels
energy efficiency,
renewable energy,
electric vehicle
interventions
types of 3 Upgrading to LED
interventions streetlights
implemented in
public &
4 Upgrading to private
electric vehicles assets
170
Three key
features of 1 Unique
institutional
2 Accelerating
climate action
3 Profitable
financial
the Program mechanism at scale mechanism
Built on a unique Overcomes the Offers a new
institutional challenge of mechanism for
mechanism that accelerating cities to mobilize
leverages climate action at investment capital
subnational scale in cities & generate profits
government’s while achieving
capabilities emission targets
171
Three key features of the Program (cont.)
Built on a unique institutional mechanism that leverages subnational government’s capabilities &
enables them to aggregate many small EE, RE & EV interventions across their own public assets as well as
privately owned assets into high-impact emission reduction initiatives
• City governments can better manage action on many small-scale investments within their jurisdiction (including their
own substantial portfolio of assets)
• Able to catalyze investments at scale, cities can generate an implementation ecosystem of engineers, suppliers, &
contracts to rapidly execute investments with lower transaction costs & investment costs
Overcomes the challenge of accelerating climate action at scale in cities

• The Program focuses on simple & replicable interventions that could be implemented at scale & achieve sizable
emission reductions in relatively short timeframe. In contrast to REDD+ & nature-based projects, where measurement,
attribution & additionality are complex, the avoidance offsets created by the Program have straightforward & long
utilized methodologies to define baselines & monitor impacts.
• The aggregated array of EE, RE & EV interventions reduces a similar number of emissions compared with large-scale,
complex, & time-consuming investments in the power sector or heavy industry – areas that have traditionally been at
the forefront of decarbonization
Offers a new mechanism for cities to mobilize investment capital & generate profits while achieving
emission targets, by tapping into the voluntary carbon market
• By harnessing the potential of the voluntary carbon market & capitalizing on cost reduction trends for EE, RE & EV
investments, the Program substantially decreases upfront public capital investment costs while bringing in additional
revenue through carbon finance
• With the launch of the Carbon Warehouse in Dec 2022, the carbon trading market infrastructure is now in place to
provide any city with access to a transparent & accountable system for carbon credits
172
City governments take the leading role as both beneficiaries &
facilitators of the Program
• Upgrade
public
assets EE retrofit for Rooftop solar installation Upgrades to LED
As beneficiary public buildings for public buildings streetlights
• Upgrade
private
assets EE retrofit for Rooftop solar installation “Upgrade to electric”
private buildings for private buildings for motorbikes
As facilitator
173
City governments take the leading role as both beneficiaries &
facilitators of the Program (cont.)
• Borrow funds to execute the

interventions in their own
public assets • Aggregate emission reduction
As beneficiary
impacts into offset contracts to sell
into the voluntary carbon market
• The offset payments would then be

• Provide technical & financial support to used to pay back the loan, while
private sectors through incentive payment the assets generate additional
programs financed by cities’ own budget or savings for cities
borrowed funds in collaboration with
low-carbon financing facilities
• In exchange for incentive payments, private

asset owners will make emission reduction
As facilitator investments in their assets & legally transfer
these impacts to the city
174
worldbank.org
Program implementation
176

Component 1: Public asset upgrades
EE retrofit for Rooftop solar installation

public buildings Upgrades to LED streetlights
for public buildings

Energy consumption: external Solar power generation system Traditional streetlights will be
shading devices, air will be installed on the rooftops replaced with those using LED
economizers during favorable of the public buildings that will technology
outdoor conditions, daylight use the energy, with or
photoelectric sensors for without being connected to
internal space & occupancy the national grid
sensors
Water consumption: water-

efficient faucets, black water
treatment & recycling system
177
Component 1: Public asset upgrades – Implementation steps
2. Implementation of EE & RE
1. Financing 3. Verification 4. Payment
upgrade interventions
The City will auction
the offset contracts to
2a. Finance an energy audit firm to 3a. Create baseline & confirm the highest bidders in
group buildings & streetlights into additionality with credit issuer Singapore.
several packages (MRV)
With support from
WBG, a transaction
advisor will:
WBG will provide a • negotiate sale
concessional loan to 3b. Agree on the registry & benefit contracts between
2b. Hire an engineering design firm
the City with the PMU sharing mechanism with the national offset buyers & City
to develop bidding documents
as the implementing government • negotiate offset
unit. payment agreement
between offset
This fund will be used buyers & institutional
3c. Upon completion of EE upgrades,
to finance the 2c. Tender the packages & hire have emission reduction certified by investors who will
emission reduction contractors in accordance with WBG credit issuer. The verification will be make pay lump sum
investments in public conducted every year over the payment to the City
procurement guidelines
assets. crediting period. (to pay back upfront
investment)
Offset buyers will then

2d. Contractors complete the EE & 3d. A third-party auditor will sign off make annual offset
RE upgrades with financial support a payment for the certification after payment to
from the Program verifying total emission reduction institutional investors
over the crediting
period.
178
Component 1: Public asset upgrades – Fund flow
Financing & Implementation Verification* Payment
Fund emission
Issue loan redution projects Upgrade
World Bank 1 2
public assets
Carbon offset
Offset
Have emission reduction certified credit buyers
3
Pay back loan City Make
annual
5 6
(with WBG offset
payment
support)
4
Pay lump sum for offset Institutional
investors
Loan
Payment
* Verification includes setting baseline, confirming addionality with credit issuers, & having ER certified by credit issuers 179
Component 2: Private asset upgrades
Rooftop solar installation for

EE retrofit for private buildings
private buildings
Energy consumption: external shading Solar power generation system will be

devices, air economizers during installed on the rooftops of the private
favorable outdoor conditions, daylight buildings that will use the energy, with
photoelectric sensors for internal or without being connected to the
space & occupancy sensors national grid
Water consumption: water-efficient

faucets, black water treatment &
recycling system
180
Component 2: Private asset upgrades – Implementation steps
2. Implementation of EE & RE
1. Financing 3. Verification 4. Payment
upgrade interventions
A Low Carbon 3a. Create baseline & confirm the highest bidders in
Financing Facility additionality with credit issuer Singapore.
consisting of IFC, 2a. Agree on fund flow mechanism (MRV)
commercial banks & With support from
funds will support WBG, a transaction
lending to private advisor will:
participants • negotiate sale
3b. Agree on the registry & benefit contracts between
sharing mechanism with the national offset buyers & City
government • negotiate offset
payment agreement
WBG will provide a 2b. Design & advertise an incentive
between offset
concessional loan program
3c. Upon completion of EE upgrades, buyers & institutional
to the City with the investors who will
PMU as the have emission reduction certified by
credit issuer. The verification will be make pay lump sum
implementing unit. payment to the City
This fund will be conducted every year over the
(to pay back upfront
used to pay for the crediting period.
investment)
emission reduction
2c. Building owners complete the EE
transfer from Offset buyers will then
& RE upgrades & agree to trade
private 3d. A third-party auditor will sign off make annual offset
emission impact for incentive
participants a payment for the certification after payment to
payment institutional investors
upfront. verifying total emission reduction
over the crediting
period.
181
Component 2: Private asset upgrades – Fund flow
Low carbon Pay back loan Fund emission

5 Private redution projects Upgrade
financing private assets
1A participants 2
facility Issue loan
Pay for emission Transfer emission

reduction transfer 4 3 reduction impact
Carbon offset Offset
6
Combine emission reduction impact credit buyers
Issue loan to pay for emission
reduction transfer from
private participants upfront City 9
Make
annual
offset
(with WBG payment
1B support)
7
investors
Pay back loan 8
World Bank
Loan
Payment
* Verification includes setting baseline & confirming addionality with credit issuers and having ER certified by credit issuers 182
Component 3: “Upgrade to electric” for motorbikes
“Upgrade to electric” for motorbikes & Allowance rebate program aim
to provide a financial incentive to retire combustion motorbikes &
switch to the environment-friendly e-motorbikes
Three key beneficiaries:
Individual drivers Ride-hailing drivers Delivery drivers
183
Component 3: “Upgrade to electric” for motorbikes - Implementation steps
1. Financing 2. Implementation of intervention 3. Verification 4. Payment

