PH companies significantly increase investments in climate action

WITH the extreme vulnerability of the Philippines to erratic climate change, climate action entails a whole-of-society approach.

Investment in environmental, social and governance (ESG) started to expand in the Philippines to contribute to the development of a sustainable society. Companies are actively embarking on projects that mitigate the impact of climate change rather than making outward donations or “cheque philanthropy.”

Various companies have joined forces to achieve sustainable transport by improving air quality. Globe Group’s 917Ventures, Ayala Corp., and Gogoro launched Gogoro Smartscooters and Battery-Swapping in April.

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Globe has debuted in the climate tech space through Gogoro, aimed at addressing commuter woes with expensive gas prices while curbing carbon emissions. Ernest Cu, president and CEO of Globe Group, said the Gogoro Smartscooters and battery-swapping are a transport ecosystem that marries mobility innovation and sustainability.

Horace Luke, founder and CEO of Gogoro said they aimed to transform urban transportation by providing an accessible path for riders to adopt sustainable urban mobility and combat climate change. “We are working together to deliver a sustainable transport system that will improve air quality, reduce carbon emissions and provide a superior riding experience for consumers in the Philippines,” Luke said.

Bernie Llamzon, director of Globe Capital Venture Holdings Inc. said these Smartscooters will serve as an eco-friendly alternative to ease congestion while at the same time reducing carbon emissions.

Vince Yamat, managing director of 917 Ventures said the shift to electric vehicles (EVs), particularly deploying Gogoro’s battery-swapping system will go a long way with sustained government support that will allow private sector initiatives to prosper.

Sustainable transportation projects are aligned with the government’s long-term agenda to promote environmentally friendly transport options.

Port industry’s action vs. climate change

The Manila International Container Terminal (MICT), the flagship port of International Container Terminal Services, Inc. (ICTSI), is integrating climate change management into its day-to-day operations to become the most sustainable terminal in the Philippines.

MICT has implemented several environmental programs and activities, which include improving waste and water management, circular economy initiatives, ecological protection and biodiversity programs, and decarbonization.

MICT received the 2022 Green Port Award (GPAS) from the Asia-Pacific Economic Cooperation (APEC) Port Services Network (APSN) The program recognizes the high caliber and excellent environmental actions and leadership demonstrated by ports in the APAC region.

The Philippine Ports Authority (PPA) has implemented ways to reduce plastic waste in the country’s ports, including the Manila North Harbor, Batangas Port, and Cagayan de Oro (CDO) port. It implemented the mandatory planting of mangroves and trees for every contract and permit that the PPA has issued. PPA banned the use of single-use plastics in all its controlled ports nationwide.

International Maritime Organization (IMO) Secretary-General Kitack Lim urged IMO member-states to unlock the opportunities in green shipping and decarbonization, particularly in retrofitting ships and digitalising port operations, as well as investing in fuels and ship-related technologies.

World Bank calls for incentivizing companies to invest in ESG

World Bank has urged the government to give incentives to the private sector to tap ESG bonds to finance climate actions countering disasters, and to invest in climate-smart agriculture and renewable energy.

According to World Bank experts, financing the cost of climate solutions is extremely high. The total gross domestic product (GDP) of the Philippines is foreseen to shrink by 7.6% by 2030 compared to what it should be in the absence of climate shocks.

The climate solutions are well known as the Climate Change Act (RA9729), which was ratified 15 years ago. These include no construction in flood-prone or coastal areas and the prohibition of building water facilities in areas where groundwater is shallow and land subsidence is high. Other solutions include investing in irrigation and farm technologies that emit less greenhouse gases (GHG), such as methane produced in rice farms.

Souleymane Coulibaly, World Bank project leader, said: “With the climate change mitigation measures, ominous predictions on GDP could be reversed. Mitigation actions that reduce GHG emissions, such as the use of renewable energy and electrifying transport, could increase GDP by about 0.5 percent and generate about 80,000 jobs in 2040.”

Coulibaly, lead economist, at the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) forum, added that these measures have a positive impact on GDP if carbon tax revenues are used for investment.

To enhance budget procurement, the government can also use green public procurement and a “layered disaster risk financing strategy.”

“Setting a moderate price of $5 per ton of carbon dioxide could signal firms to adopt low carbon technologies while raising revenues of up to 0.4 percent of GDP per year,” he said.

