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Business

Carbon tax under study

Louise Maureen Simeon - The Philippine Star

MANILA, Philippines — The Department of Finance (DOF) is studying the viability of imposing a carbon tax in a bid to generate much-needed revenues and address environmental concerns.

On the sidelines of the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum yesterday, Finance Undersecretary Zeno Ronald Abenoja said the DOF has partnered with an international organization to look at carbon taxation.

Finance Secretary Benjamin Diokno has said carbon tax is one of the measures that the administration may consider “if feasible.”

“We have an agreement already with our partner to look at this proposal. It is something that we are looking at very closely,” Abenoja told The STAR.

“We will seriously consider, that’s why we are devoting resources and studies on this issue,” he said.

Abenoja did not name the partner, but another DOF official said the Philippines is partnering with the United Nations Office for Project Services (UNOPS) for the study.

UNOPS supports the government and other partners in sustainable procurement, infrastructure, governance, grant management and logistical support services.

The UN-attached agency’s work focuses on building national capacity, strengthening community resilience and supporting efforts toward the attainment of Sustainable Development Goals.

Abenoja said the study aims to assess the current situation in the Philippines right now, as well as the structure of the economy.

“It will look at the options that could be applicable to circumstances and the gains from the experiences of other countries. That is the scope of our engagement… to provide us options as to the possible instruments that we can adopt in terms of carbon pricing and carbon taxation,” Abenoja said.

As to the timeline, the DOF official said the study would take a “few months” and that next year would be more reasonable to complete it.

Former finance chief Carlos Dominguez had proposed a tax on carbon emissions as part of the government’s fiscal consolidation and resource mobilization plan.

Under the plan, the proposal on carbon tax may be implemented by 2025.

Global efforts to slap taxes on carbon remain small. Many countries, including the Philippines, have yet to ride on the carbon tax.

The Asia-Pacific region is both highly exposed to climate risk and a major contributor to greenhouse gas emissions, considering that the region is home to the majority of the world’s population and has been the main driver of global growth for the past decades.

But imposing a carbon tax may not always be the best and most preferred choice considering every country’s circumstances just like in the Philippines, where power rates are among the costliest in the region.

No less than the Department of Energy earlier said the Philippines was not ready for carbon tax as this would make the country uncompetitive in terms of power rates.

DOF

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