A Low Carbon 2a. Design the concept & financial 3a. Create baseline & confirm the highest bidders in
Financing Facility structure for the subsidy program additionality with credit issuer Singapore.
consisting of IFC, (MRV)
commercial banks & With support from
funds will support WBG, a transaction
lending to private 2b. Work with retailers to design an advisor will:
participants implementation structure • negotiate sale
3b. Agree on the registry & benefit contracts between
sharing mechanism with the national offset buyers & City
government • negotiate offset
2c. Make an agreement with private payment agreement
WBG will provide a between offset
operators to scrap the combustion
concessional loan buyers & institutional
motorbikes 3c. Upon completion of EE upgrades,
to the City with the investors who will
PMU as the have emission reduction certified by
credit issuer. The verification will be make pay lump sum
implementing unit. 2d. Undertake an awareness raising payment to the City
conducted every year over the
This fund will be program to communicate the crediting period. (to pay back upfront
used to pay for the benefits of the program to investment)
emission reduction consumers
transfer from Offset buyers will then
private 3d. A third-party auditor will sign off make annual offset
participants 2e. Retailers give motorbike buyers a payment for the certification after payment to
upfront. a discount & claim a payment from verifying total emission reduction institutional investors
the PMU over the crediting
period.
184
Component 3: “Upgrade to electric” for motorbikes - Fund flow
Low carbon Pay back loan Fund emission “Upgrade to

5 Private redution projects
financing electric” for
1A participants 2 motorbikes
facility Issue loan
Pay for emission Transfer emission

reduction transfer 4 3 reduction impact
Carbon offset Offset
6
Combine emission reduction impact credit buyers
Issue loan to pay for emission
reduction transfer from
private participants upfront City 9
Make
annual
offset
(with WBG payment
1B support)
7
investors
Pay back loan 8
World Bank
Loan
Payment
* Verification includes setting baseline & confirming addionality with credit issuers and having ER certified by credit issuers 185
Given the strong interest from the Government of Vietnam & the economies
of scale to complete similar analyses for multiple countries at once, we are
proposing to build a platform across Southeast Asia, focusing on the
countries where we have the best access to building data

The Philippines Indonesia
Malaysia Laos
Thailand Cambodia
186
Annex 2.
WBG Low Carbon City: Energy Efficiency Retrofit Models
187

WB EE Retrofit Model
Addressable portfolio of buildings

We consider the following parameters to identify potential buildings for the EE Retrofit model:

Building sizes Construction years Building types Building owners
• Under 5,000 m2 • Buildings constructed • Community & cultural • Government

• 5,000 – 20,000 m2 between 2001 - now • Education departments & other
• 20,000 – 100,000 m2 • Health affiliated agencies,
• 100,000 – 400,000 m2 • Hospitality including SOEs
• Legal & military • Private sector
• Office
• Residential
188
Overview of EE retrofit model (1/3)

The model considers key EE factors:
Model inputs Model outputs
Inputs Source Comment Outputs Comment

Energy Derived kwh/m2 of floorspace;
EDGE App Standard costs Calculated for various scenarios
consumption assumed this is constant
Water Derived kL/m2 of floorspace; Calculated across a range of discount rates

EDGE App NPV savings using 10-years of savings; this is the most
consumption assumed this is constant
reliable metric for “justified investment”
EVN & VN Water EDGE assumes different prices
Utility tariffs Total CO2 reduction Calculated for various scenarios
Utility than Vietnam reports
Varies based on source of NPV 15-year carbon
Calculated for various scenarios
Our World in Data energy, but estimates provided offsets
Carbon emissions
2020 & EDGE App & near direct link to energy
consumption
Carbon price WB
Floor areas BCI
189

Utility tariffs
This model takes into account forecasted tariff increases (while prior projections such as EDGE assumed electricity &
water tariffs would stay constant).
Electricity & Water prices have been increasing in Vietnam at an annualized rate of 3.24% & 0.46%, respectively.
Electricity (USD/kwh) Water (USD/kL)

Forecasted Electricity Price Forecasted Water Price
0,35
0,3
0,25
0,2
0,15
0,1
0,05
190

Model $25
variables 20% 20% 8% per ton of
804g/kwh
Energy Water Discount Emission
carbon
consumption consumption rate factor
emission

Assumptions Public buildings
Avg energy consumed (kwh/m2)
EDGE
113
Low Uses
100
High Uses
200
Average Uses
168
& Scenarios Annual energy consumption (kwh)

Price of electricity (US$)
8,287,994,471
$0.087
6,010,787,989
$0.08
12,021,575,977.77
$0.087
10,098,123,821
$0.08
Average water consumed (m3/m2) 3 10 5
Annual water consumption (m3) 254,931,019 168,746,862 526,489,540 281,244,770
Price of water (US$) $0.43 $0.36 $0.43 $0.36
Rate of electricity price increase 3.24% 3.24% 6.27% 3.24%
Rate of water price increase 0.46% 0.46% 7.84% 0.46%
Commercial buildings EDGE Low Uses High Uses Average Uses

Avg energy consumed (kwh/m2) 113 100 200 168
Annual energy consumption (kwh) 33,439,993,105 23,863,817,482 47,727,634,964.74 40,091,213,370
Price of electricity (US$) $0.087 $0.08 $0.087 $0.08
Average water consumed (m3/m2) 2,5 5 3
Annual water consumption (m3) 628,368,686 558,294,010 1,116,588,020 669,952,812
Price of water (US$) $0.43 $0.29 $0.43 $0.29
191
The model is a tool to support city leaders to devise best strategy to

retrofit buildings for energy efficiency & emission reduction
Model outputs
Summary dashboard
(Standard costs, net
savings, total carbon
reduction, 15-year

carbon offsets, etc.)
192
Findings
Whole country – Public buildings

Types of buildings Sizes of buildings
268 26
1.403 1.999
5.818
3,257 m2

17,272 projects avg. floor area
56.2 mn m2 4.2
avg. stories
8.021
459
191 1.380 14.979
Community & Cultural Education Under 5,000 m2 5,000-20,000 m2

Health Hospitality 20,000-100,000 m2 100,000-400,000 m2
Legal & Military Office
193
Findings
Opportunity to save $1.0 bn in present value over 10 years through
EE upgrades to public buildings while the cost is as little as $281.2 mn*
Assumptions Floor area (m2) 56,248,954
Emission factor (ton/kwh) 0.00052
Increase $929 mn $135 mn Monetize Carbon price (US$)
Discount rate
25
8%
EE by Carbon 8.1 mn tons
Reduction in energy consumption 20%
20% Savings of CO2 reduction
offsets Reduction in water consumption 20%
EDGE Low Uses High Uses Average Uses

Avg energy consumed (kwh/m2) 100 200 153

Annual water consumption (m3) 254,960,799 111,539,344 371,797,814 254,960,799
Price of water (US$) $0.43 $0.29 $0.43 $0.29
Annual savings from EE retrofits $156,571,599 $87,772,538 $208,295,058 $139,105,138

NPV of 10-year savings $1,209,868,378 $684,131,957 $1,931,991,653 $1,079,545,031
Standard costs (EDGE interventions) $281,244,770 $281,244,770 $281,244,770 $281,244,770
Net savings $928,623,608 $402,887,187 $1,650,746,883 $798,300,261
Net savings to GDP 0.18% 0.08% 0.32% 0.15%
CO2 reduction over 10 years (tons) 8,064,888 5,279,775 10,559,550 8,064,888

10-year Carbon offsets $201,622,200 $131,994,373 $263,988,747 $201,622,200
NPV of 10-year Carbon offsets $135,290,137 $88,569,299 $177,138,598 $135,290,137
194
* EDGE interventions
Findings
To be updated
Hanoi & Ho Chi Minh City contribute EE Retrofits in Health sector generate
half of the total net savings highest net savings, while Hospitality
represents highest rate of return per m2
350 45
Millions
5%
6% 40
300
25%
6% 35
250

