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Abb e ia ed Key Ti le: Is g J Econ Bus Manag
ISSN: 2584-0916 (Online)
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Volume – III Issue - V (Sep embe -Oc obe ) 2025
F equency: Bimon hly
The Impac o Ca bon Tax Policy on Co po a e Compe i i eness and P oduc ion
Cos s: Lessons o Vie nam
Hoang Thi Thu Hien1*, La Thi Thu T ang2, Quang Manh Nguyen3
1,2,3 Banking Academy o Vie nam 12 Chua Boc, Dong Da, Hanoi
| Recei ed: 29.09.2025 | Accep ed: 04.10.2025 | Published: 06.10.2025
*Co esponding au ho : Hoang Thi Thu Hien
Banking Academy o Vie nam 12 Chua Boc, Dong Da, Hanoi
Abs ac
This s udy analyzes he ole o ca bon axa ion in educing emissions and acili a ing he ansi ion owa d a low-ca bon economy.
D awing on in e na ional expe iences om bo h de eloped and de eloping coun ies, he au ho s examine he impac s o ca bon
axes on p oduc ion cos s and co po a e compe i i eness. The s udy u he emphasizes ha he e ec i eness o ca bon axa ion
equi es complemen a y suppo mechanisms such as inancial incen i es, p e e en ial loans, aining, and echnical assis ance o
enable i ms o adap o ca bon cos s while os e ing in es men in clean echnologies and imp o ing p oduc ion e iciency. A
quali a i e esea ch app oach is employed o ex ac lessons lea ned, iden i y policy gaps, and p opose solu ions ha help small
and medium-sized en e p ises adap o ca bon- ela ed cos s, while encou aging la ge i ms o in es in clean echnologies and
op imize p oduc ion p ocesses. The indings p o ide aluable policy insigh s o Vie nam in designing a easible ca bon ax
oadmap, he eby os e ing g een ans o ma ion, imp o ing ene gy e iciency, and main aining he compe i i eness o he na ional
economy.
Keywo ds: Tax policy, Ca bon ax, G eenhouse gas emission educ ion, G een ansi ion
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1. In oduc ion
Amid moun ing in e na ional p essu e o educe g eenhouse gas
(GHG) emissions, many coun ies ha e adop ed ca bon p icing
ins umen s such as ca bon axes o emissions ading sys ems
(ETS) o in e nalize en i onmen al cos s in o economic ac i i ies.
These mechanisms a e widely ega ded as e ec i e economic ools
o incen i ize emission educ ions and acili a e he ansi ion
owa d a low-ca bon economy. Empi ical assessmen s in OECD
and G20 coun ies sugges ha well-designed ca bon p icing
schemes do no necessa ily e ode in e na ional compe i i eness,
hough speci ic impac s depend on ax le els, sec o al s uc u es,
and accompanying suppo policies (OECD, 2022).
Globally, a ious coun ies and egions ha e implemen ed ca bon
p icing ins umen s o simul aneously cu b GHG emissions and
sa egua d domes ic business compe i i eness. The Eu opean Union
has in oduced he Ca bon Bo de Adjus men Mechanism
(CBAM), which ensu es ha impo ed goods bea ca bon cos s
equi alen o hose o p oduc s manu ac u ed wi hin he bloc,
he eby encou aging clean echnology adop ion and mi iga ing
―ca bon leakage‖ (Siy, Wang, Zheng, & Hu, 2023). Japan, Sou h
Ko ea, and Canada ha e employed ca bon axes o ETS schemes,
which aise p oduc ion cos s while simul aneously s imula ing
echnological inno a ion and shielding domes ic i ms om
compe i ion wi h p oduce s ope a ing unde laxe emission
egula ions. Recen s udies indica e ha i ms wi h high emission
in ensi y end o expe ience lowe p o i abili y and ma ke
alua ion compa ed wi h low-emission i ms when ca bon p icing
policies a e enac ed, e lec ing highe ope a ional cos s o
―b own‖ en e p ises, whe eas ―g een‖ i ms o hose in es ing
ea ly in clean echnologies gain compe i i e ad an ages (Han &
Zhao, 2024). Hence, ca bon p icing no only educes emissions bu
also eshapes in es men decisions, long- e m s a egies, indus ial
s uc u es, and capi al lows, while sending ma ke signals ha
os e a shi owa d low-emission p ojec s, accele a e he ene gy
ansi ion, and con ibu e o global emission educ ions.
