Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam.
Trang 1MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY
-SUMMARY OF PHD THESIS
FINANCIAL POLICIES TOWARD GREEN ECONOMY: INTERNATIONAL
EXPERIENCES AND LESSONS FOR VIETNAM
Major: International Economics
Code: 9310106
TRAN THI QUYNH HOA
Hanoi – 2021
Trang 2The thesis is completed at: Foreign Trade University, 91 Chua Lang, Dong Da, Hanoi
Scientific supervisors: Assoc., Dr Tu Thuy Anh
Reviewer 1:
Reviewer 2:
Reviewer 3:
The thesis will be defended at Doctoral Thesis Committee for University Level Location:
…
Time: …
After the publication, the thesis will be stored at National Library of Vietnam and Foreign Trade University’s Library
Trang 3INTRODUCTION
Most countries, from developed to developing countries, are graduallymaking a transition to a green economy, aiming to restore and conserve ecosystems,and minimize the impact of climate change In Vietnam, after 30 years of rapid andinclusive growth, Vietnam's position has gradually improved However, this growthdrags on According to the use of labor, natural resources and capital leads to lowenergy and resource efficiency in practice, as well as increasing levels of airpollution, water and soil pollution, continuously increasing increase in greenhousegas emissions per unit of GDP
Currently, Vietnam has issued many financial policies towards a greeneconomy, however, in the process of implementation, these policies have alsorevealed some limitations, such as tax rates and tax rates Inappropriate activitiesthat cause environmental pollution, sanctions for acts causing environmentalpollution are not strong enough, the list of taxable environmental protection taxes isstill lacking Therefore, Vietnam needs to make some adjustments financial policy
to gradually green the economy
Therefore, it is really necessary to study the experiences of other countries inapplying financial policies towards green economy Therefore, the author choosesthe topic "Financial policy towards a green economy: International experiences andlessons for Vietnam" in order to give an overview of green economy andexperiences of other countries in the use of financial policies towards greeneconomy On the basis of analyzing the actual situation of implementing the greeneconomy in Vietnam, the thesis points out difficulties and advantages of Vietnam indeveloping green economy Finally, there are solution proposals on financialpolicies to accelerate Vietnam’s green economy effectively
2 Objectives of the thesis
The thesis aims at studying international experiences on financial policiestowards green economy, assessing the current situation of policies towards greeneconomy in Vietnam, drawing lessons and proposing solutions on financial policiestowards green economy for Vietnam
3 Literature review
Financial policy is considered to be the most effective tool to implement theprinciple of “polluter pays” Even so, financial policy towards a green economy stillfaces some obstacles such as lack of political will; limited transparency; lack ofknowledge, information, data and awareness; opposition from interest groups; lack
of human and technical capacity… (Withana, 2013)
The spending policy towards green economy has been used in manycountries Spending on the green economy allows the cost of negativeenvironmental externalities to increase in public income and expenditure, such asenvironmental taxes, public spending or harmful subsidies reform (OECD, 2020)
Revenues from environmental protection tax are set aside for a fund orallocated to specific goals, for example to projects related to sustainabledevelopment such as energy, transport, construction, tourism, fisheries, industry andagriculture From there, the impact is back on the economy (Cottrel and Falcão,2018)
Trang 4Besides revenue and expenditure policies towards a green economy, otherfinancial policies (green credit, green securities, carbon credit market ) have alsobeen widely used by countries China is considered as one of the countries that hasmade significant policy changes towards promoting green credit (Wang et al.,2019).
Green Credit provides low-interest support and implementation loans tothose who research and manufacture pollution control equipment and any business
or organization that protects ecology and builds and develops, use new energy, orengage in green production, ecological agriculture (Wien and Botang, 2012)
The issuance of green securities will help create conditions to attract largecapital sources in the society to support the implementation of environmentallyfriendly projects, meet social responsibility goals, and serve the developmentsustainability (Barnes, 2019)
Among the financial policies towards a green economy in Vietnam, tax policy isassessed as having a positive impact on environmental protection: i) Solvingenvironmental problems; (ii) Raising awareness of environmental protection; (iii) Thesetax revenues contribute to increase state budget revenue (Nguyen Thi Thanh Hoai,2014)
4 Research objects and scope
Research scope
Scope of content: Tax policies (resource tax, environmental protection tax,corporate income tax and excise tax policy), spending and other financial policies(green credits, green bonds and carbon certificates)
In terms of assessing impacts of environmental protection tax on CO2emissions, limitations in data of Vietnam do not allow the analysis of variouspolicies Therefore, the thesis uses only tax on environmental protection in theeconometric estimation
Scope of time: The thesis focuses on researching and evaluating financialpolicies and impacts of financial policies on Vietnam’s green economy in 2011-
2020 and proposes major solutions to implement until 2030
Spatial scope: The thesis studies experiences of China, Japan, and SouthKorea on financial policy Regarding green bonds and carbon credit market, thethesis studies more about the experience of India and EU, respectively
5 Research question:
Firstly, what role does financial policy play in the green economy?
