Business group backs carbon emission trading

February 24, 2024 | 12:00am

MANILA, Philippines — The government should prioritize implementing a carbon emission trading system instead of imposing taxes on carbon as the latter could cause power prices to spike, according to the Makati Business Club.

MBC chairman Edgar Chua said the group believes that setting up a carbon emission trading system is better than imposing a carbon tax since businesses are more incentivized to actually address reduction in their carbon footprint.

 Chua warned that domestic electricity costs would increase – with the consumers shouldering the burden –  if a carbon tax is implemented since the bulk of the country’s power comes from carbon and hydrocarbons. 

“It will be passed on to us as consumers (in the form) of electricity. And already, our country is one of the most expensive when it comes to power for a number of reasons,” he told reporters on the sidelines of the State of Climate Change forum in Makati recently.

“Build an enabling environment instead of one  where  you penalize users of hydrocarbon (and carbon),” he added.

Chua emphasized that establishing the carbon emission trading system would be the “best” incentive that the government could provide to encourage businesses to cut down on their carbon footprint.

“If you let the market (dictate the price) that alone is a huge thing already,” he said.

The MBC is hopeful that the government would be implementing the carbon emission trading system “as soon as possible” like within the year, Chua said.

Chua said the MBC is engaging with foreign entities and the academe in discussing the most suitable model for the Philippines in undertaking a carbon emission trading system.

 Last month, Finance Secretary Ralph Recto called for the study of carbon pricing instruments and the need to identify an optimal mix including the imposition of carbon tax and implementation of an emission trading system.

Recto said these efforts would incentivize both industries and individuals to actively reduce their carbon footprint, while allowing the government to mobilize financial resources to boost fiscal space.