CLIMATE RESPONSIVE PLANNING AND BUDGETING IN THE MEKONG DELTA

Monitoring Climate Targets through Budget Classification

2

Abbrevations

BMZ German Ministry for Economic Cooperation and Development

CA Commitment Appropriations

CC Climate Change

CCD Climate Change Delivery

CC&GG Climate Change & Green Growth

CCVI Climate Change Vulnerability Index

CPEIR Climate Public Expenditure and Investment Review

COP Conference of Parties

DAC OECD Development Assistance Committee

DARD Provincial Department of Agriculture and Rural Development

DFAT Australian Department for Foreign Affairs and Trade

DoC Provincial Department of Construction

DoH Provincial Department of Health

DoLISA Provincial Department of Labor, Invalids and Soc. Affairs

DoNRE Provincial Department of Natural Resources and Environment

DoST Provincial Department of Science and Technology

DoT Provincial Department of Transportation

DPI Provincial Department of Planning and Investment

EC European Commission

EU European Union

GDP Gross Domestic Product

GEAP Gender Equality Action Planning

GHG Green House Gas

GIZ German International Cooperation

GoV Government of Vietnam

MARD Ministry of Agriculture and Rural Development

MoC Ministry of Construction

MoF Ministry of Finance

3

MoNRE Ministry of Natural Resources and Environment

MoIT Ministry of Industry and Trade

MoT Ministry of Transportation

MRV Measuring, Reporting, Verification

MPI Ministry of Planning and Investment

NCCS National Climate Change Strategy (Vietam)

NDC (Intended) Nationally Determined Contributions

NTP National Target Programme

ICMP Integrated Coastal Management Programme

ODA Overseas Development Assistance

OECD Organisation for Economic Cooperation and Development

PEFA Public Expenditure Framework Assessment

PG Policy and Governance

PM Prime Minister

PPC Provincial People’s Committee

SEDP Socio-Economic Development Plan

SP-RCC Sector Programme to Respond to Climate Change

ST Science Technology

UNDP United Nations Development Programme

UNFCCC United Nations Framework Convention for Climate Change

USD US Dollar

VGGS Vietnam Green Growth Strategy

VND Vietnamese Dong

Y1, 2, 3 Year 1, 2, 3

4

Contents

Abbrevations......................................................................................................... 2

1. Executive Summary.......................................................................................... 6

2. From Paris to the Mekong Delta – Climate Strategy Implementation and Reporting………………………………....................................................................

8

2.1 The Paris Agreement and Enhanced Transparency…………………….. 9

2.2 Vietnam’s Response to Climate Change…………………………………... 10

3. Methods to classify climate responsive investments…………………………… 13

3.1 OECD-DAC Climate Markers………………………………………………... 15

3.2 The CPEIR Typology in Vietnam…………………………………………… 16

3.3 Which Budget? Plan vs. Disclosure and Investment vs. Recurrent……. 24

3.4 Approaches to Classification and Cooperation in the Mekong Delta………………………………………………………………………………… 25

4. Ex-Post Classification of Investment Budget Plans in the Mekong Delta……………………………………………………………………………………... 27

4.1 Results from 4 Mekong Delta Provinces…………………………………… 28

4.2 Ca Mau province……………………………………………………………… 32

4.3 Bac Lieu province…………………………………………………………….. 37

4.4 Kien Giang province………………………………………………………….. 40

4.5 Soc Trang province…………………………………………………………… 44

4.6 Summary of Findings and Conclusions Concerning the Mekong Delta Provinces…………………………………………………………………………… 47

5. Iterative Steps and Recommendations for Future Planning……………………. 49

Bibliography……………………………………………………………………………... 54

5

List of tables

Table 1: Task to implement the Paris Agreement (NDC, 2016) 10

Table 2: Connection between Vietnam’s already existing climate change approaches and NDC tasks 11

Table 3: CPEIR and CC&GG classification and weighting criteria 18

Table 4: Merging weighting criteria with investment typology 19

Table 5: Mekong Delta Climate Change Budget Classification 2013-2015 29

Table 6: Ca Mau’s climate change responsive investments 2015 according to source 33

Table 7: Ca Mau’s TOP line item climate responsive investments 2015 34

Table 8: Bac Lieu’s climate change responsive investment 2015 according to source 37

Table 9: Bac Lieu’s TOP line item climate responsive investments 2015 38

Table 10: Kien Giang’s climate change responsive investments 2015 according to source 41

Table 11: Kien Giang’s TOP line item climate change responsive investments 2015 42

Table 12: Soc Trang’s 2015 investments according to source 44

Table 13: Soc Trang’s TOP line item investments for climate change response in 2015 46

6

1. EXECUTIVE SUMMARY

7

Vietnam is among the countries worldwide to be

most affected by climate change. The

Government of Vietnam has therefore started to

focus on appropriate strategy formulation to

focus on both adaptation and mitigation. As a

signatory to the 2015 Paris Agreement,

Vietnam’s Nationally Determined Contributions

(NDC) will be moved further in the limelight of

attention. Pressure to therefore identify

approaches to ensure a visibility and connection

between policy and implementation on the one

hand and to monitor the associated flow of

funding on the other, will grow. This survey

tries to shed more light on the question, how a

higher visibility of climate responsive funding

can be reached and potentially connected to

strategies. As the country is characterized by its

high degree of decentralization, the center piece

of the survey is the assessment of climate

change investments at provincial level. The

survey has been part of the cooperation

between the Government of Vietnam (GoV), the

German Ministry for Economic Development

and Cooperation (BMZ) and the Australian

Department for Foreign Affairs and Trade

(DFAT), embedded in the Integrated Coastal

Management Programme (ICMP), implemented

by the German International Cooperation (GIZ)

with focus on the Mekong Delta. This most

southern Vietnamese region is featured by its

high vulnerability regarding the effects of

climate change, characterized by extreme

weather events, coastal erosion, saltwater

intrusion, floods and droughts. With a

population of 17 million, it is Vietnam’s most

important agricultural region, producing rice

not only for the country itself, but large parts of

Asia.

Based on the OECD-DAC Rio marker, a UNDP

driven Climate Public Expenditure and

Investment Review (CPEIR) method to classify

climate responsive investments has been

applied. The results of the 3 year cooperation in

this field have shown that the 4 examined

coastal provinces spend amounts between

approximately US$ 20-30 million per year for

climate responsive investments. Based on the

use of the CPEIR typology, the bulk share of

climate responsive classified investments

reaches high degrees of relevance in which up to

100% of the overall amounts of single

investments are accounted for adaptation. The

investments predominantly reflect the

province’s vulnerability to sea level rise, floods,

erosion and saline intrusion. Response

investments are hence mostly planned for

dykes, dyke protection or the prevention of

saltwater intrusion. In this regard, it is

remarkable that in all provinces, mostly funds

from either national allocations or ODA and

state bonds are being used. Hence, it is a

hypothesis, that equally high real climate change

expenses in the 4 provinces are also rooted in

similar response strategies and actions at

national level.

Results are so far based on investment plans

only and apply a retrospective view. To ensure a

strengthened orientation towards the fulfilment

of the Paris Agreement, the introduction of a

newly aligned process to incorporate

classification methods during the annual

planning process on the basis of cross-sectorial

cooperation at provincial level will be a key

necessity.

The Integrated Coastal Management Programme (ICMP) is a development programme funded by the governments of Australia, Germany and Viet Nam. Its objective is to support the Vietnamese authorities in preparing the coastal area of the Mekong Delta for a changing environment and to lay the foundations for sustainable growth. The programme works in six interlinked working areas: agriculture, aquaculture, coastal protection, forest, planning and budgeting, and water management.

8

2. FROM PARIS TO THE MEKONG DELTA –

CLIMATE STRATEGY IMPLEMENTATION

AND REPORTING

9

2.1 The Paris Agreement and Enhanced Transparency

Since fall 2015 the majority of nations have

subscribed to a new global regime of climate

governance, based on the COP 21’s Paris

Agreement. Based on the U.N. Framework

Convention for Climate Change,

“[…] the Paris Agreement’s central aim is to

strengthen the global response to the threat of

climate change by keeping a global temperature

rise this century well below 2 degrees Celsius above

pre-industrial levels and to pursue efforts to limit

the temperature increase even further to 1.5

degrees Celsius. Additionally, the agreement aims

to strengthen the ability of countries to deal with

the impacts of climate change. To reach these

ambitious goals, appropriate financial flows, a new

technology framework and an enhanced capacity

building framework will be put in place, thus

supporting action by developing countries and the

most vulnerable countries, in line with their own

national objectives. The Agreement also provides

for enhanced transparency of action and support

through a more robust transparency framework

(UNFCCC, 2016).”

After the ratification of 126 countries, the Paris

Agreement came into effect in December 2016. In

contrast to the Kyoto Protocol, the agreement is

not binding by international law and highlights

its voluntarily basis through the formulation of

Nationally Determined Contributions (NDC).

Article 3 of the Agreement states that NDCs have

to be ambitious and countries have to report to

UNFCCC every 5 years, including a principal

progression of formulated targets for every new

reporting time period. In contrast to the

Agreement itself, the reporting process however,

is mandated in the so-called legally binding

“enhanced transparency framework for action and

support”, outlined in article 13 of the Agreement.

Besides an emissions inventory and the tracking

of progress, the framework also governs to

provide information related to climate change

impacts and adaptation. Regarding climate

finance, mainly developed countries are

accountable to classify their contributions while

developing countries are required to provide

information on needed capacity building as well

as needed and received financial support

(UNFCCC, 2015:17). As a signatory country,

Vietnam’s ambitious goals as formulated in its

NDC will be also subject of the reporting process

and the enhanced transparency framework for

action and support. Hence, the internationally

agreed timeline and its milestones until 2028 will

require Vietnam to align with this global regime,

not only in terms of goal formulation, but also

concerning new approaches towards strategy

formulation and implementation of action as well

as evaluation.

In 2018, a UNFCCC global facilitative dialogue is

supposed to take stock of the collective efforts

made so far. Parallel, common modalities

regarding procedures and guidelines on

Measuring, Reporting and Verification (MRV)

must be elaborated until 2018 and adopted by

2020. Until 2028 stock-taking, including financial

tracking and the formulation of new pledges will

continue. As part of this roadmap, a capacity

building initiative highlights i) to strengthen

national institutions for more transparency,

related to activities in line with national

priorities, ii) provide tools and training to meet

provisions in article 13 of the Paris Agreement, as

well as iii) to assist in the improvement of

transparency over time (UNFCCC, 2015:12).

In summary, as a signatory of the Paris

Agreement, Vietnam will face the need to align

its MRV modalities. So far, related to climate

finance, only article 13 of the Paris Agreement

imposes the duty to report on received funding

for climate change response. Nevertheless, the

requirement to also report on emission

reduction and adaptation efforts foreshadow the

necessity for better tagging and tracking of

domestic climate finance as the fulfilment of

10

ambitious goals mainly rely on public funding.

Taking the Agreement’s timeline until 2028 into

account, the need to principal progression and

the formulation of more ambitious goals over

time also implies that public spending to combat

climate change has to be increased.

2.2 Vietnam’s Response to Climate Change

For the period from 1996 until 2015, Vietnam

was ranked as the 8th most affected country in

the world related to climate change with an

average 0.62% GDP loss and with second

highest number (206) of extreme weather

events worldwide (Germanwatch, 2017:6).

Similarly, according to the Climate Change

Vulnerability Index, Vietnam is currently

considered one of 30 “extreme risk countries” in

the world (CCVI, 2016). The debate about

climate change, its consequences and

vulnerabilities for Vietnam has also influenced

the country’s policy formulation hence multiple

strategies, policies and actions plans addressing

the challenges of climate change have been

prepared by the Government of Vietnam in

recent years. The most prominent ones are the

National Climate Change Strategy (NCCS), the

Action Plan to Respond to Climate Change and

Sea Level Rise, both from 2011, and the

National/ Vietnam Green Growth Strategy

(VGGS) from 2012. Further laws on natural

Disaster Prevention or Environmental

Protection are in line with the overarching

national strategies (NCCS or VGGS) and offer

further national funding opportunities for

implementation. In most cases, especially with

regards to adaptation and more recently related

to mitigation, the above mentioned Action Plan

to Respond to Climate Change and the VGGS

have also been disseminated to the provincial

level. The 63 provinces in Vietnam function as

the second administrative tier with far reaching

responsibilities and execute about 70% of the

country’s total public budget (MPI, 2015:36). A

translation and applicability of national policies

at local level has thus gained high priority.

