THE Department of Finance (DoF) said it is planning to submit its proposals for a carbon pricing scheme to Congress within the year.
“The government is deliberately prudent and careful in studying the matter,” Finance Secretary Renato E. Reside, Jr., who heads the DoF’s Fiscal Policy and Monitoring Group, told BusinessWorld on the sidelines of an event.
The DoF has been studying the possibility of a “performance-based” carbon pricing scheme, Mr. Reside said.
“The idea of the tax is to value the amount of carbon that is generated by an activity. And then to tax it accordingly based on the amount of carbon that is emitted or generated by the activity.”
“So, the more carbon that you emit in your particular activity, it could be a byproduct of an industrial process, the more you’re going to be taxed. So that’s the idea behind the carbon tax,” Mr. Reside added.
The pricing scheme is likely to target carbon emitting businesses and industries, Mr. Reside said, noting that the tax could affect the cost of doing business.
“Even if it is motivated by good intentions, there could also be costs involved. And it could affect industries that we are also trying to take care of.”
The tax is expected to help limit the Philippines’ carbon footprint while generating additional revenue for the government.
The Philippines is one of the most vulnerable countries to global warming despite accounting for only 0.48% of global carbon emissions. It aims to cut its greenhouse gas emissions by 75% by 2030.
The DoF has also been collaborating with the World Bank and other such institutions in determining the feasibility of an emissions trading system, Mr. Reside said.
“If this is something new that will be set up, we want to know what the effects are,” he said. “We’re also looking at the benefits. And then we’ll weigh these things to come up with an approach that works best for the country.”
A 2023 study by the International Monetary Fund indicated that the Philippines could generate up to $7 billion in revenue from carbon pricing.
Likewise, implementing a $50 per ton carbon price by 2030 could lower carbon dioxide emissions to 144 million tons or 13% below baseline levels, it added. — Beatriz Marie D. Cruz
