The CCDR series highlights priorities outlined in the Country Climate and Development Reports (CCDR) and draws connections to the Sovereign ESG data portal to help researchers, policymakers and investors track progress towards these priorities. For countries where investors' interest in sovereign sustainability financing is increasing, each post shows available ESG indicators that are relevant to the priorities identified in the CCDR and outlines success stories, challenges and recommendations in mobilizing finance.
Highlighted policy priorities
- Flood prevention in Mekong Delta highlighted by the Coastal Protection indicator
- Accelerating the clean energy transition highlighted by the CO2 emissions from Power Industry (Energy) indicator
- Air pollution reduction in Hanoi highlighted by the (national) PM2.5 mean annual air pollution indicator
Viet Nam has experienced remarkable growth over the past 30 years and is making significant strides in economic development. Now a lower middle-income economy with a GDP per capita of $4300, the country is striving to sustain its momentum and reach high-income status by 2045. However, its resource-intensive production and dependence on coal-based energy threaten long-term sustainability. Viet Nam is at a crossroads and must adopt a resilient and decarbonizing way forward.
The World Bank's CCDR report addresses Viet Nam's key challenges in balancing adaptation, mitigation and economic growth amid uncertain impacts of climate change. As one of the most climate-vulnerable countries worldwide, [1] Viet Nam faces escalating risks from extreme weather, rising temperatures, and sea level rise. Climate change is already straining the economy with potential losses reaching 12–14.5% of GDP by 2050 – if no measures are undertaken. See Viet Nam CCDR, page 18. Compounding these challenges, Viet Nam is one of the most GHG-intensive economies in East Asia, driving air pollution that threatens public health and reduces productivity.
This data story highlights three of five “priority policy packages” identified by the CCDR as requiring the most urgent public and private investments. Since the publication of the CCDR, many recommendations have been translated into national policy actions. The Viet Nam 2045 Growing Greener report (World Bank 2025) highlights recent progress and updates and expands on the analysis of the CCDR. Using Sovereign ESG Data Portal indicators, we take a data deep dive into the regional program for the Mekong Delta, an accelerated clean energy transition, and measures to reduce air pollution in the Hanoi airshed.
Data from the ESG Data Portal
Flood prevention in the Mekong Delta
The Mekong Delta in Viet Nam's Southern region plays a pivotal role in the country's agriculture, generating one-third of its agricultural GDP. This fertile region delivers 95 percent of Viet Nam's rice exports, 70 percent of its fruit production and 60 percent of exported fish. Yet, its future hangs in balance. Sea level rise by 75-100cm relative to the 1980-1999 period would expose nearly half of the delta to high-tide flooding by 2050. Saline intrusion could lead to substantial and persistent income losses and stall poverty reduction efforts in the region.
The comprehensive regional program for the Mekong Delta, a key policy package recommendation from the World Bank's CCDR, focusses on addressing critical challenges like land subsidence and saltwater intrusion. As a first step, the authorities inaugurated the Mekong Delta Region Coordination Council in 2023. Key actions recommended in the CCDR include reducing sand mining and groundwater extraction, adopting adaptive farming practices, boosting freshwater flow, promoting aquifer recharge, and restoring mangroves. The CCDR advocates revising current public funding mechanisms while leveraging innovative financing tools such as green bonds and other private sustainable investment avenues for new projects.
The indicator “Coastal protection” shows the intactness of marine and coastal habitats that provide protection against tidal surges, erosion, flooding, and storms. The graph below shows recent values for Viet Nam and its peers – lower-middle income countries in East Asia and the Pacific. Viet Nam scores 89.25 in the most recent assessment of the Ocean Health Index.
Accelerating the clean energy transition
At the UN Climate Change Conference in Glasgow (COP26), the government of Viet Nam committed to an ambitious net-zero emission pathway by 2050. Viet Nam has several reasons to decarbonize beyond contributing to global goals. For example, to combat severe air pollution associated with coal-intensive energy production and to keep export products competitive with increasing demand for low-carbon value chains.
The energy sector accounts for about 65 percent of Viet Nam's GHG emissions (Climatewatch, 2021) which highlights the importance of aligning investments in the power sector with the country's COP26 net-zero commitment. In April 2025, the authorities updated the National Power Development Plan (PDP8) with a more ambitious target of adding 73GW of solar and 28GW of wind power by 2030. The CCDR contains several policy suggestions, including improving regulatory frameworks and encouraging private sector participation to accelerate renewable energy deployment and investments into the power grid. The CCDR also recommends accelerating the implementation of energy efficiency plans through effective pricing policies such as a carbon tax or a carbon emissions trading system. Since the publication of the CCDR, the country has advanced preparations for such an Emissions Trading System which is expected to be implemented by 2028.
The indicator “Carbon dioxide (CO2) emissions from the Power Industry (Energy) (Mt CO2e)” shows that Viet Nam is the largest emitter amongst its peers, but numbers have decreased between 2019 and 2022. This trend reversal needs to be continued to meet the country's ambitious net-zero path by 2050.
Air pollution reduction in Hanoi
Hanoi faces a critical air quality challenge, with Particulate Matter (PM) 2.5 levels breaching the World Health Organization's (WHO) guidelines by at least five times for half of the year from 2018 to 2021. Projections indicate worsening conditions due to insufficient regulatory frameworks and plans to add ten new coal-fired power plants in the Northern region by 2030. A lack of policies on agricultural residue burning and fertilizer application further exacerbates pollution. The CCDR's recommendations include reducing the reliance on coal, incentivizing farmers to use less-polluting inputs and reduce waste burning, improving public transportation, and enforcing stricter motor vehicle emissions standards.
As of 2024, the problem of highly polluted air in Viet Nam, especially in Hanoi, remains relevant as ever . The city was the 8th most polluted city in the world and Viet Nam the 2nd most polluted country in the ASEAN region according to the IQAir's annual survey. IQAir , also provides a live tracking of air quality for different measurement stations in the country.
Looking at data that is available on a global level in a harmonized way, the indicator “PM2.5 air pollution mean annual exposure” on the ESG Data Portal shows air pollution in Viet Nam relative to neighboring countries in the same income group. Select other income groups on the right to see how countries in higher income groups often also have higher pollution levels.
What about Financing
Viet Nam's CCDR estimates that achieving a resilient and net-zero development pathway will require approximately 6.8 percent of GDP per year through 2040. Mobilizing private capital is essential for decarbonizing the energy sector, strengthening infrastructure, and creating low-carbon value chains. This requires greening the financial sector by scaling up green credit, advancing market-based instruments like green bonds and equities, and implementing de-risking strategies.
Financing needs and potential sources of funding,
2022-2040. Source: Adapted from World Bank CCDR Viet Nam, Figure 21
With sustainability high on the agenda, Viet Nam's green finance momentum is surging. Supported by IFC, the country rolled out its first sustainability-linked bonds in local currency to bolster economic and climate resilience. In 2024, SeABank issued Viet Nam's first blue bond , driving sustainable growth in aquaculture, fisheries, and water supply. The country has also revised its green credit framework to enhance corporate access to sustainable financing. With these developments, Viet Nam signals a strong trajectory toward resilience and sustainable prosperity.
The authors gratefully acknowledge constructive feedback on this post by Geetanjali Chopra, Andrea Coppola, Muthukumara Mani, Anh Thi Quynh Le, Megumi Sato, Duong Tran and Kathleen Whimp. Sophie Logan provided excellent research for an earlier draft of this post.
