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VIETNAM ACEDAMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES

LE THI THU HIEN

THE ECONOMIC INSTRUMENTS FOR
PROMOTING RESIDENTIAL SUSTAINABLE
CONSUMPTION
PHÁT TRIỂN HỢP TEECÃ VẬN TÀI THỦY-BỘ
NỘI ĐỊA Ở ĐỒNG BẰNG SÔNG CỬU LONG

Major
Code

:
:

Development economics
9.31.01.05

SUMMRY OF DOCTORAL THESIS IN ECONOMICS


HANOI – 2019


The work was completed at:

VIETNAM ACEDAMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES

Scientific Advisors:
1. Dr. Vu Quoc Huy
2. Associate Professor. Dr. Nguyen Chien Thang

Reviewer 1: Professor. Dr. Ngo Thang Loi
Reviewer 2: Associate Professor. Dr. Vu Thanh Son
Reviewer 3: Associate Professor. Dr. Nguyen Trong Xuan

The thesis will be defensed before the Academic Thesis Review
Board meeting at the Vietnam Academy of Social Sciences, 477
Nguyen Trai, Thanh Xuan, Hanoi
At …… hour ……min, date…… month ….. 2019

The thesis can be found at:
- National Library
- Library of the Academy of Social Sciences


1
INTRODUCTION
1. The urgency of the topic
Nowadays, sustainable development has been not only an
inevitable trend but also a necessary target in many countries all over
the world, specially in Vietnam. Of all a vast number of factors
which are required to ensure the sustainable development,
consumption is a key area. Moreover, residential consumption has
been an important subject to promote sustainable consumption.
The target named sustainable development has been
concerned in global in the recent years. Goal number 12 in UN
Sustainable development Goals by 2030 (SDG) is also about
ensuring the sustainability of production and consumption.


Therefore, promoting sustainable consumption is important and
essential in the general strategy of human development. Decision
No.76/QD-TTg , dated in 11/1/2016 of the Prime Minister approving
the National Action Program on Sustainable production and
consumption by 2020, vision to 203, shows the targets to change
producing and consuming patterns, consumption in the direction of
improving the efficiency of using renewable resources and energy;
environmentally friendly products; reducing, reusing and recycling
waste.
In Vietnam, there have been a lot of changes in residential
consumption. Almost the needs of people about food, dress,
transport, education, health care and entertainment are met. However,
there are also many negative trends in consumption that have been
revealed and they influenced directly to the successive generations


2
Residential consumption still has many traditional habits that consists
some problems such as using raw materials, low quality products that
harms to human health and misspending natural resources. Besides,
ostentatious and prodigal consumption in some residential groups is
not suitable with the low living standard and the income of the
majority population. Some products which is detrimental to human
health from producing process to consumption still are used widely
and unreservedly. At the same time, there are some alternative
products that manufactured to replace the unfriendly goods are not
interested properly.
To promote the residential consumption toward sustainable
and environmentially friendly way, and to ensure the needs of
consumption in generations, using the policy intrusments for
regulating and orientating are crucial. Thus they have been applied in
Vietnam in recent years, especially the economic intrusments which
are used in protecting environment.
However, their efficiencies are not as good as expected. On
the other hand, there has been any studies that is specific and
composites about the policy intrusment impacting on residential
sustainable

consumption.

Therefore,

studying

on

economic

intrusments in the policies of promoting sustainable consumption is
much necessary. The results of this study will indicate a general
review about the role of economic intrusments in the policies for
promoting sutainable consumption, the policy directions as well as
the procedures to imply these intrusments in practice. It is hopefully
expected to draw some new polices to promote sustainable
consumption in Vietnamese in future.


