Carbon tax can raise P122B in new revenue


Use it to fund environmental programs – NTRC

The government could generate some P121.97 billion in annual revenue by imposing tax on carbon-dioxide emitting sectors, says the National Tax Research Center (NTRC), a government think tank.

According to data from the Department of Energy (DOE) the country’s carbon dioxide (CO2) emissions from 2000 to 2014 recorded an annual average of 69 million tons with the majority of the emissions coming from electricity generation (41 percent) followed by transportation (34 percent) and industry (15 percent) sectors.

Based on the Philippine Energy Plan 2012-2030, the annual average CO2 emission in the country during 2015-30 is estimated to reach 122 million tons as CO2 emission increases by 169 percent, from 39 million tons in 2015 to 106 million tons in 2030.

Majority of the estimated CO2 emissions would come from electricity generation (53 percent) followed by transportation (23 percent), industry (17 percent), residential (3 percent) and commercial (3 percent).

By type of fuel, the bulk or 57 percent of CO2 emissions is estimated to come from the use of coal, 33 percent from oil and 10 percent from natural gas.

At the same time, a feasibility study has found that the Philippines is tagged as one of the world’s most vulnerable countries to climate change which is a result of global warming.

“There is, therefore, an urgent need to control the levels of CO2 to address the distressing effects of climate change not only to the environment but also to human health,” NTRC said.

It also said that to address the growing concerns on the rapid accumulation of greenhouse gas (GHG), particularly CO2 in the country, it is imperative to design an ideal carbon tax,” NTRC said.

The proposed tax, it added, should be effective, efficient and easy to administer.

Rate, revenues
The NTRC said that for purposes of estimating revenue from the proposed carbon tax, the rates of say P100 to P1,000 per ton of CO2 is suggested—for the Philippines to be at par with countries already implementing a carbon tax.

“Later, if the proposed carbon tax pushes through, it may be set at progressive rates to reflect the ability to pay of taxpayers,” NTRC said.

Based on the country’s CO2 emissions outlook from 2015 to 2030, it said, the government could generate annually P12.20 billion to P121.97 billion over that 15-year period.

Of the amount, P6.52 billion to P65.17 billion may be generated from the electricity generation sector; P2.81 billion to P28.10 billion from the transportation sector; P2.08 billion to P20.79 billion from the industry sector; and P790 million to P7.91 billion from the commercial, residential and agriculture sectors.

Meanwhile, by type of fuel, P6.99 billion to P69.88 billion may be generated from the use of coal; P4.04 billion to P40.44 billion from oil; and P1.17 billion to P11.16 billion from natural gas.

Such revenue, the state think tank said could be used to finance environment-related programs and projects of the Department of Environment and Natural Resources (DENR).

“The fund may also be used to improve and upgrade the facilities of DENR, particularly, those that are used in monitoring air quality of the country,” it said.

The NTRC said carbon tax could be levied at any point in the energy supply chain. However, for administrative simplicity, it may be levied at a point where there are relatively few entities subject to tax.

“Most proposals suggest the tax may be better applied to upstream suppliers (firms engaged in exploration and production) of coal than to “midstream” (electric utilities),” it said.

“For firms, their ultimate burden will depend on their ability to pass through abatement and tax costs to their customers and on the ensuing reductions in demand they experience in response to higher product prices,” it added.


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  1. AGREE, China contributes the biggest carbon footprint in the world, all their finished products imported into the RP must be taxed double or triple, all Super Malls selling these Chinese made products and have their building consume the most energy air-con usage alone, makes the biggest private sector carbon footprint, they should bear the full burden of the carbon tax, after all their the billionaires who can afford it.