THE PHILIPPINES may not need to impose a carbon tax due to its low emission levels, a policy think tank attached to the House of Representatives said.
“The Philippines produces relatively little carbon dioxide — whether it is compared to developed countries or its ASEAN (Association of Southeast Asian) neighbors. This, in turn, puts into question the supposed necessity and urgency of instituting a carbon tax in the Philippines,” the Congressional Policy and Budget Research Department (CPBRD) said in a report.
Philippine carbon dioxide emissions are significantly lower compared to other Southeast Asian countries, the CPBRD said, citing data from the Emissions Database for Global Atmospheric Research.
It emitted 148 million metric tons (MT) of carbon dioxide in 2021, compared to Malaysia (251.55 million MT) and Indonesia (602.59 million MT).
The CPBRD noted, however, that Indonesia’s population is twice that of the Philippines.
It also said that Malaysia, which has a population of 34 million, produces thrice the carbon dioxide on a per-capita basis. “This, in turn, underlines the energy poverty of Filipinos — even in comparison to their ASEAN neighbors,” the CPBRD said.
The think tank added that a 5% loss from imposing a carbon tax on electricity as well as land, air and water transport would mean a total economic loss of P236.7 billion, or roughly 1.1% of gross domestic product.
“If a carbon tax is intended to be the primary regulatory strategy to prevent further increases in overall carbon emissions, then its rate has to be sufficiently large to reduce demand for carbon-emitting activities by the aforementioned amount,” the CPBRD said.
It also said that the Philippine economy is still “wholly incapable of efficiently and painlessly transitioning to a low-carbon trajectory,” given its heavily reliance on fossil fuels and slow transition to renewables.
“Solar and wind resources account for a tiny fraction of electricity supply — despite billions spent in subsidies. The aggressive expansion of renewable assets also demands the conversion of agricultural land into solar and/or wind farms, further aggravating existing agricultural productivity woes,” the CPBRD said in its report.
It also said that an “energy-poor” country like the Philippines would struggle to develop its industries if a carbon tax is imposed.
“The modernization of flagging agricultural and manufacturing sectors, in particular, demand the widespread adoption of energy-intensive production processes,” the CPBRD said.
Carbon taxes in the Philippines could generate revenue of up to $7 billion by 2030, according to a study by the International Monetary Fund.
The Philippines emitted about 146.5 million tons of carbon dioxide from energy consumption in 2022, the Energy Development Corp. has estimated.
The Philippines has committed to reduce its greenhouse gas emissions by 75% by 2030.
Climate change could cut Philippine economic output by 13.6% by 2040, the World Bank said in a report last year. — Beatriz Marie D. Cruz