Cambodian Green Economy Transition: Background, Progress, and SWOT Analysis

Abstract

A green economy is not a common economic practice. This leads the governments in many countries to focus on institutional arrangement and policy development. The institutional arrangement is one of the main significant factors, while green economy policies have to be well developed to support stakeholders and put less pressure on local communities. Hence, this research aims to understand green economic development in Cambodia by focusing on institutional arrangements and green economic development policies. Thus, this research’s priority was to evaluate their background and progress, and a comprehensive SWOT (strengths, weaknesses, opportunities, and threats) analysis was conducted based on their progress/transition. This research conducted background, progress, and SWOT analyses based on (i) the government’s documents, including the code, laws, royal decrees, sub-decrees, prakas, policies, strategic plans, roadmaps, and reports; (ii) development partners’ reports from reliable sources, such as UN agencies, UN Programs, ASEAN, the Asian Development Bank, and the World Bank; and (iii) existing literature. This research presented the results and discussed the findings encompassed by political and economic conditions, institutional arrangement and capacities, policy development and coordination, and participation of the public and stakeholders, as well as global green cooperation and funding, which were conditioned by the experiences from the COVID-19 pandemic and the uncertainties resulting from global geopolitical conflicts, such as the Russian–Ukrainian conflicts. Moreover, this research discussed weaknesses against strengths and threats against opportunities to suggest solutions or implications.

1. Introduction

With its high commitment to promoting clean, green, and sustainable development, Cambodia developed a green growth national roadmap in 2009, which has been gaining more attention internationally [1]. This roadmap enables a win–win–win situation between the environment, economy, and socioculture toward achieving environmental sustainability, stable high economic growth, and human well-being [2]. The roadmap lays out seven key priority accesses: (i) access to clean water and sanitation, including waste management; (ii) access to sustainable energy, including renewable energy and energy efficiency; (iii) access to knowledge and information, including green education and skills; (iv) access to means for sustainable transports; (v) access to sustainable finance and investments; (vi) access to non-chemical products and food security; and (vii) access to sustainable land use, including protected areas and forest management [1].

Through a memorandum of understanding (MoU) on cooperation for green growth with the Global Green Growth Institute (GGGI) in 2011, Cambodia has significantly contributed to producing immediate tangible impacts towards achieving high economic growth while reducing environmental stress and improving quality of life [3]. More importantly, in 2012, Cambodia internationally co-founded GGGI, transformed it into an international, treaty-based inter-governmental organization, and nationally established a National Council for Green Growth (NCGG) to coordinate green and low-carbon development and to ensure the balance of economic, environmental, and sociocultural objectives within the kingdom [4]. In 2013, Cambodia importantly approved a green growth national policy and strategic plan for 2013–2030 with the aim of promoting Cambodia’s long-term, sustainable sociocultural and economic development [5].

In alignment with the United Nations 2030 Agenda for Sustainable Development, the Cambodia National Council for Sustainable Development (NCSD) was established in 2015 [6] by consolidating the National Green Growth Council and its General Secretariat, the National Climate Change Committee and its Secretariat, the National Biodiversity Steering Committee and its Secretariat, and the National Biosafety Committee and its Secretariat [7]. This council is a policy-making body with a mission to ensure environmental, economic, and sociocultural balances and promote sustainable development within the country. The council is composed of members from both national (line ministries) and sub-national levels (capital and provincial administrations). Furthermore, the council has a General Secretariat at the Ministry of Environment to support its daily operation and has five departments that oversee the green economy and green growth, science and technology, biodiversity and biosafety, climate change, and its administrative works [8,9,10].

In this regard, a study indicated that institutional arrangement was one of several significant factors, while the capital and provincial (local) administrations were shown to be significant in leading sustainable development efforts at the local levels through a range of initiatives [11]. The same study stressed that climate-related and environmental protection programs are transboundary in nature in that longer-term and innovative approaches are required more than relatively low-cost and easier approaches to be implemented in the future. Importantly, the political commitments were found to be significant in making the country pioneer the design and implementation of transformational climate policies, while tremendous achievements were needed to incorporate the great commitments and mobilizations of relevant stakeholders, including people and local communities [12]. Many countries have developed green economy policies with special implementation measures, excluding undesirable elements [13] that are not necessary in order to set up a policy at the right level, putting less pressure on local communities through local-level and effective institutional arrangements to deal with the challenge of guaranteeing rights to local people [13,14]. Importantly, the establishment of more promising institutional arrangements is shown to be the key to sustainable management, particularly in mitigating climate change and in the forest sector [14].

Moreover, institutional mechanisms were set up to mobilize governmental agencies and relevant stakeholders to participate in developing a green economy. A working group should be established, including employees from relevant ministries (at least seventeen), especially from the economy and finance ministry, which is important for linking national institutions in national budgeting processes [15]. Furthermore, sectorial, local green economy, and sustainable development strategies have to be supported and endorsed through consultations with relevant stakeholders undertaken during the analyzing, designing, and implementing processes. National government agencies, capital and provincial administrations, businesses, and civil society organizations were stated to be the main promoters and drivers of sustainable development and green economy initiatives, strategies, and policies [16]. The same study showed that the green economy coexists at levels that are incompatible with the concepts of sustainable development from regional/global to local/national contexts that relate to different visions and priorities of the institutions carrying out strategic plan implementation. The implementation of these sustainable development and green economy initiatives, strategies, and policies not only requires all involved stakeholders’ commitments but also requires political and institutional capacities, financial investment instruments and support, and better communication strategies on issues ranging from governmental agencies to all involved stakeholders.

Hence, this research aims to understand green economic development in Cambodia by focusing on institutional arrangements, as well as visions and priorities of institutional structures in strategic plan implementations, and sustainable development and green economy policies, strategies, and initiatives. In this regard, this research first uncovered the background and progress of green economic development in Cambodia and then conducted a comprehensive SWOT analysis based on its progress or transition. As shown in the above review, this research will conduct background, progress, and SWOT analyses, focusing on institutional arrangements (structures, roles, and responsibilities) and sustainable development and green economy policies, strategies, and initiatives. This will incorporate factors contributed by the government, participation of local people and communities, and the cooperation or partnership of public and private sectors, development partners, and other relevant stakeholders, as well as sustainable finance mechanisms, such as the joint SDG fund, and green climate fund (GCF).

The significance of this research is shown as follows: (i) improving the understanding of green economic development in Cambodia among key stakeholders, especially banking/financial institutions; (ii) providing useful information to many potential development partners, including banking/financial institutions, on the roles and responsibilities of governmental institutions responsible for green economic development and their structural reforms from time to time; (iii) increasing knowledge on Cambodia’s green economy transition and related regulations, such as the code, laws, royal decrees, sub-decrees, and prakas, as well as national policies, strategic plans, roadmaps, and other nationally supported initiatives; and (iv) suggesting implications for inclusive green economic development in Cambodia by discussing weaknesses against strengths and threats against opportunities to provide solutions/alternatives to close the gap or mitigate the risk.

2. Materials and Methods

2.1. Analytical Framework

This research analyzed the background and progress of Cambodia’s green economy transition based on (i) the government’s documents, including the code, laws, royal decrees, sub-decrees, prakas, policies, strategies, roadmaps, and reports; (ii) the development of partners’ reports from reliable sources, such as UN agencies, UN programs, ASEAN, the Asian Development Bank, and the World Bank; and (iii) existing works of literature. More importantly, this research conducted a comprehensive SWOT analysis based on Cambodia’s green economic development progress or transition. The analytical framework of this research is shown in Figure 1.

2.2. Sources of Data

This research used both primary and secondary data. First, the primary data have been gathered through meetings, workshops, and project assignments with the Department of Green Economy, General Secretariat of NCSD, and Ministry of Environment, including various participations with their staff [17]. The analysis was also based on the author’s green economy knowledge and work experiences of more than 12 years, with almost 11 years at the following green economy institutions: first, the Division of Green Economy and Investment of the NCGG’s General Secretariat (2013–2015) and then the Department of Green Economy of the NCSD’s General Secretariat (2015–2021) and the General Directorate of Policy and Strategy (2021–present). The data were fully and/or partly published or available online as follows: (i) A study on the mechanism of green economic development in Cambodia with Build Bright University [18], (ii) Cambodia’s Green Urban Development Program (GUDP I) by the Department of Green Economy and GGGI [19,20], (iii) Cambodia’s Urban Sustainability Assessment (CUSA) Project with Hanyang University [21,22,23,24] and with Sungkyunkwan University [25], (iv) the Development of an INFF finance strategy for Cambodia based on Cambodia’s SDGs framework with UNCDF and Frankfurt School—UNEP Collaborating Centre for Climate and Sustainable Energy Finance [26], and (v) a United Nations partnership for action on green economy (UN PAGE) in Cambodia with the coordinating governmental institution (Department of Green Economy of the Ministry of Environment’s General Directorate of Policy and Strategy) and the coordinating UN agency (UNITAR, on behalf of the five UN PAGE agencies: UNDP, UNIDO, UNEP, UNITAR, and ILO) [27]. Furthermore, secondary data were also used to support the background and progress analysis, as indicated in the above figure. Desk review methods, such as the reviewing of existing literature and relevant reports, were found to be useful in understanding the current context or situation, and the research based on existing information and knowledge was also identified as the building block of all research studies regardless of the disciplines [28,29,30,31]. Therefore, this research extensively reviewed documents not only from the government’s sources but also from reliable sources of development partners, such as UN agencies, UN programs, ASEAN, the Asian Development Bank, and the World Bank, and from relevant existing literature.

3. Background and Progress

3.1. Definitions

A green economy is an economy that improves human well-being, and social inequity is reduced, with or without ecological scarcities and environmental dangers—this is a view of the United Nations Environment Programme (UNEP) at a visionary level. For the operational level, UNEP has viewed a green economy as one that generates income and employment growth, driven by investments to reduce environmental pollution and carbon emissions, enhance energy and resource-efficient use, and prevent the loss of biological diversity and ecosystem services [32]. If we look at the country’s level, Cambodia defines a green economy as economic development with efficient use of natural resources, improving environmental sustainability, and promoting green technology and green jobs, as well as economic reforms by taking further consideration on green encouragement, especially green tax and green financing, such as green credit and green microfinance—this is based on green growth national policy and strategic plan [5,33].

Green growth is an initiative that fosters economic development and growth while ensuring natural assets continue to provide natural/environmental services and resources for human well-being—this is the concept identified by the OECD [34]. Likewise, Cambodia has viewed green growth (as shown in the green growth national policy and strategic plan) as a green economic development that will reduce environmental risks by using less natural resources but obtain high yields, increase energy efficiency to reduce carbon emissions, as well as improve both people’s livelihood and clean development towards achieving social inclusion, environmental sustainability, and stable high economic growth [5,33].

Sustainable development has almost reached a consensus with the following definition: “The development that meets the needs of the present without compromising the ability of future generations to meet their own needs”—this is a widely known definition of the term “sustainable development”, claimed by the World Commission on Environment and Development in 1987 [35]. For the country’s context, Cambodia has also indicated in its green growth policy that sustainable development is an economic development that can be implemented without harm to the environment by using natural resources wisely, increasing energy efficiency, maintaining less waste generation and clean development, and enhancing the quality of life while achieving a balance of economic development with environmental protection and social welfare and inclusiveness [5,23].

We understand that the definition of a green economy and green growth, defined in Cambodia’s green growth policy [5] and green growth national strategic plan for 2013–2030 [33], demonstrated above, strongly showed that green economy and green growth principles were strategically set by the royal government of Cambodia as a means to achieve sustainable development within the kingdom. As shown in the following sessions, the government has defined a green economic development framework in alignment with regional and global trends. Before 2012 and from 2012 to 2015, we see that green economic development has mainly progressed under the green growth mechanism, whereas from the year 2015 until now, we see that this green economy has been developed under a sustainable development framework in alignment with the United Nations 2030 Agenda for Sustainable Development, widely known as sustainable development goals (SDGs).

