Just last January, NASA and NOAA released their findings which showed that 2015 was the hottest year on record. This news came a month after nations agreed on a historic climate deal at the 21st Conference of the Parties (COP 21) in Paris.
This planetary fever should serve as a clarion call for nations to implement their primary commitment under the Paris Agreement, which is to limit the increase in global average temperature to 2-degrees Celsius from pre-industrial times – or to bring down the cap to 1.5 degrees Celsius if possible – to keep the warming below dangerous levels.
Climate Change and Social Justice
Climate change is a threat multiplier, and can exacerbate existing stresses like environmental degradation, conflict, and internal displacement. Put simply, climate change reverses hard-won gains and thrusts poor people deeper into poverty.
A recent World Bank report, Shock Waves: Managing the Impacts of Climate Change on Poverty, said that as many as 100 million more people could be pushed into poverty by 2030 because of climate change.
Global Increase in Climate-Related Disasters, a new report by the Asian Development Bank, also linked the rise in number of floods, storms, heat waves, and droughts to the continued increase in global average temperature.
The Philippines currently heads the Climate Vulnerable Forum. As the name suggests, CVF is a bloc of 20 nations highly vulnerable to climate change. An estimated 50,000 deaths in total are recorded each year in CVF member-nations, which also lose an estimated 2.5% of their GDP annually due to climate change. This, even if these vulnerable countries have collectively contributed less than 2% of greenhouse gas emissions.
Let me cite a few figures to illustrate the country’s vulnerability to climate change. Please watch the video below.
Farmers, historically the poorest sector in the Philippines, are placed at a greater disadvantage because of extreme weather due to climate change: A severe dry spell that is currently blanketing vast swaths of agricultural land in southern Philippines is affecting an estimated 70,000 farmers, said the Department of Agriculture.
Because of the El Niño phenomenon, economic losses amounted to PHP 3.6 billion in 2015 and already half a billion pesos in 2016.
The Philippines’ INDCs
Before world leaders and climate negotiators converged in Paris last December, countries submitted their Intended Nationally Determined Contributions (INDCs) to chart a low-carbon, climate-resilient future for the planet and its inhabitants.
The following are the key highlights of the Philippines’ INDCs:
1. Mitigation: A pledge to cut carbon dioxide emissions by 70% by 2030
Relative to its business-as-usual scenario from 2000 to 2030, the Philippines will reduce its carbon dioxide emissions by 70% by 2030. Reductions will come from the energy, transport, waste, forestry, and industry sectors.
By making such commitment, the Philippines shows that even a nation that is highly climate-vulnerable is committed to build the momentum for a future powered by clean energy. “The country however views the need to peak its emissions as an opportunity to transition as early as it can to an efficient, resilient, adaptive, sustainable clean energy-driven economy, and it is determined to do so with partners from the global community,” the Philippines says in its INDCs.
2. Adaptation as ‘anchor strategy’
Placing great consideration on the country’s high level of vulnerability, the Philippines is prioritizing climate adaptation as its “anchor strategy.” Climate adaptation will also be mainstreamed into national development plans and programs.
The country has also identified the following as its priority adaptation measures:
a. Institutional and system strengthening for downscaling climate change models, climate scenario-building, climate monitoring and evaluation;
b. Roll-out of science-based climate/disaster risk and vulnerability assessment process as the basis for mainstreaming climate and disaster risks reduction in development plans, programs and projects
c. Development of climate and disaster-resilient ecosystem(s);
d. Enhancement of climate and disaster-resilience of key sectors – agriculture, water and health;
e. Systematic transition to a climate and disaster-resilient social and economic growth; and
f. Research and development on climate change, extremes and impacts for improved risk assessment and management
3. The need for international financial support
The Philippines, however, says its commitments are conditional and contingent to financing from the international community.
“The mitigation contribution is conditioned on the extent of financial resources, including technology development & transfer, and capacity building, that will be made available to the Philippines,” it says.
“External assistance would be required to enable the Philippines to develop and adopt the most appropriate technologies to improve adaptive capacities and resilience,” it adds.
4. The INDCs will still be modified
In the last part of its INDCs, the Philippines says its contributions will be “updated as more data become available.”
In its INDCs, the country also mentions the role of marine resources in boosting the country’s climate-resilience. It adds that the expected passage of the Expanded National Integrated Protected Areas Systems (E-NIPAS) by the Legislative branch should help the country develop its resilience. However, it can be noted that the House of Representatives failed to pass on second reading the E-NIPAS bill when it ended its session in early February 2016. (The Senate has already passed its version of the E-NIPAS bill in July 2015.) If passed into law, E-NIPAS would have added an additional 97 protected areas, expanding the coverage of protecting the country’s critical ecosystems.
