The healthcare costs of Vietnam’s dependency on coal

29 Apr, 2021

Written by Gaia Lamperti

Speaking at the virtual Leaders Summit on Climate on April 23, Vietnam’s President Nguyen Xuan Phuc said that transitioning to a green and net-zero emission economy will be an inevitable trend and imperative task to limiting global heating to 1.5°C. However, the government’s coal targets tell a different story.

During the past decade, Vietnam raced to build dozens of coal-fired power plants in a bid to meet its soaring energy demands, even in the face of climate change and its commitments in the Paris Agreement. According to International Energy Agency’s (IEA) official figures, about 40% of the country’s total electricity mix is currently generated from coal accounts.

“The coal industry in Vietnam is growing faster than almost any country in the world since 2015,” James Browning, Communications Director of the NGO Global Energy Monitor, explained, “and most of that is driven by Chinese government-backed financing.” 

Out of the 80+ proposed coal plants projects in Vietnam, China committed to financing more than 60, on top of previous coal funding which amounts to over $3.5m since 2015, according to data collected by Global Energy Monitor. 

More specifically, The Industrial and Commercial Bank of China (ICBC) is one of the main investors in the country’s coal programs with financing in at least three plants under construction (Duyen Hai 2, Hai Duong Coal-Fired Power Plant, and Nam Dinh I Coal Plant) and four in the pipeline, according to research by The Sunrise Project.

In the revised draft of Vietnam’s Power Development Plan (PDP 8) updated last February, the country commits to reducing coal-fired thermal power to 27% in 2021-2030. If enacted, the draft PDP 8 will cancel seven coal plant projects totaling 9.5GW and postpone six coal projects totaling 7.6GW until after 2030. 

“But that’s almost certainly not enough for Vietnam’s commitments towards maintaining 1.5°C and at a time when renewables are as affordable and a better choice,” Browning commented.

Courtesy of Global Energy Monitor

Coal-fired stations’ emissions contribute to air pollution levels across the country, which is already a pressing issue for Vietnam, especially in high-density cities like Hanoi and Ho Chi Minh City. Exposure to air pollution accumulated from nearby plants heavily affects communities’ health and livelihoods and, as recent studies demonstrated, it has a direct incidence on hospital admissions for young children. 

Healthcare centres in coal plants’ surrounding areas are already recording increases in heart diseases, strokes, lung diseases, skin problems, and cancers. In the small village of Ky Loi by the Vung Ang 1 coal power plant in central Vietnam, records from 2017 and 2018 documented 128 cases of heart disease and stroke and 14 cases of cancer. 

According to a recent report published by the Centre for Research on Energy and Clean Air (CREA), new coal plants could cost the country over $270m annually in health care costs and productivity loss due to air pollution. “There’s real cruelty to boosting coal plants at the time when there’s a pandemic that kills people because they are having respiratory problems,” urges Browning. “It’s madness.”

Those immediate impacts have driven fierce public opposition, sparking a national conversation about rising air and water pollution. But not without difficulties as dissent is not tolerated by the Vietnamese government and many activists ended up in jail for speaking up against authorities.

For NGOs like GreenID, Vietnam’s priority should be scaling back its ambitious coal plans to favor more renewable energy options. The organization is committed to grassroots work, rolling out clean energy programs in communities across the country.

As of now, several major investors (like Japanese trading house Mitsubishi) announced their withdrawal from Vietnamese coal plants projects out of health and environmental concerns, leaving ICBC as the only significant driver of foreign finance for coal.

Despite last year’s slow down in coal plants for logistical reasons and markets’ uncertainty caused by Covid-19, since March coal financing from Chinese investors like ICBC spiked, as a way to boost domestic economic growth after the pandemic, Browning explained.

“Whatever happens in the world, it doesn’t matter, the only answer for Chinese investors is to build new coal plants,” Browning said.

Courtesy of Global Energy Monitor

About the author

Gaia Lamperti is a multimedia journalist. Born in Milan, after living in Spain, the US and Australia, she’s now based in London. She holds a master’s degree in International Journalism and reports on climate, sustainability, finance and technology across several platforms.

Gaia has been awarded the IMF Youth Fellowship in 2020 and is currently working on solutions stories about sustainable innovation that tackles the climate crisis with the Solution Journalism Network. She looks forward to working with a team of international journalists on exposing the environmental and social risks associated with coal investments.