Decoupling Economic Growth from Carbon Emissions in Vietnam’s Power Sector

Abstract

This study analyses the driving factors of carbon emissions in Vietnam’s power sector from 2002 to 2022 and explores the dynamic decoupling relationship between economic growth and emissions. Carbon emissions were estimated using the IPCC (2006) emission factor method, and the Tapio decoupling model was applied to assess the elasticity between GDP and emissions. The results indicate that carbon emissions rose sharply over the past two decades, particularly after 2010, in parallel with annual electricity demand growth of 8–10%. The share of coal in power generation increased from 18% in 2005 to nearly 50% in 2020, leading to a several-fold rise in emissions. Decoupling analysis identifies three stages: 2001–2010 was characterized by expansive negative decoupling, reflecting reliance on carbon-intensive growth; 2011–2015 recorded occasional strong decoupling, though coal remained dominant; and 2019–2022 demonstrated sustained strong decoupling. These findings underscore Vietnam’s heavy dependence on coal while highlighting the potential of renewable energy expansion and efficiency improvements to sustain decoupling. Policy implications stress the need to accelerate clean energy deployment, restructure the power mix, and reduce coal dependence to align with climate commitments.