The Low Carbon Economy Act of 2022, introduced in the House of Representatives, is a crucial legislative step toward reducing the Philippines’ greenhouse gas (GHG) emissions. It establishes an emission trading system, aiming to promote sustainable development while addressing the nation’s environmental responsibilities under international agreements like the Paris Agreement. This bill aligns with the country’s Nationally Determined Contribution (NDC) targets, which are designed to reduce GHG emissions by 75% from 2020 to 2030.
Key aspects of the bill include:
– Cap and Trade System: A national cap is set on GHG emissions for high-emission sectors. Companies that emit less than their allowed amount can sell their unused emission credits to others who exceed the cap. This creates a carbon market, providing financial incentives for companies to reduce their emissions.
– Monitoring and Reporting: The Climate Change Commission (CCC) will oversee the management of emissions and ensure compliance with targets. Several government departments will work together to track and report emissions data.
– Just Transition: The bill emphasizes the need to ensure that workers in carbon-intensive industries are supported during the transition to greener alternatives, safeguarding jobs while moving toward sustainable development.
– Local Government and Private Sector Involvement: Local governments, educational institutions, and private industries are key players in implementing the bill, helping to ensure that climate change measures are effective at all levels of society.
Carbon Markets: A Global Perspective
A carbon market is a system where countries or businesses can buy and sell carbon credits. Each credit represents the right to emit a certain amount of carbon dioxide or other GHGs. The concept is based on setting an overall emissions limit (cap) and allowing trading of credits, incentivizing companies to stay under their cap. If they emit less than allowed, they can sell the extra credits, and if they exceed the cap, they must buy credits.
Many countries have adopted carbon trading systems:
European Union: The EU Emissions Trading System (ETS), established in 2005, is the world’s largest carbon market. It covers major sectors like power generation and heavy industry. The EU has seen significant reductions in emissions since its inception.
China: In 2021, China launched its national carbon market, the world’s largest by volume, covering over 2,000 power plants. This market is a central part of China’s goal to achieve carbon neutrality by 2060.
United States: While there is no federal carbon market, states like California and regions like the Northeastern US (through the Regional Greenhouse Gas Initiative) have implemented cap-and-trade systems. These programs have effectively reduced emissions in these areas.
How the Bill Aligns with the Philippines’ Carbon Reduction Goals
The Philippines is committed to reducing its carbon footprint in line with its NDC. However, the country faces unique challenges, including vulnerability to climate-related disasters and its status as a developing economy. The bill’s introduction represents a significant step toward achieving these targets, by creating a market-driven approach that balances economic growth with environmental protection.
The bill builds on existing climate change programs like the National Climate Change Action Plan and emphasizes the importance of cross-sector collaboration. The goal is to ensure that industries can transition to greener practices without negatively impacting their productivity or workers’ livelihoods.
The Philippines’ Progress Compared to Global Efforts
While the Philippines has been slower to implement carbon trading systems compared to the EU and China, the Low Carbon Economy Act signals the country’s readiness to adopt more ambitious climate measures. Its cap-and-trade mechanism mirrors the systems seen in more developed markets, but it is tailored to the local context, ensuring that the Philippines’ socio-economic realities are considered.
The bill positions the Philippines as a proactive player in the global effort to mitigate climate change, especially in the ASEAN region, where few countries have implemented similar mechanisms. If successfully implemented, it could serve as a model for other developing nations looking to balance economic growth with environmental sustainability
Expanded Overview of CO2 Emissions in the Philippines
The Philippines, while not one of the world’s largest carbon emitters, faces considerable challenges in reducing its carbon footprint, especially as its economy continues to develop. The country’s emissions are largely driven by high-emission sectors such as electricity generation, transportation, and industry, all of which are critical for economic growth but also major contributors to environmental degradation.
According to Our World in Data, here is a sectoral breakdown of CO2 emissions in the Philippines:
Sectoral Challenges and the Road to Decarbonization
The electricity and heat production sector is the largest emitter, accounting for over 73 million tons of CO2 annually. This is due to the Philippines’ reliance on coal and fossil fuels for energy generation, despite growing investments in renewable energy. The transport sector, which includes cars, buses, and trucks, contributes over 29 million tons annually, and aviation and shipping add another 2 million tons. The rapid urbanization and the demand LS
