Promoting green finance through carbon market development in Vietnam

Abstract

At the 26th United Nations Climate Change Conference (COP26), Vietnam not only made a strong commitment to addressing climate change but also committed to reaching net-zero emissions by 2050. This target can be met only through the substantial deployment of finance for projects aimed at decreasing greenhouse gas emissions. Previous studies on carbon market development in Vietnam has mainly discussed general market-building solutions without addressing the issue of the connection between the carbon market and green finance, and analyzing the policies to promote green finance through carbon market development. By systematizing theoretical foundations, synthesizing empirical research findings, and assessing the current state of this relationship in Vietnam, this paper proposes several recommendations to improve the legal framework for promoting green finance through the carbon market, enhance greenhouse gas inventory and carbon pricing capacity, increase the participation of small and medium-sized enterprises, and strengthen regional and international cooperation in carbon market development.