Financing our INDCs
The country needs sizable investments to implement these plans.
I now will focus on climate finance to outline funding opportunities that could support innovations and interventions for climate change adaptation and mitigation in the Philippines.
1. Domestic Resource Mobilization
According to the World Bank, the Philippine government has scaled up climate financing by “leveraging the domestic budget to effectively implement and deliver its climate change reform agenda, and paving the way for a broad, strong financing strategy.”
It has also set up Climate Finance Working Group composed of four national government agencies – the Department of Finance (DOF), the Department of Budget and Management (DBM), the National Economic and Development Authority (NEDA), and the Climate Change Commission (CCC). Also, the DBM and the CCC are also working together for Climate Change Expenditure Tagging (CCET) in the national budget.
The public sector must create the right investment climate to crowd-in private funding. It can do this by minimizing risk, curbing illicit financial flows, creating a stable and predictable macroeconomic environment, and removing impediments to doing business.
2. Private Sector Investment
However, data obtained from the CCC showed only 0.3% of the GDP is allotted for climate-related appropriations in the national budget. This falls below the 2% allotment recommended by the Stern Review on the Economics of Climate Change. In other words, public funding is inadequate.
Without a doubt, public sector action alone cannot shore up much-needed climate finance. The private sector must rise to the challenge and bridge massive investment gaps on the following:
3. Development Assistance
The primary types of financial instruments that can fund climate and development projects in developing countries are grants, concessional loans, loans, equity investments, and guarantees.
In Paris last December, Philippine negotiators pushed for funding for adaptation projects in the form of grants and not loans, which will add to the country’s debt burden.
“Assistance for infrastructure improvement, the relocation of communities to places that are safer, requires money. We shouldn’t have to be subjected to having more debt from the international community to get that help,” said Alicia Ilaga, lead negotiator for adaptation.
I now discuss public and private international climate finance sources that the Philippines could tap.
3A. GREEN CLIMATE FUND
In Copenhagen in 2009, advanced economies agreed to establish a Green Climate Fund, an entity to assist developing countries in their climate adaptation and mitigation practices. Under this unique global initiative, developed nations pledged to jointly contribute USD 100 billion per year by 2020 for climate action in developing countries. The GCF’s finance architecture is as follows:
Each country will have a National Development Agency that will serve as the focal point for coordination with the GCF. In the Philippines, the CCC is the focal point.
However, a lot remains to be done. The GCF says that as of November 2015, it has raised USD 10.2 billion equivalent in pledges from 38 state governments. The number is woefully behind the target of USD 100 billion per year until 2020.
3B. MULTILATERAL DEVELOPMENT BANKS
Also in Paris, leaders of six multilateral development banks – including the Asian Development Bank (ADB) and World Bank Group (WBG), which both support development in the Philippines – announced their pledge to increase climate finance.
“Climate finance is critical to mitigate and adapt to climate change impacts. However, finance alone is not enough. It is imperative that we combine increased finance with smarter technology, stronger partnerships and deeper knowledge,” added ADB President Takehiko Nakao, President of ADB.
It can also be of note that in 2014, ADB mobilized around USD 3.2 billion in climate funding.
3C. GLOBAL ENVIRONMENT FACILITY
The Global Environment Facility (GEF) is a financial mechanism of the Environmental Conventions (UNFCCC, UNCBD, UNCCD). In the Philippines, the Department of Environment and Natural Resources (DENR) serves as the operation focal point. In the last funding cycle (2010-2014), USD 8.8 million was allotted for the Philippines. For the sixth and current cycle, an allocation of USD 7.47 million is focused on climate change mitigation.
Moving Forward: 2016 National Elections
The Philippines can blend funding sources (climate finance, public and private finance, and development finance) to achieve its climate objectives.
With the 2016 national elections less than 90 days away, it is incumbent upon Filipinos to elect leaders who will move the country towards a climate-resilient future and will ensure that the Philippines’ INDCs – and commitments to achieve the Sustainable Development Goals – are met.
In the last decade, the country has created comprehensive policies and frameworks – such as the Climate Change Act of 2009 which created the CCC, the National Disaster Risk Reduction and Management Law of 2010, National Climate Change Action Plan (NCCAP) in 2011, and the People’s Survival Fund of 2011 – to address climate change.
The next administration must build on these landmark policies to secure sustainable development.
This article was originally published in Sophia’s blog.