The Philippines may have the most to gain under a net zero transition, especially if it stops developing new coal projects, according to the Asian Development Bank (ADB).
In the special chapter of the Asian Development Outlook (ADO), ADB said the vulnerability of the Philippines to climate change also makes it a country that has the “most to gain” in the shift to a more carbon-neutral world.
This is especially crucial since climate change under a high emissions scenario could impose GDP losses of 24 percent in the whole of developing Asia, 35 percent in India, 30 percent in Southeast Asia, and 24 percent in the rest of South Asia by 2100.
“The Philippines is extreme climate change vulnerable and the Philippines is coming from a relatively low level based on emissions so it would be among the potential carbon exporters if it doesn’t develop too much new coal right now,” the report’s co-author and ADB Economic Research and Regional Cooperation Department (ERCD) economist David Anthony Raitzer said in a briefing.
Raitzer said currently, the Philippines saw an expansion in the share of coal in terms of the country’s electricity generation. This, he said, is not “economically preferable” in the study’s model.
“What our report would be urging is that the coal expansions, we don’t find that, under current policies, even economically preferable,” Raitzer said. “Investing in new coal capacity is not in any interest of any region in our model.”
The primary recommendation of the report is for countries to tap carbon pricing as a way to finance green technologies that are carbon neutral to attain the below than 1.5 degree Celsius target set under the Paris accord.
The report noted that the region’s share of global greenhouse gas (GHG) emissions doubled to 44 percent in 2019 from 22 percent in 1990 and is expected to remain at this share until mid-century under current policies.
At current levels of GHG emissions, ADB said, the region would exhaust the remaining global carbon budget consistent with limiting warming to 1.5 degrees Celsius by 2040.
“Carbon pricing is the most efficient way to cut emissions, yet pricing coverage levels and exposure of emission sources remain low. Subsidies to emitting fuels and activities remain far higher than those to clean energy. A policy mix that reforms pricing regulations and incentives and mobilizes private financing is needed,” ADB Chief Economist Albert F. Park said on Thursday.
ADB said a carbon price of $70 per ton of carbon dioxide equivalent by 2030 and $153 by 2050 is found to be able to trigger a transition to low-carbon growth and achieve global net zero.
Ambitious mitigation can be attained without carbon pricing, but the cost would be higher as carbon pricing is more efficient. Although progress is being made in the adoption of carbon prices, barriers often prevent prices from affecting investment and consumption decisions in developing Asia.
If the region’s economies do not proactively adopt carbon pricing, they risk being subjected to carbon border adjustment tariffs and other measures that could put trade at a disadvantage.
The report stated that apart from carbon pricing, Asian economies could facilitate low-carbon responses via regulations and incentives, and mobilizing finance for decarbonization and ensuring fairness internationally and domestically.
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