3.2. Cambodia’s Green Economy Transition by October 2012

3.2.1. Overview

Cambodia’s green economic development is mainly seen in the green growth mechanism, which started from a Green Growth Secretariat located at the Ministry of Environment. This Secretariat has served the inter-ministerial Green Growth Working Group, which was formalized in August 2009 [1]. This inter-ministerial working group was chaired by a Secretary of State for the Environment and consisted of members from 15 relevant ministries, such as the Ministry of Interior; the Ministry of Land Management, Urban Planning, and Construction; the Ministry of Agriculture, Forestry, and Fisheries; the Ministry of Industry, Mines, and Energy; the Ministry of Economy and Finance; the Ministry of Planning; the Ministry of Public Works and Transport; the Ministry of Education, Youth, and Sports; the Ministry of Health; the Ministry of Rural Development; the Ministry of Women’s Affairs; the Ministry of Tourism; the Ministry of Labour and Vocational Training; the Ministry of Commerce; the Cambodian Chamber of Commerce; the Phnom Penh Capital Administration and its Department of Environment, including a national project coordinator for the second national communication on climate change [18].

In 2009, the inter-ministerial working group developed a national green growth roadmap as an important tool that contributed to the national policy and strategic plan implementation of sustainable development in Cambodia. It combined the general objective of pre-existing development strategies with green growth realization and maintenance and identified economic progress with environmental sustainability that accelerates socially inclusive and low-carbon development. Importantly, the roadmap aimed to unify the environment and development objective by enhancing policy implementation tailor-made to address all needs of job creation and increasing environmental resilience towards maintaining long-term stable economic growth, environmental sustainability, and human well-being. Thus, seven key priority accesses were set as follows: (i) access to clean water and sanitation, including waste management; (ii) access to sustainable energy, including renewable energy/energy efficiency; (iii) access to knowledge and information, including green education/skills; (iv) access to means for sustainable transport; (v) access to sustainable finance and investments; (vi) access to non-chemical products and food security; and (vii) access to sustainable land use, including protected areas/forest management [1].

After the GGGI was launched on 16 June 2010 as an evidence-based policy innovation and learning platform that was employed to illuminate the practical opportunities for both industry and country-led progress on economic development and environmental sustainability imperatives at the Second East Asia Climate Forum in Seoul, South Korea [3], Mr. Han Seung Soo, Chairman of the GGGI, came to work with Cambodia and met the Cambodian Prime Minister, Samdech Hun Sen, in 2011. During the meeting, Samdech Hun Sen stated that “Cambodia is developing and despite the fact that the development is progressing with Cambodia’s own greenness, it had to be cautious as the greenness would reduce and be replaced by the dryness” [36]. During this meeting, the Chairman of the GGGI expressed that South Korea is greatly interested in increasing green resources and that the GGGI was happy to share their green growth experiences with Cambodia.

Furthermore, the Cambodian government, represented by H.E. Dr. Mareth Mok, a senior minister of environment, signed an MoU on green growth cooperation with the Chairman of the GGGI in March 2011 to design a green growth work plan for the GGGI in Cambodia in order to create fast, tangible impacts towards achieving Cambodia’s sustainable economic growth while improving the quality of life and reducing environmental risks. The objective was to (i) formulate a master plan for green growth, tailor-made to Cambodia’s specific characteristics; (ii) build a green growth plan, including working agendas, with Cambodia’s national development strategic plan; (iii) converge sectoral green growth policies and issues, such as rural agriculture, forestry, and energy; (iv) coordinate compatibility between environmental protection and industrial development; and (v) identify and prioritize adaptation activities for green growth implementation [36].

3.2.2. Discussion

Since the late 2000s, Cambodia has clearly set its goal to achieve a green economy, as evidenced by the green growth national roadmap that laid out seven key priority goals. Even though, at that time, the rest of the world faced a lot of difficulties resulting from the economic crisis in 2008, Cambodia continued its commitment to promote low-carbon and sustainable development. At that time, Cambodia faced a lot of challenges; for example, awareness of climate change and green growth was limited; local people were living in poverty; protected areas management capacity was limited; and other difficulties resulted from an economic crisis. As shown in Figure 2, Cambodia’s gross domestic product (GDP) growth rate went down from 10.2% in 2007 to 6.7% in 2008 and declined further to 0.1% in 2009, particularly in the industrial sector [37]. However, the economy grew back in 2010, with a growth rate of 6.0%, and continued to grow around 7.0% for almost 10 years.

With this well-grown-back condition, Cambodia launched the Cambodian Climate Change Alliance (CCCA) program in February 2010, which was led by the Ministry of Environment and supported by approximately USD 10.8 million by the European Union, Denmark, Sweden, and the UNDP [38]. The CCCA aimed to create enabling environments for the country to respond to climate change by building and strengthening human/institutional capacities. It targeted key governmental agencies (national), sub-national administrations, and civil societies and demonstrated pilot climate change adaptation measures [38,39]. Until now, the CCCA has succeeded in Phase III, with the aim to provide a unified engagement point as a resource pool for mainstreaming climate change through policies and programs of national and sub-national agencies [40]. The key expected outcome of the CCCA’s Phase III measures at an impact level is an increasing low-carbon and climate-resilient economy, measured by a reduced level of GHG emissions and the number of adaptation measures that beneficiaries supported through the program [41]. Moreover, Cambodia has also expanded its green growth cooperation with the GGGI since 2011 to create fast, tangible impacts towards achieving sustainable economic growth while reducing environmental risks and improving quality of life [36]. Through this good-sign transition in accordance with high economic growth, Cambodia took another step to further increase the institutional level from a Green Growth Secretariat to establish a Green Growth National Council. The detail of its institutional arrangement and progress or transition is shown in the following section.

3.3. Cambodia’s Green Economy Transition from October 2012 to May 2015

3.3.1. Institutional Arrangement

In June 2012, representatives from 16 countries, including Cambodia, signed the GGGI’s Establishment Agreement at the United Nations Conference on Sustainable Development in Brazil (Rio+20) to establish and convert the GGGI into an international treaty-based, inter-governmental organization [17]. As a founding member of this inter-governmental organization, Cambodia established a National Council for Green Growth (NCGG) on 10 October 2012 to improve Cambodia’s green economic development, public health, environmental quality, people’s livelihood, and national cultural preservation based on the four key pillars of economy, environment, society, and culture [4]. The organizational structure of the NCGG and its General Secretariat is shown in Figure 3.

The council had the Prime Minister as its Honorable Chairman and the Minister of Environment as its Chairman. A total of 26 ministries were made up of members of the council, and among these, two ministries have served as Deputy Chairs. The council also had other members from relevant councils and committees, such as the Supreme National Economic Council (SNEC), the Council for the Development of Cambodia (CDC), the Council for Agricultural and Rural Development (CARD), the National Committee for Disasters Management (NCDM), and the Cambodia National Mekong Committee (CNMC). All governors of the capital and provincial administrations were also members.

According to the royal decree on the organization and functioning of the National Green Growth Council, dated 10 October 2012 [4], the NCGG shall have a General Secretariat for its daily operation, and this Secretariat shall be housed at the Ministry of Environment. The Secretariat was led by a Secretary-General and assisted by some Deputy Secretary-Generals (at least one). The Secretary-General was also a member of the NCGG. The royal decree determined that the organization and functioning of the General Secretariat shall be defined by the sub-decree. Therefore, the government accordingly issued a sub-decree on the organization and functioning of the General Secretariat of the NCGG. This Secretariat had four divisions: (i) division of administration and finance, (ii) division of green environment and natural resources, (iii) division of green economy and investment, and (iv) division of monitoring and evaluation (M&E) [42].

3.3.2. Green Growth Policy and Strategy

The national green growth policy was approved by the government on 1 March 2013 in a full cabinet meeting of the Council of Ministers. This policy was envisioned to strike a balance between economic development and environmental and sociocultural objectives, particularly the sustainable use of national resources by matching, integrating, and harmonizing nationally existing policies with the green economy and green growth principle [5]. The aim of the green growth policy is to enhance people’s livelihood and well-being, harmonizing them with a safe ecosystem based on green and blue economy principles, social safety system, and environment protection while conserving the cultural identities of the nation. The objective of the policy is to (i) develop an economy in balance with the environment and socioculture; (ii) create an enabling environment for green growth in fraternity and quality of the economic, ecological, and sociocultural system; (iii) coordinate and manage the effectiveness of seven key priority accesses (clean water and sanitation, including waste management; renewable energy and energy efficiency; green knowledge and information; means for better mobility; sustainable finance and investment; non-chemical products and food security; and sustainable land use, including protected areas/forest management); (iv) enhance education and training on green growth; (v) strengthen green growth knowledge and information exchange, such as good experiences on green investment and green technology; and (vi) stimulate cooperation on green growth at all levels [5].

The national green growth strategic plan for 2013–2030 was also approved by the government in a full cabinet meeting on 1 March 2013 [33]. This strategic plan was envisaged to develop a sustainable economy by maintaining sociocultural and environmental sustainability, especially to end poverty. The objective is to promote stable, high economic growth, reduce environmental pollution, ensure ecosystem safety, promote people’s livelihoods, health services, and quality education, and manage the sustainable use of natural resources, such as land use and water resource management. Furthermore, it aims to increase energy efficiency, ensure food safety, and uphold cultural heritage identity. The strategic plan indicates green growth achievements by focusing on nine strategic directions as follows: (1) creating green jobs and investment; (2) managing a green economy in balance with the environment; (3) developing a sustainable blue economy; (4) managing natural resources and a green environment; (5) building green human resources; (6) managing green, efficient technologies; (7) promoting a social safety system; (8) protecting the cultural heritage identity; and (9) better governing green growth [33].

3.3.3. Discussion

The organizational structure of the green growth national institution was upgraded from a Green Growth Secretariat under the Ministry of Environment to an inter-ministerial NCGG in 2012. Furthermore, 15 ministries as members of the Inter-Ministerial Green Growth working group have increased to 26 ministries as members of the National Inter-ministerial Green Growth Council. These members included the economy and finance ministry and five relevant inter-ministerial councils and committees (SNEC, CDC, CARD, NCDM, and CNMC). All governors of capital and provincial administrations were also members. More importantly, the Prime Minister was the Honorable Chair while the Minister of Environment was the Chair. Ministers of planning and agriculture, forestry, and fisheries were Deputy Chairs [4]. This shows the government’s strong commitment to achieving green economic development through green growth mechanisms.

Moreover, institutional instruments need to be designed as a means to mobilize governmental agencies to participate in the development and implementation processes of green economic policies. These agencies should be at least 17 relevant ministries, with especially the economy and finance ministries to be included in order to link national institutions to national budgeting processes [15]. National government agencies and capital and provincial administrations are also the main drivers and promoters of the green economy and sustainable development initiatives, strategies, and policies. Consultation with relevant stakeholders during the design and implementation process is needed in order to provide effective outcomes for these initiatives, strategies, and policies [16].

Likewise, the green growth national policy and strategic plan for 2013–2030 have been consulted with relevant stakeholders before bringing them into the full cabinet meeting of the Council of Ministers. Furthermore, since both policy documents have been developed by the National Council for Green Growth, they have been processed through various consultations with the council’s inter-ministerial and sub-national members. Both policy documents were then reviewed by the government during its highest meeting (full cabinet meeting), which was led by the Prime Minister and participated by all deputy prime ministers, senior ministers, ministers in charge of ministries, ministers attached to the Prime Minister, and state secretaries at that time. Finally, both policy documents were approved by the Council of Ministers in the full cabinet meeting on 1 March 2013 [5,33].

Moreover, the government developed Cambodia’s climate change national strategic plan for 2014–2023 as a national comprehensive policy document responding to climate change issues that occur in Cambodia [39]. This climate change strategic plan shows the political will and firm commitment of the government and its readiness to combat climate change. It aimed to reduce climate change impacts through national development efforts and provide contributions to international communities regarding global GHG emission mitigating efforts under the UN Framework Convention on Climate Change (UNFCCC). Furthermore, the government’s national strategic development plans (NSDPs), updated in 2009–2013 [43] and 2014–2018 [44], have clearly defined climate change issues to be integrated into national and sub-national planning, especially setting climate change responding strategies, action plans, and financing framework among the national priorities.

