Our event today is a testament to our commitment to sustain our efforts towards a cleaner and more sustainable Philippine economy.
This is the only viable direction, especially for a climate-vulnerable country like ours. A green economy allows us to transform towards a climate- smart and climate-resilient nation.
If we want to sustain this path, we need to scale up green financing for adaptation and mitigation measures that will further enable us to protect our environment and our people's lives and livelihoods.
As we go through with our event today, perhaps our discussions should not only focus on how we could enable green financing in all sectors in our country, but also how we can sustain it.
Green financing essentially means investing on projects that preserve our environment and address our climate and disaster risks. It supplements existing government-funded projects by encouraging private investments in order to maximize our nation's capacity to protect the environment and address climate change.
Our national development plans and international commitments already encourage the promotion and advancement of green financing in the Philippines.
We have enacted in 2008 a Renewable Energy Law that provides for the full development and use of RE in the country. More recently, under the Green Jobs Act, companies that create employment which contribute to preserving the quality of our environment can avail of tax incentives and duty-free importation of equipment. We also have laws that mandate the installation of solid waste management facilities and rainwater collectors in our local government units.
Our Philippine Development Plan (PDP) has embedded mitigation strategies in various sectors which include: the promotion of green technology innovations; promotion of climate-smart infrastructure and designs as prescribed by the Green Building Code of the Department of Public Works and Highways (DPWH), which incorporates resilience in engineering; and promotion of low- carbon, energy-efficient and environment-friendly urban transport systems. Moreover, our Nationally Determined Contributions (NDC), as part of our commitment to the Paris Agreement, will serve as our roadmap on how we intend to transition towards a green economy. Our final NDCs will lay a menu of climate change projects and programs for anyone to invest or undertake in support of meeting our mitigation goals, which was committed among nations under the Paris Agreement as well below 2 degrees Celsius or essentially, 1.5 degrees to survive and to achieve the sustainable development goals.
Our NDCs alone would prove the demand for green investments now and in the future. Aside from the needs of the building sector, there will be transition plans for other sectors such as agriculture, waste, industries, transport, forestry, and energy. Each sector will have its own set of projects and programs that the private sector could invest on.
Our government certainly cannot do this alone. This would entail greater involvement from the private sector in transitioning our whole nation towards the achievement of our national targets. The government has already started "greening" our industries in various sectors, but our financial institutions and private banks could further escalate this green growth to a higher level.
A strong partnership among the government, the private sector and financial institutions will be needed to put in place the right conditions to attract domestic and foreign low-carbon investments.
While the demand side faces high capital requirements, green lending institutions also face challenges, such as market gaps, which are heightened because of uncertainties and the lack of large-scale long-term finance. For the private banks, long-term lending is constrained by the long-term risks associated with the global financial crisis, liquidity requirements, and sustainability of climate investments, among others.
To encourage investments, we must first increase awareness on the severe impacts of climate change within sectors. A national loss and damage registry and vulnerability assessment could help our banks assess the need of a proponent in a particular area for a certain project and realize the urgency of lending funds to finance it.
The government could also provide technical assistance to assist the private sector in addressing regulatory challenges and technical risks. The government may also share the cost and risk in these climate investments.
A Philippine Green Bank which would have natural bias to finance green projects could be developed using taxes on coal, other green financing reserves, or grants from foundations and corporations that support climate investments.
As we learned during the forum on green banking and financing that I hosted in the Senate in August this year, the multi-billion-dollar Green Climate Fund prefers financing NDCs as they are already aligned with country development plans. It is thus important to accelerate our NDC process to access the GCF. The Department of Environment and Natural Resources, as our National Designated Authority to the GCF, should already be taking this into consideration.
What is important is the commitment from the government, private banks and financial institutions to spur and sustain green financing. All proponents should not wait for each other's move; rather, we must act harmoniously.
We cannot expect that our households would all of a sudden shift to using solar panels if there would be no businesses that can provide them the technology, and we also cannot expect that there would be business ventures on solar panels if green banks cannot even fund their startup. Most certainly, we cannot foster the right kind of relationship among these actors if the government does not even help create the enabling environment.
What we can do through our gathering here today is to erase our doubts, assess our situation, and coordinate a plan.
The world is becoming warmer, extreme weather events becoming fiercer, but our climate action remains insufficient. It is time that we allow everyone to help us fight and win this battle against climate change.
Climate action makes good development sense. Through green financing, let us further unlock our nation's potential and secure a thriving and resilient future for all.
Source: Senate of the Philippines