This stock of vastly existing approaches on all

levels in Vietnam has also paved the way to

advance Vietnam’s aspiration for a successful

contribution to the COP 21 in Paris. And indeed,

in line with the 2015 Paris Agreement, Vietnam

formulated the Intended Nationally Determined

Contributions (INDC). After the agreement’s

ratification in 2016, the INDC dropped the first

letter and are now the Nationally Determined

Contributions (NDCs). Probably the most

important outlook for Vietnam’s actions for the

future, the NDC and its annex, the “Plan for

Implementation of the Paris Agreement” (2016)

contains an annex with a list of compulsory,

priority and encouraged tasks to be

implemented until 2020 and 2030. The task

matrix has a total number of 68 tasks, split into

five main areas, as listed in table 1 below.

Tasks to implement the Paris Agreement

1. Mitigation of greenhouse gas emission 10 tasks until 2020; 6 tasks until 2030 (#1-16)

2. Adaptation to climate change 9 tasks until 2020; 13 tasks until 2030 (#17-38)

3. Preparation of resources 13 tasks (#39-51)

4. Establishment of transparency system (MRV) 8 tasks (#52-59)

5. Development and revision of policies and institutions 9 tasks (#60-68)

(Author’s own table. Adapted from Vietnam’s NDC annex “Plan for the Implementation of the Paris Agreement”)

Table 1: Task to implement the Paris Agreement (NDC, 2016)

11

VIETNAMESE STRATEGY NDC TASKS

National Climate Change Strategy (NCCS)

#26 meteorological data modernization; #27 guidelines for public infrastructure; #28 SEDP climate change planning #29 prevention of natural disasters (floods, etc.) #38 complete coastal dykes, control of salinity intrusion #40 climate change curricula development #65 integrate cc into policies and plans of ministries and provinces

Action Plan to Respond to Climate Change

#30 integrated water management #31 sustainable forest development/ coastal forest #32 sustainable maintenance of agriculture #33 develop livelihoods suitable for cc conditions #34 enhance insurance for climate risk #35 ecosystems based adaptation #36 …integrated coastal management #37 resilient infrastructure, water supply, prevent flooding #66 revision of admin functions

Law on Natural Disaster Prevention

#19 risk and vulnerability assessment

MRV for mitigation of GHG emissions

#52- 57 establish MRV for relevant sectors until 2018

National Target Programme to Respond to Climate Change (NTP-RCC)

#21 implementation of the NTP to Respond to Climate Change 2020 (US$ 0.71 billion)

Sector Programme to Respond to Climate Change (SP-RCC)

#64 up-date policy matrix for the SP-RCC until 2020

PM Decision 593 on regional steering

#67 enhance coordination in handling regional response to climate change

(Author’s own table. Adapted from Vietnam’s NDC annex “Plan for the Implementation of the Paris

Agreement”)

The first 16 tasks mainly focus on road mapping

and the development of modalities to ensure the

formulation of future stages towards GHG

emission reductions, first until 2020, but also in a

medium-term perspective until 2030 and beyond.

Although connections to the VGGS seem obvious,

the first area does not highlight any direct

connections yet. The other four NDC task areas

however, show clear linkages to 8 different

Vietnamese strategies, action plans, laws and

Prime Minister decisions as listed in the table 2

below.

Table 2: Connection between Vietnam’s already existing climate change approaches and NDC tasks

12

29 out of a total of 68 NDC tasks are linked with

already existing legal approaches at both

national, ministerial level and also provincial

level in Vietnam. The connectivity between the

Paris Agreement and Vietnam’s NDC does not

only highlight the country’s commitment for a

global contribution, it also emphasizes the

relevance of already existing national

approaches for climate change response. Even

provincial Action Plans to Respond to Climate

Change and Provincial Green Growth Action

Plans as well as all related NTP funds disbursed

at provincial level appear in relation to the

global agreement. The connectivity also lays the

groundwork for the need to monitor and

evaluate the implementation and last but not

least also track associated funding at all levels

and from different sources. Thus, NDC task #60

“Develop budget reports for responding to

climate change, green growth to serve periodical

evaluation of global efforts 2018, 2023, 2028”

needs to be highlighted. Although there is not

yet any decision or policy formulated, MPI in

conjunction with MoF will lead the

implementation of the task. This survey, with

the objective to track and classify climate

responsive investment at provincial level, is

therefore to be seen as a first contribution to the

establishment of a transparency system.

The following chapter will further stress the

methods and practices towards budget tracking

and classification of climate changes expenses.

13

3. METHODS TO CLASSIFY CLIMATE RESPONSIVE INVESTMENTS

14

Since the Rio Convention in the 1990s,

government strategies worldwide have been

developed to consider climate change and assign

public expenditures accordingly, whether for aid

to developing countries, to create incentives or

laws to reduce greenhouse gas emissions or

later to reduce climate related domestic

vulnerabilities of e.g. public infrastructure.

Although the environmental ministries have

taken over a lead function domestically but also

during international climate negotiations, and

especially in elaborating strategic medium and

long term approaches, the lion share of public

expenditures is mostly within the responsibility

of other sectors and government agencies. In

fact, climate change is usually a cross-cutting

issue and touches the private as much as the

public spheres. Regarding climate change,

environmental ministries are of course the main

regulators and responsible for the creation of

new legislation, which certainly affects e.g.

private households and small and large

businesses. Greenhouse gas reductions by

private emitters can also be put in a direct line

to environmental policies and laws. Thus one

question is how difficult it is to install an MRV

system, which also tracks fund flows for

response implementation? As mitigation and

adaptation reflect the public domains of energy,

traffic and transportation, construction,

agriculture, forestry and coastal protection, a

multitude of government agencies, usually at

national and sub-national level are involved and

therefore responsible for expenditures. And

there is not one single budget line, just to cover

climate change mitigation and adaptation. In

addition, many countries with stronger

subnational government levels also possess the

fiscal autonomy to decide upon the use of public

resources. As already mentioned in chapter 2, it

is estimated that up to 70% of all government

expenditures relevant for climate change in

Vietnam, are spent at provincial level.

The effectiveness of international conventions

or agreements such as the 2015 Paris

Agreement depend basically on national

contributions, which are rolled out in a number

of strategies and action plans such as the NDC

but also National Adaptation Plans (NAPs) or

actions for Green Growth and mitigation. Thus,

expenditure tracking becomes not only a

national necessity to monitor domestic efforts

but a global requirement to prove that public

spending fulfills the agreed international goals.

As a cross-cutting issue with the above outlined

multitude of different national agencies and

ministries involved, this is however a difficult

task. And it needs to be mentioned that there

has not yet been an internationally agreed

methodology to assess the exact share of

expenditures which contribute to climate

change mitigation and adaptation. A number of

different types and methods to classify climate

expenditures have been introduced in different

countries and regions. Intended to be in line

with UNFCCC objectives, OECD-DAC, EU, World

Bank and UNDP driven methods will be

summarized in the following sub-chapters.

15

3.1 OECD-DAC Climate Markers

Since 1998, the OECD Development Assistance

Committee (DAC) has monitored aid which

targeted the objectives of the 1992 Rio

Conventions. The objectives are therefore also

known as the “Rio Marker”. In 2009, OECD DAC

approved a new tagging or marker system which

tracks governmental aid to developing countries

in support of both climate change adaptation and

mitigation. Ever since, the overall idea has been

to indicate the relation between donors’ aid

expenditures in relation to their own climate

policy objectives. Since 2014, the OECD Joint

ENVIRONET/WP-STAT Task Team has worked to

improve the Rio Markers in accordance with

available environment and development finance

statistics. Main objectives have been i) the

consistency to use the Rio Marker, ii)

strengthened cooperation between OECD with

Development Banks, including data availability,

iii) the development of coherent options for the

quantification of climate markers, and iv)

strengthening trust to use the OECD method as a

global reference for international MRV and

climate reporting (OECD, 2014).

The OECD scoring system for climate markers in

diagram 1 below explains the application. The

marker system is separated into three main

categories or values: “principal objective (2)”,

“significant objective (1)” and “no target to the

policy objective (0)”.

(OECD, 2011:5)

Q1. What objectives are stated in the project/ programme document? Q2. Do any of the stated objectives match “Criteria for eligibility” of climate markers Yes No Q3. Would the activity have been undertaken without this objective?

No Yes

2 Principal 1 Significant 0 Not targeted

Diagram 1: The OECD scoring system for climate markers

16

While “principal (2)” is scored when UNFCCC

objectives are fully promoted and also

documented, the latter “significant (1)” is reached

if the investment or activity had other primary

goals, but was also formulated to meet climate

change concerns. Each investment must therefore

be assessed concerning its main objective first

and whether the given objectives match the

marker eligibility criteria. Only with positive

answers, the “principal” or “significant” value can

be applied. Aid activities for flood

prevention/control do not necessarily qualify for

the adaptation marker. However, activities which

enhance flood prevention/control in such a way

that it contributes specifically to climate change

adaptation can be marked. Examples include:

- “Restoring the function of floodplains in

combination with sound land-use

planning of watersheds and wetlands

thereby reducing the exposure to floods

and improving water availability in areas

affected by water scarcity and /or

variable rainfall patterns.

- Flood control measures in areas which are

becoming increasingly flood sensitive (e.g.

closing of estuaries, building of dikes and

protections) – wit due consideration for

the potential environmental

impacts of such measures (OECD,

2011:11).”

As mentioned before, it is also here again

important to mention that there is no

internationally agreed methodology yet.

Therefore, assessing the share of expenditures

contributing to climate change mitigation and

adaptation remains subjective and has no

intention for being exact.

Besides OECD-DAC also the European

Commission has adapted the method for

assessing programmed climate change

expenditures with the aim to devote at least 20%

of the EU budget to climate change, a sum of more

than € 200 billion. It has to be underscored

however, that classification efforts in both cases

(OECD and EU Commission) target investment

budgets only. OECD-DAC reflects ODA payments,

mostly in financial and technical programmes

while the EU Commission tracks all investment

funds under the European Structural and

Investment Fund (ESIF). Nevertheless,

throughout the OECD and EU commission use, the

method has been widely spread. Although figures

are not allowing exact quantifications, they give

indications of whether policy objectives are being

followed. Before the survey will examine the

question related to investment and recurrent

budget classification in more detail in sub-

chapter 3.3, sub-chapter 3.2 will shed more light

on the methodological debate in Vietnam and the

use of the CPEIR methodology and typology.

3.2 The CPEIR Typology in Vietnam

The Climate Public Expenditure and Investment

Review (CPEIR) is a reporting approach mainly

initiated through UNDP and respective Finance or

Planning Ministries in Asian countries. Between

2013 and 2016, a growing number of Asian and

Pacific countries have officially published the

reports, which analysed mainly the central

government institutional set-up, its

appropriateness in relation to climate policies

and the results of pilot classifications concerning

climate resilient and mitigation spending. The

Vietnamese CPEIR was approved in 2015 and

covers an analysis of selected sector ministries

such as MoNRE, MoIT, MARD, MoC and MoT as

well as three pilot provinces.

In comparison to other country CPEIRs, Vietnam

also specified a methodological approach to i)

review investments as well as to compile reports,

and ii) to tag and track expenditures, using

different coefficients to weight expenses and to

also categorize along a typology which helps to

better distinguish climate change expenses in line

17

with policies and priorities as it will be shown in

chapter 4.

Similar to the explained OECD scoring system

above, the CPEIR also follows a 3-step system, in

which objectives and outcomes within the

investment portfolios are reviewed, depended on

the relevance, different percentage values for a

weighting apply. In late 2016, the CPEIR method

in terms of weighting and criteria definition has

been adjusted for two reasons. On the one hand,

the use of weighting coefficients was supposed to

be simplified, on the other a much stronger

emphasis on adaptation and Green Growth was

seized to clearly align with Vietnam’s most

prominent climate change strategies. Table 3

below lists and compares both weighting

categories and associated criteria. The dark

columns highlight the former original CPEIR

method, clustered into 5 categories of “complete

relevance (100%)”, “high relevance (75-99%)”,

“medium relevance (50-74%)”, “low relevance

(25-49%)”, and “marginal relevance (1-24)”. The

white columns in between are part of the

adjusted new method called “Climate Change and

Green Growth (CC&GG)”. The differentiation is

less specific with only two main groups. Similar

to the CPEIR, also here Group I classifies

expenses with 100%. Below the 100% level,

Group II rates everything below 100% and

further distinguishes between high (H), medium

(M) and low (L) relevance. H makes up a

coefficient range between 51-99%, M of 50% and

L and range below 50%.

