Vietnam Is A Test For What Happens When The U.S. Abandons Climate Diplomacy

The Asian country’s energy needs are growing and coal power is a tempting solution.
A motorcyclist wears a mask to block the smog in Hanoi.
A motorcyclist wears a mask to block the smog in Hanoi.
Michael Hamrah via Getty Images

HANOI, Vietnam ― There was a time, a little over two years ago, when Ted Osius could imagine the smog clearing over this sprawling capital city, with its jungle canopy of ancient banyan trees and electrical wires alive with coal-fired power and its throngs of exhaust-coughing motorbikes.

Osius, who abruptly resigned late last year after three years as the U.S. ambassador to Vietnam, now warns that the Trump administration’s retreat on climate change is encouraging Vietnam to dig in on coal power. Doing so would undermine years of progress in a country that, with 2,026 miles of coastline on its mainland alone, risks becoming a poster child for the effects of rising sea levels.

“The United States used to play a really useful role in influencing the Vietnamese to make good clean-energy decisions,” Osius told HuffPost this month in one of his first interviews since quitting in protest over a new White House policy to deport Vietnamese refugees.

“Apparently the United States government no longer focuses on policy decision-making that’s influenced by sound science,” he added. “That makes it harder to make the case to other countries that they ought to make decisions based on sound science.”

Nearly a year after President Donald Trump announced plans to withdraw the United States from the Paris climate accords, Vietnam has effectively become a canary in the coal mine for how closely other nations will stick to the global agreement’s goals as the U.S. abandons them.

Vietnam is under pressure, attempting to balance rapidly increasing energy demands with growing concerns over climate change ― and it’s finding a generous coal-friendly patron in China.

The Southeast Asian country began rapidly building up its coal-fired power capacity in 2011 as it transformed itself into a manufacturing hub and outgrew its hydropower resources. Back in its first major national plan for energy development, the country had aimed to increase its coal power generation by 75,000 megawatts by 2030.

During the final years of the Obama administration, however, the U.S. urged Vietnam to pursue renewable energy and cleaner-burning natural gas instead. Vietnam enthusiastically signed onto the Paris Agreement in April 2016 and since then has received roughly $40.5 million in aid from the United Nations Framework Convention on Climate Change’s Green Climate Fund.

In response, Vietnam reduced the planned construction of new coal-fired infrastructure by 20,000 megawatts and increased renewable energy projects by 14,000 megawatts. The country already operates more than 20 coal plants with a total capacity of 13,000 megawatts, accounting for one-third of the national power mix, according to a March report from Vietnam Investment Review.

The U.S. wasn’t the only clean-energy influence. The government faced internal pressure to shift away from coal. Last month, Khanh Ngụy Thị, founder of the Vietnamese nonprofit Green Innovation and Development Centre, won the 2018 Goldman Environmental Prize, the so-called “green Oscar,” for her work convincing state agencies to increase use of renewable energy.

U.S. President Donald Trump poses with Vietnamese President Trần Đại Quang during a welcoming ceremony at the Presidential Palace in Hanoi on Nov. 12, 2017.
U.S. President Donald Trump poses with Vietnamese President Trần Đại Quang during a welcoming ceremony at the Presidential Palace in Hanoi on Nov. 12, 2017.
Hoang Dinh Nam / Pool / Reuters

But even after scaling back its plans, Vietnam was still set to triple the number of coal plants by 2030, increasing capacity to more than 55,000 megawatts. Coal power would comprise 42.6 percent of electrical production.

Now, energy and environment experts worry that the country’s next national power development plan, which is being written this year, could hold to those figures or, worse, embrace a more aggressive coal strategy.

The Trump administration has offered some positive language to those pushing for clean energy. In a joint statement issued with Vietnamese Prime Minister Nguyễn Xuân Phúc last May, the White House “affirmed its assistance to Vietnam in combating climate change via concrete mitigation and adaptation measures.” The administration repeated a similar line in November, after a meeting with Vietnamese President Trần Đại Quang. The U.S. Agency for International Development is continuing to fund projects in the Mekong and Red River deltas.

But perhaps more significantly, the White House has proposed slashing the USAID budget by 33 percent.

“Apparently there have been some fluctuations in funding from one year to the next,” a USAID spokesman said in an email, noting that the delta projects have continued so far. He did not respond to questions about the funding for those individual programs, and they were not itemized on the State Department’s budget justification in February.

