Viet Nam: promoting green reforms in a rapidly industrialising country

Why it was set up

Viet Nam has grown fast for decades. It has pledged to reach net zero greenhouse gas emissions by 2050. Energy is an input in every sector, so a move away from fossil fuels, or a change in the fossil fuel input mix, changes relative prices, output and incomes across the economy. Those effects have not yet been quantified. The project sets out to provide a modelling framework that can quantify them and assist effective climate policy design, by developing a Vietnamese version of GreenREFORM-EU, called GreenREFORM-VN, which includes a distributional module.

The project builds on an earlier project funded by the United Nations Development Programme, which developed an energy social accounting matrix for Viet Nam for 2019 and a static CGE model for economic analysis of the energy transition. The present project updates that matrix and uses the data to calibrate GreenREFORM-VN.

What it is

The project is separate from the Technical Support Instrument project and from Version 2.0. It has its own funding and its own team. The University of Copenhagen leads it, and DREAM collaborates on the modelling.

What it sets out to do

1. Bring Danish modelling expertise together, so that Viet Nam can check that its growth targets are financially feasible, and can assess the climate and social effects of its energy and climate policies.
2. Use the model to assess green reforms and development paths, and to support evidence-based policy.
3. Train staff in green CGE modelling at three Vietnamese policy institutes.

What the project does

• Macro model and data. Update the macroeconomic data and a macro model that tests whether growth targets for the next five-year national plan are financially feasible.
• A 2024 data set. Update the 2019 energy social accounting matrix to 2024. The matrix is the data base that the dynamic model needs.
• A Viet Nam version of the model. Adapt GreenREFORM-EU to the Vietnamese economy and context, as GreenREFORM-VN.
• Policy questions. How carbon trading affects the Vietnamese economy, how subsidies to green energy production affect dependence on fossil fuel imports, and what part energy efficiency can play in the green transition, alongside the distributional implications of green reforms.
• Training and dialogue. Four workshops: data, macroeconomic modelling, the green general equilibrium framework, and applications. Policy events and a final conference in Viet Nam.

Timeline

• 18 March 2026. Launch in Hanoi, at the National Institute for Economics and Finance.
• 2026 and 2027. Modelling, data work, workshops and policy studies.
• December 2027. The project ends.

A steering committee with the Embassy meets every six months, and a committee of senior Vietnamese experts provides advice and feedback.

Who takes part

• University of Copenhagen, Development Economics Research Group (UCPH-DERG). Leads the project, with colleagues in the University’s Environmental Economics Group. Professor Finn Tarp is the principal investigator.
• National Institute for Economics and Finance (NIEF). The main partner in Viet Nam, part of the Ministry of Finance. Holds the consultancy agreement with UCPH-DERG, and the contracts with the two other Vietnamese partners.
• Institute of Policy and Strategy Studies (IPSS). Contributing partner, under the Central Commission for Policy and Strategy.
• Institute of Strategy and Policy on Agriculture and Environment (ISPAE). Contributing partner, in the Ministry of Agriculture and Environment.
• DREAM. Collaborates on the dynamic CGE modelling.
• Funder. The Royal Danish Embassy in Viet Nam, for the Ministry of Foreign Affairs of Denmark.

What it delivers

The project document sets these targets:

• Macro model. A macroeconomic model to assess the macroeconomic consequences of different economic growth targets.
• Dynamic model and data. A 2024 data set and a dynamic model of Viet Nam building on GreenREFORM-EU, with documentation, and policy studies using it.
• Policy briefs and training. Policy briefs and training workshops.

Results

The project has published no results from the model as yet. DREAM will list public notes and papers under Analyses when the partners release them.

Read more

• Project page at the University of Copenhagen
• Project document (PDF)
• Danish aid database entry
• UNDP: energy efficiency and Viet Nam’s GDP, on the earlier data set and static CGE model