18

CPEIR/ CC&GG

CATEGORY

CLIMATE CHANGE RELATED EXPENDITURE

CRITERIA

CPEIR Complete relevance

100%

Projects which either (i) explicitly state a predominant climate change objective, or (ii) are fully dedicated to exclusively delivering climate change related benefits, or (iii) sit within a governmental programme dedicated to climate change (e.g. NTP-RCC) Projects may satisfy one or more criteria to qualify.

CC&GG Group I 100%

Projects which either (i) state predominant CC or GHG reducing objectives, or (ii) deliver concrete results/ benefits which contribute directly to benefits in A or M to CC, or (iii) sit within a governmental programme dedicated exclusively to climate change, green growth or sustainable development goals (e.g. NTP-RCC/ GG). Projects may satisfy one or more criteria to qualify.

CPEIR High relevance

75-99% Projects which have (i) one or more of the primary objectives to improve climate resilience or mitigation, or (ii) deliver significant and specific results/ outcomes that improve climate resilience or contribute to mitigation. Projects may satisfy one or both criteria to qualify.

CC&GG Group II Les 100% Projects which relate to CC – GG at certain levels (H, M L); the relevance level based on the objectives and contents of the components in project files to identify.

CC&GG Group II.1 H: 51-99% Projects which set (i) at least one goal to enhance the climate resilience or reduce GHG emission, or (ii) deliver significant and specific results to promote climate resilience or mitigation effects. Projects may satisfy one or more criteria to qualify.

CPEIR Medium relevance

50-74%

Projects which either (i) have secondary objectives related to building climate resilience or contributing to mitigation, or (ii) some results/ outcomes of the project are related to building climate resilience or contributing to mitigation, or (iii) mixed programmes with a range of activities that are not easily separated but include at least some that promote climate resilience or mitigation. Projects may satisfy one or more to qualify.

CC&GG Group II.2 M: 50%

Projects which either have (i) secondary objectives related to building climate resilience or have mitigation effects, or (ii) mixed programmes with a range of activities which are not easy to separate but include at least some activities to promote the climate resilience or mitigation effects. Projects may satisfy one or more criteria to qualify.

CC&GG Group II.3 L: Under 50%

Projects which have (i) primary or secondary objective or results/ outcomes which are irrelevant to promoting the ability to adapt or to mitigation CC but include activities which can deliver indirect benefits in the field of A or M, or (ii) activities that are indirectly or theoretically relevant to climate resilience, even benefits from response to CC are not stated explicitly in objectives or results of projects.

CPEIR Low relevance

25-49% Projects that include activities that display attributes where indirect adaptation and mitigation benefits may arise but climate change benefits are not explicitly listed in project objectives or the stated results/ outcomes.

CPEIR Marginal relevance

1-24% Projects that include activities that have indirect and theoretical links to climate resilience, although climate change benefits are not explicitly listed in projects objectives or stated results/ outcomes.

(adapted from the CPEIR methodological guidebook, 2015 and the newly adjusted weighting method 2016)

Table 3: CPEIR and CC&GG classification and weighting criteria

What completes the methodological approach is the linking of the investments not only with classification criteria (in percentage) but also with a typology. Table 4 below displays the CPEIR developed typology, divided into three parts PG (Policy and Governance), ST (Science and Technology) and CCD (Climate Change Delivery).

All three typologies on the left hand side of the table are further divided into a number of sub-typologies with giving examples. The two columns on the right hand side are the associated weightings or coefficients based on the former CPEIR classification and on the far right hand side with the newly adjusted CC&GG coefficients.

19

Typology Sub-typology Provincial investments

CPEIR coefficient CC&GG coefficient

Policy & Governance (PG)

PG 1: National Framework for adaptation and risk reduction

PG 1.1 Develop climate change adaptation guidelines and tech. regulations

e.g. Provincial Action Plan to Respond to CC

PG 1.2 Develop/ adjust policy for CC response

PG 1.3 Manage and monitor implementation

e.g. budget classification

PG 2: Comprehensive national mitigation policy framework

PG 2.1 Establish policy, tax and incentive structure for clean energy, low GHG emissions

e.g. based on P-Green Growth Action Plan

PG 2.2 Develop sectoral plans and coordinate among departments

e.g. Climate sensitive Provincial Gender and Equality Action Plan

PG 2.3 Manage and monitor implementation of mitigation policies

Monitoring of P-Green Growth Action Plans

PG 3: Action Plan Impact Assessment

PG 3.1 Action and Sector Plans

PG 3.2 Climate Change Impact assessments

PG 3.3 Climate Change capacity building

e.g. capacity building workshops

PG 4: Legal framework to implement CC policy

PG 4.1 Mitigation instruments

e.g. development of the Provincial Green Growth Action Plan

PG 4.2 Adaptation instruments

e.g. adjustment of the Action Plan to Respond to CC

Table 4: Merging weighting criteria with investment typology

20

PG 4.3 Mitigation and adaptation instruments

PG 5: International cooperation, strengthening of CC investment effectiveness

PG 5.1 Strengthen cooperation

PG 5.2 Effective management and coordination of foreign and domestic investments

e.g. through investment budget classification

Scientific, Technical and Societal Capacity (ST)

ST 1: Develop S&T as a foundation for policies

ST 1.1 Information and database development

e.g. disaster risk mapping

ST 1.2 Early warning system

ST 1.3 Biologic & genetic resource strengthening

ST 1.4 CC surveys

ST 1.5 Technology for energy efficiency

ST 2: Improve awareness of CC

ST 2.1 CC awareness in education

e.g. curriculum development

ST 2.2 post school education

ST 3: Develop community capacity for responding to CC

ST 3.1 Livelihood building for communities

21

ST 3.2 Capacity across whole community in climate change response

CC Capacity building programmes

1-24%; 25-49% Less than 50%

Climate Change Delivery (CCD)

CCD 1: Natural resources

CCD 1.1 Coastal protection and coastal dykes

Dyke construction 75-99% Less than 100%

Dyke rehabilitation 100% 100%

Wave breaker/ gabions

100% 100%

Mangrove rehabilitation

100% 100%

Sluice gates 75-99% (87%) 51-99%

Coastal resources 50% (unclear) 50%

CCD 1.2 Saline Intrusion

Anti-drought and saline intrusion programmes/ irrigation, sluice gates and alternative rice production

100% 100%

CCD 1.3 Irrigation Irrigation systems 50-74% (67%) 51-99%

CCD 1.4 River dyke embankment

River dyke construction

75-99% (87%) 51-99%

Canal/ river embankment

75-99% (87%) 51-99%

Urban embankments 75-99% (87%) 51-99%

River dredging 25-49% (37%) Less than 50%

CCD 1.5 Water quality and supply

Fresh water reservoir 100% Less than 100%

Fresh/ clean water supply

100% Less than 100%

22

CCD 1.6 Rural development and food security

Rural development and food security programmes

unclear (10%) Less than 50%

CCD 1.7 Forest development

Fire protection 25-49% (37%) Less than 50%

(Protection) Forest rehabilitation

100% Less than 100%

Nursery 75-99% 51-99%

Forest ranger equipment

50-74% (50%) 51-99%

CCD 1.8 Fisheries and aquaculture

Aquaculture irrigation

50-74% (67%) 51-99%

CCD 1.9 Biodiversity& conservation

e.g. Plant varieties projects

50-74% (50%) 51-99%

CCD 2: Resilient Society

CCD 2.1 Public Health Health support projects (CC connection)

1-24% (12%) Less than 50%

CCD 2.2 Education and Social Protection

Education projects (CC connection)

1-24% Less than 50%

CCD 2.3 City area resilience

Schools, admin. buildings, cemeteries (e.g. CC proofing)

1-24% Less than 50%

Construction site levelling (CC proofing)

25-49% (unclear) Less than 50%

Resettlements (CC relevance)

(unclear) 75-99% 51-99%

Climate proof housing support

25-49% Less than 50%

CCD 2.4 Transport Climate proof roads, streets

1-24%; 25-49% Less than 50%

Roads and drainage 25-49% Less than 50%

CCD 2.5 Waste management and treatment

Waste water treatment

25-49% (unclear) Less than 50%

23

(adapted from CPEIR Vietnam, 2015)

In this table, however, only coefficients have

been inserted wherever appropriate examples

could be found in the pilot cases in the Mekong

Delta provinces. From the table it already

becomes obvious that the main typology to be

connected with provincial climate investments

is CCD. On top of that, it is now also possible to

directly link the typology with Vietnam’s NDC.

As table 2 (chapter 2) has shown, 24 of 68 NDC

tasks are directly linked with national strategies,

laws or NTPs.

Both methodological systems clearly indicate

gaps. While the OECD-DAC classification method

has the advantage to appear as rather simple

and easy to apply, the CPEIR and adjusted

CC&GG method claim to be more accurate.

Although the use of coefficients differs, the

criteria of whether expenses are related to

climate change intervention fields are similar.

And yet, both criteria leave room for

interpretation and in some cases require precise

assessments.

The OECD-DAC method is mainly based on a

decision whether an investment is mainly, partly

or not relevant for climate change. The CPEIR/

CC&GG on the other hand has for Vietnam

developed a typology of 3 main categories and

associated sub-categories. Such a typology helps

to identify investment areas assigned to

ministries and public sectors. Of course the

CPEIR/ CC&GG typology suggests a coefficient

percentage or percentage range, indicating the

investment’s relevance for climate change. The

sub-typology “Climate Change Delivery (CCD

1.1)” on “Coastal Protection and Sea Dykes” is

e.g. rated with a 100% coefficient. It has to be

noted that many OECD or EU countries would

rather rate the up-grading or heightening (e.g.

30 cm according to sea level rise) costs to be

accounted for 100% relevant.

Solid waste treatment

1-24% Less than 50%

CCD 2.6 Disaster specific infrastructure

e.g. Storm shelter 100% Less than 100%

CCD 2.7 Strengthening disaster risk reduction

Disaster risk reduction programmes

75-99% 51-99%

CCD 3: Enterprise and production

CCD 3.1 Energy generation

CCD 3.2 Energy efficiency

CCD 3.3 Infrastructure and construction

CCD 3.4 Industry and trade

CCD 3.5 Tourism Tourism investment projects (CC relevant)

unclear Less than 50%

24

According to the CPEIR/ CC&GG this distinction

does not exist, as long as

“Projects which either (i) state predominant CC or

GHG reducing objectives, or (ii) deliver concrete

results/ benefits which contribute directly to

benefits in A or M to CC, or (iii) sit within a

governmental program dedicated exclusively to

climate change, green growth or sustainable

development goals (e.g. NTP-RCC/ GG) (MPI,

2015:55).”

In fact, most dykes in the Mekong Delta cannot

be compared with those to be found in the

Netherlands or Germany. Many coastal transects

either never had dykes or were not designed to

withstand for a longer duration and especially

not regarding the effects of climate change. In

addition to the vast inland waterways, irrigation

and population growth over the last century, all

coastal protection in the Mekong Delta can be

seen as “works of Penelope”, projects without

end (Biggs, 2012: 82). The entire CCD 1.1 thus

justifies a 100% coefficient as the majority of

interventions and investments are based on a

total continuous make over.

Another conclusion is that a less distinct

differentiation of coefficients offers greater risks

to blur or even manipulate and green wash

results. On the other hand, broader range

coefficients probably allow less special expertise

which makes the entire approach more

applicable (especially at local or provincial

level) and therefore also much faster, e.g. during

an annual budgeting process and not by

hindsight only.

3.3 Which Budget? Plan vs. Disclosure and Investment vs. Recurrent

Budgets should and can function as an indicator

of whether intended policies and strategies are

being followed and implemented. As in most

countries, Vietnamese budgets are separated into

both budget plans and budget disclosures, as well

as recurrent and capital or investment budgets.

The former are the results of the annual budget

planning process at national but also at local

level, namely province, district and commune.

