Finance Secretary Carlos Dominguez III
GLASGOW – Finance Secretary Carlos Dominguez III said here Wednesday the Philippines’ participation in the Asian Development Bank’s (ADB) Energy Transition Mechanism (ETM) facility will serve as an innovative model for other countries seeking to accelerate their shift to a “cleaner energy future” by retiring their coal-fired power plants in favor of renewable energy (RE) sources.
Dominguez said the Philippines’ participation in the ETM underscores its firm commitment to “combat climate change through practical projects on the ground.”
“The time for debate and merely discussing climate change theories is over. Today, we are focusing on applied solutions and workable programs to quickly reduce greenhouse gas emissions. We have a planet to save and we do not have much time to do it,” he said at the launching of the partnership to design and establish the ETM.
Dominguez, who is chairman-designate of the country’s Climate Change Commission (CC), heads the Philippine delegation to the 26th United Nations Climate Change Conference of the Parties (COP26) ongoing in this city.
The ETM facility was announced and launched at COP26.
ADB, the Philippines, and Indonesia launched here Wednesday the landmark ETM initiative that aims to accelerate the transition of countries in Southeast Asia from coal to green energy.
Dominguez said the Philippines has a “unique opportunity” in Mindanao to pilot the ETM project as the government is in the process of rehabilitating the Agus-Pulangi hydropower plant to improve its generating capacity.
As the Agus-Pulangi power plant complex composed of seven hydropower plants increases its generating capacity, the government can proceed with its plan to gradually acquire coal-fired power plants in Mindanao and repurpose them through the ETM facility.
“Mindanao will showcase an Earth-friendly future that can be replicated in other areas in the Philippines --and even countries around the world,” Dominguez said. “Together with the Asian Development Bank, the Philippines is pioneering an innovative model that will set a global standard in transitioning to a cleaner energy future.”
The ETM is a public-private finance vehicle that aims to both reduce coal-fired power generation through accelerated plant retirement and boost the growth of RE using an equitable, scalable, and market-based approach.
According to the ADB, the ETM partners will jointly conduct a thorough feasibility study focusing on the optimal business model for each pilot country –the Philippines, Indonesia and, possibly, Vietnam– and bring together concessional resources from donor governments and philanthropies, in close coordination with global climate change-focused funds, to leverage large amounts of commercial capital to trigger a decisive shift towards decarbonization.
The ETM, envisioned to become the world’s largest emission-mitigation program, will take into account power system reliability and affordability; robust measurement, reporting, and verification protocols to track greenhouse gas (GHG) mitigation impacts; and the shift from coal to clean energy in a just and equitable manner for affected workers and communities.
Dominguez said the shift from coal-dependent to RE sources “requires an effective financing framework to be even imaginable,” which is why the Philippine government has partnered with the ADB and some private sector partners in developing the ETM-supported project for the country.
He said the ETM-supported project in Mindanao “is one of the practical projects we are ready to implement to fully realize our ambitious goal of reducing greenhouse gas emissions by 75 percent in 2030.”
As its Nationally Determined Contribution (NDC) to the Paris Agreement, the Philippines has committed to a projected GHG emissions reduction and avoidance of 75 percent, referenced against a projected business-as-usual cumulative economy-wide emission of 3,340.3 million tons of CO2 equivalent for the 2020–2030 period.
The Philippines accounts for only 0.3 percent of global carbon emissions, but as an archipelago sitting on the typhoon belt and the Pacific Ring of Fire, it is among the most vulnerable to the adverse effects of climate change.
It is ranked 9th out of 181 nations in the world as the country most affected by extreme weather events in the 2020 World Risk Index.
Each year, an average of 20 typhoons hit the Philippines, bringing torrential rains, violent winds, and extreme floods.
The country is sinking four times faster than the global average owing to its rising sea levels.
Weather-related events cause losses and damages amounting to about US$1 billion every year, Dominguez said.
“The Philippines is, therefore, very determined to do its utmost to fulfill its commitment to combat climate change through practical projects on the ground,” he said.
Dominguez said the ETM-backed project will help the Philippines accelerate the retirement of its coal-fired power plants by at least 10 to 15 years on average.
The project is also expected to attract investments in RE, create jobs locally, and promote national growth, he said.
Coal accounts for 54 percent of the Philippines’ energy mix, which makes it the largest source of GHG emissions in the Philippines.
In 2019, coal accounted for 48 percent of carbon dioxide emissions in the country.
In the coming period, the ETM partners will jointly conduct a full feasibility study focusing on the optimal business model for the Philippines.
The project will bring together financial resources from multilateral banks, private institutional investors, philanthropic contributions, and long-term investors to trigger the Philippines’ decisive shift towards de-carbonization. (PR)