3.4. Cambodia’s Green Economy Transition from May 2015 to November 2021

3.4.1. Relevant Institution Integration

In alignment with the United Nations 2030 agenda on sustainable development, Cambodia established a sustainable development council in May 2015 by consolidating relevant inter-ministerial bodies, such as the NCGG and its General Secretariat, the Climate Change National Committee and its Secretariat, Biodiversity National Steering Committee and its Secretariat, and Biosafety National Committee and its Secretariat. This consolidated council is the National Council for Sustainable Development (NCSD), a policy-making body with a mission to promote sustainable development and ensure the environmental, economic, and sociocultural balance within the country [6].

According to the establishment’s royal decree of the NCSD, dated 9th May 2015, the council has the Prime Minister as the Honorable Chair and the Minister of Environment as the Chair, as shown in Figure 4. A total of 29 ministries (all the government’s ministries) are its members, while other members come from relevant inter-ministerial councils and committees and sub-national administrations. The SNEC, CDC, CARD, NCDM, and CNMC, and all governors of capital and provincial administrations remained the members but with the addition of a Deputy Executive Director of the National Committee for Sub-national Democratic Development (NCDD). According to the member list, the Secretary-General of the NCSD also serves as its permanent member.

Even though the Environment Minister remained the Chair, and the Prime Minister remained the Honorable Chair, there is an order for Deputy-Chair positions. The first Deputy-Chair post is given to the Secretary of State of the Council of Ministers, whereas the second Deputy-Chair post is given to the Secretary of State of the Ministry of Environment. Importantly, the council has an executive committee, which consists of 12 members. This committee is chaired by the Environment Minister and supported by two Deputy Chairs. The first Deputy Chair is a Secretary of State of the Ministry of Agriculture, Forestry, and Fisheries, whereas the second Deputy Chair is a Secretary of State of the Ministry of Environment. The Secretary-General of the NCSD is also a permanent member of this committee. This shows that the government has a strong commitment to promoting green economic development by highly structuring its sustainable development council and executive committee with a regular meeting at least once every quarter [6].

The establishment’s royal decree of the abovementioned Sustainable Development Council indicated that the NCSD should have a General Secretariat for its daily operation. This General Secretariat should be housed at the Ministry of Environment. As determined by the above royal decree, the General Secretariat is led by a Secretary-General and assisted by some deputies as required. According to the sub-decree on the organization and functioning of the General Secretariat of the NCSD, this Secretariat has five supporting and technical departments as follows: (a) Department of Administration, Planning, and Finance; (b) Department of Climate Change; (c) Department of Green Economy; (d) Department of Science and Technology; and (e) Department of Biodiversity [8].

3.4.2. Roles and Duties of NCSD and DGE

According to the establishment’s Royal Decree No. 403 of the Sustainable Development National Council, dated 9 May 2015 [6], the NCSD—as a policy-making body for promoting sustainable development and ensuring the environmental, economic, and sociocultural balance within the kingdom—has roles and duties as follows: Formulating, mainstreaming, directing, promoting, coordinating, and evaluating sustainable development and related legal instruments, policies, strategies, action plans, projects, and programs; mobilizing resources; fostering and establishing partnerships; and promoting and encouraging training, education, and research studies. Other rules and duties of the NCSD are as follows: Proposing national strategies and positions to participate in international sustainable development and related meetings, agreements, and negotiations; giving approval on and reviewing national communications regarding environmental and sustainable development multilateral agreements that Cambodia is a party to; managing the government’s sustainable development and related information and communication; facilitating, managing, and leading climate change, the green economy, and other related works; and implementing the government’s other assigned tasks if required.

Royal Decree No. 403 determined that the NCSD may convene for a meeting at least once a year upon invitation by the Chairperson or his/her authorized Deputy Chairperson. The Chair of the NCSD may invite, as necessary, representatives from line ministries or agencies, technical officials, experts, or private sectors to participate in the consultation and research studies on any issues related to the duties of the NCSD. Where the Chairperson is not available, a Deputy Chairperson may chair the meeting of the NCSD as authorized by the Chairperson. The Executive Committee of the NCSD shall convene for a meeting to review and consolidate the performance and report for the NCSD at least once every quarter. The modality and procedure of the NCSD and its Executive Committee operation shall be defined by the internal regulation of the NCSD. Moreover, the NCSD may establish the committee(s), working group(s), expert group(s), or other mechanisms for specific sectors of the work as required. The NCSD may also have technical advisor(s) and national or international expert(s) as required. The NCSD shall have the authorized right to use its own logo, seal, and separate budget as an annex to the Ministry of Environment’s budget. The NCSD shall also have the authorized right to receive, manage, and use funds from various sources to perform its functions in accordance with the legal procedure in force.

More importantly, the technical Department of Green Economy (DGE) of the General Secretariat of the NCSD has a mission to promote Cambodia’s green economic development through coordinating related policies and strategies, undertaking green economy and related projects, and mobilizing technical and financial resources to implement the policies and plans [45]. The sub-decree on organization and functioning of the General Secretariat of the NCSD, dated 18 May 2015 [8], showed that the DGE is one of the Secretariat’s five departments and has roles and duties as follows: Coordinating and implementing green economy and related projects, programs, action plans, strategic plans, policies, and legal instruments, including monitoring and evaluation (M&E); coordinating and conducting research studies of development activities’ impacts and benefits to sustainable development dimensions, such as the environment, economy, and socioculture; and measuring green domestic products, and coordinating natural capital accounting.

Other rules and duties of the DGE are as follows: Coordinating a feasibility study and establishing pollution-based payment principals and environmental service-based payment mechanisms; coordinating, monitoring, and evaluating the agreed mechanism implementation; coordinating research and support tool systems’ development for decision-making, such as multicriterial analysis, impact assessment, and cost–benefit analysis, which contribute to the establishment or modification of a green economy and related projects, programs, action plans, strategic plans, policies, and legal instruments; conducting research studies related to sustainable energy, sustainable cities and green buildings, and sustainable consumption and production and a circular economy, including eco-label and green certification, as well as the implementation of agreed mechanisms, strategies, and policies, including M&E; strengthening and building cooperation on green economy and related projects with relevant stakeholders, particularly academic institutions, private sectors, and civil societies; and mobilizing resources for policy implementation.

According to the proclamation (prakas) on organization and functioning of the green economy department, dated 3 December 2015 [9], the DGE has five offices as follows: (i) Office of Administration, Planning and Finance; (ii) Office of Policy and Economic Instrument; (iii) Office of Sustainable Lifestyle; (iv) Office of Green Standard and Sustainable Consumption and Production (SCP); and (v) Office of Eco-label and Green Certification. Furthermore, based on the prakas, the Office of Administration, Planning, and Finance serves as the admin of the DGE, whereas the Office of Policy and Economic Instrument is mandated to coordinate relevant policies and projects on sustainable energies (renewable energies and energy efficiency). The Office of Sustainable Lifestyle is set to implement policies and projects on green and sustainable cities and green buildings, whereas the Office of Green Standard and SCP are mandated to implement policies and projects on sustainable consumption and production and a circular economy, including green and sustainable public procumbent. Last but not least, the Office of Ecolabel and Green Certification is set to implement policies and projects on ecolabels and green building certifications. Since their works are interconnected and linked to each other, all five offices play a working role in joint collaboration to implement their own mandate and to support each other. The structure of the Green Economy Department is shown in Figure 5.

3.4.3. Sustainable City and Circular Economy Strategies

The Strategic Planning Methodology for Green City Development in Cambodia—a Green City Strategic Plan Development Guide: This strategic planning was endorsed in August 2016 as a guideline for line ministries and capital and city administrations to embark on the transforming process of Cambodian cities towards greater green growth and sustainability, with the technical support from the GGGI and Ministry of Environment/National Council for Sustainable Development, particularly the Department of Green Economy. This guideline is fundamentally organized with ten following key steps: (1) governance arrangement for green city strategic planning; (2) urban context baseline assessment; (3) shared urban development goals, mission, and vision for a green city; (4) key urban sector review for promoting green growth in cities; (5) urban green growth priority objective development and key sectoral actions; (6) potential project identification for green urban development; (7) green urban development project prioritization; (8) envisioned green growth scenarios for cities; (9) a made list of priority green urban projects; and (10) a strategic plan arrangement for green city implementation [19]. Through this planning methodology, the government has developed Phnom Penh’s sustainable city plan for 2018–2030 [46] and seven secondary cities’ sustainable strategic plans for 2020–2030 [47]. These plans aim at (i) de-coupling economic growth from environmental impacts; (ii) reducing poverty, increasing social inclusion, and improving urban welfare; (iii) providing all citizens with cities that are resilient to climatic, natural, and other risks; and (iv) ensuring the competitiveness of cities and their attractiveness to businesses or investors.

In addition, the circular economy strategy and action plan, approved on 29 June 2021, indicates an important vision and mission, as well as key strategies and a roadmap for the country’s circular economy transition. This strategic plan aims at (a) increasing sustainable energy consumption and production; (b) increasing sustainable patterns of consumption; (c) reducing at-source waste generation; (d) improving waste management, collection, and segregation, and efficient transportation; (e) promoting repair and reuse of products; (f) increasing waste composition and recycling and energy recovery; (g) ensuring environmental control at all sites of waste management; and (h) promoting environmental education dissemination and raising awareness. Moreover, the five strategic objectives of this strategy and action plan are identified as follows: (i) increasing efficient raw material use and promoting sustainable production and design, remanufacturing, and distribution; (ii) promoting effective repair and reuse and sustainable consumption; (iii) enhancing waste collection and recycling; (iv) ensuring effective residual waste management; and (v) enhancing stakeholders’ awareness, capacity building, and engagement [48].

3.4.4. Discussion

After consolidating four relevant inter-ministerial bodies, the National Council for Green Growth was upgraded to the National Council for Sustainable Development (NCSD). This new structured council is not only responsible for promoting a green economy and green growth, but it is also a response to climate change, science and technology, and biodiversity and biosafety. Members of the council are expanded from 26 ministries to include all the government’s ministries (29 ministries) [6]. The number of relevant governmental inter-ministerial councils and committees has also increased from five (SNEC, CDC, CARD, NCDM, and CNMC) to six (added NCDD). The governors of capital and provincial administrations also increased from 24 to 25 because a new province was formed, namely Tboung Khmum Province [49]. More importantly, the General Secretariat’s structure is further strengthened with a specific technical department responsible for green economic development, namely the Department of Green Economy [8]. This department has played an important role in coordinating related policies and strategies, undertaking green economy and related projects, and mobilizing technical and financial resources to implement green growth and related policies and strategic plans [45], especially in coordinating policies and projects on sustainable energies, sustainable cities, and green buildings, as well as the SCP, including eco-labeling and green certification [9].

Moreover, the green economy/green growth policies and strategies are not only focused on circular economy strategies but also expanded to include green city planning and development [19]. The NCSD’s membership of capital and provincial administrations has supported their capital and city administrations in integrating green economy and green growth principles into their development plans. This integration has been guided by the green city strategic planning methodology [19], Phnom Penh’s sustainable city plan for 2018–2030 [46], and seven secondary cities’ sustainable strategic plans for 2020–2030 [47]. This development is well in line with global and regional sustainable urban development trends and the New Urban Agenda, building upon the rationale that the world is rapidly urbanizing, and more than half of its population has already lived in urban areas [50,51]. The UN projection showed that nearly 70% of the world’s population is expected to live in cities by 2050, with almost 90% taking place in Asia and Africa [52]. Countries in Southeast Asia are likewise facing this rapid urbanization [53]. These countries included Cambodia and six others, namely Vietnam, the Philippines, Thailand, Malaysia, Indonesia, and Singapore [54]. Hence, the abovementioned sustainable city plans will be useful tools to help Cambodia, especially capital and city administrations, to promote sustainable urban development through urban green growth and green economy principles.

3.5. Cambodia’s Green Economy Transition from November 2021 to Present

3.5.1. Secretariat Refunctioning in November 2021

In late 2021, the General Secretariat of the NCSD was repurposed to serve both the NCSD and the Ministry of Environment after acknowledging that the green economy, science and technology, climate change, biodiversity, and biosafety are key priority policies and strategies for sustainable environmental management. Thus, the General Secretariat of the NCSD was renamed to the General Directorate of Policy and Strategy and restructured under the Ministry of Environment in November 2021; however, the five departments’ roles and duties are still maintained [10]. The royal decree on the amendment of the royal decree on the organization and functioning of the NCSD, dated 24 November 2021 [55], determined that the NCSD has the General Directorate of Policy and Strategy of the Ministry of Environment as its Secretariat, as shown in Figure 6.

