Climate pact opens up $75-B investments in Philippines

MANILA, Philippines – As President Duterte finally relented to formally join the global climate change pact adopted in Paris last year, the Philippines stands to attract as much as $75 billion worth of private investments from now until 2030, the International Finance Corp. (IFC) has reported.

The IFC is a member of the World Bank and is the largest global development institution solely serving the private sector in developing countries.

In its new report titled “Climate Investment Opportunities in Emerging Markets: An IFC Analysis,” the IFC said most of the potential investments for the Philippines in the wake of the Paris Agreement are in renewable energy, $11 billion; new green buildings, $56.7 billion; waste management systems, $2.5 billion; and transportation, $48 million.

The rest are in other areas, such as climate-smart agriculture and forestry.

The historic Paris Agreement is the first deal binding countries around the globe to stop global warming.

The IFC report said the global environmental pact has opened up a total of some $23 trillion in climate-smart investment opportunities for emerging markets until 2030.

In East Asia and the Pacific alone, a total investment potential of $16 trillion was identified, mostly because of the perceived potential for green buildings in China, Indonesia, Vietnam and the Philippines.

The study was based on the national climate change commitments and policies of 21 emerging economies, the origin of 48 percent of global emissions.

A total of 189 countries have so far submitted their national plans – called Nationally Determined Contributions (NDCs) – for reducing emissions and paving the way for investments in climate-resilient infrastructure and energy generation.

The Philippines committed to reduce greenhouse gas emissions by 70 percent from the current level by 2030.

But the IFC said even if the Philippines’ planned National Renewable Energy Program and the Energy Efficiency and Conservation Roadmap are fully implemented, the country would only be able to meet its NDC target by half.

The reason, the IFC noted, is that wind and solar power sources currently do not play a big part in the country’s green development.

Instead, the country’s main source of electricity as of 2015 was still coal (44 percent), followed by gas (25 percent), geothermal and hydropower (12 percent each).

Through the Philippine Energy Plan 2012-2030, the country plans to add 9.9 gigawatt of renewable energy capacity by 2030.

“The Philippines is becoming an attractive investment destination,” the IFC said. “The country’s growing middle class and stable political environment have helped the economy grow over the past six years at an average of 6.2 percent. The government is eager to increase investments in several key sectors, including infrastructure, agriculture, manufacturing, green buildings and power generation.”

For geothermal energy alone, the IFC said the Philippines faces potential investments worth $5.2 billion by 2020.

It also noted that the country’s energy plan could drive investments worth $1.5 billion for new wind power and $500 million for small hydropower.

To attract more investments in climate-smart infrastructure, the IFC urged the Philippines to establish an affective regulatory framework to promote the use of renewable energy and attain a sustainable and equitable energy mix.

It also urged the country to enable climate-smart investments in water and water sanitation management, green buildings and energy efficient transportation systems.

The IFC also called for the retrofitting of critical hard infrastructure in the country, such as reservoirs and power transmission networks.

Scale back pledge

Meanwhile, the National Academy of Science and Technology (NAST) has urged the government to reconsider its pledge to reduce the country’s greenhouse gas emission by 70 percent by 2030.

“NAST supports the decision of President Duterte to sign the Paris Climate Change Agreement while asserting the primacy of our poverty reduction and sustainable development goals,” NAST director Fabian Dayrit said.

“(We recommend that we) scale back on our pledge of 70 percent greenhouse gas emission reduction by 2030 through a participatory and evidence-based process to ensure that it is realistic and strategically consonant to the country’s programs for poverty reduction and industrial development, which by necessity may result in some increase in greenhouse gas emissions,” Dayrit stressed.

When he announced his decision to ratify the agreement, Duterte questioned the Philippine pledge to reduce 70 percent of its carbon emissions.

Earlier, the President said reducing the carbon emission might impede the country’s industrial development.

But Sen. Loren Legarda countered in an earlier privilege speech at the Senate that the agreement would not hinder the country’s development, but would instead present opportunities for low carbon development and green growth.  

The CCC earlier said that the Philippines might need at least $15 billion in technical and financial support to achieve the 70 percent target. – With Marvin Sy, Paolo Romero, Janvic Mateo, and Christina Mendez