In Vie nam, he go e nmen has issued Decision No. 232/QĐ-TTg,
app o ing he es ablishmen o a domes ic ca bon ma ke as pa o
e o s o g adually de elop a ca bon p icing mechanism, assis
businesses and he economy in adap ing o emission educ ion
policies, and mo e owa d he ne -ze o a ge by 2050
(Go e nmen Po al, 2025; Thư iện Pháp luậ , 2025). This
decision ou lines he oadmap and guiding p inciples o ca bon
ma ke de elopmen , highligh ing he impo ance o suppo
mechanisms o en e p ises—pa icula ly ene gy-in ensi e
sec o s— o simul aneously educe emissions and main ain
compe i i eness in he con ex o in e na ional in eg a ion. Some
schola s a gue ha Vie nam may adop a low ini ial ca bon p ice
wi h g adual inc eases o a oid economic shocks while s ill
p o iding ma ke signals o i ms (Nguyen & Pham, 2021). In
addi ion, ecen mac oeconomic models indica e ha ca bon axes
would ha e une en impac s ac oss sec o s, necessi a ing
app op ia e suppo mechanisms o ensu e ai ness and easibili y
(Pham, 2025).
This s udy employs a quali a i e app oach, analyzing in e na ional
expe iences on he impac s o ca bon axes on p oduc ion cos s and
business compe i i eness, om which aluable lessons o
Vie nam a e d awn. Based on his analysis, he pape iden i ies
policy gaps and challenges, pa icula ly in suppo ing mechanisms
o i ms, emission moni o ing ools, and in eg a ion wi h
in e na ional ma ke s. Fu he mo e, i examines he po en ial
e ec s o ca bon axa ion on p oduc ion cos s and compe i i eness
in Vie nam’s key indus ies, o e ing policy ecommenda ions o
help en e p ises p oac i ely adap , in es in clean echnologies, and
imp o e ene gy e iciency. A he same ime, he s udy aims o
in o m policymake s in designing a ca bon axa ion sys em ailo ed
o domes ic socioeconomic condi ions ha bo h achie es emission
educ ion a ge s and p ese es he compe i i eness o he na ional
economy, he eby con ibu ing o Vie nam’s commi men o
achie ing ne -ze o emissions by 2050.
The pape is s uc u ed as ollows: Sec ion 1 p esen s he con ex ,
esea ch objec i es, and me hodological app oach. Sec ion 2
e iews in e na ional expe iences wi h ca bon axa ion, ocusing on
impac s on p oduc ion cos s and compe i i eness. Sec ion 3
assesses Vie nam’s cu en policy landscape and i ms’ adap i e
capaci y. Sec ion 4 syn hesizes lessons lea ned, discusses p ac ical
implica ions, and p o ides policy ecommenda ions o Vie nam in
de eloping and implemen ing a ca bon axa ion scheme.
2. Li e a u e Re iew
Ca bon axa ion is widely ega ded as a pi o al ins umen in
g eenhouse gas (GHG) p icing policy, g ounded in he ―pollu e
pays‖ p inciple, which compels economic ac o s o in e nalize he
social cos s o emissions and incen i izes he adop ion o g een
echnologies (Aldy & S a ins, 2012). Globally, h ee main models
a e commonly applied: (i) di ec axa ion o ossil uels based on
ca bon con en , as in Sweden, whe e a ax exceeding EUR 130 pe
on o CO₂ has educed emissions by o e 25% while GDP has
con inued o g ow (OECD, 2022; Wo ld Bank, 2022); (ii) he
imposi ion o a ixed ax pe on o CO₂ emissions, o en wi h a
g adual inc ease o allow i ms o adap and acili a e he ene gy
ansi ion; and (iii) hyb id app oaches ha combine ca bon axa ion
wi h ma ke -based mechanisms o enhance lexibili y and
economic e iciency. Wo ldwide, dozens o ca bon p icing
ins umen s a e cu en ly in ope a ion, co e ing a subs an ial sha e
o global emissions, demons a ing ha well-designed ca bon
p icing can achie e emission educ ion a ge s while suppo ing
economic g ow h.