All the government’s ministries have remained the members of the NCSD; the Prime Minister is still the Honorable Chair, and the Environment Minister is still the Chair; state secretaries of the ministers’ council and of the environment remained the first and second Deputy Chairs, respectively [55]. There was one ministry that upgraded and changed its name, the Ministry of Industry, Science, Technology, and Innovation (MISTI), which upgraded from the Ministry of Industry and Handicraft in March 2020 [56]. Therefore, the amended royal decree accordingly updated this ministry’s name. However, other members from inter-ministerial councils and committees (the NCDD, SNEC, CDC, CARD, NCDM, and CNMC) and all governors of the capital and provinces remained the same. The roles and duties of the NCSD and its executive committee are also still maintained.

The amended royal decree determined the Director-General of the General Directorate of Policy and Strategy to serve as a permanent member of the NCSD and its executive committee, which replaced the Secretary-General post of the previous General Secretariat of the NCSD. Furthermore, officials and properties of the General Secretariat shall be moved to the Ministry of Environment. According to the sub-decree on the organization and functioning of the Ministry of Environment, dated 17 November 2021 [10], the roles and duties, organizational structure, and all departments’ names of the General Directorate of Policy and Strategy remain the same as the previous General Secretariat’s. According to the prakas on the organization and functioning of offices under the departments of the General Directorate of Policy and Strategy (GDPS), dated 13 December 2021, the five offices of the Department of Green Economy (DGE) remained the same [57].

3.5.2. Secretariat Refunctioning in February 2024

Under the government of the seventh-legislature National Assembly (2023–2028), H.E. Dr. Sophalleth Eang, the new Minister of Environment and Chairman of the NCSD, reported to Samdech Hun Manet, the new Cambodian Prime Minister, during the annual environment congress of the Ministry of Environment, dated 21 December 2023, that the Ministry of Environment will take preparations to establish a new General Secretariat of the NCSD to coordinate and mobilize financial resources, especially under the UNFCCC, and to ensure the actual needs of the country on the environmental sector, particularly the response to climate change issues. The preparation is to transform the newly established General Secretariat of the NCSD to become an accredited entity that can mobilize financial resources directly and reduce dependency on foreign institutions. This is to truly strengthen the independence, sovereignty, and ownership of the kingdom of Cambodia.

On 14 February 2024, the royal decree on the organization and functioning of the NCSD was again amended to establish the new General Secretariat of the NCSD [58], referring to the government’s decision explained above. This new Secretariat—as determined by the above royal decree—shall be led by a Secretary-General and assisted by some deputies as required. Furthermore, the organization and functioning of this Secretariat shall be defined by a sub-decree of the royal government of Cambodia. However, this indicates that a sub-decree until now has not yet been released due to an under-decision/discussion regarding the roles, duties, and organizational structure of this new Secretariat. Hence, the main question regarding this issue is whether the main departments for promoting sustainable and green economic development, such as the departments of green economy and climate change, will be moved back to the structure of the new General Secretariat or not; these issues are discussed in the SWOT analysis section.

3.5.3. Policies and Regulations

The Cambodian Code for Environment and Natural Resources, approved on 29 June 2023, sets the rules to improve, harmonize, modernize, and strengthen environmental protection and conservation and to restore biodiversity, ecosystem functions, and natural resources toward sustainable living and development in Cambodia. The code definitively identifies significant provisions to strengthen wildlife and natural resource conservation, promote renewable energy consumption, and build climate resilience and sustainable urban environments in order to have an effective dealing capacity with waste management and pollution issues. The code set a major step to address climate change and green economic development, especially Book Three, the “environmental management and sustainable mechanisms,” which has five titles addressing these issues directly as follows: Title six, “climate change”; title seven, “sustainable consumption and production”; title eight, “environmental land use planning and sustainable cities”; title nine, “green buildings”; and title ten, “sustainable energies” [59]. As a set of environmental laws, this code is, after one year, replacing the following laws from the 29th day of this month (June 2024): the environmental protection and natural resource management law (1996), protected areas law (2008), and biosafety law (2008).

The long-term strategy for carbon neutrality (LTS4CN), approved in December 2021, aims to outline each sector’s priority mitigation actions to achieve Cambodia’s economic goal of carbon neutrality by 2050. The strategy is mainly built upon the Cambodian government’s existing commitments and proposes a reliable trajectory with the country’s updated NDCs (nationally determined contributions). This strategy takes into account the balance of stable economic growth, social inclusion, emission reduction, and climate resilience. An analysis of economic development, demonstrated in this strategy, showed that 449,000 additional jobs are potentially expected to be created, adding an annual GDP growth rate of 2.8% by 2050. Therefore, this long-term strategy is expected to achieve carbon neutrality by the year 2050 through continued efforts to address sustainable forest and land use management, decarbonize the power sector by pursuing higher efficient energy consumption, and promote low-carbon industrial processes, green agriculture, and sustainable waste management. The carbon neutrality strategic vision was set out to provide a policy direction while showing the royal government’s particular commitments and programs that are being continued, articulating the five-year national strategic development plan (NSDC) and corresponding to the sectoral plan [60].

Cambodia’s sustainable consumption and production roadmap for 2022–2035, a 14-year plan to strengthen the Cambodia’s SCP system, was developed to lay out key strategies and priority actions with the aim of strengthening Cambodia’s sustainability in socioeconomic development sectors, including education, mines and energy, protected areas land use management, and so on. The goals of this sustainable consumption and production (SCP) roadmap are as follows: (1) goods and services promotion based on the SCP or circularity principles; (2) policy and program identification and implementation, including incentives and enabling environments; (3) R&D (research and development) strengthening in business, public services, and consumption behaviors of the community; (4) across-all-sector SCP leadership promotion; and (5) public awareness raising and capacity building of the SCP and its implementation at all levels [61].

The new government’s “Pentagonal Strategy Phase I: Growth, Employment, Equity, Efficiency, and Sustainability” is a new national development strategy for the period of 2023–2028 [62]. This strategy serves as a guideline to direct activities of all relevant stakeholders to continue to maintain peace and the momentum and accumulation of past achievements, as well as to build the foundation towards accelerating medium- and long-term development through targeted reforms across all sectors, remarked by Samdech Hun Manet, the new Prime Minister of Cambodia during his first cabinet meeting [63]. The government successfully implemented the triangular strategy (1998–2003) and the rectangular strategy in four distinct phases (2004–2023), with significant achievements in all areas, including society, economy, and politics, enabling Cambodia to proudly return its image of the last 25 years with full peace, territorial integrity, and national unity achieved through a win–win policy. By realizing the past 25 years of achievements, especially global and regional trend assessments, and for the next 25-year prognostications, the main objective of this strategy is to realize the Cambodia Vision 2050 toward meeting its people’s aspirations. Hence, the strategy aims to boost growth, create jobs, ensure equity, increase efficiency, and maintain sustainability [63].

The environment circular strategy for 2023–2028 was approved in November 2023 to serve as a roadmap to outline prioritized actions with the aim of ensuring environmental integrity and sustainability, resilience to climate change, and green economy promotion. The strategy is envisioned to turn the environmental sector’s potential into real benefits for the country and its citizens of all generations. Furthermore, the strategy is developed into a circle, comprising a CORE strategy in the middle and three strategies circled on the outside. The core strategy revolves around three key approaches: policies enhanced, digital administration established, and extensions broadened. These three fundamentals serve as a driving force to propel three other strategies onward with vigor. The first one of the three is CLEAN, with three approaches targeting pollution control, the modernization of the pollution measuring system, and an improved environmental impact assessment (EIA). The second one of the three is GREEN, with three approaches set for intensifying the tree-planting movement, ensuring sustainable protected areas management, and enhancing the livelihood of the local community. The third one is SUSTAINABLE, with three approaches set for compliance being applied, cooperation being expanded, and coordination being strengthened [64].

The policies and regulations that have been demonstrated in the above sections are the main ones supporting Cambodia’s green economy transition. Other supporting policy documents and initiatives are shown in Appendix A

Table A1. Regulations, policies, strategic plans, and initiatives to support the green economy transition in Cambodia within the last 15 years (2009–2024) are listed in ascending order by year.

No.	Title (Note)	Year
1	National green growth roadmap [1] (published online in December 2009, printed book in March 2010)	2009
2	Cambodia climate change alliance [38] (led by MoE, supported by EU, Denmark, Sweden and UNDP)	2010
3	MoU on green growth cooperation with GGGI [36] (the first MoU with GGGI, signed in March 2011)	2011
4	Royal decree on the establishment of NCGG [4] (replaced by royal decree [6])	2012
5	Sub-decree on organization and functioning of NCGG’s Secretariat [42] (replaced by sub-decree [8])	2012
6	National policy on green growth [5] (approved by the royal government in the full cabinet meeting)	2013
7	National strategic plan on green growth for 2013–2030 [33] (approved at the full cabinet meeting)	2013
8	Rectangular strategy phase III for growth, employment, equity, and efficiency [159]	2013
9	Cambodia climate change strategic plan for 2014–2023 [39]	2014
10	Royal decree on the establishment of the National Council for Sustainable Development (NCSD) [6]	2015
11	Sub-decree on organization and functioning of NCSD’s Secretariat [8] (repealed by sub-decree [10])	2015
12	Prakas on organization and functioning of the DGE [9] (repealed by prakas [57])	2015
13	Cambodia’s intended nationally determined contributions (initial NDCs 2015) [160]	2015
14	Green city strategic planning methodology: a guide for a green city strategic plan development [19]	2016
15	Memorandum of understanding on continuous green growth cooperation [161]	2016
16	Phnom Penh’s Green City Strategic Plan for 2017–2026 and a list of priority investment projects [20]	2017
17	Cambodia Sustainable Development Goals (CSDGs) framework for 2016–2030 [66]	2018
18	Rectangular strategy phase IV for growth, employment, equity, and efficiency [86]	2018
19	Phnom Penh’s Sustainable City Plan for 2018–2030 [46]	2018
20	Green growth potential assessment: Cambodia country report [162]	2018
21	Economic, social, and environmental impacts of greening the industrial sector [163]	2018
22	Cambodia: de-risking renewable energy investment [164]	2019
23	Sustainable city strategic plan for seven secondary cities for 2020–2030 [47]	2020
24	Full economic appraisal of the potential of solar PV energy in Cambodia [165]	2020
25	Cambodia’s updated nationally determined contributions (updated NDCs 2020) [166]	2020
26	Royal decree on the amendment of the royal decree on the establishment of NCSD [55]	2021
27	Sub-decree on the organization and functioning of the Ministry of Environment [10]	2021
28	Prakas on organization and functioning of the offices under departments of GDPS [57]	2021
29	New law on investment of the Kingdom of Cambodia [77] (indicated green incentives)	2021
30	Stocktaking and analytical options for green buildings in Cambodia [167]	2021
31	Guideline on green offices, green events, and evaluation mechanisms [168]	2021
32	Circular economy strategy and action plan [48]	2021
33	Cambodia’s long-term strategy for carbon neutrality for 2050 [60]	2021
34	Cambodia’s roadmap for sustainable consumption and production for 2022–2035 [61]	2022
35	Memorandum of understanding on continuous green growth cooperation [169]	2022
36	UN partnership for action on the green economy (PAGE) [69]	2022
37	National energy efficiency policy for 2022–2030 [170]	2022
38	Environment and Natural Resources Code of Cambodia [59]	2023
39	New law on public procumbent [142] (indicated sustainable public procumbent)	2023
40	Draft sub-decree on eco-label [141] (under inter-ministerial technical review)	2023
41	Cambodia’s guidelines and certification for green buildings (CamGCGB) [171]	2023
42	Pentagonal Strategy “Growth, Employment, Equity, Efficiency, and Sustainability” [62]	2023
43	Circular Strategy on Environment for 2023–2028 [64]	2023
44	Draft decision on steering committee establishment for UN PAGE in Cambodia [70]	2024
45	Royal decree on the amendment of the royal decree on the establishment of NCSD [58]	2024

and are comprehensively discussed in the SWOT analysis.

