Estimating the Cost of CO₂ Mitigation through Feed in Tariff Policy in the Philippines

This research examines the cost and effectiveness of reducing carbon dioxide emissions through the implementation of a Feed in Tariff mechanism in the Philippines.

The study is based on the country’s increasing energy demand, its dependence on fossil fuels, and its strong potential for renewable energy development.

The analysis begins by evaluating the structure of the energy sector and shows that electricity generation is still largely dependent on fossil fuels, particularly coal, which contributes significantly to carbon emissions. At the same time, renewable energy sources such as solar, hydro, wind, and geothermal have considerable potential but remain underutilised. As energy demand continues to grow, carbon emissions are also increasing, highlighting the need for effective mitigation strategies.

To address this issue, the research estimates carbon emissions from different energy sources using a lifecycle approach. The findings confirm that fossil fuels are the main source of emissions, while renewable energy technologies offer a cleaner alternative with much lower environmental impact. However, the transition towards renewable energy requires strong policy support to overcome financial and market barriers.

The study focuses on the role of the Feed in Tariff policy as a key instrument for promoting renewable energy investment. This mechanism provides guaranteed payments for electricity generated from renewable sources, reducing uncertainty and encouraging private sector participation. The findings show that this policy can effectively stimulate the development of renewable energy projects and contribute to emission reduction.

The research also evaluates the cost of carbon abatement associated with this policy. The results indicate that the cost of reducing carbon emissions in the Philippines is relatively high compared to global averages. This suggests that while the policy is effective in promoting clean energy, it may not be the most cost efficient solution. Therefore, there is a need to balance environmental benefits with economic considerations.

In conclusion, the research demonstrates that the Philippines has significant potential to reduce carbon emissions through renewable energy supported by policy mechanisms such as Feed in Tariff. However, the relatively high cost of emission reduction highlights the importance of improving policy efficiency and adopting complementary strategies. A balanced and carefully designed approach is essential to achieve both environmental sustainability and economic stability.

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