3
From the reasons above, I chose the topic “The economic
instruments for promoting residential sustainable consumption”. In
this study, economic intrusment will be examined in the comparation
with other policy intrusments such as administrative intrusment,
communicative

intrusment

to

indicate

the

advantages

and

disadvantages of these intrusments to propose the solutions in using
policies to promote sustainable consumption in residents. Along with
researching the economic intrusments in promoting sustainable
consumption policy, the thesis will focus on studying 2 specific cases
of restriction on using plastic bag and incentive policy to apply E5 biofuel.
Plastic bags and E5 bio-fuel are chosen to be the target
products because they are related directly to environmental
challenges. Polluted environment, especially white pollution and
pollution due to traffic dust, often develop on a wide scale and high
speed in large urban areas and municipalities. Plastic bags and E5
bio-fuel are the products that has conflict features in environmental
aspect. Therefore, to protect the environemt and toward to
sustainable consumption, Vietnamese Government has applied many
action programs and policy intrusments to restrict the ulilization of
plastic bio-fuel and to encourage residents in using E5 bio-fuel.
However, after many years, the results is still limited. Plastic bags
have been used ubiquitously and E5 bio-fuel has not yet to be trusted
by consumers. This study also identifies the situation and the reasons
for those restrictions and find out the reasional solutions for future.


4
2. Aims of the topic
General aims:
Based on analyzing the policy intrusments of promoting
sustainable consumption, the study will indicate the situation and the
role of economic intrusments in the policy of promoting sustainable
consumption through 2 cases which focus on limiting plastic bags
and encouraging E5 bio-fuel.
Specific aims:
- Clarify the theorical base of economic intrusments in the
policy of promoting sustainable consumption of residents.
- Analyzing the situation of using policy intrusments in
sustainable consumption through 2 cases of studying: restriction
policies on plastic bags and encouraging policies in usig E5 bio-fuel.
- Proposing solutions in using policy intrusments to promote
sustainable consumption of Vietnamese people and specific policy
recommendations for the 2 cases above.
3. Objectives and scope of the topic
3.1.

Researching objectives

The objectives is economic intrusments in policy for sustainable
consumption in residents. Therefore, this study will review generally
all the policy intrusments which promote sustainable consumption,
include: economic intrusments, administrative intrusments and
communitive intrusments.
3.2.

Scope of study
* Time scope: From 2010 to 2018
* Spacial scope: In Vietnam, specific cases in Ha Noi.


5
* Scope of study content: Based on studying the issues of
policies for sustainable consumption, this study identifies some
policy intrusments for sustainable consumption in residents, focuses
on economic intrusments. Administrative and communicative
intrusments will be refered in this study to compare to economic
intrusments in order to clarify the advantages and disadvantages of
each intrusments in policy for residential sustainable consumption. In
detail:
- Review literature about economic intrusments which are
used in other countries.
- Studying, analyzing the economic intrusments which
promote sustainable consumption through 2 cases: restriction of
using plastic bags and encouraging E5 bio-fuel.
- The study focuses on analyzing the policy for sustainable
consumption from the perspective of demanding. The issues from the
other side, supplement side, will be refered as the evidents for
proposing the policy implications.
4. Researching methods
Desk study, review:
Collecting, aggregating, evaluating and analyzing the
documents which are related to the researching topic from:
- The projects that were conducted in primary, basic and
developing researchs related to the contents of study.
- Documents from libralies in Vietnam Academy of Social
Sciences such as: Institute of Regional sustainable development,
Institute of social sciences information; Institute of Vietnam
Economics, Graduate Academy of Social Sciences,…


6
- The researchs, articles in Vietnam and the world through
websites.
- The documents and data from related Departments, Agencies.
- Policy documents of Vietnam related to the policy for
promoting sustainable consumption, the policy that restricts using
plastic bags, policy that encourages bio-fuel, E5 bio-fuel.
Method of systematic, statistic, comparative analyzing
From researching approaches, author uses systematic
analysis, statistis with comparative division to evaluate the
effectiveness of the policies that impact on promoting sustainable
consumption behaviours. This method will be used in analyzing and
finding the advantages and disadvantages of policies, the proposing
some solutions in improving the efficiencies of the policies, toward to
promote the sustainable consumption.
Method of policies analyzing:
To study the policy intrusments, it is very essential to use this
method. The policies will be studied and analyzed through 3 types of
intrusments

including:

administrative

intrusments,

economic

intrusments and communicative intrusments. Besides, the restriction
policies of using plastic bages or the encouraging policies about using
E5 bio-fuel will be examined in order to understand the strengths and
weakness of each policy before proposing the appropriated policy
implications.
Field trip:
* Objective of the field trip:
Author conducts the field trip with the objectives related to
restriction of using plastic bags and encouraging to use E5 bio-fuel,


