World leaders have reached a 31- page agreement on how to address the growing problem of climate change in the recently concluded COP 21. This agreement is deemed by some experts as a turning point in the world’s battle against climate change.
There are important points about the agreement, but most notable is the agreement to hold the increase in the global average temperature to below 2 centigrade above pre-industrial levels. Holding to 2 centigrade mitigates the risks of rising atmospheric temperature. After all, the consequences of increased atmospheric temperature are grave– rising sea levels, more devastating floods, and droughts, which results in food and water shortage.
COP 21, which by the way, was the largest single gathering of world leaders for a day also reaffirmed the previous commitments of developed country to provide support to the efforts of the poorer countries in addressing climate change. The agreement reached by 195 countries also asked countries to mobilize at least $100 billion annually by 2020 to finance climate-related efforts.
This means that there will be fresh funds available to develop renewable energy in efforts to minimize the effects of climate change especially for vulnerable countries like ours. In fact, according to the International Energy Agency or IEA, some $165 trillion of funds will be available for renewable and efficiency efforts from 2020 to 2030.
The Philippines is a natural choice to receive these funds to develop renewable energy for one obvious reason: We are abundant in natural resources that can be tapped for renewable energy.
Unfortunately, and again, I stress that our regulatory barriers make us unattractive for many investors. We may have the resources, but our policies are prohibitive, particularly, our government’s stand on foreign ownership.
Our constitution prohibits foreign investors from owning more than 40 percent of businesses and real properties. Similarly, foreign investors are also restricted from exploiting natural resources. These restrictions, unfortunately, hinder us from achieving our full economic potential.
Experts like economists and businessmen have been vocal in saying that it is time to lift these restrictions.In an article published by Philstar, former NEDA chief and UP Professor Dr. Gerardo Sicat stressed that “More restrictions on policies such as disallowing foreign capital in public utilities made us unable to exactly generate the kind of activities that need to happen,” Sicat said.
In an article published by Philstar, former NEDA chief and UP Professor Dr. Gerardo Sicat stressed that “More restrictions on policies such as disallowing foreign capital in public utilities made us unable to exactly generate the kind of activities that need to happen.”
The impact of foreign investment restrictions is substantially felt by the renewable energy sector especially for geothermal energy developers since the government no longer spends for the exploration of geothermal sources. This means, as I have mentioned before that private sector must shell out money from their own pockets for exploration, which is a risky and expensive undertaking as exploration is expensive. Likewise, developing renewable energy from other sources like wind and solar is capital intensive, too.
This begs the question, how many local businessmen can afford to develop renewable energy and take on big risks? The answer is simple: very few. It will then be very helpful if foreign investors are allowed higher stakes in energy exploration. After all, they have the funds.
The Philippines has committed to reduce its greenhouse-gas emission by 70 percent by year 2030. This means shifting from fossil fuel energy to turn to renewable energy for us to meet this commitment. After all, according to WWF- Philippines, the largest emitters of greenhouse gases are transportation, agriculture, and energy.
Similarly, WWF International President and Co-chair Yolanda Kakabadse has already warned us that the Philippines’ emissions are likely to increase with the rapid economic and population growth. Kakabadse stressed that “Prioritizing your indigenous renewable-energy options, veering away from fossil fuels and optimizing energy use are the best paths to a low-cost, low-carbon future.”
The Philippines, a country ranked as the third most at-risk country to climate change, only next to the South Pacific island nations of Vanuatu and Tonga should then strengthen its fight against climate change. And that also includes paving the way for more investors in the renewable energy sector—even foreign ones.