Carbon taxes could sap PHL competitiveness, Energy department says

By Angelica Y. Yang – March 9, 2021 | 7:34 pm
from Business Mirror

ENERGY Secretary Alfonso G. Cusi said Tuesday that the Philippines’ competitiveness could be hindered by carbon taxes, adding that the country is currently incapable of implementing such a regime.

“Burdening our generation with carbon tax will make the Philippines uncompetitive,” Mr. Cusi said in a virtual panel discussion on the first day of Siemens Energy’s “Shaping the Energy of Tomorrow” conference.

He said that the Philippines is a victim of climate change, and to achieve climate justice, “we need support so that we can transition (to clean energy) properly,” he said.

In terms of executing a carbon tax, he said the Philippines needs to “build capacity” to do so.

“We still want to build capacity, so carbon tax for us; at this moment… we’re not just ready for that,” Mr. Cusi said.

Carbon taxes make emitters pay for their carbon emissions. The US non-profit Tax Policy Center said on its website that “a carbon tax’s burden would fall most heavily on energy-intensive industries and lower-income households.”

Poor countries have long argued that carbon emissions are historically greatest in the countries that industrialized early, and that forcing the developing world to abandon carbon-heavy energy sources like coal at this stage would negate many of their competitive advantages, such as cheap labor.   

Mr. Cusi said the Department of Energy (DoE) has moved to increase the proportion of renewables in the energy mix, with a target for 2040 of 65,000 megawatts (MW) of capacity, including 40,000 MW from renewables.

He noted that the department has banned greenfield coal-fired power plants, and is seeking to introduce nuclear power, which will help deliver affordable power.

“Investors, manufacturers are not coming to the Philippines… because of our energy tariff; we need to make our country competitive. To do that, we have to bring down the cost together with finding the balance (between) reduced cost, reliable, stable supply — so that can be best answered by nuclear,” he said, adding that nuclear could also help decarbonize the industry.

He said the DoE is pushing to develop geothermal, hydro and other indigenous sources to bring down carbon emissions.