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including:
+ In term of the restriction of using plastic bags: survey on
consumers about their situation in using plastic bags, their
awareness of the harmfulness of plastic bags and their opinions
about the solutions for the issue, the draw some appropriated policy
in future.
+ In term of encouraging to use E5 bio-fuel: survey on the
consumers about their situation in using bio-fuel, their awareness
about bio-fuel and E5 bio-fuel, their opinion about the policies to
promote the utilization of E5 bio-fuel, then propose some solution in
using policy intrusments more effective in future.
* Place of field trip:
Ha Noi is chosen to be the place of the survey because it is a
big city, where the majority of Vietnamese population is living in.
Therefore, for the new approval policies, Ha Noi people have the
chance to access and comply much better. Besides, within this big
city, sustainable consumption behavior such as limiting using plastic
bags and using E5 bio-fuel will be much more significant in statistic
aspects.
* Sampling methods:
This study uses simple random sampling method. Subjects are
selected randomly to interview at gas station (for E5 bio-fuel) and
markets, supermarkets and residential areas (for plastic bags) in 4
districts of Hanoi, including: Tay Ho, Ba Dinh, Cau Giay and Ha
Dong.
Survey sample: 100 questionaires about plastic bags and E5
bio-fuel.


8
Survey results will be processed through SPSS and STATA.
5. New contribution to the science of the thesis
The thesis provides a scientific basis on the use of economic
instruments to promote sustainable consumption, including: the
concepts and factors affecting consumer’s consumption, the impacts
of

economic

instruments

on

residential

consumption,

the

international experience on the use of economic instruments to
promote sustainable consumption. The thesis also analyzes the state
of affairs and the role of economic instruments in policies to promote
sustainable consumption of the residents through two case-studies:
limiting the use of plastic bags and encouraging the use of E5 biofuel. On that basis, the thesis proposes a number of solutions to
improve the effectiveness of the use of economic instruments in
policies to promote sustainable consumption in general and specific
solutions for two case-studies: restriction on using plastic bags and
encouraging E5 bio-fuel use in Vietnam.
6. The theoretical and practical significance of the thesis
- In theory: Contributing to clarifying the theorical base on
the use of policy intrusments to promote sustainable consumption of
the population, especially emphasizing economic intrusments.
- Practice: Providing some policy suggestions to limit the
use of plastic bags and encourage to use E5 bio-fuel in Vietnam
through specific data from the population survey. These policy
implications will be valuable for policy makers.


9
7. Thesis structure
In addition to the introduction, conclusion, pledge, cover page and
cover, list of symbols, abbreviations, list of tables, references and
appendices, the thesis is structured into four chapters as after:
Chapter 1: Overview of research situation
Chapter 2: Scientific basis for economic intrusmentsintrusments
in policies to promote sustainable consumption of the population
Chapter 3: Current status of economic intrusments in policies to
promote sustainable consumption of the population
Chapter 4: Views and solutions on economic intrusments in
policies to promote sustainable consumption of the population
CHAPTER 1
OVERVIEW OF RESEARCH SITUATION
Sustainable consumption is one of the goals for sustainable
development. Therefore, the use of policy intrusment to promote
sustainable consumption is important and necessary in the current
context. In policies to promote sustainable consumption, economic
intrusments are one of the crucial tools for policy implementation.
This chapter has some contents as follows:
1.1. Consumption and sustainable consumption
1.2. The elements that affect residential consumption
1.3. Policy intrusments that promote residential sustainable
consumption
1.4. Research gaps and thesis issues focused on solving
The policy tools to regulate sustainable consumption in Vietnam
have been applied in the past, but there is no specific and


