Towards a Sustainable Public Finance Model for the Green Transition in Vietnam

Abstract

This article focuses on analyzing the role and potential of public finance in supporting the green transition in Vietnam, with the aim of fulfilling the country’s net-zero emissions commitment by 2050. By synthesizing theoretical insights and international practices from organizations such as the OECD and IMF, and countries like France and New Zealand, the study highlights that green public finance is a vital tool for achieving sustainable development. Based on this foundation, the article examines Vietnam’s current context, identifying challenges such as a tax system that does not reflect environmental costs, the absence of a green expenditure classification framework, and an underdeveloped green finance market. The study proposes a sustainable public finance model built on three pillars: environmental tax reform and carbon pricing; green budgeting; and the development of green financial instruments. Policy recommendations are provided to guide fiscal institutional reforms, enhance management capacity, and integrate the green transition into medium- and long-term development plans, contributing to the realization of Vietnam’s national climate commitments.