Reducing greenhouse gas

The greatest reduction in emissions of GHG comes from converting transport to electricity.

A reduction in GHG may reach 1,000 metric tons of carbon dioxide equivalent given renewable energy investments up to 2050. This entails electrifying 90% of public transport and 72% of private vehicles with a $100 billion investment.

Reducing power rates is a significant factor in the Philippines’ competitiveness. Decarbonizing brings enormous savings in health costs as it reduces pollution.

Other climate solutions include scaling up mass transit, adding bike lanes and non-motorized transport, promoting inter-regional passenger and freight rail, and promoting telecommunity through Internet access.

Water infrastructure must be beefed up

Dr. Stefano Pagiola, a senior environmental economist at the World Bank, said: “Improving water storage is not only an infrastructure solution but also watershed management, along with forest cover improvement. Their benefits are resilience, diversifying biodiversity, and carbon sequestration.

There is an increasing risk of hunger as food prices rise. Farm technologies and their financing should be attractive to farmers. The poor and women will be most vulnerable due to agriculture’s dependence on climate and rainfall.

The right incentives include using environmental taxes to discourage harmful activities, removing regulatory obstacles to private sector climate action, attracting foreign investors, and strengthening the finance sector’s financing capability.

Training on green jobs should be made available, along with improving the resilience of the education system and introducing climate-sensitive health policies.

Pagiola said another key sector that must be addressed and financed is urban development, as 50% of Filipinos live in urban areas. Construction in floodplains vulnerable to storm surges must be avoided.

Propagation of climate-smart bamboo

The Department of Trade and Industry-Philippine Bamboo Industry Development Council (DTI-PBIDC) agreed to propagate bamboo in 1,500 towns nationwide, to position bamboo as industrial crop.

PBIDC Vice Chairman Deogracias Victor Savellano said bamboo is envisioned to be used for biofuel, food, and crafts. It can be developed as a raw material for architectural and construction purposes, “ultimately playing a large role in the economy by creating job opportunities”

The bamboo program is in line with the Marcos’ administration’s commitment to fulfill commitments to global treaties on climate change.

A memorandum of agreement will be entered into by DTI with the National Movement of Young Legislators Alumni Association (NMYLAA) even as carbon offsets are now upheld by the International Bamboo and Rattan Organization (INBAR).

The program will fulfill a plan for many years now through Executive Order 879, signed in May 2010, to position bamboo not only as a primary climate tool and plant species against man-made disasters but as a crop for use as an industrial raw material.

NMYLAA’s Project Climate Change is a mitigation strategy focusing on bamboo due to its fast-growing nature. Bamboo will be used to enhance oxygen presence, reduce pollution, reduce flooding and disaster-related incidences, and improve soil conditions.

Bamboo is also part of NMYLAA’s Project Disaster Preparedness and Project Farm Tourism.

“Barangays will have additional activity and will provide a source of income to communities. Farm tourism draws visitors to the barangay with activities such as harvesting crops, feeding and caring for farm animals, fishing, camping, hiking, and sampling local cuisine,” he said.

The Department of Environment and Natural Resources (DENR) issued DENR Administrative Order 2021-43 on carbon accounting and forest carbon project certification.

DENR DAO 2021–43 grants incentives to the private sector, upland organizations, and other entities involved in forest protection through verified carbon certificates. It will provide standardized guidance for the measurement of carbon projects. A registry for all forest carbon projects will be put up. It also supports investments in forest plantation activities that sequester carbon dioxide and avoid emissions from deforestation and degradation.

The International Bamboo and Rattan Organization (INBAR) has supported carbon offsets for bamboo. It recognized that bamboo can store substantial carbon. A 30-year giant bamboo plantation can produce 1.7 times the amount of carbon Chinese fir trees can produce.

“Countries, particularly in tropical and subtropical areas where bamboo grows, should make efforts to include bamboo in national and international carbon markets, as well as their national climate strategies,” INBAR said.

Empowering private sector and LGUs

Local government units (LGUs) should also invest in climate action, as the Mandanas ruling is enabling these to have an increased budget.

“It’s important to get down to the local level. You need numerous localized interventions to address local climate change realities,” said Coulibaly.

International financing, concessional and grant, may be limited, as many countries need climate action. Financing should be concessional to sweeten the investment that the government wants to make.