4. SWOT Analysis and Discussion

4.1. Strengths (S)

Cambodia has a strong political commitment to sustainable and green economic development, as shown in Cambodia’s long-term strategy for carbon neutrality for 2050 [60] and pentagonal strategy phase I for 2023–2028, especially pentagonal pillar four, which is set for resilient, inclusive, and sustainable development [62,63]. Cambodia has developed comprehensive policies and regulations to support a green economy transition, especially the environment and natural resource code [59], green growth national policy and strategic plan for 2013–2030 [5,33], strategy and action plan for a circular economy [48], and environment circular strategy for 2023–2028 [64]. Moreover, the government has arranged the inter-ministerial National Council for Sustainable Development (NCSD) [6], which is very sound for promoting sustainable and green economic development. The NCSD is well-structured with a composition of all governmental ministries and capital and provincial administrations, which is significant in policy-making (national level) and policy implementation (sub-national administration levels) [7]. The new Minister of Environment and chairman of the NCSD also announced the transformation of the NCSD’s General Secretariat to become an accredited entity towards coordinating and mobilizing green and climate financial resources with the vision to truly strengthen independence, sovereignty, and ownership of the country [58]. The Ministry of Industry and Handcraft is also upgraded to the Ministry of Industry, Science, Technology, and Innovation (MISTI) [56] to strengthen the promotion of science, technology, and innovation (STI) or national research and development (R&D), which are known as the backbone of low-carbon and green economic development. Furthermore, sub-national (capital and provincial) administrations have started integrating green economy (GE) and green growth principles into their development plans, especially through the national green growth policy [5] and the national green growth strategic plan for 2013–2030 [33], as well as strategic planning methodology for green city development in Cambodia—a green city strategic plan development guide [19]—Phnom Penh’s sustainable city plan for 2018–2030 and a list of priority projects [46], and seven secondary cities’ sustainable city strategic plans for 2020–2030 [47].

Moreover, Cambodia also adopted the United Nations Sustainable Development Goals (17 SDGs) [65] by localizing and approving the Cambodian Sustainable Development Goals (18 CSDGs) framework for 2016–2030. The localized CSDGs have added CSDG 18 as the priority need of the country [66]. A study showed that green economic development has a correlated role with SDGs implementation, and to achieve this implementation, a new economic practice is needed [67]. Through its strong political commitments and efforts, Cambodia prepared a membership application proposal in 2021 to the United Nations Partnership for Action on the Green Economy (UN PAGE) and was accepted for membership in 2022 [68]. The UN PAGE obtains joint support from five UN agencies (UNDP, UNIDO, UNEP, UNITAR, and ILO). More importantly, the Cambodian PAGE coordinating government institution, represented by the Department of Green Economy, strongly established a national governance mechanism for PAGE project management and implementation in Cambodia, with a composition of both technical and policy-making levels [69]. The technical-level mechanism is known as a group of focal points from line ministries, including the Cambodian Development Council (CDC); the National Bank of Cambodia (NBC); the private sector’s representative; the ‘Cambodia Chamber of Commerce (CCC)’; and the academic and research institution, the ‘Institute of Technology of Cambodia (ITC)’. The policy-level mechanism is known as the National Steering Committee (NSC) for the PAGE project in Cambodia, with a composition of members from relevant line ministries, including the CDC and NBC, with the rank of Director-General. The five UN agencies also have their representative in this NSC [70].

Significantly, awareness of environmental issues is being increased—the public has started caring about environmental and public health issues more than before. Also, there are numerous youth campaigns and initiatives for combating plastics. More importantly, a national-wide campaign for combating plastics, organized by the Ministry of Environment, has been significantly recognized and has received strong participation from the public and workers’ communities, particularly students and garment workers. By 10 April 2024, more than 7.6 million people had joined this campaign, and this number keeps increasing every day [71]. Furthermore, since the green growth and green economy-related policies have been promoted by the government, currently, private sectors and other relevant stakeholders, especially development partners and banking/financial institutions, have started incorporating green economy and green growth principles and improving understanding among their organization’s staff.

Moreover, Cambodia was found to have achieved a high employment rate—the labor market situation looks brighter, and the employment rate has reached 99.3% of the total labor force. Recent jobs created are mostly in contemporary industries, bringing extra value to the national economy [72]. The GDP (gross domestic product) per capita is also growing to USD 2071 in 2024 [73]. Remarkably, the economic situation after COVID-19 is rapidly growing back from −3.1% (minus) in 2020 to 3.0% in 2021 and to 5.2% in 2022 and 5.6% in 2023 [74], and especially to 6.4% in 2024—it is mainly driven by tourism and manufacturing sectors, according to the NBC’s Governor, H.E. Dr. Chea Serey [75]. Cambodia also offers significant advantages to investors, such as a supportive legal framework, a competitive labor market, strategic trade agreements, growing infrastructure development, and strategic geographical location [76]. Specifically, the new investment law, promulgated in 2021, established a transparent, open, predictable, and favorable legal framework with the aim to promote and attract quality, effective, and efficient investments. It provides numerous incentives for low-carbon or green investments in the following sectors and activities: Environmental management, circular economy, green technology, and energy, contributing to mitigation and adaptation to climate change [77].

In 2019, the Association of Banks in Cambodia (ABC) developed “sustainable finance principles: implementation guidelines for Cambodia” as a basis to serve Cambodia’s microfinance and bank institutions (MFIs) to develop their own approaches to sustainable finance [78]. This shows the interests and contributions of banking/financial institutions in protecting our people by prioritizing the environmental impact and preserving our cultural heritage through active management, assessment, and mitigation, as well as offsetting or avoiding negative impacts or potential risks from their business practices/activities, as stated by the ABC [79]. In mid-2023, Enterprise Asia hosted the first physical summit after the COVID-19 pandemic, namely the international CSR (Corporate Social Responsibility) and Sustainability Summit, at the NagaWorld Phnom Penh, Cambodia. This summit convened with over 300 C-suite-level executives, business leaders, and CSR practitioners from 19 countries [80]. The summit spotlighted the prestigious Asia Responsible Enterprise Award for 2023, with recognized excellence and positive impacts in key areas, such as green leadership, circular economy leadership, and corporate governance and sustainability reporting [81]. In late 2023, the NBC organized the tenth macroeconomic conference on climate risks and green economy transition, attended by leaders from line ministries, development partners, banking/financial associations, private enterprises, and stakeholders, totaling around 200 participants [82]. This conference discussed and exchanged views on green economy aspects, such as green economy contributions to reduce climate risks, the current development of green finance and a global green economy, and green finance investments, challenges, opportunities, and the government and private sector’s roles [82,83]. These major transitions showed that green economic development has been gaining high interest and involvement from banking/financial institutions, including social enterprises. These attributes and opportunities are more or less given by the improved livelihood of people within the last 15 years, and the GDP per capita has notably grown yearly, from USD 734.8 in 2009 to USD 2071 in 2024 [73]. This notable growth made Cambodia move from a low-income to a lower-middle-income status in 2015 [84] and became Asia’s new tiger economy in 2016 [85]. Cambodia also set a target in 2018 to achieve an upper-middle-income status in 2030 and a high-income status in 2050 [86]. In the new government’s pentagonal strategy, the set target is still maintained to be achieved [62].

Figure 7 below summarizes the strengths (S) demonstrated above, whereas the weaknesses (W), opportunities (O), and threats (T) presented in the following sections were also summarized together in this figure.

4.2. Weaknesses (W)

Sustainable and green economic development is not a common economic practice; even though the government has implemented a strong commitment to sustainability and green economy promotion, it still needs time and effort to develop effective mechanisms, as well as to train its staff to understand the green economy and sustainable development goals and plans, especially during the implementation process at a sub-national level. In this sense, the government has encountered more or less weaknesses on this matter. Howes et al. [87] mentioned that sustainable development has been committed by governments around the world for years, ranging from agreements at international levels to national (country’s) laws and strategies at various levels, including sub-national programs and city plans. However, a decade of monitoring showed that it is not yet closer to environmental sustainability. Also, policy implementation requires a large budget while the government has a limited budget for implementation; hence, this implementation needs contributions from development partners, private sectors, and other stakeholders. Rashed and Shah [88] showed that the private sector was found to be one of the key stakeholders contributing to accelerating implementation, such as SDGs, circularity and environmental initiatives, and CSR. Several studies showed that green economic development and green growth capacity are limited in developing countries [89], while implementation of environmental regulations is facing major challenges due to the limited working capacity and lack of resources, as well as a lack of consensus among the government’s officials [90].

Moreover, clear, responsible green economy (GE) work under each NCSD-membered institution has not been completed yet due to the following issue: green economy policies and strategies are complicated and not a common practice, which need time and a budget for staff training to so that they can understand how the green economy works under each ministry and capital and provincial administration. This also aligns with a study [87] that mentioned that it is a challenge due to the limited capability of the institution, insufficient administrative resources, conflicting objectives between existing policies, and a communication failure. More recently, based on the amended royal decree in February 2014 [58], the structure of the NCSD’s General Secretariat has not included green economy and climate change departments. As these two departments have a multi-sectoral nature to support sustainable development, this situation shows a weakness if the General Secretariat’s structure does not maintain them—the multi-sectoral work needs to be processed through an inter-ministerial council or committee, as used to be organized under a national green growth council [4] and climate change committee [39]. In order to accompany industry growth with fast-growing technologies in the fourth Industrial Revolution (Industry 4.0), the Cambodian government established a MISTI in 2020 [56] to promote STI/R&D and has launched a national research agenda for 2025 [91]. The Prime Minister stated that such a society rests upon R&D, and this national agenda is high-level guidance to incentivize and promote R&D so as to humbly contribute to the implementation of pertinent policies. Even though the government set a high commitment to promote R&D, budget allocation for R&D is still limited. Cambodia’s expenditure on R&D in 2020 is 0.12% of the GDP, which has grown from the year 2010 to 0.05% of the GDP [92].

As observed, capital and provincial administrations started integrating green economy and green growth principles into their development plans, especially through green growth and green city plans. However, the integration process of these principles into their development plans is observed to be progressing slowly due to cross-sectoral work, as confirmed by previous studies, where policy integration and implementation are challenging due to limited official capacities, lack of resources, lack of consensus among the officials, and conflicting objectives between existing policies [87,90]. Furthermore, Cambodia localized the UN SDGs and produced the CSDGs framework for 2016–2030 [66,67]. Nevertheless, the national budget allocation for CSDG implementation is still limited for the major goals for low-carbon and green economic development, especially CSDG 7 (affordable and clean energy), CSDG 12 (SCP), and CSDG 14 (climate action) [93]. Currently, Cambodia has been implementing the five-year UN PAGE workplan, which is supported by the five UN PAGE agencies [69]. However, the workplan for 2014–2015 is focused on reframing economic policies around sustainability and social inclusion and aligning sectoral and thematic policies and strategies with the key economic transformation priorities; however, it is limited in policy implementations [94].

Awareness of environmental issues is being increased, especially through the national campaign for combating plastics organized by the environment ministry [71]. However, there is still limited green economy and green growth awareness among local communities—how their local activities and businesses can contribute to a green economy still needs more time. In terms of waste management and pollution, a lack of awareness was raised as a key constraint [95]. A lack of awareness was found to be leading to a sequence of fragmented interventions with unwanted consequences for communities. In contrast, increasing green economy and green growth awareness can presumably make authorities more willing to collaborate and adopt multi-sectoral approaches, allowing them to mark more beneficiaries, be more visible, and raise more funds [96]. On the other hand, Cambodia was found to have a high employment rate [72], while the GDP per capita is projected to increase to USD 2071 in 2024 [73]. However, skills shortages and skills gaps in the labor market remain the main constraints [97]. Green jobs and green skills were also found to be limited, while challenges in promoting green jobs and green skills included limited awareness of green jobs and green skills concepts and a lack of coordination and coherence between sectors and existing policy mechanisms [98,99].

