The World Bank has urged the government to grant the private sector incentives to invest in climate smart agriculture and renewable energy and tap ESG bonds to finance climate actions countering disasters.
World Bank officials said the government should expand the access of climate financing to the private sector in a Country Climate and Development Report (CCDR) 2022 it presented in a forum of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA).
It also urged the Philippines to make investment policies for climate action attractive and encouraged access to environmental, social and governance (ESG) bonds.
“Public and private investments are needed to finance adaptation through climate-resilient infrastructure. Financing mitigation measures from private sector should be incentivized by new regulatory technology-push and demand-pull policies,” said Souleymane Coulibaly, World Bank project leader and lead economist, at the SEARCA forum.
“On the private side, issuing ESG bonds under the recently introduced Sustainability Financing Framework could leverage private financing for climate actions.”
ESG bonds are generally part of sustainability financing supported by the Bangko Sentral ng Pilipinas. Eligible green expenditures include clean transportation, climate change adaptation and disaster risk reduction projects, sustainable agriculture and renewable energy (solar, wind, geothermal, biomass, hydropower).
Dr. Stefano Pagiola, World Bank senior environmental economist, also said at the SEARCA forum that attractiveness of climate smart agriculture practices to farmers should be improved, citing three benefits such as increased productivity, higher resilience and lower greenhouse gas emissions.
He said some policies must be avoided, noting that policy for farmers not to pay for water does not give farmers incentives to use water efficiently.
In Luzon and Cordillera, a technology that may have higher financial return for farmers is the use of blight resistant white potatoes in crop rotation with green cabbage and rainwater harvesting. Financial return is estimated at more than P500,000 per hectare.
In Visayas and Cordillera, another technology with good financial return is rice-onion crop rotation with the use of early maturing rice.
Dr. Glenn B. Gregorio, SEARCA director, said talks on climate policies are now critical. Gregorio himself has been immersed since 1986 in developing adaptation solutions to climate challenge.
“Sustainable Development Goal 13 for climate action is close to my heart. I have been a plant breeder for abiotic stresses, (developing rice) for drought tolerance, submergence tolerance, and salt tolerance,” he said.
Climate change adaptation techniques in agriculture enable crops to withstand increasing temperature from global warming and receding rainfall.
Gregorio said collaboration from the academe and industries are important to promote sustainable practices.
The poorest population will be the most adversely affected by climate disasters—with consumption reducing by almost 9 percent compared to the richer population’s lower 6 percent. As such, solutions should prioritize the poorest, along with women, for their target beneficiaries.
The Philippines is extremely vulnerable to erratic climate change, with temperature that has risen by two 0.68 degrees C (Centigrade), further rising by 1-3 degrees C, on various scenarios.
As financing the cost of climate solutions is extremely high, total gross domestic product (GDP) of the Philippines is foreseen by 2030 to shrink by 7.6 percent than what it should be in the absence of climate shocks, the World Bank experts said.