These budget plans are usually approved within

the political process at the end or at the

beginning of the fiscal year, followed by its

execution between January and December of the

current fiscal year. The annual statement of

accounts is done by the Treasury Departments at

national and provincial level. The final product of

these account statements are the budget

disclosures which are, in most cases in Vietnam,

only available 2 years after the end of the actual

fiscal year period. A timely evaluation of the

execution of the planned budget and whether e.g.

provincial climate strategies were implemented

is thus difficult (PEFA, 2013).

The other important separation of budgets in

Vietnam goes along capital or investment and

recurrent budgets. The former is within the

responsibility of the Ministry of Planning and

Investment (MPI) and its provincial Departments

of Planning and Investment (DPI). Whereas in

most countries worldwide only the Ministry of

Finance (MoF) is in charge of the entire budget, in

Vietnam the MoF and its provincial Departments

of Finance (DoF) subscribe to the responsibility

for the recurrent budget, including all wages and

salaries as well as operations and running costs.

The average share of the investment budget is

currently at an average of 18% nation-wide, with

less wealthy provinces to even undercut 18%

(MPI, 2015:18).

Although it is the aim to analyze the provincial

investment budget plans in an ex-post manner, it

should be a long-term goal to also provide

appropriate recommendations which help to

better refine the actual budget planning process

in terms of its aimed climate responsive actions.

To accomplish that additional goal as also

25

described in the CPEIR, data analysis of budget

disclosures seems to be a necessary requirement.

As recurrent budgets account for an average of

80% of the overall expenditures, it seems to go

without saying that recurrent budgets can make

up a great difference in assessing the overall

climate expenditures.

However the typologies introduced in chapter 3.2

are more difficult to align with e.g. salaries and

other recurrent costs. The debate on climate

finance (with the exception of taxation) has been

Chapter 3 has so far introduced the different

classification methods, either used

internationally or in Vietnam. This sub-chapter

3.4 briefly introduces how the above explained

Map 1: Five Mekong Delta provinces

mainly steered by MPI. Hence, this survey

concentrates on the investment budget only,

captures an ex-post consideration of previous

budget plans and will forecast recommendations

to adjust the planning process for an ex-ante

climate change investment planning. It will be a

future challenge to create recurrent classification

techniques and to encourage more MoF

involvement on the other hand.

methods were introduced in the Mekong Delta

provinces of Ca Mau, Bac Lieu, Kien Giang, Soc

Trang and An Giang (as shown on the map

below).

(Source: GIZ, 2014)

3.4 Approaches to Classification and Cooperation in the Mekong Delta

26

The most southern province in the Mekong

Delta, Ca Mau, has been the first local entity in

Vietnam to be introduced to the OECD-DAC

marker classification. The method was first

applied during two training courses and another

international short-term mission in 2013 (GIZ,

2013). Back then only official budget

documents, published online by the Ministry of

Finance, were used and analyzed. However, only

a very limited number of investment examples

were shown. As the bulk share of investments

remained hidden, only a fraction of investments

could be tagged according to the OECD method.

The idea of assessing a ratio of planned climate

change investments compared with the overall

investments thus remained approximate at best.

In the aftermath of a UNDP conference in

Bangkok in 2014, where DPI Ca Mau and DPI An

Giang were also introduced to the CPEIR

method, further approaches to undertake more

refined pilot classifications of the provincial

investment budget were started. Ca Mau was

then the first province to provide the entire

investment budget plans for the years 2011

until 2015. The creation of a “task force” inside

DPI was steered by DPI’s Deputy Director. Along

the seven investment budget sources, i)

Provincial Level Budget, ii) National Budget

Allocations, iii) ODA funding, iv) State Bonds, v)

Lottery, vi) State Credits and Loans, and vii)

Other Budget Sources, the task force team

supported mainly by the planning division

inside DPI assessed each investment in

accordance with OECD-DAC marker criteria.

The DPI task force investigated all detailed

investment proposals, which were approved for

funding at the end of each budget year. Those

proposals are annually elaborated by all

provincial sector departments which seek for

rolling and multi-year investments. As the

documentation of the proposals lack pre-

determined classification regarding climate

change, the DPI experts also engaged in further

interviews with responsible officers from the

sector departments to better conclude whether

investments showed any relevance regarding

climate change as suggested in either OECD’s or

the CPEIR’s 3 step approach. As already

mentioned above, the strength of the OECD-DAC

marker method is its simplicity. Nevertheless,

DPI Ca Mau chose to further differentiate the

OECD weighting. At a later stage, the GIZ ICMP

team also synthesized the approach with the

CPEIR typology and applied both CPEIR and the

later the “CC+GG” coefficient. In 2016, Bac Lieu,

Soc Trang, Kien Giang and An Giang all followed

and were analyzed.

27

4. EX-POST CLASSIFICATION OF INVESTMENT BUDGET PLANS IN THE MEKONG DELTA

28

This chapter will first present the results from

the analysis of 4 provincial investment budget

plans for the three consecutive years from 2013

until 2015. All GIZ supported provinces were

subject to a thorough analysis using both the

CPEIR method and newly adjusted Climate

Change & Green Growth (CC&GG) weighting

method, which only differ in the use of the

coefficient, providing figures as a minimum –

maximum range.

In a first step, the figures are presented in its

highest aggregation, comparing the total

investment plan budget and its planned

expenditures for climate change (including the

percentage ratio) among all 4 provinces, for the

duration from 2013 until 2015. In a second step,

a more disaggregated analysis is being

presented. Indications are given for each

province, based on all three consecutive years,

including the interpretation of funding origins

and trends towards climate change spending.

4.1 Results from 4 Mekong Delta Provinces

Table 5 below shows the highest aggregated

results regarding the share of climate change

investments as part of the overall annual

provincial budget plan. Although 5 GIZ

supported provinces were assessed, An Giang

province does not show any complete results so

far. During the analysis it became clear that at

least the two budget sources “central

government allocations” and “state bonds” and

the respective use of the financial means were

not stated. An analysis of the ratio of climate

change adaptation and mitigation relevant

expenditures could thus not be undertaken for

the province. Future assessments for 2016

onwards, however, seem likely to conclude full

results for An Giang.

The remaining four provinces Ca Mau, Bac Lieu,

Kien Giang and Soc Trang on the other hand

provided the full investment budget plans for

the three years from 2013 until 2015. Table 5

below indicates average percentages for both,

each province for the 3 year time span on the

one hand and on the other an average

percentage for all 4 provinces within each given

year. The latter shows an increase of annual

average spending for climate change. The share

increases from 13.87% in 2013, to 17.46 % in

2014 to finally 19.42% in 2015. It has to be

noted that such kind of aggregation is rather

arbitrary as the choice of provinces only reflects

the 4 most southern provinces in the Mekong

Delta which have been supported by GIZ. As

there are 13 provinces in the Mekong Delta

which all differ in size, population but also in

terms of socio-economic and geographical

terms, the results cannot provide a general

trend for all Mekong Delta provinces or the

region as such. This difference between

provinces even becomes obvious through the

overall size of the investment budget figures

below.

29

With a population of 1.7 million and GDP of more than US$ 4 billion, Kien Giang province also bases their expenditures on a far more stable tax income power. Compared to the other 3 provinces with smaller populations and GDPs , Kien Giang thus executes investments which are almost double the amount of Ca Mau, Bac Lieu and Soc Trang. Following the investment patterns of the 4 provinces over the 3 years, however, real climate change investments all increase over the years and do not differ significantly. In fact, in 2015 all provinces planned to spend between almost US$ 20 and US$ 30 million for investments relevant for climate change, regardless of their size, socio-economic powers or overall available investment budget. It has to be pointed out that planned investment figures for the year 2015 e.g. are more important to consider than the sheer comparison of the provincial percentage figures, which obviously differ more significantly from province to province,

dependent on the different total investment budget values. The question which becomes more prominent is thus, why did Bac Lieu and Soc Trang plan to spend US$18 and US$19 million and Ca Mau and Kien Giang US$ 31 and US$ 27 million respectively? This question will be further investigated in a province by province approach, i) reflecting the geographical similarities and hence overlapping patterns of climate change vulnerabilities, ii) a continuous disaggregation of the provincial investment budgets, identifying the nature of climate change investments in each province, as well as decision making powers and investment incentives in relation to budget origins and whether investments are based on an own provincial tax bases or transfers and allocations from central government.

Table 5: Mekong Delta Climate Change Budget Classification 2013-2015

Mekong Delta Change Budget Classification 2013-2015

$1 = VND 22.500 3 year

in USD 2013 CPEIR 2014 CPEIR 2015 CPEIR provincial

Total Climate Change

% Total Climate Change

% Total Climate Change

% average %

An Giang na na na na na na

Bac Lieu $116.076.268 $ 18.636.556 16,06 $ 99.603.002 $ 19.603.002 19,78 $ 95.531.260 $ 20.072.613 21,01 18,77

Ca Mau $ 86.967.617 $ 24.924.985 28,66 $114.044.844 $ 25.174.695 22,07 $129.809.867 $ 31.822.101 24,51 24,76

Kien Giang $192.245.289 $ 7.442.232 3,87 $201.803.889 $ 15.465.619 7,66 $222.688.142 $ 27.235.874 12,23 8,13

Soc Trang $ 26.403.378 $ 7.479.624 28,33 $ 51.241.333 $ 21.160.280 41,30 $ 55.399.378 $ 18.650.862 33,67 35,55

annual annual annual

average average average

Total $421.692.552 $ 58.483.397 13,87 $466.236.444 $ 81.403.596 17,46 $503.428.646 $ 97.781.451 19,42

% % %

(Author’s calculation, based on provincial budget assessments)

1 Ca Mau – population: 1,218,821; GDP: VND 42,976 billion (US$ 1.9 billion), Bac Lieu – population: 889,109; GDP: VND

27,699 billion (US$ 1.2 billion), Soc Trang – population : 1,310,703; GDP: VND 39,998,778 million (US$ 1.77 billion)

30

GIZ – Integrated Coastal Management Programme (ICMP) Box: Survey results in accordance with ICMP’s objective and

indicator

The Integrated Coastal Management Programme (ICMP) based on the cooperation between Vietnam, Germany and Australia and

implemented through the Ministry of Agriculture and Rural Development (MARD) and GIZ, formulated an overall programme

objective for the duration of the 2nd phase from 2014 until 2018. “The government authorities at national and provincial levels

MARD and Provincial People’s Committees (PPCs) utilize their strengthened political, planning and financial capacities to foster

climate-resilient development of the Mekong Delta. "This survey provides the baseline results for the reporting towards the

programme’s indicator 2, which reads as follows: “The funds aiming at climate change adaptation allocated in the annual

budget plans of 5 provinces in the timeframe 2015-2017 amount on average to at least 20% of the respective overall

investment budgets.”

The first and most obvious question that seems striking is why 20%? Without an adequate baseline which could somewhat

indicate a trend for Vietnam and its provinces, the percentage is the random outcome of discussions between Development

Partners and the GoV during the stage of programme conceptualization for ICMP’s phase 2. And yet the discussion on ratios or

overall needed investments seem valid. The European Commission (EC) e.g. has set a target to spend 20% of all its structural

investment funds, to be allocated to European Union member countries, to tackle climate change, either adaptation or mitigation.

So far, however, there has not been any evaluation report to whether the EC’s target has been fulfilled. In its Nationally

Determined Contributions (NDC), the GoV has outlined overall estimations of needed financial resources for adaptation and

mitigation until the year 2030. This contribution to fulfill the Paris Agreement presents Vietnam’s financial capacities and also

highlights estimated funding gaps. 20% as a share for climate change response investments has however not been set as a goal,

neither for central government nor provincial funding. In fact, apart from the national CPEIR survey, based on central

government funding, a baseline for provinces has not had existed before the start of ICMP’s second phase in 2014.