Cambodia provides numerous advantages for green investments, but they are not yet widely known by outsiders; for example, regulatory environments and, institutions and structures of civil society organizations as well as grassroots communities are still unclear [76,100]. Climate-resilient, low-carbon, and green economic developments are gaining more interest from banking/financial institutions, including social enterprises [78,79,80,81,82,83]. The NBC endorsed the sustainable finance principles (CSFP), which have been developed by the ABC, and also provided inputs to the development of the ASEAN sustainable finance taxonomy, which is the first version that its member states, including Cambodia, can adopt regarding the basic requirements for developing the detailed one based on their country’s context [79]. Nevertheless, until now, the NBC has not issued any rules or policies to support green or sustainable finance in Cambodia yet. According to the International Finance Corporation (IFC) in 2019, Cambodia, however, has made significant progress on related commitments for sustainable finance, which has moved from the development stage to the implementation stage of sustainable finance policy actions [101]. Based on the ASEAN sustainable finance taxonomy, the Securities and Exchange Regulator of Cambodia (SERC) is currently under study to develop a green finance-related policy, namely green bonds, but has not yet issued any requirements on the green financing guidelines to be followed by securities issuers [79].

Another important aspect is the improved livelihood of Cambodian people [73,84], where the government has set a target to achieve an upper-middle-income status in 2030 and a high-income status in 2050 [62,86]. Regarding low-carbon and green economic development, if we consider waste separation and recycling, these are still facing numerous challenges. Two studies showed that municipal solid waste (MSW) in Cambodia, generated in 2020, was about 4.78 million tons, with a waste generation rate of 0.78 kg per capita per day [102,103]. The first study showed that cities and districts in Cambodia were only 86% accessible to collection services of MSW, while the present MSW management practice (44%) relies on landfills (a country-wide total of 164 landfills, receiving around 5749 tons per day). We understand that the recycling sharing rate for the total MSW generation was only 4%, while the total revenue recovered from recycling was USD 56 million in 2021 [102]. The country’s resource recovery was highly reliant on informal sectors, while reutilization and reduction efforts were found to be insufficient. Also, there has not yet been an established recycling value chain encompassing recyclers, but the ongoing governance reform was found to involve functional waste management service decentralization [104].

4.3. Opportunities (O)

Cambodian digital policy and infrastructure developments have rapidly increased during the COVID-19 pandemic; this included support from development partners. This period is considered a catalyst for abundant low-carbon and green economic development opportunities in Cambodia. Many studies confirmed that during the COVID-19 pandemic, digital technology, digital economy, and digital transformation have been increasingly settled, particularly in education and other relevant sectors [105,106]. Moving from physical lessons to online learning has provided exclusive opportunities for the country’s system of digitalization. These opportunities have been seen not only in deepening educational reform but also in strengthening information and communication technology (ICT) utilization, as well as enhancing modern technologies in the Cambodian education sector [107]. Moreover, Sey (2023) mentioned that COVID-19 also provided opportunities to acquire new knowledge and experiences that have not been met before, such as improving flexibility and self-responsibility and becoming an independent learner. The research results also indicated that online learning helps learners save time, gas, and money, and they do not need to drive to school but just stay home and use the internet [108].

More remarkably, SDGs financing needs have been growing more pressing than ever; the OECD (Organization for Economic Cooperation and Development), in 2022, projected that the achievement of SDGs by 2030 requires overcoming a yearly USD 4 trillion financing gap [109]. Likewise, the Cambodian SDG Investor Map was launched on 31 August 2022 as a market intelligence tool by the Cambodian government and UNDP through support from the Impact Investing and Practice Center to identify viable investment opportunity areas that align with CSDGs framework for 2016–2030 [110]. In addition, it is predicted that available funding for development in Cambodia by 2025 will reach USD 23.4 billion or 69.8% of the GDP, while the main drivers are foreign direct investments (FDIs), remittances, and domestic resource mobilization [111]. A study indicated that FDIs play a significant role in driving economic development and growth; for example, the remarkable economic growth of Cambodia has been contributed by FDIs with comparative advantages in industries. More possibly, Cambodia has the potential of becoming a new, industrialized green economy by following technological, and industrial innovation and upgrading the principle of new structural economics [112]. Also, improving and upgrading special economic zones (SEZs) with key innovations and technologies was found to be important and more competitive to attract foreign investment activities that will lead to an increase in Cambodian industries’ competitiveness in global value chains [113]. Moreover, there is an increased global partnership program for SDGs and green economy actions, especially the UN PAGE that Cambodia officially joined in 2022, which has been supported by the five UN agencies [69,70]. The joint SDG Fund is also another essential UN initiative, referred to as the “muscle” for UN resident coordinators and country teams, whose Secretary-General counted on the UN member states to financially incentivize a scaled-up response to the SDGs at a country level by promoting a whole-of-government approach and collaboration support among UN agencies and other development partners [114]. Through this joint initiative, Cambodia set up a ‘CLEAN—CLimatE Adaptation and mitigatioN’ financing mechanism; the funding progress has now reached USD 8,641,917 of USD 25,729,904, and the preparatory ongoing phase centered on the refinement and plan of financial mechanisms and related partnerships [115].

There is also an increased regional trend in promoting sustainable finance, especially green bonds. For example, ASEAN has developed a sustainable finance taxonomy that the Central Bank of Cambodia (NBC) also provided input into its development [79]. The taxonomy is known as a common building block to enable a methodical transition and to foster the sustainable finance adopted by ASEAN member states, including Cambodia. This ASEAN sustainable finance taxonomy will also become a larger priority for discussion by ASEAN finance ministers and the central banks’ governors going forward, while environmental objectives have included climate change, the promotion of resource-efficient use, and a transition to a circular economy [116]. The NBC not only provided input into the development of the ASEAN sustainable finance taxonomy but also supported the endorsement of the ABC’s developed sustainable finance principles, such as the implementation guidelines for Cambodia, while the national securities and exchange regulator (SERC) is currently under a study to develop green finance-related policy, such as green bonds [79]. According to the International Finance Corporation (IFC), Cambodia has made significant progress on related commitments for green financing that has moved from the development stage to the implementation stage of sustainable finance policy action [101].

In March 2024, the Green Climate Fund (GCF) approved the Cambodian Climate Financing Facility (CCFF) with concessional funding of USD 100 million during the 38th board meeting in Rwanda. The CCFF will be capitalized with concessional funding by the GCF and co-financing by the Ministry of Economy and Finance and other co-financers [117]. The Agricultural and Rural Development Bank (ARDB) of Cambodia was approved by the GCF to administrate this initiative, while Mekong Strategic Capital (MSC) was approved to provide independent investment advisory support as a co-executive entity, as the MSC has been conceptualized and designed to support Cambodia’s green economy transition [117,118]. The CCFF’s cross-cutting areas include accelerating Cambodia’s nationally determined contributions (NDCs) implementation, scaling up climate finance, and reducing greenhouse gas (GHG) emissions towards archiving climate resilience. The CCFF will finance high-impact climate projects focused on resource-constrained priority sectors in NDC implementation through long-term concessional lending and crowdfunding in the private sector [119].

4.4. Threats (T)

In the previous section, digitalization is considered a catalyst for low-carbon and green economic development, and the increased digital infrastructure in Cambodia provides numerous digital economy and sustainable development opportunities, especially in education and related sectors [105,106]. Studies also confirmed that the digitalization trend contributes to the sustainable development of societies from a long-term perspective, while digital technologies represent an important feature in achieving the SDGs of the European Union’s Green Deal [120]. However, digitalization was found to be risky as well. The main risks are privacy violations of staff or customers during personal data collection, technology dependency leading to vulnerability, and other risks related to cybersecurity, including cyberattacks, data breaches, and identity infringement [121]. For example, digital banking involves using the internet and mobile applications, and cybersecurity threats were found to be a major problem, while most people have not even been aware of this matter. Furthermore, the criminal activities of hackers and fraudsters to steal people’s money have also resulted from the abovementioned threats [122].

Regarding the available funding for development in Cambodia, the main drivers include foreign direct investments (FDIs), as well as remittances and domestic resource mobilization [111]. Studies also confirmed that FDIs play an important role in driving economic growth and development, while Cambodia has the potential for a new, green, industrialized economy through upgraded structural economic principles of industrial and technological innovation [112]. However, COVID-19 and wars have had a negative impact on global FDIs, especially FDIs in Europe and low-income countries. The negative impact resulted in affecting the flow of FDIs in both high- and lower-middle-income countries in North and South America, Australia and the Pacific, and Africa [123]. The pandemic created an unprecedented economic shock and fear sentiments over time for financial markets and investors’ feelings [124]. Furthermore, the war also has negative impacts on the geographical region of direct foreign investments and larger private companies [125]. Regarding these recently unpleasant conditions—first lost due to COVID-19 and then feared due to the war—numerous projects have been delayed or are pending decisions for further investments; these also included the investment to support the Sustainable Development Goals (SDGs). Mishra et al. (2024) [126] showed that these negative impacts are disrupting the smooth flow of the global supply chain, while the transmission is triggered by global geopolitical uncertainty, and this condition has influenced investors’ decisions as a result of delaying their choices, waiting for a more visible economic situation.

The conflict between Russia and Ukraine has had a significant impact on the implementation of the Green Deal in the central and southeastern European Union member states [127]. Regarding the progress towards renewable energy, the level of use and financing by European countries was found to be rising and exceeding the determined indicative renewable energy directive path. Almost all member states of the European Union experienced a significant increase in renewable energy consumption [128]. Even though this has a positive impact, the Secretary-General of the United Nations raised concerns that the present crisis is triggered by the consumption of fossil fuels, while the development issue concerning climate change impacts on a global scale is still facing uncertainty [129]. Furthermore, escalation of the conflict was found to impose severe threats to achieving the SDGs. This not only raised threats to the countries involved directly in the conflict but also to other not-involved countries, particularly developing countries that are very sensitive and more vulnerable to economic disturbance [130]. Importantly, a study revealed that there were some voices regarding ‘cutting funds for implementation of SDGs’, and this would result in negative impacts on meeting the set target by 2030, primarily in developing countries [131].

In addition, at its 2024 triennial review, the Committee for Development Policy (CDP) of the United Nations Economic and Social Council (ECOSOC) recommended Cambodia graduate from the least-developed country (LDC) status by 2027 [132]. According to H.E. Dr. Sorasak Pan, former Minister of Commerce, Dr. Pan stated that if everything goes well, this graduation will be in line with the royal government’s ambition to bring Cambodia to an upper-middle-income status by 2030 and high-income status by 2050 [133]. This is good news for Cambodia. Dr. Pan, however, emphasized that leaving the LDC list would also cause Cambodia some challenges that would be associated with the loss of some benefits from the preferential tax system that Cambodia is currently enjoying [134].

In recent years, Cambodia has shown a strong interest and intention in promoting sustainable finance, including green bonds. At the regional level, Cambodia, through the NBC, has provided inputs to the ASEAN sustainable finance taxonomy development [79], with a vision to gain larger opportunities through the promotion of resource-efficient use and transition to a circular economy [116]. However, the research showed that the sustainable finance landscape presented these days features an excess of heterogeneous definitions, concepts, policies, and industry standards that may delay or confuse the development of financial sectors and create risks that could harm the credibility of emerging markets [135]. Regarding green bonds, the SERC is currently under a study of developing a green financing-related policy; however, the SERC stressed that green bond policies could not be expeditiously formulated for the reason that it is crucial to ensure that the policy would be more effective and contribute to the development of Cambodia [79]. Likewise, even though green bonds can attract investors’ greater attention, especially investors who are looking for long-term and environmental benefits, the shortage of green bond issuance indicates low liquidity, reflecting wider bid-ask spreads and higher liquidity risks [136]. Similarly, Zhang et al. (2024) [137] empirically showed that the issuance of green bonds can significantly reduce the risks of the stock price crash; however, liquidity certainly has a significant impact on the yield spreads of green bonds or climate bonds.

