Under a high carbon emissions scenario, climate change could incur gross domestic product losses of 24 percent in developing Asia and 30 percent in Southeast Asia in 2100.
The Philippines is being encouraged to follow the lead of neighboring countries in Southeast Asia and introduce carbon pricing measures to help combat climate change. Economists at the Asian Development Bank (ADB) have suggested that a carbon tax or a carbon trading system could be implemented in the country to accelerate the reduction of greenhouse gas emissions.
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During the launch of the ADB’s Asian Development Outlook (ADO) 2023 Thematic Report, David Raitzer, an ADB Economic Research and Regional Cooperation Development economist, stated that the Philippines could benefit from a carbon pricing policy. The ADO report also examines the advantages and disadvantages of implementing carbon tax and carbon credit mechanisms, which would help the country choose the most effective carbon pricing measure for its market.
Raitzer explained that a carbon tax could be a simpler option to implement, as it could be imposed solely as a tax on fuel. On the other hand, a trading system would require more monitoring but could set the emissions objective and allow the market to resolve the price.
Despite the lack of any carbon pricing policy in the country, there are already legislative initiatives to pursue a carbon tax and a carbon credit system. However, Energy Secretary Raphael Lotilla has expressed concern about the possible impact of a carbon tax on energy prices in the Philippines.
The ADB report highlights that Asia is highly vulnerable to climate change, and if carbon emissions continue to rise, developing Asian countries could suffer GDP losses of up to 24% by 2100. Therefore, the introduction of carbon pricing measures would not only help reduce emissions but could also protect the country’s economy in the long term.
The call to introduce carbon pricing measures in the Philippines is part of a growing global effort to address the impact of climate change. As the country continues to experience the effects of extreme weather conditions and natural disasters, it is essential that action is taken to mitigate the impact of carbon emissions on the environment and the economy.