Overexploitation drives ecosystems beyond capacity

Rapid ecosystem degradation

During the 2021–2025 period, Viet Nam's economy demonstrated strong resilience in the face of multiple global shocks. Despite the prolonged impacts of the Covid-19 pandemic, disruptions to international supply chains, and geopolitical volatility across many regions, Viet Nam's average GDP growth still reached around 6.2%/year, with growth at 8.02% in 2025. The country's GDP expanded from USD 346.6 billion in 2020 to more than USD 514 billion in 2025, elevating Vietnam to 32nd place globally and fourth in ASEAN.

Notably, per capita income reached USD 5,026, marking an important milestone in Viet Nam's pathway to becoming an upper-middle-income country. These achievements reflect efforts to promote inclusive development and improve the social welfare system.

However, according to Assoc. Prof. Dr. Nguyen Dinh Tho, Vice President of the Institute of Strategy and Policy on Agriculture and Environment, recent studies show that the ecological carrying capacity deficit of the economy has reached about -220%, meaning that the total demand for resource exploitation and waste absorption by the economy exceeds more than twice the regenerative capacity of domestic natural ecosystems.

The current growth model still relies considerably on natural resource exploitation and energy-intensive consumption. The economy’s Incremental Capital Output Ratio (ICOR) remains at 6.4, reflecting limited investment efficiency. The contribution of Total Factor Productivity (TFP) to growth is only around 47%, showing that the main driver of economic growth still comes from expanding production scale rather than technological innovation. At the same time, climate change is increasing risks to the economy. Typhoon Yagi in 2024 caused damage of more than VND 80 trillion, highlighting the vulnerability of production chains to natural disaster shocks.

Viet Nam's Socio-Economic Development Plan for the 2026–2030 period sets a target of maintaining a higher growth rate, aiming for double-digit annual growth, while raising GDP per capita to around USD 8,500 by 2030. The long-term vision toward 2050 aims to transform Viet Nam into a high-income developed country, with per capita income ranging from USD 38,000 to USD 45,300. Experts assume that achieving these goals will depend significantly on the country's ability to protect and restore natural capital.

Important ecosystem services such as natural pollination for crops, aquatic resources, forests' carbon sequestration capacity, and soil fertility are under great pressure from production activities. The degradation of these services could cause substantial economic losses while increasing the costs of climate change adaptation. If ecosystem degradation continues, Viet Nam's GDP growth could decline significantly in the coming decade.

Mr. Fergus McBean, First Secretary for Climate and Nature at the British Embassy, shared that Viet Nam is a country endowed with abundant natural resources, providing stable livelihoods and serving as a key driver for achieving sustainable development goals. However, the growth model, heavily reliant on resource exploitation, is revealing its limits in terms of efficiency and generating serious environmental impacts, which affect macroeconomic stability.

Therefore, transitioning to a nature-based development model will not only help protect the environment but also create new opportunities for economic growth. In particular, integrating the value of natural capital into policymaking and development planning is considered an important step toward ensuring harmonious development across economic, social, and environmental dimensions.

Choosing a growth model that leverages natural capital

To address these challenges, experts recommend incorporating natural capital into the policymaking system through integrated economic–environmental modeling (IEEM) tools. IEEM enables the integration of economic data with environmental indicators in growth projections.

When linked with spatial ecosystem service models such as InVEST, the system can simulate the two-way relationship between economic activities and the state of nature. Under this approach, economic decisions, such as expanding industrial zones, converting agricultural land, or adjusting energy policies, are evaluated not only based on financial benefits but also on their impacts on ecosystems. This allows policymakers to identify environmental risks early and adopt more sustainable development pathways.

Nature-based Solutions (NbS) focus on protecting and restoring natural ecosystems to address socio-economic challenges. For example, restoring coastal mangrove forests can reduce storm and erosion risks while creating livelihoods for local communities through aquaculture and ecotourism. Many international studies show that every USD 1 invested in NbS can generate approximately USD 4 in long-term economic benefits.

Regarding financial mechanisms supporting the green transition, the Viet Nam Green Taxonomy, issued in 2025, plays an important role in identifying projects eligible for access to green finance. In addition, Viet Nam’s Emissions Trading System (ETS) is being piloted, creating a carbon pricing mechanism and encouraging businesses to reduce greenhouse gas emissions.

The development of a forest carbon credit market, which allows companies to offset part of their emissions by investing in forest protection and restoration projects, can both reduce emissions and create new revenue sources for localities and forest-dependent communities.

According to experts, integrating nature into socio-economic development planning is not only an environmental issue but also a long-term economic strategy. Protecting ecosystems helps reduce disaster risks, maintain resources for production, and enhance the competitiveness of the economy as global environmental standards become increasingly stringent.

The 2026–2030 period can be considered a pivotal moment for Viet Nam to shift toward a green and sustainable growth model. In this context, the combination of institutional reforms, economic–ecological modeling technologies, and green financial mechanisms will provide the foundation for a new development strategy in which nature is viewed as a strategic asset of the economy. Successfully implementing this strategy could position Viet Nam as one of the models for green economic transformation in Asia in the coming decades.