The Philippines’ Low Carbon Economy Investment Act of 2023 could bring the nation closer to achieving its Paris Agreement targets by mobilizing climate-focused private investments, requiring large corporations to implement Paris-aligned decarbonization plans, and laying the foundation for the country’s long-term climate strategy.
Congresswoman Anna Victoria Veloso-Tuazon said this at a recent sustainable finance summit in Manila.
Tuazon provided the opening keynote on August 14 at the Philippine edition of Unlocking Capital For Sustainability (UCFS) 2024, which was hosted by Eco-Business in partnership with United Nations Environment Programme Finance Initiative (UNEP FI) and themed “A new nexus for energy and nature in the Philippines”.
The event convened over 100 policymakers and leaders across business, governance, and civil society to discuss how the country will chart its course to net zero.
“Through this bill, we hope to get the private sector to decarbonise and fund viable and cost-competitive, low-carbon investments. Although the Philippines doesn’t have a formal net zero commitment, this bill [champions] decarbonisation aligned with the Paris Agreement goal of keeping global temperature rise well below 2 degrees Celsius above pre-industrial levels,” added Tuazon, representative of the Third District of Leyte and co-author of House Bill 7705, or the Low Carbon Economy Investment Act of 2023.
The House Committee on Climate Change approved the Low Carbon Economy Investment Act 2023 on 6 August, a bill that will mandate large enterprises across various sectors to develop decarbonisation plans aligned with the Paris Agreement. These plans must include clear milestones and targets, ensuring that businesses progressively reduce their greenhouse gas (GHG) emissions over time.
“The economic cost of inaction is apparent, estimated at ₱645 billion per year across [vital] sectors which include energy, transport and communications. In establishing a whole-of-nation and whole-of-society approach to low carbon, the [Low Carbon Economy Bill] should be viewed alongside policy instruments recently released also by the Climate Change Commission including the Philippine National Adaptation Plan and the Philippine Nationally Determined Contribution Plan,” said Veloso-Tuazon.
“[These could] form the cornerstone of long-term climate change planning in the Philippines, geared towards a low carbon, inclusive, sustainable and transformative development path for the Filipino people,” Veloso-Tuazon added.
Despite capping 2023 as Southeast Asia’s fastest-growing economy – on the back of heightened public infrastructure spending – the archipelago maintains its record as the most coal-dependent nation in the region.
The Philippines’ coal dependence has increased, comprising nearly 62 per cent of the nation’s energy mix and outpacing countries such as Indonesia, in spite of the country’s administration aims to peak its national emissions by 2030.
Discourse from the one-day event’s three key panels proved to be a barometer for what’s to come for the Philippines’ green economy amid increasing climate risks and more frequent extreme weather facing the nation. The panels touched on the country’s foray into carbon markets, its critical energy and construction industries, and why more companies recognise the business case of a net zero-aligned portfolio.
In addition to the Low Carbon Economy Bill, there are hopes that initiatives such as the Green Energy Auction Programme will increase renewable energy share, while the Natural Capital Accounting System Act could consolidate the accounting of the country’s environmental resources and natural capital.
“The Philippines is one of the most coal-dependent countries in Southeast Asia. However, it [still] has significant potential to take the regional lead in energy transition,” said Law Heng Dean, Managing Director, Pollination.
Law noted that the Philippines has built up a pipeline of 99 gigawatts of wind and solar developments, which is more than enough power to supply all Philippine households. He also highlighted the planned retirement of the 246-megawatt South Luzon Thermal Energy Corporation coal plant in 2030 – 10 years ahead of its scheduled retirement – as an example of how the region could accelerate the phase-out of coal plants.
“Given its vulnerability to extreme climate events caused by global warming, the Philippines will need to do more on mitigation and adaptation. Pollination is committed to deploying its expertise in identifying opportunities and assembling finance to underpin the nation’s transition to a net zero future,” Law added.
“The Philippines is making significant strides towards advancing net zero, ESG, and sustainable finance, and decarbonising its economy. The government has set ambitious targets for reducing greenhouse gas emissions and is actively promoting renewable energy sources, such as solar, wind and hydropower,” said Daniele Coronacion, Executive Advisor, GHD.
“Our aim is to support the nation by enhancing its regulatory frameworks to support ESG practices and encourage transparency in environmental impact. These efforts will foster a resilient and sustainable economic future while addressing the pressing challenges of climate change,” added Coronacion.
BDO Unibank Inc (BDO) President and CEO Nestor V Tan disclosed the impact of BDO’s US$100 million Blue Bond financing water and wastewater management projects in water-stressed areas in the Philippines.
“Blue financing will work best in a country where many of the utilities are privatised and may be financed by banks. Ours is a modest initiative, but we have been seeing good results and impact. Remaining true to BDO’s sustainability philosophy, we continue to integrate sustainability into everything that we do. We are committed to building a better and greener future for our stakeholders, clients and employees,” Tan said.
“Our country stands at a crossroads in its just transition. We’re convening policy leaders, banks, investors and key stakeholders to catalyse development and solutions that are net zero, nature-positive and beneficial to the long-term well-being of the Philippines and the Filipinos,” said Ping Manongdo, Country Director, Philippines, and Assistant Director, Partnerships, Eco-Business.