Remarkably, the Cambodian Climate Financing Facility (CCFF) was approved by the Green Climate Fund (GCF) in March 2024 during its 38th board meeting to support Cambodia’s green economy transition [117,118]. However, the entity accreditation barrier prevented Cambodia from having direct access to this fund. The challenges resulting from accreditation barriers generally centered around strengthening the management system of public finance, building public finance management capacity, and presenting detailed evidence of their effectiveness [138]. During the annual environment congress, dated 21 December 2023, the new Minister of Environment and Chair of the NCSD announced a transformation of the General Secretariat of the NCSD to become an accredited entity that can mobilize financial resources directly while reducing dependency on foreign institutions. The minister stressed that this is to truly strengthen the independence, sovereignty, and ownership of Cambodia. He further added that this transformed institution will play an important role in coordinating and mobilizing financial resources, especially under the UNFCCC, for the country’s needs in the environmental sector, particularly the response to climate issues. Kalinowski (2024) [139] showed that one of the reasons that the GCF failed to deliver on its ambitious goals was the strong adjustment between the private sector’s projects and principles of global partnership for effective development cooperation (GPEDC) of the country’s ownership, transparency, and participation of civil societies. The other failure was the limited interest of the private sector in GCF projects—the involvement of the private sector was found to be helpful in creating mitigation bias within the GCF portfolio. Private sectors did so regularly through larger multi-nation projects with weak ownership of the country, even though their portfolio was good at channeling the funds to predominantly vulnerable countries. There was a threat that private climate financing, based on loans and equity, might be added to the debt problem of developing countries, as well as destabilizing financial markets and further increasing dependency on global northern countries. Overall, it is more important to ensure that the accredited entity is aligned with the GCF goal [140].

4.5. Summary, Discussion, and Implications

Based on the comprehensive SWOT analysis results and discussion in the above sections, Cambodia’s green economy transition was found to encompass the following aspects: Political and economic conditions, institutional arrangement and capacities, low-carbon policy development and coordination, and participation of public and private stakeholders, as well as global green partnerships and green and SDGs funds, which are conditioned to the experiences learned from the COVID-19 pandemic and the uncertainties that have resulted from global geopolitical conflicts, such as the Russian–Ukrainian and Israel–Hamas wars. However, the study remarkedly noticed that Cambodia has maintained a high employment rate these days, in which the labor market situation looks brighter and where the employment rate has reached 99.3% of the total labor force. The recent jobs created are mostly in contemporary industries, which bring extra value to the national economy [72]. Significantly, the gross domestic product (GDP) per capita is projected to reach USD 2071 in 2024 [73]. Cambodia also maintained high economic growth, notably right after the COVID-19 pandemic. As shown in Figure 8, Cambodia’s economic growth is rapidly increasing—the growth rate in 2020 is at a minus rate (−3.1%) but quickly growing back to 3.0% in 2021, to 5.2% in 2022, and to 5.6% in 2023. More importantly, the economic growth rate is projected to reach 6.4% in 2024 [74,75].

The following is a summary of the implications for weaknesses against strengths and for threats against opportunities. First of all, green growth, low-carbon, or green economic development is not a common practice; hence, by implementing it, Cambodia face a number of challenges even though the government has put much effort with a strong political commitment through a green growth policy in 2013. It consumes both effort and time, especially in developing/finding effective mechanisms and in training their staff to understand the green economy, green growth goals, plans, and targets. It is similar to what Howes et al. [87] mentioned: Governments around the world have committed to this development for years, ranging from a policy to strategies at many levels, but it is still not yet closer to environmental sustainability. In this sense, this research suggests first focusing on staff capacity and building on the green economy and low-carbon development by strengthening and enhancing global partnerships [69] and allocating green funds [117] for sub-national level staff capacity building. Furthermore, green and low-carbon development needs technological skills to create new economic structures and opportunities and to provide solutions or alternatives, such as renovating new resources; hence, the government should support long-term investments in young generations with education and research programs in a circular economy, as well as smart cities, green buildings, and green energy and technology applications to mitigate and adapt to climate change.

Cambodia has comprehensively developed policies and strategic plans to support its green economy transition, especially regarding the green growth national policy and strategic plan for 2013–2030 [5,33], as well as the long-term strategy for carbon neutrality 2050 [60], pentagonal strategy phase I [62], and circular strategy on environment [64]. Yet, the policy implementation budget is still limited. This would need support and contributions from all relevant stakeholders, especially international development partners and private sectors. Rashed and Shah [88] showed that the private sector is one of the key stakeholders contributing to accelerating the implementation of SDGs through environmental and CSR initiatives. To enhance this support, finalizing the sub-decree on eco-label [141] should be prioritized; furthermore, finalizing the sub-decree on sustainable public procumbent to implement article 56 of the new public procumbent law [142], which should also be a prioritized action. Another priority should be to finalize the guidelines and certification system for green buildings. It provides credits by certification to building and construction investors and would become an attractive tool to garner more involvement from the private sector. This would have a huge impact since construction is the main final energy consumption sector [143], and this sector’s energy consumption would more than double by 2040 [144]. This research also suggests prioritizing activities to be implemented because, due to limited resources and capacities, focusing on the key priority would be the best option for effective results.

The government has consolidated four relevant inter-ministerial bodies to develop the NCSD [6], which is a very sound move to promote sustainable and green economic development. However, as a cross-sectoral coordinating council, it also faces a challenge in terms of coordination capacities. Two studies showed that developing countries faced the challenge of green development capacities being limited [89], as well as a lack of resources and consensus among their officials [90]. In this case, the NCSD and its Secretariat could mobilize human resources in low-carbon and related green fields, such as climate change, green cities and buildings, and renewable energy, and/or relocate its staff based on their knowledge and skills by placing them in the right place or position. In the long run, the government should invest in young employees’ education and research, such as providing scholarships and increasing funds in the STEM fields.

Members of the NCSD are composed of senior officials from all governmental ministries and capital and provincial administrations [7], which would be significant to policy-making (national) and policy implementation (sub-national). However, there is also a gap since the green economy task of each agency (each of all NCSD’s members) has yet to be established. A study [87] showed that this challenge resulted from conflicting objectives between existing policies, the limited capability of the institution, insufficient administrative resources, and communication failures. Hence, clarifying roles and duties between its members is needed to avoid conflicting objectives during policy and strategic plan design and implementation, and a green economy office or task force should be set up at their institution; for example, the Ministry of Economy and Finance has set up an office to coordinate green economy and related policies under its sectors. Sub-national administrations should follow this suggestion as well, and that office would help in implementing low-carbon, green economic, and sustainable development policies, especially integrating these policies into the development plan.

The NCSD’s General Secretariat was recently set [58] to become an accredited entity in order to have the right to coordinate and mobilize global funds and to truly strengthen independence, sovereignty, and ownership of the country. Green economy and climate change departments have recently not been included in the General Secretariat’s structure. This could be a weakness for the NCSD’s General Secretariat since low-carbon and green economic developments so far have been set as a means to achieve sustainable development in Cambodia. Likewise, this cross-sectoral work needs to be overseen through an authorized process of the inter-ministerial structure like before [4,39]. In this sense, green economy, climate change, and related projects should be consulted and processed through the platform of the NCSD and its General Secretariat. An R&D office or division should be established under the General Secretariat’s structure in order to support the NCSD and its General Secretariat in providing evidence-based policy-making, strategic plan development, and monitoring and evaluation (M&E). This office/division could serve as a think-tank for green and low-carbon development.

In 2020, the MISTI was established [56] to strengthen science, technology, and innovation/R&D promotion since R&D is known as the backbone of low-carbon and green economic development. In this sense, the new R&D office of the NCSD’s General Secretariat should work closely with the MISTI on technology-driven green and low-carbon development. The national budget allocation for R&D, however, is still limited. Cambodia’s expenditure on R&D in 2020 was 0.12% of the GDP, which has grown from 0.05% of the GDP in 2010 [92]. This was much less than the average rate in the same year of lower-middle-income countries, where Cambodia is currently ranked. As that average rate is 1.64% of the GDP [145], this research suggests increasing Cambodia’s expenditure rate on R&D to this level in order to effectively implement its national research agenda, and this would contribute to a greener economy.

The capital and provincial administrations have been integrating green economy and green growth principles into their development plans, especially through green growth policy [5] and green city strategic plan [19]. However, the integration process is observed to be progressing slowly due to cross-sectoral work, limited official capacity, lack of resources, and conflicting objectives between or within existing policies [87,90]. The solution to this challenge is increasing capacity building, similar to the previously mentioned solutions. In particular, the DGE should create a group of trainers to provide training on green economy and green growth concepts and policies to all relevant sub-national officials, including how to integrate these concepts and policies into their development plan.

Cambodia localized the SDGs [65] by producing a CSDGs framework for 2016–2030 [66] and submitted its implementation’s voluntary national review in 2019 [146]. Even though the green economy was found to have a correlated role with SDGs implementation [67], the national budget allocation for CSDGs is still limited, particularly in major green economy goals, such as the CSDG 7, CSDG 12, and CSDG 14 [93]. In this regard, global green initiatives and partnerships should be strengthened, such as UN PAGE [69] and the joint SDG fund [115]. SDGs and green funds [117] should be prioritized to be allocated for the CSDGs with a limited implementation budget. Moreover, support and contribution from private sectors, including foreign investments, should be enhanced through the public–private partnership and the guidance of Cambodia’s SDG investor map [110].

In addition, since becoming a member of the UN PAGE in 2022 [68], Cambodia is currently implementing the five-year PAGE work plan [94]. This five-year work plan, however, focused on reframing economic policies but limited policy implementation if referring to the budget line of the year 2024–2025 [147]. In this case, this research suggests increasing the budget line for existing policy implementation and, of course, for the reframed economic policy implementation in the next two-year budget line for 2026–2027.

Another important factor that has influenced almost all development issues is public awareness. This has been increased rapidly by the national-wide campaign for combating plastics (organized by the environment ministry); over 7.6 million people have joined the campaign up to 10 April 2024, and the number is increasing every day [71]. Public understanding of the green economy and growth, however, is still limited, especially in local communities; how their local business and activities can contribute to a green economy still needs more time. A study confirmed that a lack of awareness of circular management was the key constraint [95]. A lack of awareness was found to be leading to unwanted consequences for communities—but if green awareness is increased, it will presumably make authorities more willing to collaborate and adopt multi-sectoral approaches, allowing them to mark more beneficiaries, be more visible, and raise more funds [96].

In this regard, this research strongly suggests investing more in raising awareness, and all stakeholders should contribute or be involved in green economy activities because, by joining hands, we can achieve a clean, green, and sustainable future. The DGE should also prepare educational tools or guidebooks to help improve public understanding, especially for students and workers, of green activities in everyday life. The DGE should create a media program, as well, to promote national activities, raise awareness, and encourage citizens to become involved via TV programs, YouTube, Facebook, and so on. The DGE should enhance the participation of students from universities and academic institutions in green economy dissemination workshops, capacity-building programs, green economy seminars, and the Cambodia Green Economy Forum (CamGEF)—to be co-organized with UN PAGE agencies (UNDP, UNIDO, UNEP, UNITAR, and ILO) [147]. Moreover, the CamGEF should be organized yearly and upgrade its level to include a wide range of stakeholders. It could also consider hosting in different provinces yearly to encourage the public and local community to become involved with the host province.

Currently, Cambodia has a high employment rate, and the labor market situation looks brighter with the recent jobs created, mostly in contemporary industries [72], and with the GDP per capita increasing to USD 2071 (2024) [73]. However, Cambodia was found to have skills shortages and skills gaps in the labor market [97]. Green jobs and green skills were also limited, and the challenge to promote green jobs and green skills included a limited understanding of the concept and a lack of coherence between sectors and existing policy mechanisms [98,99]. In this regard, domestic and foreign investors should take high considerations on green investments. Through these investments, the investors will enjoy a wide range of incentives for their green projects, as indicated by the new Investment Law [77]. The DGE should cooperate with vocational training centers to provide some courses on green economy and growth, especially on green jobs and green skills, including sharing experience and joint skill development projects.

