Finance Secretary Ralph Recto has started exploring policies on carbon taxes and carbon emissions trade to increase government revenues for long-term socioeconomic growth. 

The DoF on Wednesday said it had convened a meeting on the matter, as head of the technical working group on preparing carbon pricing instruments for the Philippines.

“This ambitious pledge underscores our firm resolve to become a world leader in confronting climate change head-on,” Recto said.

Reducing reliance on dirty fuels

Carbon taxes could reduce reliance of firms on dirty fuels in the long-term by increasing their operating costs and, thus, consumer prices through pass-on costs which then encourages consumers to patronize businesses using renewable energy. 

Meanwhile, carbon emissions trade allows highly oil-dependent countries to buy carbon credits from less emitting countries like the Philippines so that the former can further support the latter’s green projects as they are catch on climate change goals. 

“There is increased momentum in the establishment of carbon pricing systems in the Asia-Pacific region. Carbon pricing instruments serve as a powerful fiscal tool, allowing us to incorporate social and external costs associated with carbon emissions,” Recto said.

Members of the technical working group include the Climate Change Commission, Department of Environment and Natural Resource, Department of Trade and Industry, Department of Transportation, and National Economic and Development Authority. 

Foreign consultants in the meeting included representatives from World Bank, Asian Development Bank, and the United Nations Development Program.

Most vulnerable

The DoF said the Philippines contributes only 0.48 percent to global carbon emissions, but is the most vulnerable to the impact of climate change due to its geographical attributes, apart from low disaster resilience capacity. 

To help ensure that the country avoids the worst climate disaster scenario, the Philippine government is committing to reduce emissions from climate change-inducing greenhouse gases by 75 percent by 2030.

This move supports the goal of the United Nations’ Paris Agreement to keep temperature increases below 2 degrees Celsius to prevent extreme flooding, drought and wildfires.