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Cablegate: Possibilities for Usg Collaboration with Vietnam On Climate

VZCZCXRO8338
RR RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHLN RUEHMA RUEHNAG RUEHNH
RUEHPB RUEHPOD
DE RUEHHI #0537/01 1290950
ZNR UUUUU ZZH
R 080950Z MAY 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 7767
INFO RUEHHM/AMCONSUL HO CHI MINH 4682
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHPH/CDC ATLANTA GA
RUEAUSA/DEPT OF HHS WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 05 HANOI 000537

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, EAP/EP, OES/EGC, OES/STC
STATE PASS TO USAID FOR ANE, G/ENV, EGAT/ESP (CHIP BARBER)
STATE PASS TO EPA/OIA (DENNIS CUNNINGHAM AND MARK KASMAN)
STATE PASS TO NOAA/NOS/OIA (JONATHAN JUSTI)
HHS/OSSI/DSI PASS TO HHS/OGHA (WSTIEGER, LVALDEZ, CHICKEY) AND
NIH/FIC (RGLASS)
CDC FOR SBLOUT, KMCCALL, JGERBERDINE, MCOHEN
USDA FOR FOREST SERVICE/INTERNATIONAL PROGRAMS (CYNTHIA MACKIE AND
KELLI YOUNG)
BANGKOK PASS TO RDMA

E.O. 12958: N/A
TAGS: SENV ENRG ECON TBIO KGHG VM
SUBJECT: POSSIBILITIES FOR USG COLLABORATION WITH VIETNAM ON CLIMATE
CHANGE

Ref: A. Hanoi 108 B. 07 Hanoi 1869 C. Herrup 4/8/08 e-mail

HANOI 00000537 001.2 OF 005


1. (U) Summary: Vietnam's unique position as a growing emitter
facing imminent and serious impacts from climate change makes it a
particularly attractive partner for collaboration with the United
States. The Intergovernmental Panel on Climate Change (IPCC) warned
that Vietnam will be one of the countries most severely affected by
climate change. At the same time, Vietnam's greenhouse gas
emissions will continue to grow at extremely high rates and it is
quickly is joining the ranks of major developing nation emitters.
The Government of Vietnam (GVN) has made a firm commitment to
addressing climate change and, with World Bank and UNDP support, has
already begun drafting a comprehensive national action plan.
Efforts to assist Vietnamese climate change adaptation and
mitigation can make a difference now, when it has just begun in
earnest the process of ramping up industry and power generation.
Though we understand that available funding and resources may be
limited, targeted use of these resources for mitigation and
adaptation interventions - increasing efficiency and productivity
before the need for expensive retrofitting and remediation - can be
successful in addressing the effects of climate change in Vietnam.
The upcoming visit of Prime Minister Dung provides an opportunity to
highlight existing and new efforts in a way that maximize their
public diplomacy impact. End Summary.

Vietnam Will Face Severe Climate Change Impacts
--------------------------------------------- --

2. (U) A 2007 World Bank study listed Viet Nam as one of the top
five countries most at risk from sea level rise. Vietnam's
coastline stretches 3,260 kilometers, with major population,
agriculture, and industry concentrated in two broad river deltas,
the Red River in the north and the Mekong in the south. Already,
Vietnam has witnessed increased temperatures and rising sea levels.
The World Bank and the Intergovernmental Panel on Climate Change
(IPCC) each predict that a significant rise in sea levels in Vietnam
(Note: World Bank and UNDP predict one meter, IPCC predicts 69
centimeters). A one meter rise in sea level would flood half a
million square hectares of the Red River delta and from 15,000 to
20,000 km2 of the Mekong River delta and would destroy 2,500 km2 of
mangrove swamps. Vietnam would lose five percent of its land, seven
percent of agricultural output and ten percent of GNP. Per UNDP,
rising sea levels in Mekong Delta would expose 45 percent of land in
Vietnam's 'rice basket' to extreme salt water intrusion and crop
damage, reducing rice productivity by nine percent and eroding
Vietnam's remarkable progress to alleviate poverty - especially as
climate change is most likely to affect the poorest citizens.
Eleven percent (over ten million) of Vietnamese would lose their
homes - the largest impact in the developing world. Approximately
1,000 km2 of cultivated farm land and sea product culturing area
would become salt marshes. Expected changes in weather patterns
will lead to worse flooding (and erosion) during the rainy season
and more severe drought during the dry season, along with increased
frequency and severity of typhoons (which already caused damage
valued at $ 750 million, or one percent of GDP, for 2007).
Increasing water shortages and growing demand for water threaten
water use conflicts. Other negative impacts include biodiversity
degradation, increase and spread of human and plant pests and
diseases, damage to fisheries and injuries to coral reefs