30
8%
Net savings per m2

200 25
150 20
15
100
23%
10
27%
50
5
- 0
56 others Hà Nội Hồ Chí Minh Health Office Education Community Hospitality Legal &
Binh Duong Bà Rịa Vũng Tàu Cần Thơ & Cultural Military
Đà Nẵng
Net Savings from EE Net savings per m2
195
Findings
Whole country – Commercial buildings

Types of buildings Sizes of buildings
110 636
560
2.813
2.155 297

979 1.985 31,068 m2
7,188 projects avg. floor area
223.3 mn m2 14.2
avg. stories
1.754
3.087
Community & Cultural Education Under 5,000 m2 5,000-20,000 m2

Health Hospitality 20,000-100,000 m2 100,000-400,000 m2
Residential Office
196
Findings
Opportunity to save $3.9 bn in present value over 10 years through

EE upgrades to commercial buildings while the cost is ~$1.1 bn*
Assumptions Floor area (m2) 223,300,000
Emission factor (ton/kwh) 0.00052
Increase $3.4 bn $529 mn Monetize Carbon price (US$)
Discount rate
25
8%
EE by Carbon 31.5 mn tons
Reduction in energy consumption 20%
20% Savings of CO2 reduction
offsets Reduction in water consumption 20%
EDGE Low Uses High Uses Average Uses

Avg energy consumed (kwh/m2) 150 200 168

Annual water consumption (m3) 627,987,906 646,895,099 2,156,316,998 627,987,906
Price of water (US$) $0.43 $0.36 $0.43 $0.36
Annual savings from EE retrofits $580,699,040 $481,351,695 $814,659,573 $531,164,920

NPV of 10-year savings $4,514,956,549 $3,740,692,597 $7,602,384,596 $4,134,081,241
Standard costs (EDGE interventions) $1,116,588,020 $1,116,588,020 $1,116,588,020 $1,116,588,020
Net savings $3,398,368,529 $2,624,104,577 $6,485,796,576 $3,017,493,221
Net savings to GDP 0.65% 0.50% 1.25% 0.58%
CO2 reduction over 10 years (tons) 31,563,010 28,235,950 37,647,933 31,563,010

10-year Carbon offsets $789,075,242 $705,898,751 $941,198,334 $789,075,242
NPV of 10-year Carbon offsets $529,475,910 $473,663,808 $631,551,743 $529,475,910
197
Findings
To be updated
Hanoi & Ho Chi Minh City contribute EE Retrofits in Residential sector generate
59% of the total net savings highest net savings, while Hospitality
represents highest rate of return per m2
1.600 40
Millions
7%
5% 20% 1.400 35
1.200 30
9%

Net savings per m2
1.000 25
800 20
600 15
26%
400 10
33%
200 5
- 0
56 others HCMC Ha Noi Residential Hospitality Office Health Education Community
& Cultural
Da Nang Quang Ninh Khanh Hoa
Net Savings from EE Retrofits Net savings per m2
198
Findings
89 Community & Cultural
466 Education
Types of 1,572 projects Health
public buildings 7.8 mn m2 Hospitality

43
854
Portfolio I:
Legal & Military
14 106
Office

Ho Chi Minh 43 2
City 378
4,981 m2
Under 5,000 m2
Sizes of buildings
5,000-20,000 m2
avg. floor area
5.5 20,000-100,000 m2
avg. stories
100,000-400,000 m2
1.149
199
Findings
Opportunity to save $119.2 mn in present value over 10 years through

Increase HCMC EDGE
EE by Avg energy consumed (kwh/m2)
20%
$103.5 mn $15.7 mn Annual energy consumption (kwh) 901,000,000
Carbon Price of electricity (US$) $0.087
Savings
offsets Average water consumed (m3/m2)

Annual water consumption (m3) 33,100,000
Monetize Price of water (US$) $0.43
0.9 mn tons of
CO2 reduction Annual savings from EE retrofits $18,493,110
Assumptions NPV of 10-year savings $142,640,090
Floor area (m2) 7,829,550 Standard costs (EDGE interventions) $39,147,750
Emission factor (ton/kwh) 0.00052 Net savings $103,492,340
Carbon price (US$) 25
Net savings to GDP 0.02%
Discount rate 8%
Reduction in energy CO2 reduction over 10 years (tons) 937,040
consumption 20%
Reduction in water 10-year Carbon offsets $23,426,000
consumption 20% NPV of 10-year Carbon offsets $15,719,037
200
Findings
40 62
152 143 Community & Cultural
829 Education
Types of 2,262 projects Health
commercial 72 mn m2 Hospitality
buildings
Portfolio I:
Office
Residential

1.036
Ho Chi Minh
200
City 31,786 m2
Under 5,000 m2
Sizes of buildings 918 5,000-20,000 m2
avg. floor area
646
14.7 20,000-100,000 m2
avg. stories
100,000-400,000 m2
498
201
Findings
Opportunity to save $1.0 bn in present value over 10 years through EE

upgrades to commercial buildings while the cost is as little as $359.5 mn*
Increase HCMC EDGE
20%
$872 mn $142 mn Annual energy consumption (kwh) 8,140,000,000
Savings

8.5 mn tons of
Assumptions NPV of 10-year savings $1,231,532,645
Discount rate 8%
Reduction in energy
CO2 reduction over 10 years (tons) 8,465,600
consumption 20%
202
Findings

524
Education
25
10 Health
Types of 2,404 projects
100
public buildings 9.5 mn m2 Hospitality
Legal & Military
Portfolio II: 1.404 Office

Hanoi
4
68
311
Under 5,000 m2
Sizes of buildings 3,962 m2
5,000-20,000 m2
avg. floor area
5.5 20,000-100,000 m2
avg. stories
100,000-400,000 m2
2.021
203
Findings
Opportunity to save $138.1 mn in present value over 10 years through

Increase Hanoi EDGE
20%
$120 mn $18.1 mn Annual energy consumption (kwh) 1,040,000,000
Savings

1.1 mn tons of
Discount rate 8%
Reduction in energy CO2 reduction over 10 years (tons) 1,081,600
consumption 20%
204
Findings
13
42
43 Education
500
Health
Types of 1,174 projects
commercial 56.7 mn m2 Hospitality
buildings Office
Portfolio II: Residential

480
Hanoi 172 207

Under 5,000 m2
Sizes of buildings 48,348 m2
5,000-20,000 m2
avg. floor area
21.2 20,000-100,000 m2
293
avg. stories
100,000-400,000 m2
502
205
Findings
Opportunity to save $807.5 mn in present value over 10 years through EE

upgrades to commercial buildings while the cost is as little as $283.8 mn*
Increase Hanoi EDGE
20%
$694.4 mn $113 mn Annual energy consumption (kwh) 6,480,000,000
Savings

6.7 mn tons of
Discount rate 8%
Reduction in energy CO2 reduction over 10 years (tons) 6,739,200
consumption 20%
206
WB LED Streetlights Model
Overview of LED streetlights model (1/3)

Model inputs Model outputs
Inputs Source Outputs Comment
Carbon price WB Calculated for 2 alternatives &

LED swapping investment 11 cities

Hours of operation/ day
Calculated for 2 alternatives &
Annual electricity tariff EVN Total energy savings 11 cities
Electricity cost EDGE Calculated for 2 alternatives &

Total carbon offset 11 cities
Streetlight distance VNLico, Global Designing Cities
Calculated for 2 alternatives &
Department of Transport, press Total CO2 reduction 11 cities
Streetlight count research
CO2 emissions from Carbon offset rate Calculated for 2 alternatives

electricity production in Our World in Data 2020
Vietnam in 2020 Payback period Calculated for 2 alternatives
Product details (wattage, Payback period (w/ Carbon

Philips, Rạng Đông websites Calculated for 2 alternatives
lifespan, purchase price) offset)
207

Model variables
$25 12 3.24% $0.09/kWh
per ton of hours of annual electricity
carbon operation per electricity cost
emission day tariff

