Delegates sign an Emissions Reduction Purchase Agreement (ERPA) at a ceremony on Thursday. — VNA/VNS Photo

HÀ NỘI — The Ministry of Agriculture and Rural Development (MARD) and the World Bank (WB) - the trustee agency of the Forest Carbon Partnership Facility (FCPF) - signed an Emissions Reduction Purchase Agreement (ERPA) at a ceremony on Thursday.

Under the terms, the FCPF will pay Việt Nam US$51.5 million if Việt Nam fully implements its commitments, under which the north-central and central provinces of Thanh Hoá, Nghệ An, Hà Tĩnh, Quảng Bình, Quảng Trị, and Thừa Thiên-Huế are to reduce CO2 emissions by 10.3 million tonnes in 2018-2024.

Carolyn Turk, WB Country Director in Việt Nam, said this is a results-based payment and the basic indicators underpinning it are to reduce greenhouse gases in the provinces.

MARD must periodically report on the volume of reduced emissions after it is confirmed by an independent international agency, and will then receive the payment to invest in developing sustainable forests and forestry land.

Turk said there has never been a deal of this size in Việt Nam or in Asia-Pacific, adding that it not only creates a strategic source of finance to invest in agriculture but also represents an important contribution to achieving climate change mitigation goals in Việt Nam.

The agreement also opens up other future forms of international carbon finance, including those for the private sector, and this is only the first source of financing to be introduced in Việt Nam, she noted. 

To sign the agreement, Việt Nam had to meet high technical requirements, including the capacity to measure and report on emissions in line with international standards and the ability to distribute and pay funds to local beneficiaries, she said.

Deputy Minister of Agriculture and Rural Development Hà Công Tuấn said the payment for results-based emissions reduction is part of efforts to implement the reduction of greenhouse gas emissions in line with the Reducing Emissions from Deforestation and Forest Degradation (REDD+) international framework.

The agreement is the result of co-operation between Việt Nam, the FCPF, and the WB in joint efforts to implement the Paris Agreement on climate change, he added. 

Implementing the ERPA will create a new additional source of finance, contributing to investing in activities to reduce deforestation and forest degradation, and increase incomes for forest owners, towards a domestic and international carbon credit market, contributing to forest protection and sustainable development in the north-central and central region, Tuấn said.

Việt Nam is the fifth partner in the FCPF and the first in Asia-Pacific to sign an ERPA. 

Agreements on emission reduction are a new tool to promote sustainable land management at large scale and help connect countries with other climate finance sources. To date, committed funding for the FCPF to pay for forest emission reduction services has reached $1.3 billion.

In 2018, the FCPF recognised that Việt Nam had basically completed the preparatory phase to reduce greenhouse gas emissions in line with the REDD+ international framework, an international initiative aimed at providing financial and technical assistance for developing countries, to help reduce greenhouse gas emissions and mitigate the impact of climate change by combating deforestation and forest degradation.

Việt Nam has participated in REDD+ since 2008 and more than 45 related projects have been implemented in the country. — VNS