In de eloped coun ies, ca bon axes a e ypically in oduced ea ly,
wi h ela i ely high a es and clea ins i u ional amewo ks,
designed o achie e en i onmen al objec i es wi hou unde mining
economic compe i i eness. OECD (2022) highligh s Sweden as a
pionee , implemen ing a ca bon ax as ea ly as 1991; oday, he
a e s ands a app oxima ely EUR 137 pe on o CO₂— he highes
globally—and has enabled signi ican emission educ ions
alongside s eady GDP g ow h. Simila ly, Finland and No way
adop ed ca bon axa ion in he ea ly 1990s, e lec ing a b oade
Eu opean end o u ilizing ca bon p icing as a s uc u al
ins umen o ene gy sys em ans o ma ion (Wo ld Bank, 2022).
Eu opean expe ience demons a es ha a s able and su icien ly
high ca bon p ice, complemen ed by suppo i e measu es such as
enewable ene gy in es men and echnological inno a ion
incen i es, can deli e a dual di idend: educing emissions while
sus aining economic g ow h.
By con as , eme ging and de eloping economies ha e gene ally
adop ed a mo e cau ious app oach, o en implemen ing ca bon
axes a low le els o limi ing hei scope. In Japan, he cu en
ca bon ax a e is 289 JPY pe on o CO₂ (app oxima ely USD 2–3
pe on), in oduced in 2012. This ax has p ima ily symbolic and
policy-signaling unc ions, encou aging i ms o educe emissions
wi hou imposing signi ican bu dens on ene gy-in ensi e sec o s
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such as hea y indus y and anspo a ion (Joo e al., 2023). Sou h
Ko ea, meanwhile, launched i s Emissions T ading Scheme (ETS)
in 2015, becoming he i s Eas Asian coun y o adop such a
sys em. The scheme cu en ly co e s a ound 79% o na ional GHG
emissions and suppo s he coun y’s commi men o achie ing ne -
ze o emissions by 2050. Howe e , acco ding o Joo e al. (2023),
he sys em aces pe sis en challenges, including non- anspa en
allowance alloca ion, c edi p ice ola ili y, and di icul ies in
moni o ing co po a e compliance.
The expe iences o Japan and Sou h Ko ea sugges ha beyond he
nominal ca bon p ice, he key de e minan s o success lie in
ins i u ional capaci y, ansi ion suppo mechanisms, and he
deg ee o socie al consensus.
3. In e na ional Expe iences
3.1 Expe iences om De eloped Coun ies
3.1.1Eu opean Union (EU)
The Eu opean Union has implemen ed he Emissions T ading
Sys em (EU ETS) o educe ca bon emissions while se ing a
ca bon p ice o i ms ha exceed hei alloca ed allowances.
Acco ding o DNB (2021), a ca bon ax o EUR 50 pe on o CO₂
inc eased p oduc ion cos s by app oxima ely 1–2% in ene gy-
in ensi e indus ies such as s eel, cemen , and chemicals, whe eas
se ice sec o s we e less a ec ed. This e lec s di e ences in
ca bon in ensi y ac oss sec o s and illus a es he di ec impac on
p oduc p ices, p o i abili y, and compe i i eness, pa icula ly o
expo e s o ma ke s ha ha e ye o adop compa able ca bon
p icing mechanisms (OECD, 2022; Wo ld Bank, 2022). Rising
p oduc ion cos s ha e compelled i ms o op imize p ocesses,
imp o e ene gy e iciency, and conside in es men in clean
echnologies.
The EU has complemen ed he EU ETS wi h he Ca bon Bo de
Adjus men Mechanism (CBAM), which mi iga es indi ec ca bon
cos s o expo e s when goods a e consumed in ma ke s wi h s ic
emission egula ions. This no only p o ec s domes ic
compe i i eness bu also encou ages compliance wi h in e na ional
en i onmen al s anda ds. Membe S a es such as Ge many, F ance,
and Poland ha e alloca ed app oxima ely EUR 27.5 billion o
suppo i ms in upg ading echnologies, shi ing o clean ene gy,
enhancing e iciency, and educing ca bon in ensi y. Such inancial
assis ance has alle ia ed immedia e inancial p essu es, acili a ed
long- e m in es men planning, and s imula ed echnological
inno a ion (DNB, 2021). By in eg a ing ca bon p icing, cos -
compensa ion schemes, and echnology suppo , he EU has
c ea ed a comp ehensi e model ha balances emission educ ion
wi h compe i i eness while os e ing sus ainable business
de elopmen . This o e s aluable lessons o de eloping coun ies
such as Vie nam in designing ca bon ax egimes wi h e ec i e
complemen a y policies.