The analysis covers all 5 provinces, with 4 providing accurate figures with results so far. The years 2016 and 17 have not been

covered yet. For the year 2015, the provinces Bac Lieu, Ca Mau and Soc Trang already fulfill the indicator, as their climate change

investment ratio is above 20%. Including Kien Giang province, which possess the largest total investment budget, the average

figure for the four assessed provinces drops to 19.42 %. Since 2013, the average planned investments have been increased by 5.5

percentage points or by almost USD 40 million for the four provinces over three years. Although, it cannot be automatically

concluded that this trend will be continued in a medium-term time span, a rise in ODA grants and loans for climate change

purposes such as coastal protection, mangrove rehabilitation, resilient housing and irrigation by the World Bank, France, Korea,

Japan, Germany and GCF funding will likely lead to higher rates until the year 2020. Further developments after 2020 are

however unclear as new Vietnamese loan regulations for provinces apply. Higher obstacles in terms of credit-worthiness might

limit the provinces access for investment funding.

Lessons and recommendations for future indicators: Setting a percentage target, as done by the European Commission (EC) has

to be seen as a political commitment. Many Development Partners also follow the SMART criteria for indicator formulation,

which stands for s=specific, m=measurable, a=achievable, r=relevant, t=time bound (Poister, Theodore H. (2008). Besides a

potential political commitment, the 20% indicator also fulfills all smart criteria. What remains questionable however is the “r”

for relevance. A 20% spending ratio for climate change investments does not indicate whether needs to adequately respond to

climate change are taken into account. In addition, a 20% share of investments also does not disclose cost effectiveness or

whether quality standards have been applied. Even over spending, green washing or waste e.g. for large adaptation

infrastructure investments would add and increase the potential share of climate resilient investments. It is thus rather

suggested to focus more on an orientation towards the question whether NDC tasks are reflected in provincial investment plans

and therefore a financial contribution to the implementation becomes visible.

31

The southern Mekong Delta and its vulnerability

to climate change

As mentioned before, Vietnam is among the 30

countries in the world most affected by climate

change. The Vietnamese Mekong Delta yet, is

one of the most vulnerable regions in Vietnam

and among the most vulnerable river deltas in

world with distinct differences compared to the

rest of the country. As a river delta, the region is

low lying and alluvial. It has ever since offered

great potentials for agricultural production,

such as 2 and even 3 rice crops and by now

feeding more than 245 million people in Asia

and worldwide annually. But the delta has also

always been exposed to many threats (GIZ,

2017). Historical accounts reported on land

subsidence, annual flooding and saline water

intrusion, dating back to even precolonial times,

even when first settlers arrived in the region

(Biggs, 2010:128). Intensive land use from

continuous extension of the Delta’s canal system

during French colonial times to an over

utilization of the soil and groundwater

resources until today’s construction of upstream

river dams and hydropower stations are the

human interventions and contributions to not

only increase the value of the land but also make

it more vulnerable. Climate change has not only

amplified the difficult livelihood situations of

the people, it has added to constant sea level

rise and more extreme weather events such as

storms, further floods and droughts.

Although the above mentioned geographical

features apply to the entire Mekong Delta and

thus underscore the homogeneity of the region,

various distinct sub regions are more prone to

more climate change impacts than others. While

the Mekong Delta’s upper river region (e.g. An

Giang and Dong Thap province) more often

suffers from river floods, especially during the

rainy season, the estuary region along the east

sea coast (e.g. Ben Tre, Tra Vinh and Soc Trang

province) as well as the most southern

peninsula (Ca Mau, Bac Lieu and Kien Giang) is

are more often affected by saltwater intrusion in

connection with droughts, storm surge and

coastal erosion. Governmental response thus

also differs between the sub-regions. As this

survey highlights the investment plans of four

coastal provinces, either along the east coast or

at the southern peninsula, conclusions do not

apply for the entire Mekong Delta region.

Nevertheless, the survey offers a high degree of

comparability as geographical features of the

four provinces and vulnerabilities to climate

change are very similar. Hence, it is a

hypothesis, that equally high real climate change

expenses in the four provinces are also rooted in

similar response strategies and actions. This will

be further investigated through an analysis of

individual provincial disaggregated budget lines

and an identification of whether these show

similar investment patterns.

Decision making power is inevitably connected

to financial responsibilities. Table 5 above

shows the overall investment budget for each

individual province and the share of planned

investments which are programmed for climate

change response. As the total 63 Vietnamese

provinces possess extensive fiscal autonomy,

decision-making powers are mainly with the

Provincial People’s Committees (PPCs).

Although the common feature of a communist

one party system is a high centralization of

power, Vietnam has been undergoing a number

of administrative reforms which led to higher

degrees of provincial autonomy and fiscal

decentralization. But besides more decision-

making powers for provinces, vertical financial

resource allocations from central to provincial

government level have been a vital bargaining

chip to further exercise central government

influence at subnational level. Vietnam is of

course not in unique position here, as

governments around the world, especially in

highly decentralized and federal countries use

financial allocations, e.g. as earmarked transfers

32

to gain or maintain influence. As in other

countries one part of these allocations is

supposed to fulfill balancing effects in which

provinces with a smaller tax basis and less

income are being supported. The other reason

for allocations, especially for earmarked

allocations are related to the implementation of

national policies at subnational level. Especially

National Target Programmes (NTPs) have

played a vital role to boost policy

implementation at provincial level. As

mentioned in chapter 2, Vietnam has a set of

policies developed to respond to climate change,

either through adaptation or green growth and

mitigation. The ratification of the Paris

Agreement in fall 2016 adds additional pressure

to successful climate change policy

implementation nationwide. In the following

sub-chapters all provinces will be thus analyzed

regarding the question of budget origin and

which financial sources have contributed most

to climate change related investments at

provincial level.

4.2 Ca Mau province

Table 6 shows Ca Mau’s 2015 investment plan

and is further divided into three climate change

expenditure related columns, based on three

different weighting or coefficient types. As

already described in chapter 3, all three types

are based on the same CPEIR method of

classification to categorize climate change

relevant expenditures. The new CC&GG

coefficient also uses only percentage ranges

with minimum and maximum amounts relevant

for climate change. The figures are thus

different, however follow the same pattern. The

CC&GG coefficient on the right hand side

estimates a valid range between US$ 22.6 and

almost US$ 44.8 million for climate change

related investments. DPI’s own calculations

based on slightly higher coefficients accounts for

almost US$ 35 million, while the CPEIR

coefficient accounts for almost US$ 32 million.

Both are almost exactly placed in between the

minimum and maximum values of the CC&GG

coefficient. As the pattern between the three

coefficients does not lead to any deviations, also

calculations for single budget sources and their

allocations for climate change are congruent.

For all three coefficient types, National budget

transfers include by far the highest

contributions for climate change. The National

allocations make up for almost 50% of all

climate change investments in Ca Mau, followed

by State Bond transfers with around 20% and

means from ODA with a little more than 10%.

The own provincial income base mainly

determined through Provincial taxes and

Lottery only account for around 10% with

relevance for climate change. A further

disaggregation seems necessary as to identify

single budget line items to understand the

nature of climate change investments, to

compare these among provinces and to finally

engage in tracking between actual climate

change response implementation and earlier

policy formulation.

33

Table 7 displays Ca Mau’s top line item climate

change investments only. The aim is to highlight

examples of the largest single investments

related to climate change in 2015, clustered

according to the origin of funding sources. The

results from table 6 indicated a share of 24.51%

in line with the CPEIR coefficient formula which

accounts for almost US$32 million. The largest

climate change response investments are the

“Upgrading of the west sea dike” with an annual

planned investment of more than US$ 5.3

million, followed by national park support with

US$ 2 million and irrigation, coastal resource

projects, coastal erosion prevention, fresh water

reservoir and urban climate proofing with a

share of US$ 1 million or less.

Ca Mau 2015

$1=VND 22,500

DPI coefficient CPEIR coefficient

CC&GG coefficient range

Source Total Allocated for CC Allocated CC Allocated range for CC Provincial National ODA State Bond Lottery State Credit Other Sources

$ 16.757.422 $ 23.724.444 $ 20.796.444 $ 28.225.956 $ 24.130.178 $ 7.333.333 $ 8.842.089

$ 129.809.867

%

$ 2.606.569 $ 16.831.111 $ 4.755.556 $ 7.239.529 $ 472.498 $ 1.975.111 $ 1.043.129

$ 34.923.502

26,90

$ 2.438.120 $ 15.628.711 $ 3.464.444 $ 6.937.984 $ 850.551 $ 1.532.000 $ 970.291

$ 31.822.101

24,51

min

$ 1.110.014 $ 14.414.741 $ 2.173.333 $ 4.332.748 $ 42.555 $ 639.289 $ 112.369

$ 22.610.309

17,42

max

$ 4.414.741 $ 16.869.333 $ 5.160.000 $ 11.481.207 $ 2.085.200 $ 2.525.156 $ 2.347.676

$ 44.883.313

34,58

Table 6: Ca Mau’s climate change responsive investments 2015 according to source

34

The pie diagram below summarizes the climate

change response investments with a value of

US$ 24.51 million in 2015. Investment

categories are in line with the 3 main CPEIR

classification categories Policy and Governance

(PG), Climate Change Delivery (CCD) and

Science and Technology (ST).

With more than 250 km coastline, Ca Mau

province has one of the longest shoreline in the

country. Exposure to sea level rise, coastal

`

erosion, floods and saltwater intrusion clearly

indicate a concentration of public spending for

coastal protection and dykes with 35% and

irrigation systems with 26%, totaling to almost

two thirds of the annual investment pie. In

greater distance, these investment types are

followed by forest development with 14%,

urban resilience with 7%, transportation 6%

and disaster infrastructure with 4%.

Table 7: Ca Mau’s TOP line item climate responsive investments 2015

TOP line items

Ca Mau 2015 VND×1mil USD CPEIR

% VND×1mil USD responsible nat.policy

Provincial Budget

Several projects of urban infrastructure development in Cà Mau City (in which the amount of VND 1 million allocated for construction of Tắc Thủ river bridge, ring-road No.1)

40.543 $ 1.801.911 20% 8.109 $ 360.400 DoC

National Allocations

U Minh Hạ National Park 45.000 $ 2.000.000 100% 45.000 $ 2.000.000 DARD

Upgrading of West side sea dike in Cà Mau province

42.000 $ 1.866.667 100% 42.000 $ 1.866.667 DARD NTP 667

Upgrading of West side sea dike in Cà Mau province

120.000 $ 5.333.333 100% 120.000 $ 5.333.333 DARD SP-RCC

Project of protection, rehabilitation and development of mangrove forest, phase of 2015-2020

30.000 $ 1.333.333 100% 30.000 $ 1.333.333 DARD SP-RCC

Project of anti-erosion, setting sedimentation and mangrove forestation to protect sea dike in Trần Văn Thời district

12.000 $ 533.333 100% 12.000 $ 533.333 DARD SP-RCC

Project of anti-erosion, setting sedimentation and mangrove forestation to protect shoreline in Đất Mũi commune

16.000 $ 711.111 100% 16.000 $ 711.111 DARD SP-RCC

Project for construction of fresh water reservoir on Hòn Khoai island, in Cà Mau province

13.500 $ 600.000 100% 13.500 $ 600.000 DARD

ODA

Coastal resrources for sustainable development (CRSD)

60.000 $ 2.666.667 50% 30.000 $ 1.333.333 DARD

Irrigation system for sub area X-South of Cà Mau, a project on Irrigation Management for rural development in MKD

35.000 $ 1.555.556 67% 23.450 $ 1.042.222 DARD

State Bond

Irrigation system for subregion III – Northern Cà mau

61.821 $ 2.747.600 67% 41.420 $ 1.840.892 DARD

Irrigation Sub region XVII-Southern Cà Mau 50.000 $ 2.222.222 67% 33.500 $ 1.488.889 DARD

State Credit

Investment project to construct T25 sluicegate 7.000 $ 311.111 87% 6.090 $ 270.667 DARD

35

It has to be noted that the CPEIR method so far

has not distinguished between adaptation and

mitigation or green growth. Nevertheless, from

Ca Mau’s analysis it can be also concluded that

the bulk share of investments followed

adaptation purposes, with mainly forest

development so far, offering at least combined

effects of mitigation and adaptation.

Another important question if not concern that

needs to be addressed is the accuracy of the

classification. The above chapter on the

classification methods and use of coefficients

has already highlighted the debate which comes

along all assessments. One conclusion is that a

less distinct differentiation of coefficients offers

greater risks to blur or even manipulate or

green wash results. On the other hand, broader

range coefficients probably allow less special

expertise which makes the entire approach

more applicable (especially at local or provincial

level) and therefore also much faster for the

assessment process.

