Opinion



By Wael Hmaidan


How the Philippines’ climate leadership also paved the way for its economic development




Posted on October 27, 2016


REFUSING TO PLAY the role of the victim, the Philippines has remarkably proven itself in the last few years to be a formidable leader in climate change negotiations.

Joining forces with 40 other relatively small countries under the banner of the Climate Vulnerable Forum (CVF), the disaster-prone archipelago set the level of ambition for the Paris Agreement, which is now coming into force this November.

Working closely with small island states and least developed countries, the CVF achieved what many thought was impossible: enshrining the target of keeping global temperature increase below 1.5 degrees Celsius.

Arguably, the United States, China and Europe are easy targets when the need for climate change leadership is raised, considering their responsibility for the majority of greenhouse gas emissions. The Paris Agreement, however, proves that climate-vulnerable countries like the Philippines have as much say in the climate discourse.

In its push for greater ambition for everyone to commit to a low-carbon development future, the Philippines did not only contribute significantly to solving the climate crisis, but fostered a clearer and cleaner way to achieve economic development.

THE DOWNTURN OF FOSSIL FUELS
The challenges the Philippines is facing to achieve industrialization are the same all over the world. I come from Lebanon, and my country is at a crossroads. We have recently discovered fossil fuel resources in our sea, and many people in Lebanon believe that these resources are the best way for Lebanon to industrialize.

But even if we turn a blind eye on climate change or extreme weather events, we can still see the economic downturn of the fossil fuel economy all over the world. The Bank of England warned that a collapse in the value of oil, gas, and coal assets is a potential systemic risk to the British economy. Peabody, the biggest global coal company in the world, filed for bankruptcy this year. Saudi Arabia meanwhile had $96 billion in budget deficits last year and had already started building a national plan for an economy beyond oil, along with other countries in the Arabian Gulf.

I consider Lebanon lucky for not investing in our fossil fuel resources yet. If we did that before the price of oil collapsed, we would have been stuck for the next 50 years in a failed economy. Now, with the current high volatility of oil prices, such fossil fuel resources have no added value, like investing in stones at the end of the Stone Age.

SEIZING THE DECLINE OF RENEWABLE ENERGY COSTS
While the fossil fuel age is setting, we are also witnessing renewable energy (RE) costs declining in an unprecedented manner in countries like Morocco, Egypt, South Africa, India, United Arab Emirates, Brazil, and many others.

In January, officials in UAE saw as much as 3 US cents/kWh for solar energy production while Even Morocco is now producing wind energy at a record price of 2.7 US cents/kwh, cheaper than any existing source of energy globally.

The RE sector in the Philippines is still small but booming.

Long reliant on fossil fuels, the Philippines now meets over a third of its energy needs through renewable sources.

In the past 2 years, around $2 billion have been invested in RE, creating local jobs all over the country from Davao to Batangas to Cadiz City. RE creates more jobs per kWh than fossil fuels. So if a country imports fossil fuels for energy generation, then they are not only creating fewer jobs, but missing out on investing in their own job economy.

A big challenge for any country that wants to industrialize is attracting foreign investments. Last year, investors worth $14 trillion in assets committed to shifting their investments towards renewable energy, and this number will only increase in the future. In 2014, $920 billion of green credit was outstanding for someone to grab. So who will attract all these resources?

At the moment, the big developing countries are moving fast to capture these investments. India and China are leading in green bonds, and providing long-term assurance to attract these investments.

But it doesn’t only have to be the big developing countries.

The Asian Development Bank, based in the Philippines, wants to raise $20 billion through green bonds this year alone, and any national government can do it. The country that commits to an RE future will provide a decreased risk of long-term investments in the renewable energies market of that country.

It is not only about jobs and investments. The reduction of pollution and climate impact through doubling global renewable energy by 2030 could save up to $4.2 trillion per year in external costs. Doubling the share of renewables in the energy mix by 2030 would increase global GDP by up to 1.1%, improve welfare by up to 3.7% and support over 24 million jobs in the sector.

If all these aspects are taken into consideration, I have no doubt that the Philippines will see that the benefits of shifting to renewables are massive, and the economic and social risks of fossil fuels are just not worth the effort.

Wael Hmaidan is international director of Climate Action Network.