Assumptions
CO2 emissions from electricity production in Vietnam Streetlight count
City # of streetlights
Streetlight distance in 2020
Hanoi 212,000
Avg. streetlight height 10 m CO2 emission HCMC 161,400
Electricity structure Weightage
(kg/kWh) Da Nang 90,755
Spacing ratio 3.x Binh Duong 58,912
Coal 52.9% 0.82
Hai Phong 147,484
Distance between 2 lights 30 m Hydropower 25.5% 0.02
Vung Tau 22,000
Natural gas 15.7% 0.49 Can Tho 38,180
Renewable energy 5.5% 0.00 Thai Binh 6,003
Dong Nai 10,525
LED replacement cost Imports 0.4% 0.00
Nha Trang 19,528
Cost per unit $100 CO2 emissions 0.52 kg/kWh Dong Thap 12,453
208

The model considers key city lighting progress:
Current
# LED Left to Project
City lights replace Total Start date Note manager Source
ADB, Can Tho https://kinhtexaydung.petrotimes.vn/can-tho-huong-toi-xay-dung-thanh-pho-thong-minh-va-tiet-
1 Can Tho 7,601 30,579 38,180 Apr 2022 US$67.29 million People's kiem-nang-luong-607931.html
Committee https://canthohomes.vn/adb-de-xuat-lam-thanh-pho-thong-minh-hon-1-500-ty-dong-o-can-tho/
Hai
2 3,469 Mid 2020 Has started to implement solar LED lights https://baoxaydung.com.vn/ky-1-hai-phong-but-pha-xay-dung-do-thi-thong-minh-278562.html
Phong
In 2016, assembled 2,000 RoadFlair LED with
Binh
3 2,000 Dynadimmer for dimming adjustments https://thegioichieusang.com/1-000-du-an-den-duong-thong-minh-cua-dai-gia-chieu-sang/
Duong First urban city to adopt CityTouch in Vietnam

Vung http://www.baobariavungtau.com.vn/ban-doc/201809/se-lap-dat-den-led-chieu-sang-o-cac-tuyen-
4 22,000 End 2018
Tau duong-tai-tpvung-tau-815660/
Nha https://tietkiemnangluong.evn.com.vn/d6/news/Nha-Trang-Khanh-Hoa-Se-su-dung-den-led-chieu-
5 1,943 17,585 19,528 Mid 2017
Trang sang-cong-cong-0-154-9080.aspx
In 2018-2019, Department of Commerce reported
http://doanhnghiepvn.vn/doanh-nghiep/dau-tu/da-nang-chi-90-ti-dong-thay-the-he-thong-dien-
6 Da Nang 13,878 76,877 90,755 on the project of replacing 2,877 LED lights.
chieu-sang-cong-cong-bang-den-led/20210118072856561
In 2020-2021, plan to replace 9,000 more LED lights
Dong https://tietkiemnangluong.evn.com.vn/d6/news/Dong-Thap-thi-diem-thay-the-den-LED-phuc-vu-
7 12,453 Late 2015 Replaced 33 LED lights
Thap chieu-sang-cong-cong-115-109-7186.aspx
Dong
8 10,525 In 2020-2021, plan to replace 7,500 LED lights https://www.dongnai.gov.vn/pages/newsdetail.aspx?NewsId=161755&CatId=111
Nai
Thai Currently focusing on traffic & waste management
9 6,003 https://baothaibinh.com.vn/tin-tuc/5/58780/tiet-kiem-dien-he-thong-chieu-sang-cong-cong
Binh first
60% of cabinets are using remote lighting control https://www.baothaibinh.com.vn/news/4/113747/thanh-pho-thai-binh-huong-den-do-thi-thong-
minh
system with 3G/4G-GSM tech
10 Hanoi 38,160 173,840 212,000 https://kinhtedothi.vn/ha-noi-dau-tu-1800-bo-den-led-chieu-sang-397747.html
Currently, Hapulico just replaced 4,820 LED - 3.8% https://hanoimoi.com.vn/ban-in/Xa-hoi/867438/xa-hoi-hoa-thay-the-den-led-trong-chieu-sang-do-
of the total lights it owns in Hanoi thi
https://nhandan.vn/tin-chung1/cong-nghe-chieu-sang-cho-thanh-pho-thong-minh-345259
Planning to build infrastructure & lighting control
11 HCMC 18,000 143,400 161,400 2018 https://hcmcpv.org.vn/tin-tuc/tphcm-xay-dung-trung-tam-quan-ly-va-dieu-hanh-he-thong-chieu-
system & replacing LED more in 2021
sang-do-thi-1491879713
209

upgrade to LED streetlights for energy efficiency & emission reduction
Model outputs
Summary dashboard
(Total investment, total energy savings, total
carbon offsets, total CO2 reduction, etc.)

Output by city
(LED count to roll out, LED investment, 15-
year electricity saving, 15-year carbon
offset, annual CO2 reduction.)
210
WB E-Motorbikes Model
Overview of e-motorbikes model (1/5)

The model considers key variables:
Inputs Sources
1 Subsidy amount for individual A rate in percentage that applies accordingly to the sales price of each e-motorbike product WB
drivers (%)
2 Subsidy amount for ride-hailing A different subsidy rate for drivers of ride-hailing apps as they spend more time on the road & battery WB
drivers (%) runs out more quickly
3 Driving efficiency of ride-hailing A rate corresponding to the number of hours ride-hailing drivers spend taking customers to
drivers (%) destinations (remaining % will include wait time, break & dead time of not locking in any trip) – apply

for ride-hailing scenario
4 Total # e-motorbikes to impact Total number of bikes to introduce & distribute to current users of ICE motorbikes, while scraping old https://tuoitre.vn/xe-may-cu-ha-noi-doi-
ICE motorbikes registered before 2000, according to Vice President of Hanoi Department of Natural lay-moi-tphcm-muon-thu-hoi-
Resources & Environment 20200910073231596.htm
5 Life cycle per e-motorbike Lifespan of each e-motorbike before customers need to buy a new one
(years)
6 Annual distance traveled Average daily mileage of each motorbike multiplied by number of days (365) – currently taking 8,000 https://vtv.vn/doi-song/moi-nam-nguoi-
(km/bike) km as reference from a survey of AMR Group regarding annual distance traveled of each motorbike viet-di-xe-may-trung-binh-7800-km-
user 20200122175535781.htm
7 CO2 price (USD/ton)

WB
8 Allowance for transmission loss The transmission loss percentage will help us find the transmission efficiency of the national grid
on national grid (%)
9 Efficiency of bike battery charge The variable helps assume a fixed efficiency % on battery used across e-motorbikes
(%)
10 Unit allocation by brand (%) The current model has 6 common products (Vinfast Feliz, Honda Mono, Vespa Venus, Pega Aura+,
DIBAO Gogo SS, DK Bike Roma RX) & “Others” for remaining brands. Users allocate the unit in % for
each product based on variable 4
211
The model is based on the following assumptions:
Assumptions Sources
1 Average scrap value per bike (VND) 1,000,000 VND per motorbike with reference data taken from
calls to scrap dealers in Hanoi & HCMC
2 Technical information of e-motorbike Assuming just one person driving the e-motorbike at ~30-35 km/h Vinfast Feliz: https://shop.vinfastauto.com/vn_vi/bike-feliz.html
a) Power per usage (kWh), b) Distance per charge (km), c) Sales Honda Mono: https://thegioixedien.com.vn/xe-may-dien-honda-mono-chinh-hang-honda-nhat-ban
brands Vespa Venus: https://xedienvietthanh.com/xe-may-dien-vespa-venus/
price (VND)
Pega Aura+: www.pega.com.vn/aura.html
DIBAO Gogo SS: https://dibao.com.vn/xe-dien-dibao-pansy-s.html
DK Bike Roma RX: https://dkbike.vn/xemay-dien/dk-romasx
3 CO2 emission per gas liter (kg) 3 kg/L – taken from Natural Resources Canada www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/oee/pdf/transportation/fuel-efficient-
technologies/autosmart_factsheet_6_e.pdf

