DAVAO CITY (MindaNews / 21 Nov) – The Philippines should work doubly hard to tap into the emerging global carbon credit markets, a non-profit organization said.
During the “Greening Caraga Project: 2.0 PH Carbon Credit Market” at the Acacia Hotel Davao on Wednesday, Antonio Peralta, executive director of Foundation for Rural Enterprise and Ecology Development of Mindanao (FREEDOM Inc.), said that the Philippines lags behind other countries in seizing the opportunities in the carbon credit markets.
“This thing has been going on and we can see from the chart that we are way behind and our neighbors are way ahead. I’m just afraid that we lose out on the opportunities that are still there,” he said.
He added that there is still sufficient time for the Philippines to join the time vibrant carbon credit market.
Through the carbon credit market, the United Nations Development Programme (UNDP) stated that companies or individuals “can use carbon markets to compensate for their greenhouse gas emissions by purchasing carbon credits from entities that remove or reduce greenhouse gas emissions.”
During the forum, a technical working group (TWG) was created to collaborate with other sectors, including the government and other stakeholders, to help develop the country’s carbon credit market, particularly in crafting policies.
He said that the TWG hopes to enhance the Philippines’ readiness and capability to participate in and benefit from the global carbon markets, including compliance with frameworks like the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
It also serves as a strategic platform to facilitate collaboration among government agencies, industry stakeholders, foreign investors, and carbon project developers ensuring that the Philippines leverages carbon market opportunities.
Bonar A. Laureto, a principal at SGV & Co. who was appointed as the interim co-chairman of the TWG, discussed how the global market for carbon credits presents promising opportunities for the Philippines as the number of credits “has compounded to $10 billion over the years” as of 2023.
He said that the countries earning from the trade of carbon credits include India, the United States, China, Guyana, Cambodia, Kenya, and Indonesia.
Laureto lamented how the Philippines, the most vulnerable to climate change, has yet to access the global carbon market.
He noted that carbon credits are priced differently, emphasizing the need to create the right market in Mindanao “that can get us the highest price” and build a “strong understanding of the market dynamics.”
Laureto said, for instance, that Cebu Pacific is buying carbon credits from Guyana to meet its commitment to the International Civil Aviation Organization (ICAO) under the CORSIA because the country lacks such a market.
Once the domestic market is established, Laureto said that big Filipino companies could buy locally its carbon credits.
The ICAO requires international airlines to reduce their carbon emissions and they can comply with this requirement through CORSIA, an offsetting mechanism.
Secretary Leo Tereso A. Magno, chairperson of the Mindanao Development Authority, said that there is a notable surge in the interest in the global carbon market, driven by “mechanisms that allow governments, private companies, and other entities to trade greenhouse gas (GHG) emission reductions and carbon credits, either internationally or domestically.”
“While many countries have already established robust carbon markets, our country is still in the early stages of developing the necessary laws and frameworks to fully capitalize on this emerging market. However, we have made significant strides in the right direction,” he said.
Magno stated that the Department of Environment and Natural Resources (DENR) issued Administrative Order 43 in 2021, establishing “the carbon accounting, verification, and certification system for forest-based carbon sequestration projects.”
He said that the agency pushed for the institutionalization of the carbon credit system, advocating for new environmental laws, which paved the way for the filing of House Bill 7705, also known as the Low Carbon Economy Bill in 2023, which would facilitate the trading of carbon credits within the Philippines. (Antonio L. Colina IV / MindaNews)