Tóm tắt tiếng anh: Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam

Tóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt NamTóm tắt tiếng anh:Chính sách tài chính hướng tới nền kinh tế xanh: kinh nghiệm quốc tế và bài học cho Việt Nam

MINISTRY 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

The 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

1 Rationale of the study

Most countries, from developed to developing countries, are graduallymaking a transition to a green economy, aiming to restore and conserveecosystems, and minimize the impact of climate change In Vietnam, after 30years of rapid and inclusive growth, Vietnam's position has gradually improved.However, this growth drags on According to the use of labor, natural resourcesand capital leads to low energy and resource efficiency in practice, as well asincreasing levels of air pollution, water and soil pollution, continuouslyincreasing increase in greenhouse gas 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

is still lacking Therefore, Vietnam needs to make some adjustments financialpolicy to gradually green the economy

Therefore, it is really necessary to study the experiences of other countries

in applying financial policies towards green economy Therefore, the authorchooses the topic "Financial policy towards a green economy: Internationalexperiences and lessons for Vietnam" in order to give an overview of greeneconomy and experiences of other countries in the use of financial policiestowards green economy On the basis of analyzing the actual situation ofimplementing the green economy in Vietnam, the thesis points out difficultiesand advantages of Vietnam in developing green economy Finally, there aresolution proposals on financial policies to accelerate Vietnam’s green economyeffectively

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 financialpolicies towards green economy for Vietnam

3 Literature review

Financial policy is considered to be the most effective tool to implementthe principle of “polluter pays” Even so, financial policy towards a greeneconomy still faces some obstacles such as lack of political will; limitedtransparency; lack of knowledge, information, data and awareness; oppositionfrom 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, industryand agriculture From there, the impact is back on the economy (Cottrel andFalcão, 2018)

3

Besides revenue and expenditure policies towards a green economy, otherfinancial policies (green credit, green securities, carbon credit market ) havealso been widely used by countries China is considered as one of the countriesthat has made 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 anybusiness or organization that protects ecology and builds and develops, use newenergy, or engage 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

is assessed as having a positive impact on environmental protection: i) Solvingenvironmental problems; (ii) Raising awareness of environmental protection; (iii)These tax revenues contribute to increase state budget revenue (Nguyen Thi ThanhHoai, 2014)

4 Research objects and scope

Research scope

Scope of content: Tax policies (resource tax, environmental protectiontax, corporate income tax and excise tax policy), spending and other financialpolicies (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 agreen 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

7 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 Vietnam

8 Contribution of the thesis

In term of practice, the thesis has researched the international experience

of some countries such as South Korea, Japan and China in using financial

policies 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

Lessons and Solutions

Spending policy

Current status of financial policty towards green economy in Vietnam

Other financial policy

On the basis of clarifying the legal and practical aspects of research, thethesis has proposed a number of solutions to improve the current financialpolicies, and at the same time, add a carbon tax to the tax system in order tocontribute to better 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 Vietnam Chapter 4: Lessons for Vietnam and measures to improve financial policies

towards green economy in Vietnam

CHAPTER 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

of the 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 gasemissions and 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)are related 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, informationpolicy, 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

to the regulation, supervision and supervision of the financial and paymentsystems, including markets and institutions, to promote stability financialperformance, market efficiency and customer-asset and consumer protection”.For Vietnam, the scope of national financial policy covers public finance,corporate finance, financial markets, and household or residential finance

1.2.2 Role of financial policy

First, financial policy is theoretically a tool to overcome market failuresand effectively allocate resources in the economy through government spendingand revenue collection

Second, financial policy functions as a tool to distribute and redistributegross national product, creating a social stability to create a stable environmentfor investment and growth

Third, financial policy is aimed at growth and developmentorientation Fourth, financial policy can be applied to stabilize themacro-economy

1.3 Overview of financial policy towards green economy

1.4.1 Parts of financial policy towards green economy

a State financial policy

State financial policy in the green economy is a government intervention

in the 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

or transitioning to the green economy such as taxes, fees, charges, credits ,budget expenditure for direct or indirect support, price subsidies, pricecompensation, credit guarantee funds, regulations on financial management incapital mobilization of enterprises in order to support and develop enterprises

to transform change economic model to green economic model operation

c Financial market development policy

The green economy could become a key driver of value creation forinvestors, banks and other financial services companies Therefore, the financialmarket development policy in the green economy includes the policy ofdeveloping the equity and debt capital markets, the private investment fund, theventure capital and early stage investment, and the development of the bank andinsurance with the goal of Sustainable Development