4 Mileage per gas liter (km) Taken as average from gas consumption per 100km for 21 https://vnexpress.net/so-sanh-muc-an-xang-cua-xe-may-honda-yamaha-4051275.html
products from 4 largest brands in Vietnam (Honda, Yamaha,
Piaggio, Vespa)
5 Gas burned while idling (L/hour) The amount of gas lost in liters per hour to idling while www.researchgate.net/publication/318788877_Evaluation_of_Idling_Fuel_Consumption_of_Vehicl
participating in traffic – mean value from research is 0.14 L/hour es_Across_Different_Cities#:~:text=The%20mean%20value%20of%20fuel,significant%20influence%20
on%20fuel%20consumption
6 Time stuck in traffic per day Traffic data of Hanoi is used as reference, cited from BCG & Uber https://businessmirror.com.ph/2017/11/18/is-ridesharing-the-answer-to-the-worsening-traffic-
research in 2017 and UNESCAP report in 2018 situation/
(minutes) https://image-src.bcg.com/BCG-Unlocking-Cities-Ridesharing-India_tcm21-185213.pdf
https://www.unescap.org/sites/default/files/Final%20Report-SUTI_Hanoi.pdf
7 CO2 emissions from electricity Calculated with weightage distributed to each type of electricity www.hydropower.org/factsheets/greenhouse-gas-emissions
in Vietnam’s structure in 2020 – data taken from Our World in www.vietinbank.vn/investmentbanking/resources/reports/102019-CTS-BCnganhdien.pdf
production in Vietnam (kg/kWh)
Data 2020
8 Ride-hailing Grab’s record for Vietnam on its second billion ride www.grab.com/vn/en/blog/grab-dat-2-ty-chuyen-xe-chi-9-thang-sau-khi-dat-cot-moc-1-ty-chuyen-
xe
a) Distance traveled per trip (km)
b) Average speed for traditional 40 km/h is the limit set by Vietnam Ministry of Transport, https://luatvietnam.vn/giao-thong/thong-tu-31-2019-tt-bgtvt-toc-do-va-khoang-cach-an-toan-cua-
currently putting 30km/h to weigh in on traffic jam & safety xe-co-gioi-khi-tham-gia-giao-thong-176529-d1.html
motorbikes
c) Average working hours per day for Input from Grab & Be motorbike drivers
drivers
d) Total distance traveled per year Assumes each driver works 6 days per week 212

Model variables
% unit
For individual drivers For ride-hailing drivers Brand allocation
7.5 million Total # e-motorbikes to impact 200,000 bikes Vinfast Feliz 20%
Total # e-motorbikes to impact
bikes
Life cycle per e-motorbike 10 years Honda Mono 20%

Life cycle per e-motorbike 15 years
Annual distance traveled 70,200 km Vespa Venus 15%

Annual distance traveled 8,000 km
CO2 price (USD/ton) $25 Pega Aura+ 15%
CO2 price (USD/ton) $25
Avg. battery price VND 3 million DIBAO Gogo SS 15%
Avg. battery price (for
VND 3 million
replacement) DK Bike Roma RX 10%
Battery lifespan 5 year
Battery lifespan 5 years
Efficiency of bike battery charge 85% Others 5%
Discount rate 8% Total 100%

Discount rate 8%
Efficiency of bike battery Productivity of ride-hailing

85% 75%
charge drivers
213

Assumptions
Traditional motorbike scrap value $43.4 CO2 emissions from electricity production in Vietnam in 2020 Actual power for e-motorbike battery
Vietnam electricity (per kWh)
Transmission loss on national grid 8% Weightage CO2 emission (kg/kWh) Annual CO2
structure 1 kWh power generation
Gasoline price (per liter) emission
VND 20,000 Coal 52.9% 0.82
Transmission loss 0.08 kWh
Gas burned while idling 0.14 L/hour Hydropower 25.5% 0.02
Efficiency to household 0.92 kWh
Natural gas 15.7% 0.49
Electricity price (per kWh) $0.09 Efficiency to bike battery 0.85 kWh
Renewable energy 5.5% 0.00

Source: PVOil, AMR Group, ResearchGate Battery power 0.78 kWh
Imports 0.4% 0.00
CO2 emissions from
0.52 kg/kWh
electricity
Source: Our World in Data 2020
Distance traveled & compensated for idling Reference for drivers' annual distance traveled Reference for # ride-hailing drivers
Gas burned while idling 0.14 L/hour Distance traveled per trip 6 km From Grab Brand # drivers
Time stuck in traffic per day 58 minutes Maximum 40km/h from Grab Vietnam 190,000
Average speed 30 km/h
Ministry of Transport Law
Conversion to hour 0.97 hour Gojek Vietnam 200,000
Time taken per trip 12 minutes
Gas burned per day (L) 0.14 L
Input from Be & Grab Be Group 100,000
Average working hours/ day 10 hours
Gas burned per year (L) 49.4 L drivers Total 490,000
Distance compensation from Estimate, excluding wait &
2,119 km Driving efficiency 75%
idling traffic times
Source: BCG & Uber Survey Estimated distance per day 225 km
Assuming 6 working days
Total distance per year 70,200 km
per week
Source: Grab, Ministry of Transport Law 214

Assumptions
Technical information on e-motorbike brands CO2 emissions from ICE motorbike per km
per e-bike CO2 emission from gasoline 67.5 g/MJ
Brand Power per usage Distance per usage Power used per km Annual CO2 emission Grid emission factor for gasoline 42.5 MJ/kg
Vinfast Feliz 1.2 kWh 90 km 0.017 kWh 0.15 tons
Specific weight of gasoline 0.759 kg/L
Honda Mono 1.2 kWh 90 km 0.017 kWh 0.15 tons
Specific fuel consumption 0.02331 L/km
Vespa Venus 1.2 kWh 90 km 0.017 kWh 0.15 tons
Mileage per liter 42.9 km/L
Pega Aura+ 1.4 kWh 100 km 0.018 kWh 0.15 tons

DIBAO Gogo SS 1.2 kWh 80 km 0.019 kWh 0.16 tons Source: VnExpress, IPCC2006, Methodology AMS.III-C
DK Bike Roma RX 1.2 kWh 80 km 0.019 kWh 0.16 tons

Others 1.2 kWh 85 km 0.018 kWh 0.15 tons
Source: Brands’ websites
Purchase cost Operating cost per bike

Brand E-motorbike price Brand Total annual cost Annual electricity cost Annual power loss cost
Vinfast Feliz VND 27,900,000 Vinfast Feliz $17.72 $14.71 $3.01
Honda Mono VND 21,500,000 Honda Mono $17.72 $14.71 $3.01
Vespa Venus VND 18,000,000 Vespa Venus $17.72 $14.71 $3.01
Pega Aura+ VND 20,400,000 Pega Aura+ $18.6 $15.44 $3.16
DIBAO Gogo SS VND 19,890,000 DIBAO Gogo SS $19.92 $16.54 $3.38
DK Bike Roma RX VND 20,500,000 DK Bike Roma RX $19.92 $16.54 $3.38
Others VND 19,000,000 Others $18.76 $15.57 $3.19
Source: Brands’ websites
215

upgrade to e-motorbikes for energy efficiency & emission reduction
Model outputs
Summary dashboard
(Total subsidy investment,
total offsets incl. carbon
offset & motorbike scrap,
loan amount, etc.)

