National and Global Energy Governance: Issues, Linkages and Challenges in the Philippines
This study examines the state of energy governance in the Philippines and assesses how domestic energy policies have shaped or been shaped by global energy institutions and issues. It analyzes the most pressing issues hounding the country’s energy sector, paying particular attention to the role of global and regional energy prices, the influence of bilateral and multilateral financial institutions, the impact of private sector investments, and climate change imperatives. Given the country’s lack of energy resources needed to fuel major economies today, the Philippines is unavoidably influenced by and participates actively in the dramatic and dynamic shifts in energy happening across the globe. Yet its greatest challenge is to secure its local energy needs amid an insecure and unpredictable global energy future and to balance this with equally important domestic concerns such as affordability of energy prices and environmental sustainability. For the Philippines, the priority is to build modern, competent, credible and accountable energy institutions that implement transparent and participatory governance processes in making energy decisions. Global energy governance and trends are important drivers that influence this critical institution-building and modernizing process.
- The Philippines needs to build capacity to understand global energy trends, including energy prices, better. The Philippine government should strengthen its relationship with the International Energy Agency, the International Renewable Energy Agency and similar global and regional energy institutions that can help address this capacity need.
- The Philippines should prioritize an energy security approach anchored on regional cooperation. This includes working for a fair resolution of the longstanding maritime boundary dispute with China which would allow for joint utilization of the substantial oil and gas resources in the contested Spratly Islands.
- Climate change needs to be mainstreamed in energy policies and resource plans in the context of an integrated adaptation-mitigation approach to energy where the Philippines secures new sources of energy while at the same time reducing its contribution to global greenhouse gas emissions. The United Nations Framework Convention on Climate Change provides for opportunities to implement such an approach.
- Related to climate change, the emergence of international carbon markets opens up opportunities for local renewable energy players to participate in such markets. But the government must be able to rationalize policies on subsidies and fiscal incentives to overcome the conflict of shifting the burden of revenue generation to taxpayers as happened in the power sector.
- Energy efficiency and conservation programs need to be enhanced to encourage wider participation and, more importantly, compliance. The assistance of international energy agencies and bilateral and multilateral partners is critical to scale up these programs.
- To achieve energy security and meet climate change and other environmental objectives, reforming energy institutions and energy governance processes is critical. The Philippines should continue to engage bilateral and multilateral institutions that promote such governance reforms like USAID, the World Bank and the Asian Development Bank, while retaining its independence in making reform decisions consistent with its interest.