The Philippines is to introduce a carbon pricing framework after passing its Low Carbon Economy Investment Act of 2023.
The bill has been hailed as ‘groundbreaking’ in setting the Asian country on a low-carbon pathway. It mandates that large enterprises across various sectors develop decarbonisation plans aligned with the goal of limiting global temperature rise to below 2°C.
For any emissions that exceed targets set in the sectoral decarbonisation pathways, companies will be ‘required to allocate its own Decarbonisation Fund’, which can then be used by covered enterprises to invest in viable low-carbon business models.
Businesses have several options for using these funds, including investing in their own low-carbon projects that reduce emissions and generate savings; pooling resources with other companies to jointly invest in low-carbon technologies, especially beneficial for smaller enterprises; and equity investments in dedicated low-carbon enterprises that specialise in sustainable solutions.
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