Second, what are the contents of financial policies in countries around the world aimed at a green economy and what can Vietnam learn?
Third, what results have been achieved in Vietnam's fiscal policy towards a green economy? What contents need to be revised, supplemented and perfected?
Fourth, the solution to improve financial policy in Vietnam towards a green economy?
6 Analytical framework of the thesis
To clarify the research contents, the thesis is based on the following
analytical framework
Trang 57 Research methodology
The thesis is conducted by qualitative and quantitative research using bothprimary and secondary data Qualitative and quantitative research based on
secondary data is carried out in the office, which includes methods of analysis,
comparison, synthesis of theoretical frameworks on green economy, financial policy
towards green economy, experiences of financial policies towards green economy,
characteristics of financial policies towards a green economy in Vietnam Then, the
author uses qualitative and quantitative research based on primary data with the
ordinary least squares to estimate the impact of the tax policy on CO2 emissions in
toward a green economy, thereby drawing lessons for Vietnam The thesis has also
quantified the impact of environmental protection tax on CO2 emissions in
Vietnam The thesis also pointed out the results achieved by financial policies
towards a green economy in Vietnam through economic, social and environmental
channels, and also pointed out the limitations in some policies, the reasons for these
limitations
Experiences in other financial policy
Experiences in revenue policies
Experiences in spending policies
International experiences
Other financial policy
Current status of financial policty towards green economy in Vietnam
Spending policy
Lessons and Solutions
Trang 6On the basis of clarifying the legal and practical aspects of research, thethesis has proposed a number of solutions to improve the current financial policies,and at the same time, add a carbon tax to the tax system in order to contribute tobetter realizing the goal of Vietnam's green economy.
9 Structure of the thesis
Apart from the introduction and conclusion, the thesis is organized into 4 chapters including:
Chapter 1: Overview of green economy and financial policy towards green economy
Chapter 2: International experiences in financial policies towards green economy
Chapter 3: Assessment of financial policy towards green economy in VietnamChapter 4: Lessons for Vietnam and measures to improve financial policiestowards green economy in Vietnam
Trang 7CHAPTER 1 OVERVIEW OF GREEN ECONOMY AND FINANCIAL
POLICY TOWARDS GREEN ECONOMY
1.1 Overview of green economy
1.1.1 Concept and characteristics of green economy
According to the Green Economy Coalition - 2012 cited in the UnitedNation's A guidebook to the Green Economy study: “A green economy is one thatcreates a better quality of life for all people humans within the ecological limits ofthe earth” (United Nations, 2012)
Some basic features of a green economy are as follows:
Firstly, a green economy is one that aims to reduce greenhouse gas emissionsand respond to climate change
Second, a green economy is an economy that exploits and uses resourcesefficiently
Third, a green economy is an economy that applies advanced andenvironmentally friendly technologies
1.1.2 The goal of moving towards green economy
According to UN (2015), 12 of 17 Sustainable Development Goals (SDGs) arerelated to green economy
1.1.3 The role of green economy
Green economy plays an important role in sustainable development
Green economy can help alleviate poverty
Green economy can create jobs in new industries and fields such asrenewable energy, organic agriculture, public transport, recycling, etc
Green economy protects biodiversity
1.1.4 Policy system towards a green economy
UNDESA has proposed six policies towards a green economy: Internalpolicy, incentive policy, institutional policy, investment policy, information policy,and other policy
1.2 Overview of financial policy
1.2.1 Concept of financial policy
According to the OECD (2002), “Financial policy refers to policies related tothe regulation, supervision and supervision of the financial and payment systems,including markets and institutions, to promote stability financial performance,market efficiency and customer-asset and consumer protection” For Vietnam, thescope of national financial policy covers public finance, corporate finance, financialmarkets, and household or residential finance
1.2.2 Role of financial policy
First, financial policy is theoretically a tool to overcome market failures andeffectively allocate resources in the economy through government spending andrevenue collection
Second, financial policy functions as a tool to distribute and redistributegross national product, creating a social stability to create a stable environment forinvestment and growth