The EU’s expe ience unde sco es ha a mode a ely se ca bon ax,
when pai ed wi h suppo mechanisms, can simul aneously educe
emissions and minimize ad e se economic impac s (DNB, 2021).
Well-designed ca bon axa ion exe s economic p essu e on i ms
o imp o e ene gy e iciency and op imize p oduc ion wi hou
causing excessi e cos inc eases (Han & Zhao, 2024). Howe e ,
ca bon axa ion in isola ion, wi hou accompanying suppo
policies, isks o e bu dening i ms, e oding compe i i eness, and
igge ing ca bon leakage (OECD, 2022). The EU demons a es
ha combining ca bon axa ion wi h inancial assis ance, clean
echnology incen i es, and indi ec cos -compensa ion mechanisms
enables i ms o adap , enhance echnological capaci y, and emain
compe i i e globally (Wo ld Bank, 2022; DNB, 2021). This
comp ehensi e s a egy is pa icula ly ele an o de eloping
coun ies such as Vie nam, whe e echnological ansi ion cos s
emain high, highligh ing he impo ance o coupling app op ia e
ca bon ax le els wi h suppo policies o achie e bo h emission
educ ion and compe i i eness (F ase Ins i u e, 2023).
3.1.2Japan
Japan has implemen ed ca bon axa ion alongside clean echnology
in es men incen i es o encou age i ms o ansi ion owa d
sus ainable ene gy and imp o e p oduc ion e iciency. Acco ding
o Sa o e al. (2024), i ms in ene gy and chemical sec o s
expe ienced p oduc ion cos inc eases anging om 0.5% o 1.8%
ollowing he in oduc ion o ca bon axa ion, while se ice and
echnology i ms we e less a ec ed. To mi iga e hese impac s, he
Japanese go e nmen has launched inancial suppo p og ams o
equipmen upg ades, echnological imp o emen s, and enewable
ene gy adop ion. E idence shows ha ca bon axa ion has
mo i a ed la ge i ms o inc ease in es men s in clean
echnologies, hough small and medium-sized en e p ises (SMEs)
con inue o ace capi al cons ain s and hus equi e ailo ed
suppo mechanisms (Sa o e al., 2024).
The ax’s e ec s a y acco ding o i m size. Fo la ge en e p ises,
ca bon axa ion p o ides s ong economic incen i es o in es in
clean echnologies and ene gy-e icien solu ions, le e aging
inancial capaci y and access o ad anced echnologies (Sa o e al.,
2024; OECD, 2022). Ca bon ax becomes a manageable cos ac o
h ough p ocess op imiza ion and echnological upg ades, na u ally
d i ing g een ansi ion. Con e sely, SMEs ace g ea e challenges
due o inancial limi a ions, es ic ed access o echnology, and
limi ed ene gy managemen capaci y (Kuma e al., 2025; F ase
Ins i u e, 2023). Addi ional ax bu dens can signi ican ly s ain
SMEs’ compe i i eness and e en pose inancial isks. This
highligh s he necessi y o di e en ia ed suppo policies, such as
p e e en ial inancing, concessional loans, echnical assis ance, and
aining p og ams, enabling SMEs o adap wi hou jeopa dizing
he b oade g een ansi ion. Ca bon axa ion hus se es no only
as an en i onmen al egula o y ool bu also as a ca alys o clean
echnology in es men , wi h i s e ec i eness con ingen on
suppo i e policies ha p e en widening inequali ies be ween i m
g oups (Sa o e al., 2024; Kuma e al., 2025).
3.1.3Canada
Canada has adop ed a g adually inc easing ca bon ax, beginning a
ela i ely low le els and scheduled o ise o e ime, p o iding
i ms and he economy wi h an adap a ion pa hway (F ase
Ins i u e, 2023). This design enables businesses o adjus cos s
inc emen ally, op imize p oduc ion p ocesses, and in es in clean
echnologies wi hou sudden inancial shocks. Such an app oach is
pa icula ly impo an o ene gy-in ensi e indus ies such as
cemen , s eel, and chemicals, whe e emission- ela ed cos s
cons i u e a signi ican sha e o p oduc ion expenses. By con as ,
low-emission sec o s ace mo e modes impac s, illus a ing he
une en e ec s o ca bon axa ion ac oss indus ies (F ase
Ins i u e, 2023). The g adual ajec o y also mi iga es ca bon
leakage isks, as i ms a e no o ced o eloca e p oduc ion ab oad
o e ade ca bon cos s.
