$51.5 Million Carbon Credits Sale to World Bank
In a significant stride towards environmental sustainability, Vietnam has completed the sale of carbon credits amounting to 10.3 million tons of CO2 to the World Bank, fetching a total of $51.5 million. The Ministry of Agriculture and Rural Development’s report, submitted to the Prime Minister on Thursday, marks a pivotal moment in Vietnam’s commitment to carbon reduction.
The carbon credits, equivalent to 10.3 million tons of CO2, originate in the forests of north-central Vietnam. This initiative aligns with the Emissions Reduction Purchase Agreement (ERPA) inked between the International Bank for Reconstruction and Development (IBRD) of the World Bank and Vietnam’s agriculture ministry back in October 2020.
Under the terms of the agreement, Vietnam committed to providing the World Bank with credits for 10.3 million tons of carbon dioxide at a rate of $5 per ton. The buyer has already made an initial payment of $41.2 million, constituting 80% of the total, with the remaining $10.3 million slated for payment upon the completion of the exchange.
As per VnExpress, it has been confirmed that the north-central region of Vietnam has reduced 16.21 million tons of CO2 during the initial stage of the agreement, surpassing the agreed-upon amount. This outstanding performance reflects Vietnam’s dedication to combating climate change and fostering sustainable practices.
In light of the exceptional results, the Ministry of Agriculture is contemplating the sale of credits for the remaining 4.91 million tons. The objective is to generate additional funds for forest protection and conservation efforts. Furthermore, the World Bank has expressed interest in acquiring an extra one million tons of credits, signaling continued collaboration in pursuing environmental goals.
The generated revenue will be allocated strategically to support forest protection and conservation initiatives. Forest managers, provincial authorities, and agencies responsible for forest management will benefit from these funds. Additionally, efforts will be directed towards enhancing the livelihoods of individuals involved in generating carbon credits.
To ensure transparency and effective utilization of funds, the Vietnam Forest Protection and Development Fund will oversee the distribution. The six north-central provinces that benefit from these carbon credits include Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, and Thua Thien Hue.
Vietnam’s successful sale of carbon credits to the World Bank marks a significant financial achievement and underscores the country’s commitment to sustainable environmental practices. The surplus in carbon reduction and exploring additional opportunities showcase Vietnam’s dedication to mitigating climate change and fostering a greener future.
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