Third, financial policy is aimed at growth and development orientation.Fourth, financial policy can be applied to stabilize the macro-economy
1.3 Overview of financial policy towards green economy
Trang 81.3.1 Parts of financial policy towards green economy
a State financial policy
State financial policy in the green economy is a government intervention inthe tax system and government spending to achieve the goals related to thetransformation of the economic model to a green economic model
b Corporate finance policy
In the green economy, corporate finance policy is understood as theregulations on mobilizing resources for business activities in the green economy ortransitioning to the green economy such as taxes, fees, charges, credits , budgetexpenditure for direct or indirect support, price subsidies, price compensation, creditguarantee funds, regulations on financial management in capital mobilization ofenterprises in order to support and develop enterprises to transform changeeconomic model to green economic model operation
c Financial market development policy
The green economy could become a key driver of value creation for investors,banks and other financial services companies Therefore, the financial marketdevelopment policy in the green economy includes the policy of developing theequity and debt capital markets, the private investment fund, the venture capital andearly stage investment, and the development of the bank and insurance with the goal
of Sustainable Development
1.3.2 Effects of fiscal policy towards a green economy
The influence of financial policy on the green economy is considered fromthe following angles:
In economic terms, financial policies aimed at a green economy areimplemented to encourage investment in the premise for a green economy, creatingeconomic restructuring towards low-consumption production industries and low-emission industries
In terms of environment, financial policies towards a green economy havethe following impacts: (1) Tax and fee policies aim to influence production andconsumption behavior through tax incentives for activities eco-friendly economicactivity while taxing economic activity that harms the environment; (2) Policy onspending budget for the purpose of environmental protection, encouragingenvironmentally friendly economic activities
Socially, the impact of financial policy on the green economy is throughincreasing human health due to an improved environment and indirectly by creating
or releasing resources for poverty programs or pro-poor investments.
However, the influence of financial policy on the green economy depends onmany other factors such as: policy formulation process; qualifications of thecontingent of cadres and civil servants participating in policy making; methods ofreceiving information for policy formulation; socio-economic developmentstrategies of countries in each period; the process of international economicintegration of countries
1.4 Research method of financial policy towards a green economy
Group of theoretical research methods: A group of methods of collectingscientific information on the basis of studying existing documents and documentsand by logical thinking manipulations to draw necessary scientific conclusions
Trang 9Analytical and synthetic methods: the PhD student conducts research onvarious documents related to financial policy, to the green economy by analyzingthe content of each financial policy to gain insight on the role of financial policy inthe green economy.
Classification and systematization method: using classification andsystematization to classify financial policies according to the goals to be achieved tobuild a green economy
Research method: study the experiences of countries on financial policiestowards a green economy
Case study method: through assessing the impact of environmentalprotection tax on CO2 emissions of Vietnam
Group of practical research methods: In the thesis, practical researchmethods are used including: qualitative research methods and quantitativeresearch methods
Qualitative research method: This is the method that the thesis uses to base
on the nature, characteristics and role of financial policies and the characteristics ofthe green economy to make judgments about the link between fiscal policy andgreen economy
Quantitative research methods
Based on theoretical research and literature review, a model to assess theimpact of financial policies on the green economy is built as follows:
LnCO2i = b0 + b1CSTCi + b2Xi + εi
in which, CO2 is the dependent variable – CO2 emissions
CSTC is financial policies such as carbon tax, environmental tax, energy tax;
Xi are the determinants of CO2 emissions (control variable), including: Economic
growth; Energy consumption; Population; Trade openness;Environmental Protection tax
Regarding estimation methods, there are many methods to estimate theimpact of fiscal policy on CO2 emissions such as Granger causality and ARDL(Menyah, 2010); GMM regression method (Omri, 2013); Johansen Fissher, co-affiliated Pedroni, FMOLS and dynamic OLSD (Rehmand and Rasid, 2017);FMOLS and DOLS (Sevgi and Betul, 2019)