216
WB Rooftop Solar Model
Overview of rooftop solar model (1/3)

Key variables
Public buildings Residential buildings
Installation cost (at panel cost rate) 5% Installation cost (at panel cost rate) 5%
Inverter replacement cost Inverter replacement cost
6% 6%
(installation rate) (installation rate)
Panel cost (per kWp) VND 10,000,000 Panel cost (per kWp) VND 12,000,000
Electricity price (per kWh) $0.09 Electricity price (per kWh) $0.09
Avg. Performance Ratio Avg. Performance Ratio
87% 87%
(inverter DC >> AC) (inverter DC >> AC)
Annual degradation factor 75% Annual degradation factor 75%
Project rollout rate 100% Project rollout rate 100%
Energy value to be realized 100% Energy value to be realized 100%
CO2 price (USD/ton) $25 CO2 price (USD/ton) $25
Discount rate 8% Discount rate 8%
Project rollout period 1 year Project rollout period 1 year
Energy storage rate 30% Energy storage rate 30%
Solar production meeting demand % energy allocation in each city
50% 65%
(public) (residential)
Source: Federal Ministry for Economic Affairs & Energy, MDPI, Source: Federal Ministry for Economic Affairs & Energy, MDPI,
Intech Energy Intech Energy
217

Assumptions for private buildings
Annual energy consumption & yield by city (public buildings) CO2 emission 0,8641 kg/kWh
City Annual consumption Specific yield Maximum carbon credit 10 years
Ho Chi Minh City 901,000 MWh 1,362 kWh/kWp Source: MONRE, NREL
Da Nang 204,000 MWh 1,259 kWh/kWp

Financing structure for private and public sectors
Hanoi

1,040,000 MWh 1,103 kWh/kWp
Debt/ capital rate 70%
Hai Phong 100,000 MWh 1,103 kWh/kWp

Equity/capital rate 30%
Thai Binh 197,000 MWh 1,103 kWh/kWp

Annual rate (APR) 8,99%
Nha Trang 173,000 MWh 1,239 kWh/kWp

Loan tenor 8 year
Binh Duong 305,000 MWh 1,362 kWh/kWp

Source: Federal Ministry for Economic Affairs & Energy, MDPI, Intech Energy
Vung Tau 242,000 MWh 1,460 kWh/kWp

Equipment generalized price (standardized across sectors)
Can Tho 222,000 MWh 1,420 kWh/kWp Product kW range Price Average lifetime
Dong Nai 193,000 MWh 1,362 kWh/kWp Combiner box ~473 kWh VND 5,000,000 25 years
Dong Thap 158,000MWh 1,370 kWh/kWp Inverter ~132 kWp VND 79,486,000 10 years
Source: BCI, City Governments, EVN, IntechSolar, PV Watts Source: Market Research, Schneider
218

Assumptions for residential buildings
Annual energy consumption & yield by city (residential buildings) CO2 emission 0,8641 kg/kWh
City City areas (km2) Specific yield Maximum carbon credit 10 years
Ho Chi Minh City 2,061 1,362 kWh/kWp Source: MONRE, NREL
Da Nang 1,285 1,259 kWh/kWp

Financing structure for private and public sectors
Hanoi

3,359 1,103 kWh/kWp
Debt/ capital rate 65%
Hai Phong 1,562 1,103 kWh/kWp

Equity/capital rate 35%
Thai Binh 68 1,103 kWh/kWp

Annual rate (APR) 12,99%
Nha Trang 251 1,239 kWh/kWp

Loan tenor 8 year
Binh Duong 2,694 1,362 kWh/kWp

Source: Federal Ministry for Economic Affairs & Energy, MDPI, Intech Energy
Vung Tau 141 1,460 kWh/kWp

Equipment generalized price (standardized across sectors)
Can Tho 1,439 1,420 kWh/kWp Product kW range Price Average lifetime
Dong Nai 5,907 1,362 kWh/kWp Combiner box ~473 kWh VND 5,000,000 25 years
Dong Thap 3,384 1,370 kWh/kWp Inverter ~132 kWp VND 79,486,000 10 years
Source: BCI, City Governments, EVN, IntechSolar, PV Watts Source: Market Research, Schneider
219

invest in rooftop solar for energy efficiency & emission reduction
Model outputs
Summary dashboard
(Total investments, total energy savings, total carbon offsets, payback period, etc.)

220
Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
leave a comment.
We will review and

One Million Hectares High Quality
and Low Carbon Rice Program
Vietnam Results-Based Carbon and Climate Finance Training,

Hanoi, February 27 to March 1, 2023
Experiences from previous WBG projects
VnSAT Techniques Results from WB Agriculture

• 1 Must use certified seed; Competitiveness Project
• 5 Reductions: reduced rates of seed, Reductions:
1. Seed use: 29–50% lower
fertilizer, pesticide, water, and 2. Inorganic fertilizer use: 22–50% lower
postharvest loss; 3. Water use: 30–50% lower
4. Pesticide applications: 20–33% lower
5. Production cost: 22% lower;
Benefits
1. Rice yields: 5.2–7.9% increase
2. Profits: 29–67% increase
3. GHG emissions: 26.6% lower percent in winter-spring;
29.9% lower in summer-autumn.
Source: VNSAT and IRRI

One Million Hectares High Quality and Low Carbon
Rice Program
Objective
To promote sustainable farming practices to produce high-
quality low-carbon rice responding to increasing domestic and
export market demands.

Rice Program
Characters of high-quality low-carbon rice:
• high-quality varieties and certified seeds for quality, productivity, and higher
income;
• sustainable farming techniques adopted to achieve “more from less” and
reduce environmental pollution and emissions;
• value chains and links among key actors strengthened to enhance value
addition;
• infrastructure modernized to support precision agriculture, digitalization,
and traceability; and
• access to carbon finance to improve returns to investment and financial
sustainability in the long term.

Rice Program
Description of the Program until 2030 and 2050: 1 million ha high-quality
rice program by 2030 in MKD; Scaling up to 2-3 million by 2050 nationwide;
Institutional Roles & Responsibilities: MARD will lead the preparation in the
design phase with participation from interested provinces. The program is
expected to become a national program which will be approved by the Prime
Minister. During the implementation phase, MARD will provide guidance to
provinces and coordinate the work related to carbon finance, including
monitoring, reporting, and verification (MRV), benefits sharing and incentive
policies, capacity building for low carbon value chains, and so on.

Rice Program
• Expected Outcomes:
 Increased farmers’ income by around 20% by improving productivity and quality
while reducing production costs
 Rice subsector’s competitiveness increased
 Environmental footprint (i.e., pollution and emissions) reduced, and rural
ecosystems restored.
• Expects Outputs:
 1 million ha of high-quality rice areas (adopting sustainable farming practices)
developed and fully operationalized
 MRV systems for rice developed and operationalized (TCAF)
 Rice value chains in the project areas strengthened
 Reduced carbon emissions by around 9 million tons of CO2e annually
 Access global carbon markets to reward the achievements in carbon emission
reductions (around US$5-10 per ton of CO2e) (TCAF)

TCAF Activity Objective:
• Support MARD in accelerating Vietnam’s low carbon rice sector transformation for the period of
2021-2030 by providing up to US$100M result-based carbon/climate finance support (RBC/CF) to
be paid against actual mitigation generation
• Support MARD in generating high market value emission reduction credits (ERCs), as by-
products of Vietnam’s 2021-2030 low carbon rice value chain transformation, and use it for
Vietnam’s own NDC targets, and/or have it monetarized in international carbon/climate markets
• Support MARD in piloting the institutional framework and business model, built upon what FCPF
project has developed. which together will contribute to Vietnam’s overall country legal,
regulatory, institutional framework conducive to ERCs generation, monitoring/reporting/verifying
(MRV), authorization, issuance, and monetize/mobilizing financing under the Paris Agreement
and the Glasgow Climate Pact.
Proposed TCAF Design
Today
1M5R starts Scale to Viability
Proof of Concept Expand to Maturity
Readiness -term: 2 years Short -term: 2 years Medium term: 4 years Long-term: 2 years
X% of RBC/CF payments Z% of RBC/CF payments to purchase ERCs achieved

Y% of RBC/CF payments to
to retroactively purchase along the implementation of the new World Bank IPF
purchase ERCs achieved before
ERCs achieved under low carbon rice project
the new World Bank IPF starts
VnSAT
Up to US$100M TCAF and SCALE support
• The X,Y, and Z percentage of RBCF payments (i.e the quantity and price per ton of ERCs to be purchased by
TCAF and SCALE) will be calculated by particularly considering: a) financial and economic analysis of
targeted low carbon rice value chain program in the defined term, b) the incentive gaps in the defined term
and c) the unique value proposition of RBCF which the other financing instruments can not provide
Next Steps
• Oct 2022: Preparation of TCAF Preliminary Concept Idea Note (Pre-PIN) with World Bank support
• Nov 2022: a consultation with MONRE on the draft Pre-PIN (led by MARD with WB support)
• Dec 2022: submission of TCAF Pre-PIN to the World Bank with a request letter
• Dec 2022: TCAF Donor discussion on the TCAF Pre-PIN
• Mar 2023: start TCAF program preparation
• Oct 2023: TCAF ERPA negotiation in parallel to first monitoring report and verification
• Feb 2024: signing of TCAF ERPA and disbursement of TCAF payment for the first monitoring period
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Results-Based
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Session 8:
Assessment of Vietnam’s Policy
Landscape for RBC/CF
• Recap our preliminary view of the general legal and

institutional frameworks and the high-level process of
producing the country assessment
• Share our understanding of the carbon market context in

