07:09, 12/01/2024
Recently , at the conference to review the work of 2023 and deploy the plan for 2024 of the Ministry of Agriculture and Rural Development (MARD), there was a very remarkable piece of information, which was that for the first time, Vietnam sold 10.3 million forest carbon credits, earning 1,200 billion VND.
From "vague concepts" to "cash on delivery" has become an important milestone, promoting a new way of thinking about development for localities, especially for provinces with forest advantages like Dak Lak.
“Forest carbon credits” are not a new concept. In February 2020, the Ministry of Agriculture and Rural Development and the World Bank (WB) signed the “Agreement on Emission Reduction in the North Central Region” for the period 2018 - 2024.
Under this agreement, Vietnam will transfer the emission reduction of 10.3 million tons of CO2 in the North Central region (including 6 provinces of Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri and Thua Thien - Hue) to the Forest Carbon Partnership Fund through the World Bank, with a transfer price of 5 USD/ton, equivalent to 51.5 million USD, or about 1,250 billion VND.
The above amount has been allocated to relevant localities to pay forest owners, commune-level People's Committees, organizations assigned with the responsibility of managing natural forests and other groups with activities related to developing and reducing deforestation and forest degradation, increasing income and improving livelihoods for people working in the forest.
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| Participating in the forest carbon credit buying and selling market helps localities have more financial resources for forest management and protection. Photo: Thuan Nguyen |
According to research, the nature of the above agreement is not necessarily market-oriented. This is a cooperation agreement to support Vietnam in protecting and developing forests and reducing greenhouse gas emissions. Instead of providing direct funding, this agreement requires Vietnam to commit to protecting and developing forests and the amount of carbon absorption in the forest area that the WB has "purchased".
However, “carbon credits” are tradable certificates that represent the right to emit a certain amount of CO2 or another greenhouse gas equivalent to CO2. Forest owners can convert forest area into CO2 absorption, into carbon credits, and can sell these credits.
Therefore, in the near future, a real forest carbon credit market will be formed to supply industries and countries with large greenhouse gas emissions exceeding the permitted quota (according to the roadmap, by 2025, Vietnam will establish a carbon trading floor).
In particular, the demand for carbon credits will certainly increase sharply in the coming time when production capacity must increase to meet consumption demand but the market increasingly requires products that do not impact the environment.
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| By keeping forests well, Dak Lak can reap huge profits from selling carbon credits. Photo courtesy of Yok Don National Park |
Thus, participating in the forest carbon credit buying and selling market not only helps forest owners and people who directly protect forests have more income; localities have more financial resources to serve the work of forest management, protection, and improving the quality of forest ecosystems, but also affects the green production thinking of businesses.
Currently, Vietnam plans to transfer 5.15 million forest carbon credits in the Central Highlands and South Central regions in the period of 2022 - 2026 at a unit price of 10 USD/ton of CO2. If this transfer is successful, just by keeping the forests well, localities in these two regions will have a significant source of profit to invest in sustainable development.
Particularly for Dak Lak, not only does it have a large potential from forests, but also renewable energy sectors such as wind power, solar power, energy conversion projects, waste collection and recycling, agriculture, forestry, etc. are all sectors that can benefit from selling carbon credits. Therefore, the locality needs to have a suitable development strategy as soon as possible to take advantage of its advantages from a multi-purpose revenue source such as carbon credits.
Jiangnan
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