Carbon Tax or Carbon Trade?What Approach to use in Vietnam?

My StoryMy Country

My Fellowship

My Learning

My Take-away

✓Vietnam & Threat of Climate Change✓PFES policy & success in Vietnam

✓Carbon PFES & Forest Management✓Networking & Field Studying✓New Concepts & Perceptions

✓Carbon Tax & Credit✓Market Mechanism & CSR✓Capitalism & Community Initiatives✓Carbon Policy & Politics

✓Implication & Policy Action

Vietnamthe Socialist Republic

Located in the Tropics

Half a Globe away

VietnamMost Vulnerable to CC

Low-Elevation Coastal Zone

Water Scarcity

Action to Keep Forest

Payments for Forest Environmental Services (P-FES)

a mechanism for forest conservation & preservation

Vietnam - Most Vulnerable to CC

P-FES in Vietnam

• Hydro-Power Plants• Water Utilities• Fish Farms• Tourist Firms

Vietnam Forest Fund(VNFF)

Forest Owners

Payers Fund Management Receivers

Origin and Destination of Funds

P-FES in Vietnam

• P-FES revenue = US$90mil/year

• 45% of the country’s forest areas (6 mil ha) protected

However

• Only watershed forest conservation

• Only water-related, no Carbon-PFES

International Experiences needed

Framework

Payers Fund Management Receivers

• how funds flow• what are the funds for

• who benefits from them

• Drivers• Power shift• Impact

Origin and Destination of Funds

WFI 2018 Fellowship● PSU ● OSU College of Forestry● OSU Department of Forest Ecosystems and Society ● OSU Forests and Climate Change Graduate Program ● Center of Expertise Smart Sustainable Cities ● Citizen Climate Education ● Oregon Department of Forestry ● Pinchot Institute ● Bureau of

Planning and Sustainability City of Portland ● Heron Timber ● Oregon Forest Resources Institute ● Forest Service Pacific Northwest Research Station ● Portland Park & Recreation ●Oregon Forest & Industries Council ● MC Ranch ● Northwest Hardwood NWH ● West Pacific

International ● Society of American Foresters SAF ● Trillium Pacific Millwork ● Star Fire ●Green Energy Fund ● Hoyt Arboretum● Port Blackely ● Finite Carbon ● Forest Seedling

Network FSN ● Te Papa Tipu Innovation Park ● Solid Ground Consulting ● USDA Forest Service ● IDG● Washington State Department of Natural Resources● Vanport Manufacturing Inc ●National Indian Carbon Coalition ● Natural Resources Science and Management Graduate

Program University of Minnesota ● Timberland Appraisal ● Oregon China Sister State Relations Council ● Vietnam Oregon Initiatives VOI ● Forest Park ● PMW Research Station ●

California Forest and Climate Policy Council ● Washington Park ● Columbia River Gorge Forest Service ● Freres Forest Products ● Zena Forest Products ● Portland’s Heritage Tree Committee

● Logger Association ● Hampton Lumbers ● The Joinery ● Weyerhaeuser / Mt St Helens Monument ● Native American Timber Symposium ● Northwest Forest Plan Science Synthesis

– Science Forum ● HJ Andrews Experimental Forest ● Softwood Export Council ● Bull Run Watershed ● Columbia Vista Corporation ● Orick Redwood National Park ● Eagle Fern Park ●

West Multnomah Soil & Water Conservation District

WFI 2018 Fellowship

Several U.S. Examples on Carbon Policy

and Related Models

Cap-and-Trade

Carbon Fee and Dividend

Carbon Tax

Water Quality Trade

1631 Initiative (WA)

Conservation Easement

Clean Energy Fund (PDX)

Example 1

California Cap and Trade

WFI 2018 Fellowship

Example 1: California Cap and Trade

Idea: - Price carbon- Use market mechanisms to reward companies that find ways to reduce their emissions

Complying Entities: Large emitters >25,000 MT/yr CO2eConcept: -“Permit” requirement for every MT CO2ePermits: -“Allowances” and “Offsets” (4% to 8%)

Covered Entities~450~

•Refineries•Power Plants• Large Factories

Greenhouse Gas Reduction Fund

California Air Resources Board (CARB) strategic reserve

Off-set Projects~2bl$~

• Forestry (incl. urban forestry)• Dairy (methane digesters)• Ozone depleting reduction• Mine methane capture • Rice cultivation

Emitters Fund Management Receivers

Origin and Destination of Funds

Example 1: California Cap and Trade•Revenue must be used to reduce GHG emissions•25% of the revenue goes to disadvantaged communities

Entities invest to reduce carbon

emissions

Example 2

Carbon Tax

WFI 2018 Fellowship

Example 3: Carbon Tax

Emitters Fund Management Receivers

Origin and Destination of Funds

Tax carbon by tCO2-e

Carbon Tax

Emitters Fund Management Receivers

Origin and Destination of Funds

“A tax on carbon emissions will unleash a wave of innovation to develop technologies, lower the costs of clean energy and create jobs as we and other nations

develop new energy products and infrastructure”

Henry M. PaulsonTreasury Secretary under President George W. Bush

Example 3Portland Clean Energy Fund

formally the "Portland Clean Energy Community Benefits Initiative 2018"

WFI 2018 Fellowship

Example 3: Portland Clean Energy Fund

Origin and Destination of Funds

Payers Fund Management Receivers

Large retail corporations pay 1%

• > $1 billion annual national sales

• $500K annual Portland sales

• Energy efficiency upgrades• Home weatherization• Solar rooftops• Job training• Local food production• Increase green infrastructure

Clean Energy Fund

Carbon Policy MappingCap-and-Trade

Fee and Dividend

Emitters GGRF “Green” Projects

Vietnam PFES Hydro Power Plants VNFF Forest Owners

Emitters Households

Carbon Tax Emitters Government Households

Permittee Project Developer Forest OwnersWater Quality Trade

1631 Initiative

Easement

$

$

$

$

$

E

E

Clean Energy Fund Retailers CEF “Green” Projects$

Emitters Project Developer “Green” Projects

Sources Project Developer Forest Owners

$

$

E

Take-awayCarbon PricingIncentivize and impose Entities to reduce emission by:• Investing in energy efficient technology• Switching to clean energy

Fund Use• “Clean” and “Green” projects• Forest preservation and conservation• Goods/ services carbon footprint reduction

Target Sources• Large corporate emitters• Government budgets• NGOs• Corporate retail chains• “Off-set” obligations

Rationales• Include social-economic justice• Benefit communities at large• Protect the environment

$

E

Thank you!!!

Phan Manh Tuantuanpm.vietnam@gmail.com