Unraveling the political economy of coal: Insights from Vietnam

To meet its rapidly growing electricity demand, Vietnam envisages ramping up its coal-fired generation capacity substantially. Realizing all coal-fired capacity additions that are planned globally would undermine international climate targets. This paper systematically analyzes the political economy shaping climate and energy policies in Vietnam, and finds that the country's coal developments are primarily motivated by political rather than economic considerations. Based on extensive data collected in semi-structured interviews, we identify the relevant actor groups and how their objectives influence energy policy formulation. This allows us to unravel the complex political channels that link Vietnam's move to coal to four overarching energy goals, which are, in turn, closely entangled with the Communist Party's strategy to legitimize its power: affordability, security of supply, promoting the domestic energy industry, and environmental sustainability. We show why Vietnam's tightly regulated electricity market, dominated by state-owned enterprises and vested interests, favors large-scale coal investments and weakens renewable energy regulations. While environmental and health concerns are becoming politically more relevant on the provincial level, silo mentalities within the administration and among international organizations result in weakly integrated environmental strategies. These in-depth insights from Vietnam have wider implications for understanding the adoption of coal in other country contexts.