Cambodia provides numerous advantages for investments, especially incentives for green investments, with a strategic geographical location, strategic trade agreements, and a competitive labor market [76]. This wide range of advantages, however, is not yet widely known by outsiders/foreign investors due to misunderstandings and misconceptions about Cambodia, resulting from the Democratic Kampuchea [148,149] and the trust issue resulting from misleading information or information disorder outside of Cambodia [150]. Regarding these issues, governments from various countries decided to develop investor handbooks, presenting the facts of Cambodia to their citizens and investors.

For example, the Australian government, through its Department of Foreign Affairs and Trade, developed, with the CDC, the Handbook on Investing in Cambodia [76]. Likewise, the Japanese government, through its Japan International Cooperation Agency (JICA), has translated the Cambodia Investment Guidebook [151]. Foreign researchers have similarly provided facts about Cambodia regarding the investment landscape to their country and the world [100], including special economic zones (SEZs) in Cambodia [152]. Following its findings, this research suggests broadening the abundant opportunities and benefits of green investments to the outside world through working with those government agencies or embassies in Cambodia in developing, updating, and/or translating the handbook on investing in Cambodia into their language(s) and to share it on their embassy’s website. Promoting green investment opportunities during the CamGEF would be another option.

The NBC endorsed the Cambodian sustainable finance principles [78] and provided inputs to ASEAN sustainable finance taxonomy development [79]. However, the NBC has not yet issued any sustainable finance-related rules or policies, even sustainable finance taxonomy. The literature shows that the sustainable finance landscape these days features an excess of heterogeneous definitions, concepts, policies, and industry standards that may delay or confuse the development of financial sectors and create risks that can be harmful to the credibility of emerging markets [135]. Regarding these issues, this research first suggests developing Cambodia’s national taxonomy for sustainable finance by adapting from the ASEAN taxonomy. For the next step, Cambodia should develop sustainable finance-related policies, including green bonds. This research agreed with the SERC [79] that the green bond policy could not be expeditiously formulated, as it is crucial to ensure that the policy would be more effective and contribute to the development of Cambodia.

Significantly, the livelihoods of Cambodian people have been improved, especially within the last 15 years; the GDP per capita has grown from USD 734.8 in 2009 to USD 2071 in 2024 [73]. While enjoying economic growth, Cambodia, however, still faces a challenge regarding waste management, especially waste separation and recycling. The recycling rate is still limited; a recycling sharing rate to the total municipal solid waste (MSW) generation was only 4%, even though the total revenue recovered from recycling was USD 56 million in 2021 [102]. The country’s resource recovery was found to be highly reliant on informal sectors [104]. Based on these issues, this research suggests establishing a recycling value chain encompassing recyclers. Cambodia should invest more in R&D, particularly green technology and innovation, renewable energy, and energy generation from municipal waste, which could lead to sustainable municipal waste management.

Moreover, digital policy and infrastructure development in Cambodia have increased, especially during and after COVID-19—this period was considered a catalyst for abundant low-carbon development opportunities in Cambodia. These included the digital economy and digital transformation [105,106] and mainly deepened education reform while strengthening modern technologies and ICT utilization, as well as acquiring new knowledge and experiences by saving time, gas, and money and just staying home and using the internet [107,108]. However, with digitalization comes some risks. The main risks are privacy violations during personal data collection, resulting in cyberattacks, data breaches, and ID infringement [121]. For mobile application-used digital banking, cybersecurity threats were found to be a major problem since most people have not even been aware of this problem [122]. In this regard, this research suggests increasing public awareness of this problem, accelerating the process of establishing a National Anti-Cybercrime Committee (NACC) [153] to oversee and take action on time when any issue is found, and harmonizing the draft law on cybercrime with the law on electronic commerce [154].

In August 2022, the Cambodia SDG Investor Map was launched by the government and UNDP as a market intelligence tool to identify viable investment opportunity areas that align with the CSDGs [110]. The main drivers for the development of Cambodia regarding available funding included FDIs, as well as remittances and domestic resource mobilization [111]. The literature indicated that FDIs play a significant role in driving economic development and growth, while Cambodia has the potential for the new structural economic principle of industrial and technological innovation [112]. However, the COVID-19 pandemic and wars had a negative impact on global FDIs, especially in low-income countries, and created an unprecedented economic shock and fear sentiments over time for financial markets and investors’ feelings, including larger private companies [124,125]. Regarding these recently unpleasant conditions, numerous projects have been delayed and are pending decisions for further investments, including investment projects that support the SDGs. Mishra et al. (2024) [126] showed that disruption to the smooth flow of the global supply chain and transmission is triggered by global geopolitical uncertainties, resulting in delayed investors’ choices. In this sense, this research suggests broadening the supportive condition of investing in Cambodia, such as flexibility and a supportive legal framework [76]; those included numerous investment incentives for environment-friendly and low-carbon investments, such as a circular economy, green energy, and green technology for adaptation and mitigation to climate change [77].

As projected by the UNDP in 2021, available funding for development in Cambodia by 2025 will reach USD 23.4 billion [111]. More possibly, Cambodia has the potential to become a new industrialized, green economy by following technological and industrial innovation with upgraded principles [112]. Upgrading SEZs with key technologies and innovation is more competitive and will attract foreign investment activities, leading to an increase in the industry’s competitiveness in global value chains [113]. At its 2024 triennial review, the UN ECOSOC’s Committee for Development Policy recommended Cambodia graduate from the least-developed country (LDC) list [132]. This is very good news, but leaving the LDC’s list would also encounter some challenges associated with the loss of some benefits from the preferential tax system that Cambodia is currently enjoying [134]. As stated by the ADB, Cambodia should pursue new FTAs (free trade agreements) and promptly take action to accelerate its trade reform in order to deal with challenges that it may encounter when graduating in 2027 [155]. Regarding this point, this research suggests Cambodia is preparing to catch up with new opportunities through a green window as an alternative. For example, the new European Union trade rules, “Due Diligence,” are set for companies to create a green transition plan that complies with the Paris Agreement, giving poor countries a billion-dollar ‘green squeeze’ [156].

Global partnerships and initiatives for green economy and joint SDG actions have increased; for example, the global green economy partnership “UN PAGE” that Cambodia joined in 2022 [69], and another UN initiative, the “joint SDG fund,” is used to financially incentivize a scaled-up response to the SDGs at a country level [114]. This initiative in Cambodia set up the CLimatE Adaptation and mitigatioN (CLEAN) financing mechanism, with funding progress now reaching USD 8,641,917 of 25,729,904 [115]. However, concerns raised around the Russia–Ukraine and Israel–Hamas conflicts have more or less impacted these initiatives and partnerships. The literature expressed that escalating conflicts were found to be imposing severe threats to achieving the SDGs, particularly in developing countries [130]. Also, there were some voices regarding cutting funds for SDG implementation, which will impact the set target of 2030, primarily in developing countries [131]. In this regard, this research suggests that Cambodia should strengthen existing partnerships, especially the public–private partnership, through the framework indicated by the public–private partnership law [157]. This law is set to promote public–private partnerships (PPP mechanism management), by preparing and developing public services and infrastructure projects in an effective, efficient, sustainable, accountable, transparent, and fair manner for greater socioeconomic development benefits to Cambodia.

According to the IFC, Cambodia has made significant progress on related commitments for green financing, which has progressed from sustainable finance action development to the implementation stage [101]. The NBC has also provided inputs to ASEAN sustainable finance taxonomy development, with a vision to gain larger opportunities, including the promotion of resource-efficient use and circular economy transition [116]. Zhang et al. (2024) [137], by studying the risk of a stock market crash resulting from the issuance of green bonds, empirically showed that green bond issuance can significantly reduce the risks of a stock price crash. Likewise, the SERC is currently under a study of developing a green finance-related policy, “green bonds”. However, the SERC stressed that green bond policies could not be expeditiously formulated for the reason that it is crucial to ensure that the policy would be more effective and contribute to the development of Cambodia [79]. Several studies showed that green bonds could attract investors’ greater attention, but the liquidity certainly has a significant impact on the green bond yield [158], and the shortage of green bond issuance implied low liquidity, which is reflected in wider bid-ask spreads and higher liquidity risks [136]. Regarding this issue, this research agreed with a study on the liquidity risk effects of Chandrasekaran [158] that green bond issuers should improve their liquidity levels in order to tighten the spread of green bond yields; in turn, that would reduce the associated risks with the issuance of green bonds, while simultaneously increasing confidence among investors.

In March 2024, the Green Climate Fund (GCF) approved the Cambodian Climate Financing Facility (CCFF) with concessional funding of USD 100 million during its 38th board meeting [117]. Cross-cutting areas of the CCFF included accelerating Cambodia’s NDC implementation by scaling up climate finance and reducing greenhouse gas (GHG) emissions towards achieving climate resilience [119]. However, the entity accreditation barriers did not allow the country to receive and use the funds directly. The challenge resulting from these barriers generally centered around strengthening management systems of public finance, building public finance management capacity, and presenting detailed evidence of their effectiveness [138]. A study by Kalinowski (2024) [139] showed that one of the reasons that the GCF failed to bring on its ambitious goals included transparency and the country’s ownership, as well as the participation of civil societies. Other failures were the limited interest of private sectors in GCF projects. Overall, the research was found to be more important to ensure that accredited entities aligned with the GCF goals [140]. In this regard, transforming the General Secretariat of the National Council for Sustainable Development (NCSD) to be an accredited entity would be the best option for Cambodia to access green climate funds and other green financing in order to truly strengthen the ownership, transparency, and participation of civil societies.

5. Conclusions

Through background, progress, and SWOT analyses, this research found the Cambodian green economy transition within the last fifteen years (2009–2024), listing its strengths, weaknesses, opportunities, and threats as follows:

Strengths: Strong political commitment and efforts; strong regulations and policies to support the transition; a sound inter-ministerial council, which was established with an inclusive composition of membership; the NCSD’s General Secretariat being set for an accredited entity; the MISTI, established to strengthen R&D; sub-national authorities integrating green growth principles; CSDG voluntary national review submitted and NDCs updated; a strong national governance mechanism for PAGE; environmental awareness has increased; high economic growth and a high employment rate; numerous advantages for green investments; banking and financial institutions and other stakeholders have gained more interest; and the livelihoods of Cambodian people have improved.

Weaknesses: Effort and time-consuming; cross-sectoral implementation’s capacities and budgets are limited; the roles and duties of each NCSD member on green economy are not established yet; the green economy/climate change department is no longer under the General Secretariat’s structure; national expenditure on R&D is limited; green economy principles are being integrated into the sub-national development plans slowly; budget allocations are limited in major green economy goals; the 2014–2015 workplan for PAGE is limited in existing policies’ implementation; waste separation and recycling are limited; public understanding on the green economy is limited; there are skill shortages and skill gaps with limited green jobs and green skills; outsiders do not widely know about Cambodia’s abundant advantages for green investments; and there is a lack of national taxonomy and policies to support sustainable finance, including green bonds.

Opportunities: Digitalization has increased globally while the government strongly supported it; the Cambodia SDG Investor Map was launched; available funding for Cambodia has increased; there are increased joint partnerships and SDG funds; ASEAN sustainable finance initiatives increased, including green bonds standards; the Cambodia Climate Financing Facility (CCFF) has been approved by the Green Climate Fund (GCF).

Threats: Digitalization comes with some risks, such as cyberattack, identity theft, fraudsters in digital banking; “lost by COVID-19—feared by WAR” caused investments to be delayed/pending decisions; future funding and some benefits will be reduced after graduating from the LDC list; the wars (for example, Russian–Ukrainian conflicts) affected fundraising for green development and SDG funds; a shortage of green bond issuance implied low liquidity, reflected bid-ask spreads more, and liquidity risks became higher; and entity accreditation barriers prevented the country from directly receiving GCF.

This research discussed weaknesses against strengths and threats against opportunities, not to show any equalized comparison by number or weight between them, but to provide alternative solutions or implications to close the gap. All the solutions and implications were presented in the summary, discussion, and implication sections. Also, this research was limited to the national green economy and green growth mechanisms of the main government-responsible institutions, such as the NCSD, GSSD, and DGE. Therefore, the Green Economy Office or related division under other governmental institutions which are members of the NCSD, such as the Ministry of Economy and Finance, was not covered in this research. Hence, future research exploring existing mechanisms under the NCSD’s members would improve our further understanding.