To u he p o ec compe i i eness, Canada has implemen ed ax
eba es o businesses and households, alle ia ing di ec inancial
bu dens (F ase Ins i u e, 2023). This ensu es ha i ms e ain a
le el playing ield domes ically and in e na ionally, while
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simul aneously acili a ing public and business accep ance o
ca bon axa ion (Wo ld Bank, 2022). Addi ionally, he go e nmen
suppo s in es men in g een echnologies and enewable ene gy,
encou aging i ms o adop p oduc i i y-enhancing inno a ions and
op imize p oduc ion p ocesses (ICAP, 2023; F ase Ins i u e,
2023). These measu es collec i ely educe ca bon cos s o e ime,
main ain compe i i eness, and os e long- e m sus ainable
in es men s (F ase Ins i u e, 2023).
Canada’s expe ience highligh s he impo ance o combining a
g adual ca bon ax ajec o y wi h complemen a y suppo policies,
pa icula ly o ene gy-in ensi e indus ies acing high cos
p essu es. Ins umen s such as in es men incen i es, eba es, and
echnical ad iso y p og ams allow i ms o mi iga e inancial
bu dens, op imize p oduc ion, and imp o e ene gy e iciency. As a
esul , i ms can main ain compe i i eness while ad ancing clean
echnology adop ion, con ibu ing o sus ainable economic
de elopmen and emission educ ions.
3.2 Expe iences om De eloping Coun ies
3.2.1Thailand
Thailand has pilo ed ca bon p icing mechanisms in ene gy-
in ensi e indus ies such as elec ici y, cemen , and chemicals o
educe emissions, s imula e clean echnology adop ion, and
enhance ene gy e iciency (Chak abo y e al., 2025). The
in oduc ion o ca bon axes o emission ading mechanisms has
aised p oduc ion cos s, wi h a ying deg ees o impac depending
on ca bon in ensi y and sec o cha ac e is ics. Ene gy-in ensi e
indus ies bea g ea e cos p essu es, whe eas low-emission
sec o s a e less a ec ed. SMEs a e pa icula ly ulne able due o
limi ed capi al, echnological access, and ene gy managemen
capaci y. Wi hou adequa e suppo , ca bon p icing can unde mine
SMEs’ compe i i eness, educe p oduc ion capaci y, and inc ease
inancial isks.
To mi iga e hese e ec s, he Thai go e nmen has in oduced
complemen a y measu es, including subsidies o enewable
ene gy in es men , incen i es o clean p oduc ion echnologies,
excise ax educ ions o highly a ec ed i ms, and echnical
ad iso y and ene gy managemen aining p og ams (Chak abo y
e al., 2025; OECD, 2022). These policies help SMEs educe
inancial bu dens while encou aging la ge i ms o in es in
echnological upg ades, imp o e ene gy e iciency, and op imize
p oduc ion. As a esul , ca bon cos s a e mo e e ec i ely managed,
and i ms’ long- e m compe i i eness is s eng hened.
Thailand’s policy model sha es no able simila i ies wi h Vie nam’s
con ex , as bo h economies ely hea ily on SMEs in ene gy-
in ensi e indus ies such as elec ici y, cemen , and s eel. These
i ms a e bo h economically signi ican and highly sensi i e o cos
luc ua ions, pa icula ly unde ca bon p icing egimes. Bo h
coun ies ha e adop ed ca bon axa ion o emission ading
mechanisms complemen ed by echnical, inancial, and aining
suppo , enabling SMEs o g adually adap while incen i izing
la ge en e p ises o in es in clean echnologies and p oduc ion
op imiza ion. This app oach e lec s a long- e m s a egic
objec i e: o d i e g een ansi ion, achie e e ec i e emission
educ ion, s eng hen in e na ional compe i i eness, and ul ill
sus ainable de elopmen commi men s.