President Trump has pushed to scale back regulations on coal in the U.S. and made pitching the fuel a top priority at the annual United Nations climate conference. In one of his first moves as president, he pulled the U.S. out of the Trans-Pacific Partnership, a multi-nation trade deal that, despite drawing criticism from environmental groups, was expected to drive down the costs of renewable energy in developing countries. Last June, he announced plans to withdraw from the Paris accord and curtailed all U.S. payments to the Green Climate Fund. This year, he named a new secretary of state: Mike Pompeo, a vigorous climate change denier who, as a congressman, made repeated attempts to cripple funding for renewable energy projects.

In short, the Trump administration seems unlikely to apply any real pressure on other countries to pursue clean energy or combat climate change.

“When we stopped leading on climate change, that made it a heck of a lot easier for people to proceed with business-as-usual policies,” Osius said.

For Vietnam, that means modeling itself on China, the world’s biggest source of climate-altering pollution. Vietnam’s ruling Communist Party transformed the country into one of the continent’s fastest-growing economies by following in China’s footsteps, becoming a magnet for textile, chemical and electronics manufacturing as its giant neighbor increased wages and environmental regulations.

“When we stopped leading on climate change, that made it a heck of a lot easier for people to proceed with business-as-usual policies.”

- Ted Osius, former U.S. ambassador to Vietnam

Mechanisms like the Green Climate Fund were meant to help countries such as Vietnam leapfrog the most pollution-prone stage of economic development by building up wind, solar and energy efficient infrastructure instead of coal-fired power plants ― something China did not do.

“We are supposed to be the big counterweight to China,” said Virginia B. Foote, chief executive of Bay Global Strategies, an energy-focused government relations consultancy based in Hanoi. Now Vietnam is “just going to listen to the big bully to the north, and there’s no counter-bully to listen to at all.”

Vietnam’s energy needs are growing. The country’s industrial south suffers frequent power outages, relying on a grid so fragile that a crane operator’s accident plunged 22 of 63 provinces into darkness for 10 hours in May 2013. Vietnam’s state-owned utility, EVN, began burning more diesel to meet the country’s energy needs last year and said it would likely increase use of the fuel from 2018 to 2019.

Despite this, the Vietnamese enjoy low energy costs, particularly in the north, where most of the country’s coal mining takes place. The average price of electricity comes to about 7.5 cents per kilowatt-hour ― far below even that in Louisiana, the cheapest state in the U.S., where residents pay nearly 9 cents per kilowatt-hour, according to the latest Energy Information Administration figures.

“Politically, it’s understandable,” Foote said. “Everybody loves having cheap power, though it leads to waste and lack of incorporating clean technology.”

The prices in Vietnam fail to factor in the steep societal costs of increased coal burning. A 2015 Harvard University study found that 4,300 Vietnamese die prematurely each year as a result of coal pollution ― a figure that could increase to as much as 25,000 per year under a more aggressive coal buildup.

In the crowded streets of smoggy Hanoi, a train passes very, very close by people's homes.
In the crowded streets of smoggy Hanoi, a train passes very, very close by people's homes.
Alexander C. Kaufman / HuffPost

The state-owned utility operates as a nationwide monopoly, forcing proposals on electricity development to navigate a labyrinthine bureaucracy. The current low rates make any tweaks to the existing model a difficult sell. The template that EVN released last year for power purchase agreements on renewable energy was panned by investors as “unbankable,” meaning it posed too much risk to private companies.

“[F]ew reputable financiers would be likely to sign up,” Giles Cooper, co-general director of the Ho Chi Minh City-based law office Duane Morris Vietnam, wrote in a blog post in October, concluding that the “final text does little to inspire confidence.”

Officials at the Vietnamese Embassy in Washington did not respond to a request for comment.

Vietnam has, however, found a steady stream of suitors to finance its coal infrastructure. As of last December, foreign investors funded new Vietnamese coal projects to the tune of more than $16 billion. Of that, Chinese investments, funneled through that country’s biggest state-owned commercial banks, made up 50 percent, followed by Japan’s 23 percent and South Korea’s 18 percent. Vnesheconombank, a Russian financial entity, is backing the controversial Long Phu 1 power plant under construction in Soc Trang Province.

In February, PetroVietnam, the state-owned Vietnamese company building the Long Phu 1 plant, withdrew its application for U.S. financial support, ending what was widely seen as the first major test of whether the Trump administration would use the Export-Import Bank of the United States to support a project that exacerbated climate change.

Hanoi enjoyed just 38 days of clean air last year as air pollution surged to levels four times higher than those deemed acceptable under World Health Association guidelines, according to a January report from the Green Innovation and Development Centre. That makes Hanoi’s pollution worse than that of the Indonesian capital of Jakarta and puts it close to notoriously smog-choked Beijing.

“Now, when it comes to climate, our government’s head is in the sand,” Osius said. “That means countries are going to have to fend for themselves a lot more.”

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