Increasing Vietnamese Greenhouse Gas Emissions
--------------------------------------------- -

3. (U) According to the UNDP Human Development Report 2007/08,
Vietnamese CO2 emissions increased from 0.3 tons per capita in 1990
to 1.2 tons per capita in 2004, a 400 percent increase. The 25.8
percent annual growth rate was three times that of China and 12
times higher than the average world growth rate. Vietnam's share of
global carbon dioxide emissions jumped from 0.1 percent in 1990 to
0.3 percent in 2004. The Asia Pacific Energy Research Center

HANOI 00000537 002.2 OF 005


predicts 6.2 percent annual growth in CO2 emissions over that time
period. The Vietnamese Ministry of Natural Resources and
Environment (MONRE) predicts CO2 emissions of 268 million tons by
2020. (Note: fossil fuel burning also causes other air pollution
issues in major Vietnamese cities).

4. (U) As its energy consumption has grown, Vietnam has become
increasingly dependent on fossil fuels (coal, oil and natural gas).
Currently constituting 42 percent of Vietnamese energy generation,
fossil fuels are expected to constitute 69 percent by 2030.
Consistent with projections for continued rapid economic growth, the
GVN and industry observers expect that Vietnamese power demand will
increase steadily - up to 17 percent annually over the next two
decades. To meet that demand, Electricity of Vietnam (EVN), the
state-owned power generation authority, forecasts that Vietnam will
generate nearly 26,000 megawatts by 2010. By 2025, EVN expects to
generate 85,411 megawatts, over three times current generation
capacity. The Ministry of Industry (MOI) projects total coal
consumption to reach 29-32 metric tons in 2010, 47-50 metric tons in
2015, 69-72 metric tons by 2020, and 112-115, metric tons in 2025.
By 2025, coal generation will increase by nearly sevenfold to 35,750
megawatts and will form Vietnam's largest source of domestic energy
-- 42 percent of power production. Between 1998 and 2005, Vietnam
signed more than 50 petroleum contracts with international oil
companies to develop oil and gas resources and is planning a major
refinery as well as gas-fired power plants. Motor vehicle usage
will continue to skyrocket, leading to additional emissions. Per
official statistics, as of December 2006, Vietnam had over 21
million motorbikes (one for every four citizens, though observers
believe that figure may under-represent the actual number). Vietnam
is the fastest motorizing nation in the world with motorbikes
increasing by 15 percent (about two million units) each year.

Now Is the Time to Intervene
----------------------------

5. (U) Vietnam's economy continues to boom with average annual
economic growth of 7.5 percent during the last decade and 8.5
percent growth in 2007. The GVN aims to enter the ranks of
middle-income developing countries by 2010 and achieve
industrialized country status by 2020. Goldman Sachs recently
predicted continued eight percent annual growth through 2020 leading
to a higher per capita GDP than Indonesia and the Philippines. As
noted above, Vietnamese industry and power generation will explode
to support this sustained economic growth. Therefore, now is the
time to intervene in Vietnam - before the need to spend greater
amounts to remediate and retrofit. The United States can help
Vietnam get it right the first time by working to increase the
efficiency of energy generation and the productivity of industrial
processes. We can help reduce emissions before they reach
problematic levels.

The Government of Vietnam Is Committed
--------------------------------------

6. (U) In the past, Vietnam consistently joined international
climate change efforts and now has initiated a strong internal
effort to address climate change. Vietnam signed the UN Framework
Convention on Climate Change (UNFCCC) on November 16, 1994 and
ratified it on August 20, 2002. In March 2002, Vietnam conducted
the National Strategy Study to assess the country's GHG emission
reduction potentials and costs. Vietnam established the Clean
Development Mechanism National Executive and Consultative Board on
April 29, 2003 to approve projects eligible for CDM. Through June
2007, the CDM had approved nine project design documents for CDM
projects with another 30 in the pipeline. Vietnam ratified the
Kyoto Protocol on May 29, 2005.