3.2.2India
India has expe imen ed wi h ca bon axa ion in ene gy-in ensi e
indus ies such as cemen and s eel o educe emissions while
p omo ing he ansi ion o clean echnologies and ene gy
e iciency (Kuma e al., 2025). The ax has aised p oduc ion
cos s, wi h a ying impac s depending on ca bon in ensi y and
sec o cha ac e is ics. Ene gy-in ensi e indus ies ha e expe ienced
highe cos p essu es, while low-emission sec o s ace ligh e
impac s. SMEs a e disp opo iona ely a ec ed due o inancial
cons ain s, limi ed access o ad anced echnologies, and weak
ene gy managemen capabili ies. Wi hou a ge ed suppo , ca bon
axa ion can e ode SMEs’ compe i i eness, exace ba e inancial
isks, and supp ess p oduc ion ou pu .
To add ess hese challenges, he Indian go e nmen has in oduced
suppo ing measu es, including excise ax educ ions, subsidies o
enewable ene gy in es men s, and incen i es o clean echnology
adop ion in p oduc ion p ocesses (Kuma e al., 2025; OECD,
2022). These policies help SMEs alle ia e cos p essu es while
mo i a ing la ge i ms o in es in echnological inno a ion,
imp o e ene gy e iciency, and op imize p oduc ion p ocesses.
Consequen ly, ca bon cos s a e mo e e ec i ely managed, and
i ms’ long- e m compe i i eness is enhanced.
India’s expe ience closely mi o s ha o Vie nam, whe e SMEs
domina e ene gy-in ensi e sec o s and ace signi ican inancial
and echnological cons ain s. In bo h cases, ca bon axa ion o
emission ading mechanisms impose subs an ial cos p essu es,
pa icula ly on SMEs, while la ge i ms a e be e posi ioned o
in es in clean echnologies and op imize p oduc ion. These
simila i ies unde sco e he impo ance o ie ed suppo policies—
encompassing inancial assis ance, echnical suppo , and
aining— o enable SMEs o adap , imp o e ene gy e iciency, and
educe emissions. Such measu es no only s eng hen
compe i i eness bu also suppo he b oade g een ansi ion
wi hin he economy.
4. Lessons o Vie nam
Expe iences om bo h de eloped and de eloping coun ies
demons a e ha , in o de o educe emissions wi hou
unde mining compe i i eness, ca bon axa ion mus be designed as
a g adually inc easing ajec o y accompanied by comp ehensi e
suppo measu es. La ge en e p ises a e encou aged o in es in
clean echnologies and op imize p oduc ion p ocesses, while small
and medium-sized en e p ises (SMEs) equi e inancial, echnical,
and aining suppo o adap e ec i ely. Vie nam can lea n om
hese expe iences by combining ca bon axa ion wi h lexible
suppo mechanisms, simul aneously p omo ing g een echnology
in es men , os e ing a sus ainable economic en i onmen , and
main aining i ms’ compe i i eness.
Fi s , a lexible and g adual ca bon ax ajec o y should be
designed o ease immedia e cos p essu es on en e p ises.
Expe iences om he EU and Canada illus a e ha a phased
app oach allows i ms o adap , op imize p oduc ion p ocesses, and
plan in es men s in clean echnologies. In he EU, he ca bon ax
combined wi h he Ca bon Bo de Adjus men Mechanism
(CBAM) has enabled ene gy-in ensi e indus ies such as cemen ,
s eel, and chemicals o main ain domes ic compe i i eness while
educing emissions (DNB, 2021). Simila ly, in Canada, he g adual
inc ease in ca bon axa ion, coupled wi h ax eba es, has alle ia ed
di ec inancial bu dens while encou aging la ge en e p ises o
in es in clean echnologies and p oduc ion op imiza ion (F ase
Ins i u e, 2023). The lesson o Vie nam is o es ablish a clea ,
anspa en , and p og essi e ax oadmap ha a oids sudden cos
shocks, pa icula ly o ene gy-in ensi e sec o s. Such a ajec o y
enables bo h medium and la ge en e p ises o g adually adap ,
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while mi iga ing he isk o ―ca bon leakage,‖ whe eby i ms
eloca e p oduc ion ab oad o e ade axa ion.