Taking this potential dilemma between accuracy

and applicability into account, the provincial

analysis offers a perspective which proves that

accuracy is not at risk. Matching the above

displayed TOP item investment list with the

diagram of summarized climate change

investment categories shows that the majority

of investments are without doubt 100%

creditable for climate change response. In table

7, the center column displays the assigned

CPEIR percentage, indicating the share of the

overall investment amount to be relevant for

climate change. The list shows that more than

half of the TOP line items account for 100%

CCD1.1: Coastal protection and dykes

35%

CCD1.3: Irrigation systems

26%

CCD1.4: River embankments

1%

CCD1.5: Water quality 2% CCD1.6: Rural

development 2%

CCD1.7: Forest development

14%

CCD 2.1: Public Health 1%

CCD 2.3: Urban resilience

7%

CCD 2.4: Transportation

6% CCD 2.6: Disaster

Infrastructure 4%

other <1%

ST 3.2: Capacity 1%

Diagram 2: Ca Mau’s climate responsive investments according to CPEIR typology

36

based on the CPEIR. The other half of the biggest

investments with relevance for climate change

account for more than 50% relevance, with only

one investment rated with 20%. Comparing

these main line item investments, accounting for

climate change with the pie diagram, it becomes

obvious that most of the 100% climate change

investments are summarized as coastal

protection and dykes (CCD 1.1) as well as forest

development (CCD 1.7). Both categories CCD 1.1

and CCD 1.7 make up almost exactly 50% of the

entire budget pie on climate change. Irrigation

systems (CCD 1.3) which account for 26% of all

investments are rated with a coefficient of either

67% for actual irrigation systems or 87% for

sluice gates. In a nutshell this suggests for a

higher degree of certainty towards the accuracy

of the classification, as most investments are

without doubt a response to floods, sea level

rise and erosion as well as saltwater intrusion.

Another conclusion is that this finding of

accuracy will not be much different if the

broader CC&GG coefficient range was being

used. Still then, most coastal protection and

irrigation investments account for 100% or up

to 99% for climate change.

Nevertheless it has to be noted that this survey

has not shed light on non-coastal and hinterland

provinces in the Mekong Delta, where the

climate change investment focus will not be on

coastal protection. Also transportation and

urban infrastructure already play a very

important role in each provincial investment

portfolio. Resilience for this infrastructure will

become key for the Mekong Delta region with

growing cities, increasing industrialization and a

much better transportation networks. Higher

proportions for these investments will

automatically lead to more debate as their

climate change response functions are less clear

compared with e.g. a dyke. Climate proofing for

roads or urban sewage systems is more difficult

to calculate or might risk higher inaccuracy

levels. Future surveys which concentrate on

other Mekong Delta provinces should take this

into account. It also suggests that a stronger

emphasis is given to ex-ante tagging modalities

which would allow provincial departments (e.g.

for transportation or construction) to already

include a classification of actual costs during the

planning and implementation process, instead of

complicated and time consuming ex-post on site

visits to assess climate proofing costs of the

past.

37

4.3 Bac Lieu province

Table 8 shows that Bac Lieu spends about US$

20 million according to the CPEIR coefficient

and a range between US$ 18 and US$ 21 million

based on the CC&GG coefficient for climate

change responsiveness. For the CPEIR

coefficient, this makes up 21.01%, for the

CC&GG coefficient a range between 18.8 and

22.1% of Bac Lieu’s total US$ 95.5 million.

Similar to Ca Mau, Bac Lieu province uses the

least of its own provincial sources for climate

change related investments. E.g. only US$

799,331 out of more than US$ 35.5 million in

Table 9 is a disaggregation of Bac Lieu’s

investment budget and shows the province’s

TOP line items which account for climate

change. The list shows the 12 largest climate

response investment projects in categories such

as disaster prevention, coastal protection,

including mangrove rehabilitation, secure water

supply and embankments along inland rivers

and canals and therefore emphasizing Bac Lieu’s

high vulnerability as a coastal province. With

provincial lottery income adds to the overall US$

20 million related to climate change. Indeed the

bulk share stems from ODA funding with US$ 7.6

million, state bonds with US$ 5.1 and further

national budget allocations of US$ 4.6 million. In

addition, Bac Lieu highlights and separates NTP

funding in its aggregated overview, which

accounts for more than half a million US$ for

climate change in 2015. Overall more than 90%

of the US$ 20 million are funded from non-

provincial sources.

more than US$ 5 million, the estuary erosion

prevention project funded through state bonds

is the biggest. In the future it would be also

helpful to indicate the linkage between the

investment and the respective national policies

as part of the budget line item. As 11 out of

those 12 single investments derive from

national or ODA funding, a connection to

national policies or strategies seems obvious.

Table 8: Bac Lieu’s climate change responsive investment 2015 according to

source

Bac Lieu 2015 CPEIR coefficient CC&GG coefficient range

$1= VND 22.500

Source Total Allocated for CC Allocated for CC

min max

Budget balanced Lottery Exceeded revenue from Land-use Budget revenue Loan State Bond Basic contruction ODA NTP resources

$ 10.600.000 $ 35.555.556 $ 500.709 $ 870.622 $ 2.222.222 $ 20.032.844 $ 11.760.000 $ 10.095.378 $ 3.893.929

$ 780.344 $ 799.331 $ 82.327 $ 469.840 $ - $ 5.111.689 $ 4.680.000 $ 7.600.000 $ 549.082

$ 549.070 $ 737.660 $ 62.610 $ 351.041 $ - $ 4.555.081 $ 4.418.875 $ 6.821.496 $ 537.631

$ 827.270 $ 850.363 $ 83.257 $ 475.149 $ - $ 5.357.451 $ 5.117.884 $ 7.880.880 $ 555.287

TOTAL $ 95.531.260 $ 20.072.613 $ 18.033.463 $ 21.147.541

% 21,01 18,88 22,14

38

The pie diagram for Bac Lieu below summarizes

the climate change response investment

categories. The categories are in line with the 3

main CPEIR classification categories Policy and

Governance (PG), Science and Technology (ST)

and Climate Change Delivery (CCD). All three

main categories are further divided into sub-

categories. As the other surveyed provinces, Bac

Lieu is a coastal province. Although it possesses

less than 100km coastline, the province has

been in the media more often between 2015 and

2017 for severe damages along its shores, dykes

breaches and erosion along river embankments.

Hence, CCD 1.1 coastal protection accounts for

Table 9: Bac Lieu’s TOP line item climate responsive investments 2015

TOP line items

Bac Lieu 2015 VND×1mil USD CPEIR

% VND×1mil USD responsible nat.policy

$1=VND22.500 $1=VND22.500

Provincial

Project to construct tide prevention and innudation protection works for Bạc Liêu city and surrounding area

5.982 VND $ 265.867 87% 5.204 VND $ 231.289 DoC

National Allocations

Residential projects, resettlement of protection forest in Bac Lieu

12.000 VND $ 533.333 87% 10.440 VND $ 464.000 DoC

Construction projects for water supply system in Phuoc Long, Phuoc Long distric

10.160 VND $ 451.556 87% 8.839 VND $ 392.844 DoC

Project construction of the embankment projects to combat erosion urgently overcome the consequence of and flood disasters in the two river banks of Bac Lieu (under the investment project the river embankment in the city of Bac Lieu)

38.000 VND $ 1.688.889 87% 33.060 VND $ 1.469.333

Sub-projects for sea dyke section from the channel to the T-junction of Mui Tau and a pillar-structure dam (sluice gate combining function of bridge) through district channel of Huyen Ke

35.000 VND $ 1.555.556 100% 35.000 VND $ 1.555.556 DARD

Investment projects for storm shelters in Nha Mat

20.000 VND $ 888.889 100% 20.000 VND $ 888.889

ODA

Invest in construction of urgent, disaster prevention and response to climate changeworks in the province (Project to construct tide prevention and innundation protection works for Bạc Liêu city and surounding area)

90.000 VND $ 4.000.000 100% 90.000 VND $ 4.000.000

Project on sediment accretion and tree planting for erosion protection in Nhà Mát coastal areas

20.000 VND $ 888.889 100%

20.000 VND $ 888.889 DARD

Project on sedimentation for erosion protection, mangrove planting for erosion protection and Gành Hào sea dyke protection

15.000 VND $ 666.667 100%

15.000 VND $ 666.667 DARD

Project on sediment accretion and coastal protection mangrove rehabilitation in Bạc Liêu province

26.000 VND $ 1.155.556 100%

26.000 VND $ 1.155.556 DARD

Project on climate change adaptation through promotion of biodiversity

20.733 VND $ 921.467 100%

20.733 VND $ 921.467 DARD

State Bond

Coastal river estuary erosion protection revetment of Gành Hào town, Đông Hải

114.280 VND

$ 5.079.111 100% 114.280

VND $ 5.079.111 DARD

39

48%, very similar to the shares measured in Ca

Mau and Soc Trang province. CCD 2.6 as the

category on disaster risk comes second with

25%, followed by CCD 1.5 and CCD 1.4 related to

river embankments and water quality with each

7%. While erosion along river and canal

embankments has to be seen as a common

problem for all Mekong Delta provinces, the

need to improve water quality is again a rather

common phenomenon in either coastal or lower

Mekong river provinces. It has to be noted that

the sub-category CCD 1.5 for water quality has

been selected due to the wording characteristics

of the single investment lines. In other provinces

with similar vulnerability patterns, e.g. in Soc

Trang or Ca Mau, the wording prevention of

saline water intrusion has been used by the

DARDs. It is thus suggested to further

investigate in the use of a sub-category as

similarities might occur and might lead to

unclear result interpretation. In comparison

between the pie diagram and the TOP line item

list, it can be again concluded that for about

three-quarter of all climate responsive

investments (48% coastal protection and dykes

as well as 25 disaster prevention), a 100%

coefficient applies. As for Ca Mau, it is thus save

to say that room for interpretation concerning

climate change relevance is rather low. In fact,

investment categories such as CCD 2.3 urban

infrastructure, CCD 2.4 transportation and CCD

2.5 waste management for which climate change

is only partly relevant (less than 25%) account

for only less than 3% in relation to the overall

US$ 20 million in Bac Lieu.

40

4.4 Kien Giang province

Out of the 4 successfully surveyed provinces,

Kien Giang gains special attention. As the other

3 provinces all spend more than 20% of their

annual investment budgets in 2015 for climate

change. Kien Giang only accounts for a 12.23 %

ratio of the overall investment pie. However, as

one of the wealthier provinces of the Delta (US$

4.1 billion GDP in 2015), Kien Giang possesses

also the biggest of all 4 investment budgets with

more than US$ 222 million in 2015. With

12.23%, the share might be smaller compared to

the other three provinces, real spending

nevertheless reaches US$ 27.2 million and is

thus the second highest amount for climate

response measures. It has to be highlighted that

only about 3% of the US$ 27.2 for climate

change stem from own provincial sources such

as its own tax base and lottery income. Though

this finding makes Kien Giang an extreme case

in which almost the entire climate responsive

funding originates from central government

allocations, ODA and bonds, it is also just

another case which contributes to a pattern that

suggests the hypothesis of central government

funding to be most important for climate

response. This hypothesis might be validated

through an assessment of rich coastal provinces

with a substantial own tax bases such as Da

Nang or Ba Ria Vung Tau.

Diagram 3: Bac Lieu’s climate change responsive investments according to CPEIR typology

CCD1.1: Coastal protection and dykes

48%

CCD1.3: Irrigation systems

3%

CCD1.4: River embankments

7%

CCD1.5: Water quality 7%

CCD1.7: Forest development

3%

CCD 1.9: Biodiversity 5%

CCD 2.6: Disaster Infrastructure

25%

ST 3.2: Energy Efficiency <1%

CCD 2.5: Waste

Management <1%

CCD 2.4:

Transportation <1%

CCD 2.3:

Urban resilience 1%

41

Table 11 below displays the 16 TOP line items

relevant for climate change in Kien Giang

province in 2015. The sole investment from a

provincial source is for urban flood proofing and

is also by far the smallest, compared with

central government allocated, ODA and state

bond projects. The largest single investments

have been made for sluice gates, coastal dykes

and wave breaker, irrigation, water retention

measures and forestation with most

responsibilities assigned to DARD and DoC.