Vietnam
Objectives for this • Get your feedback regarding the preliminary assessment
presentation of the Vietnam policy landscape against the overall
framework
• Get your feedback on potential options to pursue in the

key areas for further policy action in Vietnam based on
the assessment
Recap of the Legal and Institutional Frameworks

Policy and institutions conducive to the generation, monitoring, monetization

of ERCs internationally
Overall Supply creation:
Incentivizes investments in
Supply verification: Builds
the integrity of local ERC
Demand creation:
Facilitates market access
framework: high-quality ERC projects
S1
projects
V1 D1
Robust integrity Defined Corresponding
Eleven S2
V2
mechanisms
D2
Robust and efficient Defined verification Actively develops
elements S3
permitting & standards capabilities markets
across four S4
Clear roles & incentives
for stakeholders
over-arching Investable demand

signals
policy Institutional arrangements: Fosters trust in ERCs issued to local projects
objectives I1
Strong legal mandate for
I2
Capabilities developed
I3
Transparency and
accountability
execution
mechanisms set-up
Sequencing : Elements are proposed to be sequenced based on impact and/or materiality to

the overall ERC objectives as well as the relative ease of implementation
Three broad Phase 1: Foundational Phase 2: Critical elements Phase 3: Key elements in
phases defined elements in establishing an
ERC supply market
in building high-integrity
ERC supply markets
creating sustainable ERC
markets
in the S1
V1 Robust integrity S4Investable demand
evolution of S2 Robust and efficient

mechanisms
S3 Clear roles & incentives
signals
D2Actively develops
the ERC permitting & standards for key stakeholders
Transparency and
markets
D1Defined
V2 Defined verification I3 Corresponding
policies & capabilities accountability
mechanisms set-up
institutions I1 Strong legal mandate for

execution
*Sequencing for any market will be contextualized to I2
the baseline as well as actual progress made for each Capabilities developed
element, resulting to an assessment of size of the gap
to be addressed and the current capacity to address
the gap
Process | Four key steps to conducting assessments of a country's ERC policies and
institutional arrangements
1
Define country 2
Assessment against 3
Propose policy 4
Finalize
context guidelines actions recommendations
Engagements throughout with key stakeholders to gather feedback regarding the inputs used, the analyses being conducted,
as well as the recommendations being developed (today's engagement)
Create a baseline understanding of Conduct analyses on the policies Identify the policy Finalize assessments and overall
the country's participation in and institutions landscape of the recommendations based on the recommendations, taking into
emissions reduction credit (ERC) country across the 13 components assessments and considering the account the feedback received from
activities, including: and based on the suggested country context; propose the the touch-points as well as further
• Role of ERCs in broader analysis for each of the sequencing of the policy actions refinements suggested
decarbonization objectives components; assign initial taking into consideration two
• Historical supply and demand of assessments of the policy factors:
ERCs components as follows:
• High-level timeline of policy and 1. Impact or the materiality of
institutional developments in • Best practice in place the gap to address in so that
relation to ERCs • Good design in place the overall policy landscape
• Some elements in place achieve its objectives
• Pending development 2. Current capacity to address
the gap considering resources
and capabilities
Preliminary Assessment of Vietnam

Vietnam has made significant efforts to …And has promulgated some key policies
advance its carbon market… for the development of its carbon market
Participation across mechanisms
Decree Lays out timeline for Vietnam carbon market and
Clean Development Mechanism - 31mtCO2e credits issued across 06/2022 ND- establishes high-level regulations on carbon
332 projects (1.2mtCO2e retired)1 CP credits, emission quota trading, and carbon credit
Global Voluntary Market- 10.3mtCO2e/year credits issued across 01/2022 market operations
100 projects (3.9mtCO2e retired)2
Joint Crediting Mechanism (Japan)- 4.4ktCO2e credits issued across Define ministries' roles and responsibilities in the
8 projects (14 total registered projects)3
development of carbon market
National • Ministry of Finance (MOF): Establish carbon
Timeline to develop carbon credit market 4 Green credit exchange & financial management
Growth mechanism for carbon market
Up to 2027- Formulate carbon credit management regulations, • Ministry of Natural Resource & Environment
formulate operation rules of the Carbon Trade Exchange, provide Action Plan
07/2022 (MONRE): Develop carbon markets mechanism &
guidance on operation of domestic and international carbon exchange
regulations to connect domestic carbon credit
and offsetting mechanisms
exchanges with regional and global markets
Starting 2025- Operate GHG emissions inventory and pilot trading
scheme & exchange mechanism; improve capacity and raise awareness
about carbon market development Nationally Defines need to improve and standardize GHG
determined inventory tracking system as precedent for carbon
Starting 2028- Officially start operation of the carbon credit exchange market, develop expert team for tracking GHG, and
mechanism; prescribe carbon credit exchange mechanism contribution
10/2022 improve enterprise capacity & readiness to
participate in carbon market
1. Based on CDM Registry Issuances and Voluntary Cancellations report as of January 31, 2023
2. Based on Gold standard and Verra
3. Based on JCM website (as of Feb 2023)
4. Based on Decree 06/2022 on Mitigation Of Green House Gas Emissions And Protection Of Ozone Layer
Preliminary assessment | Significant progress made along most elements; Vietnam can build on
her deep experience in the carbon markets to address remaining areas in the adoption of
standards, integrity mechanisms, and capabilities development
Policy & frameworks: Responsive and credibility-building policies that enable ERC project effectiveness throughout the project lifecycle Remaining areas for
Supply creation support: Incentivizes investments in high-quality ERC projects Supply verification: Supports the Demand creation: development:
Well-defined asset rights credibility of local ERC projects Facilitates market access
• Legal definition of ERCs as tradeable instrument under Decree 06/2022 Robust integrity mechanisms: Defined corresponding
• Some existing asset regulations (e.g., Law on Forestry, Land registration) but • Self-reporting requirements adjustment mechanisms: 1 Permitting and
pending clear provisions assigning ownership of carbon avoided/ removed to the standards: Pending
prescribed in Decree 06/2022 • Corresponding identification
ERC project developer • Pending integrity mechanisms adjustments Mechanism
Robust and efficient permitting & standards: such as audit guidelines, used and developed of methodologies to be
• Broad guidelines on project application available (e.g., Form 03 in validation and verification in JI scheme; learnings used aligned with
Decree 06/2022) processes & capabilities, can be leveraged in priority supply sources
• Pending identification of methodologies to be used aligned with adoption of transparent record- relation to Carbon Trade
priority supply sources and coordinated with NDC commitments of sector 1 keeping mechanisms to ensure Exchange and meeting 2 Integrity and
Clear roles & incentives for key stakeholders traceability of ERCs issued Vietnam's NDC transparency
• Pending regulations and structured frameworks for flow of funds to unlock 2 commitments mechanisms: Pending
value from co-benefits and stakeholder incentives in relation to ERCs (can Defined verification capabilities: Actively develops markets: integrity mechanisms
leverage Benefit Sharing Mechanism in REDD+ program) • Pending identification of • Proactive effort in governing offset project
Investable demand signals: independent, properly recent years to promote development such as
• Clear potential demand from sub-national context - Carbon Trade Exchange accredited verifiers (gov't or 3rd CDM and JI carbon audit guidelines,
(voluntary) and cap-and-trade offsetting scheme (compliance) party) for implementation of credits in trade validation and
• Ambiguous mechanisms for use of ERC in the international (e.g., Article 6.2 & 6.4) verification activities 2 relationships verification processes
and national (e.g., use of offsets to meet NDC) context & capabilities, adoption
Institutional arrangements: Institutions designed to enable trust in ERCs generated locally of transparent records
• Strong legal mandate for execution: High-level carbon market mandates along with appointment of MOF and MONRE to implement ERC policies stated 3 Capability
in Decree 06/2022; However, pending promulgation of detailed operational mechanisms (to be released before 2025 pilot) and Decision from Prime development:
Minister Continuous capacity
• Capabilities developed: Technical capabilities developed from previous engagement win CDM and JCM; Further developments expected from building required to
MONRE and MOF to resource carbon market activities before 2028 3
align with the global
• Transparency and accountability mechanisms set-up: Mechanisms and implementation of regular public reporting of ERC activities yet to be VCM markets &
established; MONRE expected to operate national MRV database for GHG inventory mitigation 2 standards
Policy/institution design fully addresses objective Policy/institution design mostly addresses objective Policy/institution design partly addresses objective Policy/institution design to be developed
Source: Decree 06/2022 on Mitigation Of Green House Gas Emissions And Protection Of Ozone Layer, BCG analysis
Action-plan| Standing up the standards and integrity systems are