Second, ca bon axa ion should be pai ed wi h comp ehensi e
suppo mechanisms o mi iga e nega i e impac s on
compe i i eness. E idence om India, Canada, and he EU
indica es ha s and-alone ca bon axes inc ease p oduc ion cos s,
disp opo iona ely a ec ing SMEs due o limi ed capi al and access
o echnology (Kuma e al., 2025; F ase Ins i u e, 2023; DNB,
2021). In India, suppo measu es such as excise ax educ ions and
incen i es o enewable ene gy in es men s ha e alle ia ed
inancial p essu es on SMEs, while encou aging la ge i ms o
adop clean echnologies and op imize p oduc ion p ocesses
(Kuma e al., 2025). Simila ly, he EU and Canada ha e
in oduced inancial suppo , ax eba es, and g een echnology
p og ams o sus ain domes ic compe i i eness (DNB, 2021; F ase
Ins i u e, 2023). The lesson o Vie nam is o a oid uni o m
applica ion o ca bon axa ion and ins ead design ie ed suppo
mechanisms acco ding o i m size and inancial capaci y. Such
measu es may include p e e en ial inancing, concessional loans,
echnical assis ance, and ene gy managemen aining. These allow
SMEs o adap wi hou sac i icing compe i i eness, while
mo i a ing la ge en e p ises o in es in echnological inno a ion
and p oduc ion e iciency.
Finally, ca bon axa ion should se e as a ca alys o clean
echnology in es men and sus ainable g een ansi ion. Lessons
om all coun ies unde sco e ha ca bon axa ion is no solely an
en i onmen al policy ool bu also a d i e o echnological
mode niza ion and p oduc ion op imiza ion. In he EU, en e p ises
ecei ing echnology upg ade suppo alongside ca bon axa ion
ha e success ully educed emissions while emaining compe i i e
(DNB, 2021). Canada and India demons a e ha la ge i ms ha e
in es ed in clean echnologies due o inancial incen i es and
phased ca bon ax ajec o ies, imp o ing ene gy e iciency and
lowe ing long- e m ca bon cos s (F ase Ins i u e, 2023; Kuma e
al., 2025). Fo Vie nam, his highligh s he need o incen i ize
i ms o in es in clean echnologies and enewable ene gy, while
applying suppo i e measu es such as ax incen i es, concessional
loans, and echnical aining. Such policies would help o se
addi ional p oduc ion cos s om ca bon axa ion, enhance ene gy
e iciency, s eng hen compe i i eness, and accele a e he
comp ehensi e g een ansi ion. Fo ene gy-in ensi e sec o s such
as cemen , s eel, and chemicals, combining ca bon axa ion wi h
a ge ed suppo and clean echnology incen i es is c ucial o
achie ing emission educ ion goals while sus aining long- e m
economic g ow h.
5. Conclusion
The implemen a ion o ca bon axa ion ep esen s a c ucial
ins umen o educing g eenhouse gas emissions and ad ancing
he ansi ion owa d a low-ca bon economy. In e na ional
expe ience demons a es ha , when app op ia ely designed, ca bon
axa ion no only educes emissions bu also os e s echnological
inno a ion, enhances p oduc ion e iciency, and sus ains i ms’
compe i i eness. Key elemen s o success include a g adual ax
ajec o y, comp ehensi e and ie ed suppo mechanisms o small
and medium-sized en e p ises (SMEs), and s ong incen i es o
in es men in clean echnologies and sus ainable g een
ans o ma ion. Fo Vie nam, adop ing a phased ca bon ax will
enable en e p ises o adap p og essi ely, mi iga e he isk o
―ca bon leakage,‖ and a oid sudden cos shocks, pa icula ly in
ene gy-in ensi e indus ies such as cemen , s eel, and chemicals.
Suppo mechanisms—such as inancial incen i es, concessional
loans, aining, and echnical assis ance—will help SMEs main ain
compe i i eness while encou aging la ge i ms o in es in clean
echnologies and op imize p oduc ion p ocesses. P omo ing
in es men in g een echnologies will educe long- e m ca bon
cos s, imp o e ene gy e iciency, and c ea e momen um o
inno a ion. Ul ima ely, hese measu es will lay he ounda ion o a
g een, e icien , and sus ainable economy.
Acknowledgmen s Funding: The au ho s g a e ully
acknowledge he inancial suppo om he Banking Academy
o Vie nam.
Compe ing in e es s: The au ho s decla e ha he e a e no
con lic s o in e es ega ding he publica ion o his pape .
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