Table 10: Kien Giang’s climate change responsive investments 2015 according to source

Kien Giang 2015 CPEIR coefficient CC&GG coefficient range

$1= VND 22.500

Source Total Allocated for CC Allocated for CC

min max

Budget balanced Central Budget 1 Central Budget 2 ODA National Target Programme State Bond State Bond Counterpart ODA State Bond Rural Programme Loan Lottery Lottery Fund

$ 50.687.600 $ 41.937.778 $ 11.164.133 $ 1.546.667 $ 44.565.600 $ 1.688.889 $ 3.022.230 $ 5.555.556 $ 49.186.356 $ 13.333.333

$ 437.007 $ 12.559.689 $ 9.340.485 $ 577.778 $ 3.811.556 $ 177.778 $ - $ - $ 331.582 $ -

$ 290.653 $ 9.728.400 $ 943.556 $ 577.778 $ 2.901.333 $ 8.889 $ - $ - $ 150.376 $ -

$ 460.991 $ 15.571.600 $ 9.801.844 $ 577.778 $ 5.632.000 $ 435.556 $ - $ - $ 476.691 $ -

TOTAL $ 222.688.142 $ 27.235.874 $ 18.033.463 $ 32.956.460 % 12,23 18,88 14,80

42

Summarizing Kien Giang’s overall climate

response investment in 2015, the conclusion

also differs slightly compared with the other 3

provinces. While Ca Mau has spent 35% and Bac

Lieu and Soc Trang more 45%, Kien Giang only

budgeted 18% for coastal protection and dykes.

Kien Giang’s climate investment pie is more

balanced among coastal protection, saline

intrusion prevention, forest development and

aquaculture. Below 10% are CCD 1.4 river

embankments, CCD 1.5 water quality and also

CCD 2.6 disaster infrastructure. Special

attention should be on the other hand paid to

the province’s transportation and road

investments. With 7% for CCD 2.4 the category

is already relatively well positioned compared

with the other three provinces. Mainly central

government allocations for the up-grading and

partly climate proofing of roads can be

accounted here with a percentage coefficient

between 1-24%. But in addition to that, the

province has funded the construction of new

roads with state bond sources worth VND

672,726 million or US$ 29.9 million in 2015

alone. As for the state bond funding no

information e.g. through DoT’s investment

proposals could be disclosed, it remains unclear

whether part of the investment funding has

Table 11: Kien Giang’s TOP line item climate change responsive investments 2015

TOP line items Total investment value Climate responsive share

Kien Giang 2015 VND×1mil USD CPEIR

% VND×1mil USD responsible nat.policy

Provincial Budget

Flood proofing projects for urbans in MK delta

10.000 VND $ 444.444 100% 3.000 VND $ 133.333 DoC

National Allocations

Embankment in Giồng Riềng 38.900 VND $ 1.728.889 87% 33.843 VND $ 1.504.133

Infrastructure for aquaculture production in Vĩnh Phong – Vĩnh Thuận

5.000 VND $ 222.222 67% 3.350 VND $ 148.889 DARD

Wave breaking dyke and river dredging of Dương Đông river

17.000 VND $ 755.556 100% 17.000 VND $ 755.556 DARD

Sea dyke project in An Biên – An Minh (27 sluicegates)

13.000 VND $ 577.778 100% 13.000 VND $ 577.778 DARD

Sea dyke through Rạch Giá 50.000 VND $ 2.222.222 100% 50.000 VND $ 2.222.222 DARD

Reinforcement & upgrading sea dyke in An Biên – An Minh

10.000 VND $ 44.444 100% 10.000 VND $ 444.444 DARD

Shelters and storm shelter for fishing boats in Lình Huỳnh, Hòn Đất, Kiên Giang

17.000 VND $ 755.556 87% 14.790 VND $ 657.333

Infrastructure construction for resettlement in Gành Dầu

20.000 VND $ 888.889 80% 16.000 VND $ 711.111 DoC

Investment, restoration and protection National forest of UMT

42.000 VND $ 1.866.667 100% 42.000 VND $ 1.866.667 DARD

Water retention of Bãi Nhà, Kiên Hải (Hòn Ngang, Bãi Nhà and repairing retention of Hòn Lớn), Kiên Hải, Kiên Giang

15.000 VND $ 666.667 15.000 VND $ 666.667 DARD

ODA Allocations

Irrigation management serving agri development in MK

21.000 VND $ 933.333 100% 21.000 VND $ 933.333 DARD

Sluicegate for Sông Kiên river, Rạch Giá 115.000 VND $ 5.111.111 100% 115.000 VND $ 5.111.111 DARD

Gaining alum for mangrove forestation to protect sea dyke from Bình Sơn to Bình Giang

13.000 VND $ 577.778 100%

13.000 VND $ 577.778 DARD

Forest restoration project along the coast in Kiên Giang 2015-2020

38.000 VND $ 1.688.889 100%

38.000 VND $ 1.688.889 DARD

State Bond DARD

Adapted irrigation system for aquaculture production

128.000 VND $ 5.688.889 67%

85.760 VND $ 3.811.556 DARD

43

been used for climate proofing measures. It has

to be thus noted that the amount for

transportation from state bond sources in Kien

Giang was classified as non-relevant (0%) due to

lack of appropriate information.

It is therefore one of the key lessons of the

classification process to not only involve the

various provincial departments such as DoT, but

to identify a mechanism in which investment

proposals can highlight climate change response

in rather cross-cutting infrastructure projects

such as roads or urban infrastructure. In

addition, it is also obvious that capacity building

towards climate proofing of public and private

infrastructure has just begun and requires a

horizontal approach, involving more ministries

and departments.

Diagram 4: Kien Giang’s climate change responsive investments 2015 according to CPEIR typology

CCD1.1: Coastal protection and sea

dykes 18%

CCD1.2: Saline intrusion

22%

CCD1.4: River embankments

6%

CCD1.5: Water quality

5%

CCD1.7: Forest development

15%

CCD1.8: Aquaculture 19%

CCD 1.9: Biodiversity 1%

CCD 2.3: Urban resilience

4%

CCD 2.4: Transportation

7%

CCD 2.6: Disaster infrastructure

3%

44

4.5 Soc Trang province

Soc Trang’s results for the 2015 investment

budget plan show high percentage values for

both coefficient methods CPEIR and CC&GG (see

table 12). While the latter indicates a range

between 27% and 38%, the CPEIR almost

perfectly claims the middle with 33.67% climate

change investments. As already seen in table 5

(classification overview 2013-15), Soc Trang

shows peculiar percentage ratios for all three

consecutive years between 2013 and 2015 with

an average of 35.55%. However, what has to be

First of all, the question seems to be difficult to

answer, as Soc Trang could not provide a

funding source differentiated list. As mentioned

earlier, the formats of the all provincial

investment budget plans differ. In most cases,

annual delays e.g. with regards to ODA no

nation-wide template being used at provincial

level, many DPIs also use different formats.

While Bac Lieu province e.g. displays all

expenditures with an indication of the financial

source in one sheet, Ca Mau separates individual

pointed out is that Soc Trang has a much smaller

overall investment budget basis. With US$ 55.3

million, Soc Trang possesses only 60% of Bac

Lieu’s investment budget. And yet, the

province’s investment expenditures for climate

change are almost identical to Bac Lieu’s

investments with US$ 18.6 million vs. US$ 19.6

million. What is the reason for a much smaller

investment budget but relatively high climate

change resilient spending?

spreadsheets according to source in one excel

file. Soc Trang on the other hand lists all

investments, but without further differentiation

according to source. Compared to the other sub-

chapters, an overview to identify highest source

contributions for climate change is not provided.

What offers more insights though is a closer

look through which climate change response

expenses Soc Trang’s budget is being dominated.

Table 13 shows the TOP line items with

relevance for climate change in Soc Trang

Table 12: Soc Trang’s 2015 investments according to source

Soc Trang 2015 CPEIR coefficient CC&GG coefficient range

$1= VND 22.500

Source Total Allocated for CC Allocated for CC

min max

Provincial National NTP ODA State Bond Lottery Loans Other Sources

$ 7.384.000 $ 15.128.889 $ 1.613.333 $ 6.800.000 $ 16.568.889 $ 4.404.267 $ 2.166.667 $ 1.333.333

$ 55.399.378 $ 18.650.862 $ 15.034.085 $ 21.197.328 % 33,67 27,14 38,26

45

province. River embankments and various dyke

projects with a total of more than US$ 3 million

are followed by mangrove rehabilitation and

reforestation projects of around US$ 2 million in

total. With less than US$ 1 million irrigation,

saltwater prevention and climate proof road

construction can be accounted for climate

resilient expenses. Also like in the other

provinces, mainly DARDs are responsible for the

execution of the projects. Although funding

sources cannot be attributed to climate change

expenses in the first place, it seems very likely

that as in the other 3 surveyed provinces, the

majority of climate change funding derives from

national allocations and ODA. One conclusion is

hence, that for the 4 assessed Mekong Delta

provinces, the overall investment budget size is

not determining the amount spend for climate

change response measures. A hypothesis for

future assessments is rather suggesting a large

dependency on fund allocations from central

government for larger infrastructure projects

(dykes and embankments e.g.) or forestation,

based on national policies such as the Decision

667 for the dyke construction from Quang Ngai

to Kien Giang, NTPs or the SP-RCC.

46

The pie diagram below is also confirming the

observation from the examples given in the TOP

line item list and concenring a major attention

on coastal vulnerabilities. CCD 1.1 and CCD 1.3

on coastal protection and dykes as well as river

embankments and dykes make up more than

three-quarter of the entire climate response

funding in Soc Trang province. The overall

pattern is again very similar compared with the

other 3 provinces. Coefficients indicating a much

lower significance of up to 25% relevant for

climate change, only account for the smallest

pieces of the overall climate investment pie. As

in the other provinces, these are transportation

and mainly waste management, which require

further surveillence and methodological fine

tuning in the future. Nevertheless, as they make

up only less than 10% of all climate related

investments, potential deviations are unlikely to

distort provincial results.

Table 13: Soc Trang’s TOP line item investments for climate change response in

2015

TOP line items

Soc Trang 2015 VND×1mil USD CPEIR % VND×1mil USD responsible

Build surrounding dyke to protect low-lying areas in Ngã Năm district (Ngã Năm town at present) from flooding, Sóc Trăng province

28.000 VND $ 1.244.444 99% 27.720 VND $ 1.232.000 DoC

Build surrounding dyke to protect low-lying areas in Ngã Năm district (Ngã Năm town at present) from flooding, Sóc Trăng province

60.000 VND $ 2.666.667 99% 59.400 VND $ 2.640.000

Improve and upgrade irrigation system for aquaculture in Lai Hòa – Vĩnh Tân, Vĩnh Châu town, Sóc Trăng province

13.000 VND $ 577.778 67% 8.710 VND $ 387.111 DARD

Improve and upgrade irrigation system for aquaculture in Vĩnh Phước – Vĩnh Tân, Vĩnh Châu town, Sóc Trăng province

14.500 VND $ 644.444 67% 9.715 VND $ 431.778 DARD

Saltwater intrusion prevention system to stabilise production at Saintard river right bank area-under the irrigation management for rural production in the Mekong Delta project

14.100 VND $ 626.667 100% 14.100 VND $ 626.667 DARD

Improve and upgrade irrigation system for aquaculture in Cù Lao Dung district

17.500 VND $ 777.778 67% 11.725 VND $ 521.111 DARD

District road 50, Mỹ Xuyên district 21.700 VND $ 964.444 20% 4.340 VND $ 192.889 DoT

Rural roads for traffic and for rescue, security and defense of new rural communes in Vĩnh Châu town, Sóc Trăng province

48.750 VND $ 2.166.667 20% 9.750 VND $ 433.333 DoT

Maspero river bank embankments 77.800 VND $ 3.457.778 87% 67.686 VND $ 3.009.267 DARD

Maspero river bank embankments 14.000 VND $ 622.222 87% 12.180 VND $ 541.333 DARD

Protect from erosion, create accretion and plant mangrove trees for sea dyke protection from erosion in Vĩnh Hải commune, Vinh Chau district (Vinh Chau town at present)

20.000 VND $ 888.889 100% 20.000 VND $ 888.889 DARD

Create accretion and plant mangrove trees at sea dyke of Vĩnh Tân – Vĩnh Phước communes

20.000 VND $ 888.889 100% 20.000 VND $ 888.889 DARD

Pilot new plantation, restoration and protection of mangrove forests for climate change adaption in the coastal zone of Soc Trang province

25.000 VND $ 1.111.111 100% 25.000 VND $ 1.111.111 DARD

Vĩnh Châu embankment for river erosion protection

20.000 VND $ 888.889 87% 17.400 VND $ 773.333 DARD

Embankments to remedy river erosion in Ke Sach district

10.000 VND $ 444.444 87% 8.700 VND $ 386.667 DARD

47

4.6 Summary of Findings and Conclusions Concerning the Mekong Delta Provinces

National sources are mainly used for climate

change response investments, regardless of the

individual provincial tax base and how big

lottery incomes are. Most sources with

provincial origins are being spent for education,

health or transportation and roads. Hence the

lack of climate responsive spending from

provincial sources does not offer much room for

criticism. The finding about the lion’s share

origin of climate investment sources rather

leads to the hypothesis that investments,

especially in coastal protection and dykes, but

also inland waterway embankments and erosion

protection as well as larger irrigation and saline

water intrusion prevention projects depend on

national funding and nationally steered planning

One conclusion is hence, that for the 4 assessed

Mekong Delta provinces, the overall investment

budget size is not determining the amount spent

for climate change response measures. A

hypothesis for future assessments is rather

suggesting a large dependency on fund

allocations from central government for larger

infrastructure projects (dykes and

embankments e.g.) or forestation, based on

national policies such as the Decision 667 for

the dyke construction from Quang Ngai to Kien

Giang, NTPs or the SP-RCC.