10
comprehensive study on policy intrusments affecting sustainable
consumption. solidity the residents. Economic intrusments have also
been used in environmental protection policies, but research on this
issue is rarely mentioned. This study will provide a holistic view of
the role of policy intrusments to promote sustainable consumption,
especially the use of economic intrusments in policies to promote
sustainable consumption for two limited cases: using plastic bags
and encouraging the use of E5 bio-fuel to provide policy implications
for promoting sustainable consumption of people in Vietnam.
CHAPTER 2
SCIENTIFIC BASIC FOR ECONOMIC INTRUSMENTS IN
POLICIES TO PROMOTE SUSTAINABLE CONSUMPTION
OF RESIDENTS
2.1. Theorical basic about policy
2.1.1. Concepts
2.1.2. Goals and roles of policy
2.2. Theorical basic about residential sustainable consumption
2.2.1. The concept of consumption and sustainable consumption.
The concept of sustainable consumption has been mentioned
by countries around the world since the 1990s. The Oslo Conference
in 1994 introduced the concept of sustainable consumption "the use
of goods and services to meet human basic needs and bring better
quality of life, while minimizing the use of natural resources,
reducing pollution emissions and toxic substances in the product life
cycle, thereby not affecting the essential needs of future generations”.
Thus sustainable consumption is a term that includes a number of key


11
issues such as meeting demand, improving quality of life, improving
resource efficiency and reducing environmental pollution.
There are many concepts of sustainable consumption, but
most of the concepts are unified based on the concept of sustainable
consumption at the Oslo Conference in 1994, which is consumption
to meet human needs from previous generations to the next ones,
ensuring the equality between every people in the context of effective
use of natural resources and reducing environmental pollution. This
thesis only focuses on environmental protection in sustainable
consumption. Therefore, limiting the use of plastic bags or
encouraging the use of E5 gas are activities, that aim to protect the
environment, are selected as the target for this study.
2.2.2.The elements that affect residential consumption
Consumers always tend to maximize their utility and choose
goods to maximize their own benefits. According to microeconomics
approach, the determinants of consumer choice include income,
prices of goods, consumer preferences. When these factors change, of
course, consumer choice will change.
2.2.3. Factors to promote sustainable consumption
Consumption is also influenced by many factors including
subjective factors and objective factors. Subjective factors are factors
that belong to consumers themselves, objective factors are external
factors affecting consumers such as manufacturers, markets or
policies. ... In order to promote sustainable consumption, it is
necessary to have a coordinated implementation from all these
factors.


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2.3. Economic intrusments in the policies to promote residential
sustainable consumption
2.3.1. Classification of policy intrusments to promote residential
sustainable consumption
There are many ways to classify the policy intrusments to
promote sustainable consumption. How to use the classification
depends on the approach and the impact of each policy. However,
policy tools can be aggregated into three main groups:
-

Legal

and

administrative

intrusments:

including

documents on laws and sub – law documents (regulations, decrees,
permits, standards…)
- Also known as market-based intrusments which are used
to influence the costs and benefits of the activities of individuals and
economic organizations to create effects tothe behavior of economic
actors toward

to the benefit of society. Economic intrusments

include: taxes, fees, permits, refund deposit systems, subsidies
- Communicative and educational tools to change
consumer’s behavior:

through advocacy, providing perfect

information to consumers so that they have right awareness and will
actively choose behavior to promote consumption lasting
This study will use the classification of policy tools to
promote sustainable consumption, including: economic tools,
administrative tools and communication tools. Of all these kinds of
tools, the study will focus mainly on economic intrusments. In
addition, administrative and communication tools will also be
addressed because the success of a policy requires a combination of
multiple tools.


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2.3.2.

The impact

of economic

intrusment

on sustainable

consumption
Economic intrusments will adjust consumer behavior through
regulating prices of goods and consumers' income. Economic tools,
such as taxes and fees, will push the prices of goods up. Taxes and
fees will also reduce the relative income of consumers; thus, they will
have choices to make their buying decisions. in accordance with his
conditions.
Consumption

Price
(relatively)

Income

Supplement
(Produce, trade,
import, export)

Economic
intrusments

Habits
Demographi,
social and
cultural
factors

Administrative/law
intrusments

Communicative/
educational
intrusments

Analyzing framework abuot policies tools which affect consumption
2.4. Experiences in applying economic intrusments in policies to
promote sustainable consumption.
2.4.1. Expericences in France
2.4.2. Experiences in Canada
2.4.3. Experiences in Neitherland
2.4.4. Experiences in United Kingdom


