Pnoy’s Edict on Coal-fired Power Plants A Good Start, Digong Should Keep It

CURRENT SOCIETAL CONCERNS
Elpidio V. Peria
12 June 2016

LCDS

image from : https://www.ecn.nl/docs/library/report/2011/e11059.pdf,

Environment and climate change advocacy groups in the Philippines recently hailed one of President Aquino’s “last two minutes” action in the Executive Department where he signed last 18 May 2016 Climate Change Commission Resolution No. 2016-001 which was explicitly aimed at coal-fired power plants as it is entitled : Resolution on the Development of a Clear Policy on Coal-Fired Power Plants in Pursuit of a Low Carbon Development Pathway for the Philippines.

The said Resolution, which was duly issued with proper legal authority since Pnoy is the Chair of the Climate Change Commission, is one of the actions that make real Philippine commitments to the Paris Agreement, the recently-adopted global agreement that deals with climate change with renewed vigor for the 21st century. The Resolution has four main actors tasked to do the following :

One, the Climate Change Commission, to facilitate within six months from the date of the Resolution, or until November 18, 2016 , a national policy review and framework development on energy in accordance with a low carbon development pathway and, among others, will consider the prioritization and acceleration of renewable energy development;

Two, the DENR and the DOE are urged to initiate and coordinate discussions and harmonize policies and regulations on new and existing coal-fired power plants in accordance with a low-carbon development pathway to be reflected in the Philippine Energy Plan;

Three, the DENR is urged to ensure the incorporation of the measurement and mitigation of GHG emissions in the development and review process for the Environmental Impact Statements of coal-fired power plants;

Four, the NEDA is urged to prioritize the mainstreaming of low carbon development and climate change adaptation and mitigation strategies in the formulation of all national and local development plans.

While it was not that explicit about it, this resolution from the Climate Change Commission will definitely do something about coal-fired power plants along with what it dubbed as a “low carbon development pathway”, a phrase not exactly found in the Paris Agreement though there are similar words there in art. 4, para. 19 thereof which mentions the term “long-term low greenhouse gas emission development strategies”.

Reviewing the literature on this, the Energy research Center of the Netherlands (ECN) noted that low-carbon development typically focuses on reducing emissions (e.g. in energy, industry and agri-culture) and increasing carbon sequestration (e.g. through improved forest management). The term ‘low-carbon’ does not necessarily imply that overall emissions in a country will decrease , but it does mean an emissions trajectory below business as usual, i.e. below what would happen without addi-tional policy interventions.

The ECN also said that the ultimate aim of a low-carbon development strategy or LCDS is to catalyse concrete actions that support development, but with less emissions than without intervention. To establish this, an LCDS can serve different audiences and have different purposes depending on the stakeholder.

Now, given that the Climate Change Commission Resolution that Pnoy signed specifically deals with coal-fired power plants, it is inevitable that the “low carbon development pathway” that the Philippines will now have to undertake will have to deal with the existing and future coal-fired power plants in the country.

How these coal-fired power plants will be dealt with may be through the energy framework that the Climate Change is tasked to evolve within the 6-months time-frame that it gave itself to accomplish and though it doesn’t say there specifically that coal-fired power plants will now be phased out, it states there instead the “prioritization and acceleration of renewable energy development.”

What will that prioritization and acceleration mean may include increasing the share of renewable energy in the current energy mix and perhaps start the transition of gradually reducing the share of coal energy in the country.

While this is happening, the DENR and the DOE will sit down to harmonize their policies on “new and existing” coal-fired power plants, whether those in the pipeline and not yet approved are considered part of what is “new” will have to be ironed out between the two agencies, hopefully in consultation, not only with the affected companies but also with the affected communities and their support groups like civil society organizations who will have some ideas also on how these are done.

How this harmonization may happen could be in the existing environmental compliance certificates that the DENR has issued to new and existing coal-fired power plants and putting additional mitigating measures there that will reduce the carbon emissions of these plants. This is where the GHG measurement and mitigation mentioned in the Resolution that the DENR will do will come in.

These measures, once put in place, will definitely increase the operating costs of the coal-fired power plants. Will this be passed on to the consumers? This is where the DOE may enter the picture- it can issue guidelines that may be considered by the Energy Regulatory Commission in revising the power supply agreements that the companies operating the coal-fired power plants have already been given when they got the go-ahead to operate. Will this result in the revision of their existing contracts midstream? It is, and the companies should not object since they will now have to abide by this “low carbon development pathway’ which also lays out a way for them to recover their costs if they wish to continue to operate.

What the ‘low carbon development pathway’ will be in terms of economic policy will have to be spelled out by NEDA as it works to develop the new Philippine Development Plan under the new Duterte administration, which takes into account all the cost implications of implementing this pathway while ensuring that over-all economic growth prospects, including GDP growth, which somewhat peaked at the close of the Pnoy administration, will not be undermined.

Ultimately, the more important question from hereon is : so what will President-elect Digong and his incoming appointees to the DENR, DOE and NEDA do about it even though it can be noted that the Resolution only “urges” these agencies to do these things, not actually mandating them to do what’s in the Resolution. This is due to the nature of the mandate given by the Climate Change Act to the Climate Change Commission where it may only take a lead in “mainstreaming” these policies, but not really take over how the various agencies will do about their mandated tasks.

That is why there is merit in Aksyon Klima’s advocacy that climate change is an economic issue that must now be included in Digong’s 8-point economic agenda. Easily, two of the 8 points in the agenda there about continuing Pnoy’s macroeconomic policies and ensuring foreign direct investment attractiveness in the country might already include the “low carbon development pathway” that this Resolution already enshrines as a key policy and this may include giving more incentives so that renewable energy companies can further scale up their efforts, but perhaps also assisting new and existing coal-fired power plants to upgrade their technologies so they will not be as high-greenhouse gas-emitting as before or perhaps and this will be controversial, give them some means to help them pay off their liabilities and loan commitments so that they will have to get out of the business entirely, but not pass on these costs to the Filipino consumers who already suffer the highest electricity rates in Asia.

oOo

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