7. (SBU) Prime Minister Nguyen Tan Dung raised climate change at his
last meeting with the "Consultative Group" of international donors

HANOI 00000537 003.2 OF 005


in December 2007. Over the next few months, the GVN quickly jumped
into action, tasking MONRE with spearheading the creation of a
National Target Programme on Response to Climate Change (NTP) - the
national strategy to address climate change. On March 28, 2008, the
GVN cabinet met to review the first draft of the NTP, with a second
draft sent to the Cabinet last week. We expect the NTP to receive
approval from the Office of Government and move to the National
Assembly within the next month or two. Early drafts of the NTP
comprehensively discuss impacts - water, agriculture, forestry,
fisheries, energy and transportation, human health, as well as
Vietnam's need to limit greenhouse gas emissions and import better
technologies. MONRE Minister Pham and Vice Minister time have
repeatedly requested climate change assistance from Ambassador
Michalak, with a particular interest in financing mechanisms for
adaptation and mitigation efforts (Refs A and B).

8. (U) Other Vietnamese policies and laws buttress its commitment to
reducing its carbon footprint. For example, the new Vietnamese
National Energy Policy focuses on environmental conservation and
sustainable development, energy efficiency, and developing new and
renewable energy sources. Several recent GVN energy efficiency
decrees, decisions, and circulars have urged energy saving and
efficiency. Other GVN agencies have initiated their own responses
to climate change. The Ministry of Agriculture and Rural
Development (MARD) recently announced a 1.9 trillion dong
(approximately USD 120 million) plan to cope with impacts of climate
change on the farming sector and, through its Forest Protection
Bureau, has developed significant aforestation plans. Finally, in
March 2008, the GVN approved a national pilot policy and program on
payments for ecosystem services (PES) 2008, the first of its kind in
Asia. USAID, through its Asia Regional Biodiversity Conservation
Program, is currently working with GVN to incorporate payments
reductions in forest-based greenhouse gas emissions into the
national PES scheme.

Vietnam: A Steady Partner in International Efforts
--------------------------------------------- -----

9. (SBU) Vietnam plays a leading role in international global health
initiatives. As one relevant example, international donors hold
Vietnam up as a model for its response to avian influenza, both for
its strong domestic initiatives and for its consistent participation
in global efforts. Learning from its experience with Severe Acute
Respiratory Syndrome (SARS), the GVN took quick action to contain
avian influenza, and has been rewarded with a notable drop in the
number and intensity of animal outbreaks and human infections.
Through the Partnership on Avian and Human Influenza, Vietnam works
closely with donors to develop a comprehensive and sustainable
response to avian influenza. Unlike Indonesia, Vietnam remains
committed to sample sharing and coordinating with international
vaccine efforts.

A Broad and Fruitful History
of U.S.-Vietnam Cooperation
----------------------------

10. (U) The GVN sees the United States as a critical source of
financial and technical assistance in many areas. Over the past ten
years, Washington has effectively invested limited aid dollars to
support Vietnam's transition to a market economy by strengthening
trade liberalization. Two USAID-funded programs, the Support Trade
Acceleration (STAR) and the Vietnam Competitiveness Initiative
(VNCI), both have had great success in their support for Vietnam's
efforts to create a modern market economy and the requisite legal
framework. Last September, pursuant to the U.S. National Nuclear
Security Administration's (NNSA) Global Threat Reduction Initiative
(GTRI), the USG brokered cooperation with the Russian Federation and
the International Atomic Energy Agency (IAEA) to assist Vietnam in
converting its only civilian nuclear reactor from high to low
enriched uranium fuel and return spent high enriched uranium to

HANOI 00000537 004.2 OF 005


Russia. NNSA continues to assist Vietnam to develop the necessary
physical and regulatory safeguards to establish a civilian nuclear
power sector. Finally, the United States and Vietnam have a long
history of collaboration on health issues, including HIV/AIDS, avian
influenza, and the fight against other infectious diseases. We work
very closely with our GVN counterparts and have been consistently
impressed with their skills and engagement.