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2.5. Theoretical basis for economic intrusments in the policy of
restricting the use of plastic bags and encouraging the use of E5
bio-fuel
2.5.1. Theoretical basic for economic intrusments in the policies of
restricting the use of plastic bags.
2.5.2. Theoretical basic for economic intrusments in the policies of
encouraging the use of E5 bio-fuel.
CHAPTER 3
CURRENT STATUS OF ECONOMIC INTRUSMENTS IN
POLICIES TO PROMOTE SUSTAINABLE CONSUMPTION
OF RESIDENTS
Vietnam
problems

caused

is

currently
by

the

facing

process

environmental
of

pollution

industrialization

and

modernization, especially the problems of dust pollution caused by
traffic vehicles

and white infection due to widespread use of

persistent nylon bags. It become as serious as a national
environmental disaster. The Government has been applying many
different policy measures and intrusment to change consumer
behavior, towards sustainable consumption and environmental
protection.
To study and understand the current status of economic
intrusments

in

policies

to

promote

residential

sustainable

consumption, this chapter will focus on two cases (1) restriction on
plastic bag use and (2) promotion the use of E5 bio-fuel. Limiting the
use of plastic bags and encouraging the use of E5 bio-fuel is
considered to be the behavior that

promotes sustainable


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consumption; therefore it should be an influence to the policies from
management agencies. Economic intrusments will be examined in the
overall analysis of policy intrusments to promote sustainable
consumption, including: administrative tools, economic tools and
communication tools.
3.1. Policies of restricting the use of plastic bags
3.1.1. Current situation and economic intrusments in restricting the
use of plastic bags in Vietnam
3.1.2. Case study of Hanoi
Using plastic bags is still popular and there has been an
increase in using this kind of products through time. Most of
consumers have awareness about plastic bags’ harmfulness to human
health and environment. However, there is a big gap from awareness
to behavior.
Economic tools to restrict the use of plastic bags has not
brought the expected effectiveness because the amount of taxes
applied is not appropriated. This types of intrusment need to be
combined with other policy tools to restrict the use of plastic bags,
especially communicative intrusments. Moreover, there should be a
new kind of bags for consumers that can replace the plastic bags.
3.2. Policies of encouraging the use of E5 bio-fuel
3.2.1. The situation and policies of encouraging the use of E5 biofuel in Vietnam
3.2.2. Case study in Hanoi
3.2.3. Regression model assesses the factors affecting consumer
decisions about using E5 bio-fuel
3.2.4. Review policies for E5 bio-fuel through the case of Hanoi city


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The policy to encourage the use of bio-petrol to completely
replace petroleum and mineral applied in Hanoi city has undergone
many times of extension. The first time to completely replace biofuel with E5 bio-bio-fuel was on December 1, 2014, the second was
on January 1, 2016, then to June 1, 2016; 1/6/2017 and finally on
January 1,2018. However, until July 2017, the policy has not brought
about the desired results. Consumers continue to use traditional biofuel and do not care much about the new product as E5 bio-fuel for
many reasons.
- Using economic intrusments, however, the subsidy level
from Government is not enough to help encouraging the consumers
to change their behavior. The price difference between E5 bio-fuel
and Ron92 bio-fuel (from 200 – 500 VND) is still low, so it is not
attractive to consumers.
- Strict administrative orders are not flexible so they are not
supported by the people.
- Coordinate between policy intrusments is not really
harmonious
- Propaganda is almost ineffective
3.3. Compare policy intrusments in restricting the use of plastic
bags and promoting the use of E5 bio-fuel
Researching two cases of restriction policy on plastic bag use
and encouraging the use of bio-petrol E5 showed that the issued
policies have some shortcomings.
In the case of plastic bags, the current economic intrusments
are mainly environmental taxes for production units. However, this
tax is too low compared to the cost of plastic bags. Therefore, when it


