Green Fiscal Policy and Its Role in Promoting Sustainable Growth in Vietnam

Abstract

Amid the context of global climate change and commitments to sustainable development, green fiscal policy has attracted increasing attention in Vietnam. Research findings indicate that Vietnam’s average GDP growth rate during 2020–2024 fluctuated around 6–7% annually, yet greenhouse gas emissions have continued to rise significantly. Vietnam’s current environmental tax policies and clean energy subsidies remain in their early stage: the environmental protection tax is still low compared to its potential; there is no carbon tax yet, and green spending mechanisms are limited. Although some initiatives, such as green bond issuance and the development of green credit, have been introduced, the legal system and policy framework still lack synchronization and comprehensiveness. This paper proposes strengthening green fiscal tools and integrating green fiscal policy into the budgetary process to promote sustainable growth in Vietnam.