Can Vietnam Ever Become Green?

Real Estate - Saigon/HCMC: May 4, 2016

Citypassguide.com met with Solidiance’s Michael Sieburg to determine whether Vietnam, and in particular HCMC, can ever become truly green. Here is the transcript of Michael’s comments:

Solidiance is a consulting firm that works with clients across industries. There are three industries we focus on. One is simply called industrial, which includes construction, chemicals, and all that. That’s the core of what we do. Then there is healthcare, especially in Vietnam. And what we call technology. In total we have 12 offices across Asia.

Within the industrial stuff we do, our research in green tech and buildings are really driven by two things: our personal interest and by our belief that this is where the country is going. We think Southeast Asian countries will be using these technologies more and more - green cities, clean cities, however you want to describe them. Our CEO is personally interested in this. He’s doing an online course with Harvard University to learn more about this subject. I don’t know when he sleeps. “When there is that mismatch of the developer and the user of the building, it can be harder to make it green because the immediate incentive is not there”

We are also a consulting company - we have clients who want to be where our other clients are - large multi-nationals. These companies are at the forefront of developing more efficient air conditioners, elevators, eco-friendly paint, smart grid technology, electric cars and batteries. Our clients are often innovating and making these technologies, and part of these projects involves green building output. They want to sell their products and part of their line is more energy efficient stuff.

School of The Art - Singapore

Most of the certified green buildings in Vietnam have been factories. And it’s not like there are thousands of green factories, but they are the biggest component, and I think part of it is that when you’re a company developing a factory, you’re also using that factory and they consume a lot of energy. It makes sense to find ways to save on that, even though electricity prices are low here, for now. A lot of these companies also have global standards that they must adhere to. “Our research in green tech and buildings are really driven by two things: our personal interest and by our belief that this is where the country is going”

One of the biggest factors in pushing green building practices is electricty prices. The government is currently subsidizing, which won’t go on forever. I think it needs to be balanced with low-income residents. For example, energy prices in Cambodia and the Philippines are high. And that hurts manufacturing investment there. Once electricty prices rise, there is a point when wind power become profitable, and at some point (economists figure out this point) you see further adoption of energy efficient machinery.

Calling for a country to raise electricity prices where many people cannot afford it is a difficult thing to do, which is why the government treads slowly.

Green Building - France

The cost of making a building is a bit more expensive - how much? That depends on what you’re doing. I think the real issue in buildings going green is when property developers create buildings for somebody else. The developer’s incentive is to keep costs down and cut corners where they can, because operating costs are somebody else’s problem.

When there is that mismatch of the developer and the user of the building, it can be harder to make it green because the immediate incentive is not there. You can argue that there is an incentive that you price the units higher when you sell them - President’s Place proved that correct.

Vertical gardens at Parkroyal, located in the heart of Singapore's Central Business District. Photo credit: Straits Times

At the moment there are not really well-defined mandates in Vietnam. In Singapore there are mandates - any new building must meet green standards. Everything here is left up to the developer, if they want to build green or not. If you talk to the architects around here, the younger generation is getting it, but not yet necessarily at all levels. What you do see here is that a building might not be certified green, but the water heaters are solar. There is a move towards that. A lot of hotels are doing that - they probably have some hybrid electric-solar water heater when it’s not a sunny day, but as a way to save electricity costs. “The younger generation is getting it, but not yet necessarily at all levels.”

So factories also have that. The biggest solar plant in Vietnam at the moment is Intel’s factory, which is saying something. Vietnam is a sunny place; you can’t run the whole country on solar, but is there a gap between what there is and what there could be? Definitely.

Green Building - China

Young people are interested in sustainable development, which is good to see. Saigon in some ways doesn’t have to follow the same practices as other countries - they have the luxury of learning from others’ mistakes, one would hope.