17
comes to consumers, plastic bags are mostly free of charge, so
consumers still cannot give up this product. Besides, the production
of alternative bags to replace plastic bags has not been focused so
consumers do not have plastic bags yet. Thus, it is necessary to have
policies to support the production of environmentally friendly bags to
replace the use of plastic bags.
In addition to using economic tools to limit the consumption
of plastic bags and encourage the production and consumption of
alternative bags, it is necessary to combine with other tools such as
administrative and public communication tools. Only when finding
solutions to replace plastic bags and other remedies to combine, the
application of a ban on using plastic bags as many countries around
will be effective. In addition, it is necessary to promote advocacy to
raise awareness for consumers in limiting the use of plastic bags to
protect the environment for sustainable development.
For E5 biofuel case, the economic tools are used through
supporting to lower the price of traditional bio-fuel. However, this
price difference is assessed as not enough to encourage consumers to
change their behavior. Economic intrusments have not been effective
at all during the implementation of the incentive policy, consumers
still prefer to choose traditional bio-fuel instead of bio-fuel despite
subsidies.


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CHAPTER 4
PERSPECTIVES AND SOLUTIONS ON ECONOMIC
INTRUSMENTS IN POLICIES TO PROMOTE
SUSTAINABLE CONSUMPTION OF RESIDENTS.
4.1. International and domestic contect for promoting sustainable
consumption
4.1.1. International context
4.1.2. Domestic context
4.2. Perspective on the use of intrusment in policies to promote
residential sustainable consumption
The policy tools to promote sustainable consumption have
been implemented, however, there is still no synchronization, and the
effectiveness is not high.
Economic intrusments based on market factors differ from
other tools because it ensures transparency on the basis of adjusting
individual behavior based on market signals and enticing
participationpositively and proactively fromthe central government,
local authorities, producers to the final consumers in the commodity
market. In the world, the use of economic intrusments on the basis of
market factors in environmental protection is a key trend and is
increasingly being expanded. In the context of Vietnam today, the
use of economic intrusments based on market factors in policy in
general and policies to promote sustainable consumption in particular
are very important and necessary. This is also consistent with the
general trend of the world and the transformation fromthe
administrative and administrative economy to the market economy
currently implemented in Vietnam.


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The application of market-based economic intrusments can yield the
expected effects at the lowest possible cost, which is very vital for a
developing country with financial resources. restrictions, budget
deficits and public debt as high as Vietnam today.
4.3. Solutions on using economic intrusments in the policies of
promoting sustainable consumption in residents
4.3.1. Solutions on economic intrusments in the policies to restrict
the use of plastic bags
Plastic bags are a convenient and popular type of packaging,
but in parallel with this advantage, there are many serious impacts on
the environment, society, the country's economy and people. To limit
the use of plastic bags, it is essential to have appropriate policies and
certain routes. The policy tools applied in our country, especially
economic tools, have not been effective because of many reasons
such astax tools are not strong enough to affect consumer behavior,
communication tools are notstrong and regular enough, while
administrative tools are lacking many conditions about environment
as well as legal corridors in the implementation of monitoring. In
order to limit the use of plastic bags in the coming time, some
solutions are mentioned for reference for policy makers as follows
Regulations to prohibit retailers from distributing free plastic
bags to customers
The goal of these regulations is to force the retailers to ask
customers to pay for plastic bags or switch to alternative bags to
change customers' habits of using plastic bags with anappropriate
roadmap, then the objects of this regulation will be gradually
expanded. This regulation can begin to be applied insupermarkets


20
and shopping centers and then to agency stores and markets. The fact
that customers have to spend money to share the cost of using plastic
bags will cause customers to gradually change their behavior.
However, how much the customer has to pay for plastic bags needs
to be calculated more specifically so that the value can be large
enough that people change their behavior.
Taxations on plastic bags
Taxes

will

be

applied

to

plastic

bags

ditributors

manufacturers, based on the unit of plastic bags produced. The
manufacturer and distributor will publicly add this cost to the cost of
plastic bags and the retailer/consumer must pay for this. The
application of this tax will directly affect retailers' habits in giving
free plastic bags to customers and thereby changing the habit of using
plastic bags of customers. It is important that the tax rate is calculated
high enough to change the retailer's and consumer's habit of using
plastic bags. Taxes will be collected from manufacturers or
distributors.
Supporting to produce the alternative goods to replace
plastic bags
In fact, the survey shows that most people are aware of the
harmful effects from plastic bags and are willing to change their
behavior. However, there are no items that can replace plastic bags
because of its convenience and low cost. When asking people about
the necessary conditions for people to stop using plastic bags, most
respondents think that there is a need for substitutes to stop using
plastic bags. So applying a ban or restriction on plastic bags in