1.4.2 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,creating economic restructuring towards low-consumption production industriesand 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-friendlyeconomic activity while taxing economic activity that harms the environment; (2)Policy on spending budget for the purpose of environmental protection,encouraging environmentally 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

on many 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

1.5 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

Analytical 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

in the green economy

Classification and systematization method: using classification andsystematization to classify financial policies according to the goals to beachieved to build 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 tobase on the nature, characteristics and role of financial policies and thecharacteristics of the green economy to make judgments about the link betweenfiscal policy and green 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, energytax; 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 thethesis to estimate the impact of financial policies on the green economy inVietnam is the usual least squares model Where the dependent variable is CO2emissions, the independent variable is economic growth, environmentalprotection tax, trade openness, population and energy consumption

CHAPTER 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

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,hinder business innovation, and thus affect the environment affect thecompetitiveness of enterprises In addition, Japan's carbon tax has also beencriticized, saying that the revenue from the carbon tax is not transparent and lacksclarity, especially when energy prices increase rapidly after the closure offactories nuclear power plant after 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 offsettingthe financial burden that low-income households have to bear with theintroduction of a carbon tax

and 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 onEnvironmental Protection Tax) and the document guiding the implementation ofthis Law is the Charter for the Implementation of the Law on EnvironmentalProtection Tax China imposes emissions taxes on 44 types of emissions with taxrates ranging from 1.2 yuan 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%

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 taxpolicies has improved environmental quality by effectively addressing the mainsources of environmental 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 goodair quality reached 79.3%

Some problems exist

The impact of tax policies is still limited in terms of management objectsand imbalances between regions, causing economic losses and unfair distribution

of environmental benefits

Lesson learned

In order for the implementation of tax policies towards China's green economy to

be effective, it is necessary to apply a number of other financial policies tominimize the negative impacts that this tax policy creates Qianyang Tu and YingWang, 2021)

2.1.3 Experiences of South Korea

a Tax on energy

Tax rates for traffic energy tax are flexibly applied within the range of +/- 30% of the basic tax rate in order to flexibly respond to fluctuations in oil prices

b Emission fee

Korea has introduced a fee for emissions since 1983 (according to theClean Air Conservation Law), according to which the objects to be chargedinclude suspended dust, SO2, NH3 Until June 1996, the fee be applied withemissions exceeding the allowable standards From July 1996, the fee applies toall emissions (even those within the permissible standards)

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

f In order to encourage scientific and technological activities to protectthe environment towards a green economy, South Korea allows businesses todeduct CIT for pollution management equipment at the rate of 3% for importedequipment and 10% for domestically produced equipment; allows rapiddepreciation for new technology at 30% for imported equipment and 50% fordomestically produced equipment

g South Korea’s tax revenue towards green economy to GDP reached14.1% in 2014, higher than the average of 9.1% in OECD countries and ranked4th among OECD countries OECD countries have a high ratio of revenue fromthis tax

h In terms of environment, the proportion of urban population exposed toair pollution has gradually decreased, especially in the 7 major cities Greenspace in urban areas has increased

i The trend of energy consumption remains stable compared to pre-taxbut household energy consumption in Korea is very low, below the OECDaverage (only about 0.76 TOE/day/person)

j Some problems exist

k Taxes towards South Korea's green economy are quite complicated, especiallythe energy tax This stems from the fact that the concept of “green” in theeconomy is ignored, or in other words, it is the next choice for marketdevelopment in the direction of prioritizing economics over the environment

o Outcomes: Thanks to expenditures towards the green economy,technology made in Japan is encouraged to switch from the traditional mode ofenvironmental pollution control to non-traditional technology related to the greeneconomy

2.2.2 Experiences of China

p In the period 2016-2020, China has spent 78.3 billion yuan on the fund

of preventing and controlling water pollution to develop water pollutionprevention and control in key river basins, protect the ecological environment ofwater sources, protect the groundwater environment and overcome pollution

q Outcomes: China's green economy expenditures have a positive impact

on environmental performance (Lin 2010), but their effectiveness is relativelylow from the point of view of service performance of the fund (He et al., 2011).The effectiveness of budget expenditures also varies across regions and provinces(Jin et al., 2011)

2.2.3 Experiences of South Korea

r After the enactment of a law promoting the development of alternativeenergy in 1987, Korea spent a budget of $4.8 billion on the new and renewableenergy industry