Another major conclusion though picks up on

the finding that provincial climate change

response investments mark a significant

dependency on central government funding. Of

course dependency provides negative

associations, especially in a highly decentralized

context. Also the principal of subsidiarity states

that no higher-level public agency should

Diagram 5: Soc Trang’s climate change response investments according to CPEIR

typology

CCD 1.1: Coastal protection and sea

dykes 47%

CCD 1.2: Saline Intrusion 3%

CCD 1.4 : River dyke embankments

30%

CCD 1.5: Water quality 2%

CCD 1.8: Aquaculture 9%

CCD 1.9: Biodiversity 1%

CCD 2.4: Transport 4%

CCD 2.5: Waste Mgmt.1%

Science&Tech: 2%

48

attempt to do what a lower-level agency can do

better. And this seems to be one of the core

questions for Vietnam’s implementation of

climate change strategies. Are provinces, as the

main lower administrative level, able to handle

climate change response and related mitigation

and adaptation investments better than central

government? The nature of the majority of

climate responsive infrastructure investments

e.g. for coastal protection and inland irrigation

suggests differently for a number of reasons.

First, most infrastructure investments require

technical expertise and capacities which are

hardly to be found in every single province and

rather available at national level. Second and

probably more important however, is the fact

that the Mekong Delta proves to be a common

geographical region that shows not only a huge

number of similarities but interdependencies.

Every coastal intervention in one province can

lead to consequences in neighboring provinces

down or up the coastline or related to its fresh

and saltwater regime. To avoid negative lock-in

effects and to ensure investment prioritization

along vulnerability criteria instead of rather

equal provincial fund distribution, a more

centralized strategic approach to include the

entire coastline of the Mekong Delta is thus a

necessary condition. NTPs or the mentioned

Decision 667 for the dyke construction and

routing from Quang Ngai to Kien Giang are

examples for the needed national influence on

climate responsive planning. And yet, although

funding dependency is given, actual on-site

planning and implementation of provincial

measures is often characterized by negotiations

between national ministries and provinces. The

results are often compromising and it remains

an open question whether the national fund

allocations always follow a streamlined regional

approach. Instead experiences in the four

examined provinces also indicate piece-meal

solutions e.g. concerning coastal protection

measures, which rather lead to the hypothesis

that competition between Mekong Delta

provinces determines funding allocations more

than regional strategic views. The Prime

Minister’s Decision 593 from 2016 stresses the

importance of a regional coordination

mechanism which could incorporate both, the

national and provincial views and demands and

leads to much more efficient ways for

appropriate investment decisions. As Decision

593 is also highlighted as one of the connections

to NDC task #67, the planning and budgeting

landscape for climate responsive investments

might also change.

49

5. ITERATIVE STEPS AND RECOMMENDATIONS FOR FUTURE PLANNING

50

The findings and results of chapter 4 shed light

on the actual provincial planning figures and

commitments towards climate change response.

In the light of strengthening MRV, it has to be

noted that this ex-post analysis provides

straight answers to “R” reporting and “V”

verification. Although the above initiated

analysis leaves questions concerning the linkage

between national climate change strategy

formulation and implementation verification so

far unanswered, a follow-up to this survey

should highlight this connection. At best, such

verification would offer PPCs and technical

implementers a chance to better align

investment planning to given national

requirements. National policy makers on the

one hand would receive feedback to also

conclude whether national targets are realistic

or too ambitious for provincial implementation

or whether interfaces in the translation between

policy (e.g. laws, decisions, strategies) and the

formulation of practical guidelines are missing.

Already now, linkages between the NDC tasks

and both single line item investments and the

applied CPEIR typology (especially Climate

Change Delivery) apparently offer ways for a

much better synchronization between the Paris

Agreement and provincial implementation.

A procedural mechanism which includes the

involvement of different national and provincial

actors to cooperate on verification questions

however, is yet to be established. Another

shortcoming so far is also the lack of a

horizontal, inter-sectoral approach at provincial

level. The analysis above is a result of the

cooperation between the provincial DPIs and

GIZ. It has been mainly DPI staff to participate in

trainings and to organise internal task forces to

gather all necessary investment plan data to

ensure a classification by hindsight. Although

the DPIs are the main responsible sector

departments at provincial level to overlook the

investment planning, the initial proposal and of

course final execution of climate response

investment is mainly within the responsibility of

other sector ministries or departments at

provincial level. As the TOP line item tables in

the previous chapter show, the vast majority of

provincial TOP line item investments for climate

change response are planned by DARD.

Irrigation, agriculture but also coastal

protection and forestry are all areas for which

DARD is responsible. Other important provincial

departments are the DoC and DoT, as they

mainly subscribe to questions related to climate

proof urban infrastructure and transportation.

In general, this implies functioning iterative

loops characterized by a rather high level of

“guided change” instead of a top-down “directed

change” process (Buono; Kerber, 2009). It

remains to be analyzed whether “guided

change”, based on cooperation between actors is

feasible in Vietnam, e.g. between central

government and provincial level. Sluggish

reaction time of either central government or

provinces to adjust climate change targets or

implementation practices would of course

hamper the process. In light of the Paris

Agreement’s binding timeline, one question for

the nearer future will be whether a national

MRV system based on ex-post tagging and

tracking will allow for needed adjustments and

also create room to formulate even higher

ambitious targets and milestones in 5 year

steps.

Although climate models and down-scaling

abilities have become more accurate in recent

years, extreme weather events and the difficulty

to calculate appropriate contingencies lead to

higher uncertainty, especially at local level.

Using MRVs to also accelerate reaction time of

public serve providers has thus to be seen as a

managerial asset for the future.

This survey recommends a piecemeal approach

which focuses on a potential adjustment of the

planning procedure, based on an ex-ante budget

classification. Diagram 6 below shows the

51

hierarchy and the top-down flow of the climate

planning process. Although Vietnam’s Central

Party Committee Resolution and both the

National Climate Change Strategy as well as the

Vietnam Green Growth Strategy have been in

place since 2011 and 2012, the Paris Agreement

and Vietnam’s NDC are now internationally

recognized and will be the focus until 2030. In

the course of establishing an appropriate MRV

system, the harmonization of both levels,

international and national will be important.

This is true as all subsequent provincial climate

responsive planning and implementation efforts

are supposed to be based on the 2011 and 2012

national strategies. But besides this rather high

level synchronization, this survey emphasis on

the interface between “Provincial Action Plans

to Respond to Climate Change”/ “Provincial

Green Growth Strategies” and annual

investment budget planning.

(author’s diagram)

Diagram 6: Suggestion for future CC&GG investment planning and tracking

52

At provincial level a higher degree of horizontal

coordination with a key role for the DPIs seems

to be important for success. Already in the

aftermath of the 2011 National Climate Change

Strategy, provinces under the leadership of the

DoNREs established Provincial Task Forces or

Steering Groups to allow for mainly adaptation

action plan formulation. Many provinces did not

have an appropriate follow-up system to either

monitor or evaluate the adequacy of the action

plans, although they exist on paper. Even more

important was the fact that the Provincial Action

Plan to Respond to Climate Change and Sea

Level Rise has always seen as stand-alone

document without the necessary linkages to

other already existing sectorial plans. In

retrospect, this has made many response actions

plans toothless. As highlighted in the previous

chapter of results from the provinces, mainly

DARD, but also DoC and DoT are planning

climate responsive investments. Therefore both,

the 5 year medium-term strategy planning and

annual planning cycle must ensure the

synchronization of all relevant sector strategies

and plans with both provincial adaptation and

mitigation strategies (climate response and

Green Growth). As the lead agency for

investment planning at provincial level, DPI

could lead a facilitation role. Probably the most

important aspect of the investment planning

process after a medium-term strategy

formulation is the elaboration of the sectorial

investment proposals. Dependent on the nature

of the investment, a proposal rolls out a funding

time line for subsequent years to be followed. As

Commitment Appropriations (CA) are not

granted for a multi-year investment roll-out,

continuous funding for on-going investment

projects has to be planned and approved on an

annual basis. The proposal process is initiated

by the respective sector department,

coordinated by DPI and finally approved by the

Provincial People’s Committee and Council.

Without synchronization of the climate change

actions with the above mentioned individual

sector plans, it will be highly unlikely that

investment proposals reflect climate change and

take targets into account.

As an investment planning facilitator, DPI would

need to initiate a broader sensitization and

training approach, to include the most relevant

sector departments such as DARD, DoC, DoT,

DoNRE, DoH, DoST and DoLISA in this

harmonization effort of climate and sector

planning. With a multitude of 63 provinces in

Vietnam or 13 provinces in the Mekong Delta,

external support from MPI as well as respective

donor agencies seems decisive. Interprovincial

capacity development and training approaches

probably also increase the efficiency for up-

scaling. Experience in the Mekong Delta has

shown that many provincial departments have

not yet been sufficiently exposed to climate

change related questions and insufficiently

enabled to mainstream adaptation or mitigation

considerations into their field of work. GIZ’s

capacity development approaches e.g. have

empathized on the mainstreaming and gap

bridging e.g. with the DARDs through coastal

protection and management planning in relation

to sea level rise and erosion or even in

cooperation with DoLISA and newly developed

viewpoints to include vulnerabilities due to

climate change into Gender Equality Action

Planning (GEAP). Only this horizontal

involvement of different actors to recognize

investments e.g. in dyke upgrading and to

realize the “mainstreaming” contributions e.g.

for livelihood improvements with a special

gender and vulnerability focus or “climate

proofing” of flood risk roads will ensure a

thorough application of climate strategies at

provincial level.

As a result, sector departments will be better

equipped to formulate multi-year investment

proposals with active reference to provincial

climate strategies (adaptation or Green Growth)

53

and potentially the NDC. In addition, a “pre-

tagging” or classification could be introduced in

which the sector departments already rate their

proposed investments in line with the CPEIR

categories (PG, CCA, ST and also GG) and the

associated CC&GG coefficient. In the process of

collecting all sectoral investment proposals on

an annual basis, DPI would exercise another

check (in accordance with DoNRE) regarding all

made references and the accuracy of the “pre-

tagging”. Potentially an extra list, which

summarizes all climate relevant annual

investments, could support PPC throughout the

approval process and also during yearly

negotiations with central government for

obtaining NTP funding. A real-time monitoring

(“M”) might thus offer more action to also

improve iterative policy loops and to strengthen

interfaces between the needed quick reaction

due to extreme weather events and public

service provision to ensure appropriate

resilience.

54

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As at

May 2017

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Photo credits

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Author

Benjamin Hodick

In cooperation with

Silke Bommersheim, Bui Hoa Binh, Son Thanh Phuc, Phan

Thanh Tinh

GIZ is responsible for the content of this publication.

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Australian Department of Foreign Affairs and Trade (DFAT)

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Development (BMZ)