We Can Build on Existing Climate Change Collaboration
--------------------------------------------- --------

11. (U) For a number of years, USAID has supported efforts to help
address Vietnamese environmental issues. From 1993 to 2005, USAID's
U.S.-Asia Environmental Partnership program developed a number of
activities in Vietnam, including the promotion of cleaner energy
production and cleaner fuel standards. USAID's regional Eco Asia
program now focuses primarily on cleaner coal technologies and
promoting the standardization and increased usage of compact
fluorescent light bulbs. In 2007, Vietnam became the 20th nation to
join the U.S.-led Methane to Markets Partnership, an international
initiative that advances cost-effective, near-term methane recovery
and use as a clean energy source. Since 2005, USAID has supported
the USD 5 million Asia Regional Biodiversity Conservation Program
(ARBCP), which has been instrumental in developing the new national
payment for ecosystem services (PES) policy. Currently, USAID is
extending this program, with additional funding, through 2010,
including a specific focus on integrating forest carbon into the PES
system, and establishing systems and capacities for monitoring the
impacts of climate change on key river systems. The United States
Forest Service (USFS) has worked for several years on forestry
projects in Vietnam, often in partnership with USAID initiatives.
On April 22, 2008, USFS signed a Letter of Intent with the
Vietnamese Forest Protection Department for future cooperation that
included a specific reference to climate change. The United States
Geographic Survey (USGS) has begun to work with Vietnamese
environmental scientists to study the health of the Mekong Delta in
the face of climate change and the National Oceanic and Atmospheric
Administration (NOAA) continues to work on coastal management issues
in northern Quang Ninh province.

U.S. Efforts Can Plug Into Multilateral Initiatives
--------------------------------------------- ------

13. (U) Earlier this year, several donors, including the United
States, formed a committee to coordinate climate change efforts in
Vietnam. Representatives from over twenty countries, international
organizations and NGOs have met to review GVN initiatives and to
begin to discuss multilateral and bilateral assistance. Chaired by
the Danish Ambassador and the Resident UN Representative, the
committee has provided input to the draft GVN NTP and has begun to
coordinate assistance programs. The Dutch Government and UNEP have
funded a capacity development program for Clean Development
Mechanism (CDM) projects in Vietnam and the GVN worked closely with
the World Bank, UNDP, and Danida in drafting the initial NTP.

Vietnam Can Serve as a Model
for Interventions Elsewhere
----------------------------

14. (U) The United States can leverage assistance to Vietnam to
support broader climate change initiatives. We can use Vietnam as a
laboratory to devise programs and practices that we can then modify
and adopt to other Southeast Asian nations or to Vietnam's larger
regional neighbors, China and India. The GVN's sustained history of
adopting innovative solutions to a variety of national issues, make
it a natural location to work on climate change. Vietnam has been a
model for avian influenza and HIV/AIDS responses. We believe it
could fulfill the same role with climate change. The success of
other U.S. environmental initiatives has already spawned requests
for similar programs abroad. For example, recent progress on

HANOI 00000537 005.2 OF 005


payments for ecosystem services (PES) under the USAID-supported
ARBCP, discussed above, have resulted in requests from the
governments of Cambodia and Lao PDR for ARBCP assistance to develop
their own PES policies and projects. The GVN's demonstrated resolve,
creativity, flexibility, and openness to cooperative partnerships,
combined with its ability to quickly implement policy initiatives,
make it possible to initiate innovative programs and approaches here
that may be scaled up for application in China and India.

If We Decide to Collaborate,
Now Would be Good Time to Act
-----------------------------

15. (SBU) Vietnamese Prime Minister Nguyen Tan Dung plans to visit
the United States at the end of June. This could create a possible
setting to announce a package of climate change related initiatives.
We have already detailed several mitigation and adaptation
proposals in correspondence to various U.S. agencies (Ref C) and ask
that these agencies strongly consider these or other ways to support
Vietnamese climate change initiatives.

MICHALAK


6

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