Coal and fossil fuel taxes help shield businesses and consumers from climate risks and losses
December 2017
The passage of the coal tax hike is just and necessary to help protect our people and environment from the devastating impacts of coal consumption. The government and businesses have a lot to gain when energy security goals support the county's sustainable development agenda.
Atty. Angela Consuelo Ibay, WWF-Philippines' Head of Climate and Energy Program said, "Companies need to embrace sustainability as a business imperative. Extreme weather events, climate disasters, resource depletion, ecosystem loss and pollution can cause major disruptions on businesses' value chain and productivity, and can debilitate our economy. Taxing coal and other fossil fuels is a way of climate-proofing our assets and industries. Consumers have become more socially and environmentally aware and demand companies to make lasting contributions to our people and planet's overall well-being."
After 42 years of government subsidies and 30 years of being exempted from all taxes - except for income taxes, current excise tax on coal is just ₱10 per metric ton or 1 centavo per kilogram. The proposed coal tax hike by the Senate involves an increase of only ₱0.10/kg in 2018, ₱0.20/kg in 2019, and ₱0.30/kg in 2020. Adjusting coal's excise tax can generate more than ₱24 Billion in its first 3 years of implementation. Its first year cost of impact is minimal at ₱1.50 per 100 kWh per month for every Filipino household. The impact of industries has been calculated by the Department of Finance to be negligible.
WWF, along with other civil society organizations, communities and consumers are urging members of the House of Representatives to support the measure, even as there is staunch support from Senators Villanueva, Zubiri, Recto, and Legarda, and notably Finance Secretary Dominguez who shares the same vision of "transitioning into a country with a low-carbon modern economy."
The coal tax can translate to easy government revenues that can be allotted to help sustain government's drive to deliver on its promise to fast track infrastructure development and provide much-needed social services. With the ambitious ₱8-B “Build Build Build” program of President Duterte, the coal tax pooled together with fossil fuel taxes from diesel, kerosene and natural gas can bring valuable fiscal benefits for the country.
"Why do we continue to allow the dirtiest fossil fuel to enjoy exemptions from taxes which they have been enjoying for more than 30 years? Our people deserve better. The transition to clean energy can happen sooner when our legislators do right by passing this progressive tax measure that meaningfully tackles carbon dioxide pollution from coal and other fossil fuels," Ibay added.
For more information, contact Ms. Angela Ibay at gibay@wwf.org.ph.
