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VOL. 11, ISSUE 12 (2025)
Legal frameworks for green budgeting in the twin transition: Comparative insights and implications for Vietnam
Authors
Thu Trang Nguyen, Kim Anh Nguyen, Thao Chi Vu
Abstract
As countries navigate the twin transition,
green budgeting has emerged as a vital instrument for aligning fiscal
governance with sustainability goals. In Vietnam, green budgeting is officially
recognized as a strategic objective under Decision No.1658/QD-TTg (2021), which
outlines the National Strategy on Green Growth for 2021-2030. The approach
draws inspiration from OECD principles that emphasize transparency,
accountability, and performance-based fiscal planning. However, the legal
foundations and institutional mechanisms necessary to operationalize these
principles remain underdeveloped. This paper investigates the current state of
Vietnam’s legal framework for green budgeting, including the analysis of the
Law on State Budget (2015), the Law on Environmental Protection (2020), and
related secondary regulations. It also draws comparative insights from
international legal frameworks in jurisdictions such as the European Union,
Indonesia, the United States, and Japan - countries that have pioneered structured
and transparent models for green public finance. The study finds that while
Vietnam’s legal system acknowledges the importance of green budgeting in
principle, it lacks enforceable criteria for green expenditure classification,
coherent integration across fiscal levels, and robust oversight mechanisms. To
address these gaps, the paper proposes a set of legal reforms: (i) developing
unified legal definitions and criteria for green budgeting; (ii) establishing
binding transparency requirements; (iii) adopting performance-based budget
evaluation; and (iv) strengthening multi-level fiscal coordination. By
emphasizing legal and institutional dimensions over economic modeling, the
paper contributes to the emerging discourse on sustainable fiscal governance and
offers practical legal pathways for enhancing Vietnam’s capacity to support a
just and efficient twin transition.
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Pages:121-130
How to cite this article:
Thu Trang Nguyen, Kim Anh Nguyen, Thao Chi Vu "Legal frameworks for green budgeting in the twin transition: Comparative insights and implications for Vietnam". International Journal of Law, Vol 11, Issue 12, 2025, Pages 121-130
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