21
Vietnam may not be effective without finding a solution to produce
other alternative bags. .
There are already some types of bags that can be replaced for
plastic bags including cloth bags, paper bags, biodegradable bags ...
There are many conditions and solutions that promise the ability to
replace plastic bags with different types of environmentally friendly
packaging. The study and introduction of biodegradable packaging to
replace plastic bags should receive support from the State through
regulations, rules and policies to encourage changes in the habit of
using plastic bags and strategic orientation in environmental
protection and proper waste treatment. However, it is necessary to
calculate measures to work towards the use of reuse plastic bags
which would be more economical, more natural and more
environmentally friendly than biodegradable bags.
Besides the use of economic tools, communication tools are
indispensable in environmental programs, which significantly
influence the success of other tools to reduce the use of plastic bags.
These communication programs should be organized regularly and
periodically under propaganda campaigns. The target groups include:
consumers, retailers / distributors and plastic bag manufacturers and
each community member. The process of planning and carrying out
propaganda to raise people's awareness of the use of plastic bags
needs the coordination of authorities, political organizations, civil
society and to encourage the

participation of communities,

individuals and local people.
4.3.2. Solutions on economic intrusments in policies to promote the
use of E5


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In the context of the depletion of oil resources and the
destruction of the natural environment, the use of bio-fuel is a trend
towards sustainable development. According to prediction by many
experts, bio-bio-fuel will become the main fuel source to replace
fossil fuels in the near future. Therefore, it is necessary to gradually
switch from using mineral gas to bio-petrol. This policy has been
paid attention by the State for over 10 years. However, the
implementation of the State's guidelines and policies encountered
some difficulties from both supply and demand sides of the product.
Economic intrusments are market-based tools which are
based on the harmonization of interests and costs of stakeholders.
Therefore, when applying to the use of bio-fuel to use in Vietnam, it
is necessary to have a more careful calculation and consideration of
the benefits and costs of the whole society, the production and
business enterprises and consumer.The investment in fuel production
plants but not being put into work at present has caused great losses
and waste of funds. It is necessary to review the continued
investment in bankruptcy factories to avoid further state budget
losses. Some petroleum enterprises which are not state-owned
enterprises are not interested in E5 bio-fuel business because it is not
as profitable as petroleum business due to high loss rate and
expensive investment costs. When the benefits of businesses are
affected, they will tend to shift to selling bio-fuel Ron 95 more than
E5 bio-fuel. This will cause unnecessary waste for society. Should it
be more careful in maintaining existing bio-fuel types and
continuing to use E10?


23
Moreover,

the price policy that needs to be carefully

considered when applying the price for new items to encourage
consumers. Currently, the bio-fuel price difference compared to
traditional petrol is considered low, not enough to encourage users.
According to the survey results on the price difference
between mineral petrol and E5 gas so that consumers can accept E5
bio-fuel, the expected gap is about 10%. Thus, the price of E5 gas
must be lower than petrol Ron 92 about 1,500-2,000 VND and lower
than Ron 95 bio-fuel about 3,000-4,000 VND. Therefore, the
difference between E5 and Ron 95 is not attractive enough to change
consumer behavior. In order for consumers to change their choice to
switch to E5 bio-fuel, it should have a more attractive price,
particularly it should be lower than Ron 95from 3000 to 4000 VND.
Experiences from other countries also show that, when
putting bio-fuels into use, it is necessary to introduce thesupporting
policies in price to stimulate the market and when the ethanol
industry goes into stability, subsidies can be stopped to save State
budget. Besides the use of economic tools, the coordination of tools
such as combining administrative tools and communication tools are
also essential for promoting the use of E5 bio-fuel in Vietnam.


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