The Asian Development Bank (ADB) opines that the Philippines could benefit from a carbon tax, but it should be sufficient for the demands of a country that is still strongly dependent on fossil fuels and driven by the market.
In a report by The Philippine Star, ADB country director for the Philippines Pavit Ramachandran said that the proposed carbon tax must be implemented fairly and inclusively.
Ramachandran stressed that the solution, whether it’s carbon taxation or carbon pricing, must be market-driven. It should be fair, inclusive, and tailored to the Philippine setting.
As economies grapple with the effects of climate change, there is a greater demand than ever for policies that would place an expense on emissions caused by burning fossil fuels.
However, critics countered that each country has special circumstances, as demonstrated by the Philippines, which has some of the most expensive power rates in the area, and that applying a carbon tax may not always be the best or most desirable option.
The Department of Finance (DOF) is looking into carbon pricing tools to find the best combination to address environmental issues and increase revenue.
Ramachandran added that the financing firm backs this initiative by organizing its domestic resource mobilization (DRM) program in the country.
The country director added that the financial institution has an assistance program in place and that there had been talks about several policy proposals, possibly including a carbon tax.
The goal of the DRM is to modernize the revenue management of the country by utilizing technology and solidifying international tax cooperation.
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