Summary: 1. Introduction. – 2. Research Methods. – 3. Regulations on the Emission Trading System and Carbon Tax: Experiences from Chinese Law and Lessons Learned for Vietnam. – 3.1 Analysis of the Legal Framework and Climate Finance Institutions. – 3.1.1 Challenges in Developing Climate Finance Institutions in Vietnam. – 3.1.2. Experience From China: Strengths And Limitations of a Comprehensive Legal Framework. – 3.1.3. Recommendations for Vietnam: Improving the Legal Framework and Climate Finance Institutions Towards Net Zero 2050. – 3.2. Analysis of Environmental Justice Issues and Climate Finance Policy. – 3.2.1. The Implementation of Environmental Justice in Response to Climate Change in Vietnam. – 3.2.2. China's Environmental Justice Enforcement and Its Limitations. – 3.2.3. Recommendations for Vietnam to Improve Regulations to Promote Environmental Justice. – 3.3 Analysis of the Right to Live in a Healthy Environment. – 3.3.1. Provisions of Vietnamese Law to Ensure Human Right to Live in a Healthy Environment. – 3.3.2. Experience From China in the Regulation to Ensure Human Right to Live in a Healthy Environment. – 3.3.3. Lessons Learned for Vietnam in Perfecting Regulations to Ensure Human Right to Live in a Healthy Environment. – 4. Conclusion.
Background: The defining challenge of the 21st century is climate change, which has necessitated countries to incorporate financial instruments ranging from carbon tax to the Emissions Trading System (ETS) for emission abatement. China, the world’s biggest CO2 emitter, has implemented an Environmental Protection Tax (EPT) since 2018 and launched a national ETS in 2021. Vietnam, committed to Net Zero by 2050 and currently developing its carbon market, faces significant challenges in strengthening its financial and legal regulations.
Methods: This article integrates qualitative methodology and comparative analysis to delineate the nexus between carbon taxation and Emissions Trading Systems (ETS), concomitantly emphasising the human right to a clean environment. The qualitative approach is employed for an in-depth examination of policy, economic, and societal facets within the respective jurisdictions of China and Vietnam. In parallel, comparative analysis serves as the central framework for assessing the efficacy of these two instruments in mitigating greenhouse gas emissions, alongside exploring their potential for synergy and associated challenges.
Results and Conclusions: This article seeks to answer the question: In the process of building and perfecting regulations on the emissions trading system and carbon tax, what lessons can Vietnam learn from China's experience to ensure fairness and the right to live in a clean environment?
China’s ETS currently covers approximately ≈40% of CO2 emissions, predominantly in the power sector. However, the lack of coordination between the EPT and ETS, low quota price and free allocation of allowances have discouraged investments in low-carbon technologies. Drawing on these lessons, Vietnam should consider adopting a carbon tax to replace the current Law on Environmental Protection Tax. Such legislation should incorporate reasonable provisions such as higher tax rates, flexible adjustment mechanisms, and targeted exemptions or reductions to influence consumer behaviour and reduce reliance on fossil fuels.
Furthermore, it is crucial to reform state budget management regulations concerning the utilisation of financial resources derived from carbon taxes and an Emissions Trading System (ETS). These funds should be allocated to finance environmentally friendly agricultural models, mangrove reforestation projects, and the development of irrigation systems resilient to mangrove inundation, thereby promoting environmental protection and long-term livelihood security. Concurrently, establishing a rational long-term roadmap for the development of a national carbon market is essential. This integrated approach, combining both financial instruments, will safeguard Vietnamese citizens' right to live in a clean environment and ensure compliance with the Net Zero commitment by 2050.