On that basis, along with data limitations, the NCS model used in the thesis
to estimate the impact of financial policies on the green economy in Vietnam is theusual least squares model Where the dependent variable is CO2 emissions, theindependent variable is economic growth, environmental protection tax, tradeopenness, population and energy consumption
Trang 10CHAPTER 2 INTERNATIONAL EXPERIENCES IN FINANCIAL POLICIES TOWARDS
GREEN ECONOMY
2.1 International experiences in taxes policies towards a green economy
2.1.1 Experiences of Japan
2.1.1.1 Japan's revenue policies towards green economy
a Carbon tax policy
Carbon tax is levied on the import or extraction of fossil fuels – crude oil,natural gas and coal Carbon tax is applied differently to various kinds of fuels anddepends on the CO2 content In the first stage, the tax is calculated at 1/3 of 289yen/ton CO2 and then gradually increased over the course of 5 years, reaching a fulltax rate of 289 yen/ton CO2 in April 2016
b Energy tax policy
To limit the use of fossil energy and promote the use of renewable energy,Japan launched a tax project called Feed-in-taiffs on July 1, 2012
2.1.1.2 Outcomes and lessons learned
In terms of economic effects, Japan's carbon tax policy has helped increasetax revenue, from $500 million in 2012 to $2.18 billion in 2015
Environmentally, a carbon tax has an effect on reducing greenhouse gasemissions, but the impact is still small (Lee et al., 2012)
The introduction of an energy tax has encouraged renewable energycompanies to invest in Japan
Some problems exist
The application of a carbon tax in Japan faces challenges from businessobjections, when businesses believe that carbon taxes increase energy prices, hinderbusiness innovation, and thus affect the environment affect the competitiveness ofenterprises In addition, Japan's carbon tax has also been criticized, saying that therevenue from the carbon tax is not transparent and lacks clarity, especially whenenergy prices increase rapidly after the closure of factories nuclear power plantafter the disaster in 2011 (Carl and Fedor, 2016)
Lesson learned
The introduction of a carbon tax with a low tax rate does not have muchimpact on the green economy Therefore, it is necessary to have a plan to increasethe carbon tax specifically, for a long enough time for businesses to adjust theirbusiness strategies towards a green economy
To achieve the goal of a green economy, it is necessary to simultaneouslyapply tax policies such as carbon tax, energy tax, etc
The proceeds from the carbon tax should be partly dedicated to offsetting thefinancial burden that low-income households have to bear with the introduction of acarbon tax
Trang 11and royalties tax rates are specified in the “Tax rate table section”.
b Emission tax
Currently, China's emission-related tax collection policy is implemented inaccordance with the Law on Environmental Protection Tax (Law on EnvironmentalProtection Tax) and the document guiding the implementation of this Law is theCharter for the Implementation of the Law on Environmental Protection Tax Chinaimposes emissions taxes on 44 types of emissions with tax rates ranging from 1.2yuan to 12 yuan
c Tax on motor vehicles
China has imposed a tax on the purchase/sale of motor vehicles, wherebyindividuals and organizations buy cars, electric vehicles, trailers and motorcycleswith an engine capacity of over 150cc in the territory China will be subject to amotor vehicle tax, with a tax rate of 10%
2.1.2.2 Outcomes and lessons learned
Economically, the policy of natural resources tax and emission tax hascontributed to encouraging the production and consumption of solar electricity
- In terms of environment: China's implementation of the above tax policieshas improved environmental quality by effectively addressing the main sources ofenvironmental pollution (Lijie Wang and Jianjun Lu, 2019)
As for air quality, the number of provincial cities meeting air qualitystandards in 2018 increased by 6.5% compared to 2017, the proportion of good airquality reached 79.3%
Some problems exist
The impact of tax policies is still limited in terms of management objects andimbalances between regions, causing economic losses and unfair distribution ofenvironmental benefits
Lesson learned
In order for the implementation of tax policies towards China's green economy to beeffective, it is necessary to apply a number of other financial policies to minimizethe negative impacts that this tax policy creates Qianyang Tu and Ying Wang,2021)
2.1.3 Experiences of South Korea
2.1.3.1 South Korea's revenue policies towards green economy
c Tax on fossil fuels
Fossil fuel tax is applied at absolute rates with 475 KRW/liter on gasolineand similar alternative oil, and 340 KRW/litre on diesel and similar alternative oil
d CIT incentives for businesses