by Vijay Jayaraj
The Philippines was one of the first countries to pull out of the international Paris climate agreement. However, it rejoined soon after and is now torn between its need for energy from coal and appeasing Western powers.
Philippines’s Paris Timeline: Yes, No, Yes
The Philippines joined the Paris agreement in 2015. Manila even submitted it’s Intended Nationally Determined Contribution (INDC), a document that outlined its plans to cut carbon dioxide emissions and transition to renewable energy.
However, in July 2016, President Rodrigo Duterte said that the Philippines would not honor the climate deal. He reasoned that the agreement was dictatorial and would slow his poor country’s economic growth.
Duterte had been a vocal critic of the Paris agreement, labelling the UN as hypocrites because the agreement requires poor countries to make emission reductions while rich countries enjoy economic success built on past use fuels that generated the same emissions.
But Duterte surprised everyone by recommitting to the Paris agreement in 2017, after his Senate voted to ratify it.
Paris Agreement: Not for a Young and Booming Philippine Economy
The Philippines has been slow to implement its emission reduction plans since ratifying the agreement. But it has made critical decisions recently to halt emissions. Those decisions pose a serious threat to its economic ambitions.
In November 2020, the Philippines announced that it would no longer give approval for new coal plants. If the country sticks to this policy, it will cause considerable disruption to its energy sector. But not during the next 10 years. Here’s why
The moratorium on new coal plants will not affect plans submitted before November 2020. The government has already approved 22 new coal plants, and those will come online during the next 10 years.
Department of Energy continued to issue accreditations for coal traders and coal end-users even as the moratorium came into effect. Currently, there are around 306 registered coal end-users with 10-year permits. Some permits begin in January. This means that Manila’s dependency on coal will increase, not decrease, in the coming decade.
Philippines coal imports have nearly tripled in the last ten years, and energy generated from coal doubled between 2011 and 2018. Coal currently accounts for half of the country’s energy mix and is projected to be around 53 percent by 2030.
Though the economy will be coal-dependent for the foreseeable future, and coal end-users have been approved to continue coal use, a string of pro-renewable policies and mandatory laws for natural gas transition threaten the country’s long-term energy security and energy affordability.
Benjamin Diokno, an economist and Governor of the Central Bank of Philippines, has warned that a transition away from coal will involve financial risks. Lawrence Fernandez, Vice-President of The Manila Electric Company, an electric power distribution company, says, “Electricity consumers have been saddled for years by various subsidies and mandates to support (a) renewable energy (RE) via Feed-in Tariff Allowance and Renewable Portfolio Standards, (b) remote area electrification via Universal Charge Missionary Electrification, (c) off-grid RE development via RE Cash Incentive, and, (d) Malampaya gas via take-or-pay provision.”
Bienvenido Oplas Jr, a Fellow of South East Asia Network for Development, warns, “These endless attacks to ease out or kill coal power in the Philippines and replace it with more intermittent RE and natural gas which is also fossil fuel, are inconsistent with global energy realities.”
But the country’s Energy Secretary, Alfonso Cusi, is adamant on the transition to clean energy. He insists that the moratorium on coal plants was a necessary step to curb global warming. The only issue where the current administration in the Philippines disagrees with the European powers is the idea of a carbon tax. In March 2021, Cusi said, “Burdening our generation with a carbon tax will make the Philippines uncompetitive. So, we’re not ready for a carbon tax.”
Maybe it is time the administration applied the same principle to other aspects of the energy sector, like undependable and unaffordable green energy. Renewables will make the Philippines uncompetitive. Even the most developed economies are not ready to embrace a renewable-dominated energy grid, and the Philippines definitely is even less so. Its lawmakers must wake up to this reality.
The Philippines must retract the moratorium on new coal plants and enact laws that enhance the production, import, and use of coal as a fuel, a strategy that will help its economy grow by leaps and bounds in the next two decades.
Vijay Jayaraj (M.Sc., Environmental Science, University of East Anglia, England), is a Research Contributor for the Cornwall Alliance for the Stewardship of Creation and resides in Bengaluru, India.