proposed immediate actions for Vietnam
Potential evolution of Vietnam's ERC policies & institutional frameworks
Establish the supply market Support a high-integrity market Enable a sustainable ERC market
Robust and efficient permitting & standards: Adopt methodologies aligned Clear roles & incentives for key stakeholders: Assign the roles and equivalent
with global standards, local supply, and sectoral NDC needs incentives to the key stakeholders within Vietnam's ERC project landscape
Robust integrity mechanisms: Identify verification mechanisms to be Transparency and accountability mechanisms: Set-up public reporting and
undertaken by Vietnam in alignment with the standards public consultation mechanisms for carbon credit transaction
Strong legal mandate for execution: Finalize the specific roles & engagement Investable demand signals: Strengthen voluntary demand through targeted
model of MONRE & MOF with the key Ministries non-policy driven initiatives (e.g. claims standards, buying fund establishment)
Well-defined asset rights: Refine existing property & land laws to establish Actively develops markets: Incorporate ERC in existing trade relationships and
linkage between carbon units and assets explore international carbon exchange to facilitate future sale of ERCs
Defined verification capabilities: Define qualifications & licensing for resources that will conduct Vietnam's chosen integrity activities
Capabilities developed: Leverage capabilities developed from CDM & JCM systems to execute the upcoming policies
Defined corresponding adjustment mechanisms: Start by leveraging process & learnings from CDM & JCM experiences for the upcoming CTX & other VCM ERC
transactions that will involve corresponding adjustment mechanisms
Proposed to start with more basic functionalities in implementation to meet

policy objectives before full system roll-out for each of these components
Summary | Significant progress made on key elements allows

Vietnam to fast-track remaining systems in standards, integrity
Vietnam has made significant progress along the high impact elements of the policy and institutional frameworks; a summary of
the preliminary recommendations for Vietnam to consider in strengthening the remaining areas needed to establish high-
integrity ERC supply markets
• Adopt project methodologies to be allowed for ERC projects in Vietnam that are (1) contextualized to potential
Robust and
supply (2) globally aligned and (3) coordinated with NDC commitments of sectors. Options:
efficient permitting
– (1) Adopt select standards currently accepted in the global VCM (e.g., Verra, Gold Standard) as in California
& standards
– (2) Develop and adopt own methodologies aligned with global standards as in Australia
Robust integrity • Establish integrity mechanisms and activites to be undertaken by the government that are non-duplicative and
mechanisms, aligned with the permitting processes & standards. Range of options:
verification – Range of activities seen in other markets: Registration vetting, review of regular project reports, physical
capabilities, inspections, project validation, pre-issuance verification, set-up of complaint mechanisms, etc.,
transparent records – Range of resourcing options: (1) Establish in-house unit to conduct activities as in Australia for select
& accountability physical audits; or (2) Provide licenses to qualified bodies or professionals to conduct activities as in
mechanisms Australia, California for their validation and pre-issuance verification activities
• Define plan to build capabilities needed based on the standards and integrity mechanism identified, taking into
Institutional account specific capabilities that can be carried over from the CDM and JCM experiences
capabilities • Range of capability building options observed, for example, in the adoption of project methodologies: (1)
developed creation of unit within the CER in Australia to recommend methodologies to adopt; (2) appointment of
representative civilians (e.g., scientists, environmental advocates, etc.,) to a Task Force to select methodologies
to be adopted by California; Vietnam may also look into similar cooperative arrangements leveraged in the JCM
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Session 9:
Group Discussions on
Next Steps for RBC/CF
Session Format
In groups, identify priority next steps for accessing and
using results-based climate and carbon finance in
different sectors
Group Topic Room Name
Low-Carbon Rice Fansipan 2 + 3 (stay in main room)
A
Forestry Fansipan 1
B
Low-Carbon Cities Hồ Tây
C
• What are this sector’s priorities for accessing and using
results-based carbon and climate finance?
• What are your short-, medium-, and long-term goals?
• What other stakeholders/actors can you work with to
achieve these goals?
• What steps can your team take to reach these goals…
• In the next 6 months?
• Year?
• Five years?
• Ten years?
• Discuss roles and responsibilities – who needs to lead on
which pieces of this action plan? What support is needed
from other ministries/organizations?
Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
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Plenary Report
Out
• What are this sector’s priorities for accessing and using
results-based carbon and climate finance?
• What are your short-, medium-, and long-term goals?
• What other stakeholders/actors can you work with to
achieve these goals?
• What steps can your team take to reach these goals…
• In the next 6 months?
• Year?
• Five years?
• Ten years?
• Discuss roles and responsibilities – who needs to lead on
which pieces of this action plan? What support is needed
from other ministries/organizations?
Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam
Day 3 Survey
Results-Based
Carbon & Climate
Finance Training
Hanoi, Vietnam

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Concepts and Opportunities

Climate Finance Levels Must Rise

Source: IPCC 2022 - Working Group III (Mitigation of Climate Change)

MDB Climate Finance is Only a Small Part of the Whole Picture

Current annual MDB climate finance with mobilized private

Understanding Different Types of Climate Finance

International Public Climate Finance Other Climate Finance

Dedicated Climate Development Private Finance Local Government Carbon Markets

Carbon Pricing Instruments

Source: Allied Crowds, 2020

Types of Carbon Pricing Instruments to Support Decarbonization

© 2021 International Bank for Reconstruction and Development/The World Bank

Voluntary Carbon Market has Grown in Recent Years

Commitment to NGFS scenario

TSVCM survey NGFS “immediate action”

Compliance Markets Under Article 6 also Expected to Grow

Compliance markets linked

20+ Years of World Bank Experience in RBCF

Evolution of the World Bank’s Work in

Concepts and Opportunities

Emission Reductions (“Carbon”) Credits Have Different Values and Prices

Voluntary Carbon Markets Compliance Carbon Market

Demand in VCM is Driven by Companies Committing to Climate Action

All brands net-zero Carbon neutral by 2030

Carbon neutral by 2050.

Carbon neutral by 2030 by

Monthly Volume Weighted Average VER Price – by project type (USD/tCO2e)

Concepts and Opportunities

Coordinated with MONRE & other

Vietnam has Benefited from Carbon Market and RBC/CF

Source: Allied Crowds, 2020

Vietnam has been increasingly engaged in VCM transactions in the last

(19%), and energy efficiency (18%) projects

1,15 mil >10,3mil

Average emission reduction added by new projects each year (mtCO2e)

Total number of projects stating their crediting period each year

Concepts and Opportunities

Fully Unlocking RB/CF Opportunities for

Meet NDC Raise

Enhanced access to RBCF

Seven Key Factors Influencing Vietnam’s RBC/CF Opportunities:

Sector-specific factors Cross-cutting factors

Economic Impact Internalization of macroeconomic impacts of emission reductions credits

Financial Cost competitiveness of credits across sectors/types of policy interventions

Market Options Quality, credibility of emission reductions credits

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Vietnam Low Carbon Rice Sector Transformation

2. Inorganic fertilizer use: 22 - 50%

Capital costs $1.4 bn $40 bn $67 mn $937 per e-motorbike

Energy savings 142%* for individual driver

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Review of Agenda and

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2:45 - 3:00 pm BREAK

4:00 - 4:30 pm Summary and Closing Remarks