Effects of carbon emission standards and trading system on the competitiveness of the Philippine airline industry

• Main Author: Dequiña, Doanni Lou F.
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Airlines—Environmental aspects—Philippines Carbon offsetting—Philippines; Carbon dioxide mitigation—Philippines; Tourism and Travel
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6499; https://animorepository.dlsu.edu.ph/context/etd_masteral/article/12930/viewcontent/CDTG004897_P.pdf
• Institution: De La Salle University

We are at a critical point in history, “we” meaning Homo sapiens. We face a collision of problems on a scale beyond anything in the experience of our species, all having to do with the carrying capacity of the planet. Maybe, just maybe, it’s not too late to surmount these problems – if we are smart, fast, persistent, creative and lucky. Fortunately, after decades of painting environmentalism as fringe thinking, the corporate world has come around to seeing green as the future – or at least the path to profit. Yet, the green practices of most major corporations have remained timid and undemanding, following behind most of the public instead of leading it. These practices are often focused narrowly on energy, leaving aside many environmentally relevant questions. As unavailing questions still surfaces, the Kyoto Protocol was made to relatively address these queries. The protocol provided an effective strategy for reducing any activity that spurs climate change while simultaneously preparing life in a changed climate. EU countries were able to effectively implement this program resulting to lesser carbon dioxide emissions. As this seems to be a good answer to climate change, hence, this study would like to address the viability of such mechanism in the Philippine business and legal setting. This study will prove that implementing Kyoto Protocol’s mechanisms will provide sustainable development benefits to further achieve economic and environment objectives. Climate Change is unlike any other environmental or public health challenge that industrialized democracies have ever faced. The problem’s sheer scale over time and space, the massive cost of addressing it and the even more massive cost of ignoring it all defy our intuition. Philippines have experienced temperature spikes brought about by climate change. It has been observed that warming is experienced most in the northern and southern regions of the country, while Metro Manila has warmed less than most parts. In addition, the regions that have warmed the most (northern Luzon, Mindanao) have also dried the most. Largest precipitation trends are about 10 percent during the 20th century. Weather events have also occurred more frequently since 1980. These include deadly and damaging typhoons, floods, landslides, severe El Niño and La Niña events, drought, and forest fires. Adversely affected sectors include agriculture, fresh water, coastal and marine resources and health. Worth note-taking that in the Philippines pollution of air is very common and dangerous. Ninety-eight (98%) percent of residents in Metro Manila are affected by air pollution and 50 percent want to move to a less polluted place, according to the latest results released from an Asian air pollution survey by global market research company Synovate. The study, involving over 4,500 respondents across major cities in China, Hong Kong, Malaysia, the Philippines, and Thailand, examined residents’ perceptions of air pollution and their environmental concerns. One major contributor of air pollution comes from carbon emissions of aircrafts. According to the Center for Climate Change and Environmental Forecasting, CO2 constitutes roughly 70% of aircraft engine emissions, amongst other harmful emissions and particulates. Much of the current discussion among business and policy leaders involves details on how to fight problems that causes climate change. EU, for instance, applied a market-based “cap and trade” system. This is the scheme in which regulators prescribe emissions limits (the “caps”) and set up a system of fungible credits that allow businesses to comply with those limits (the “trade”) – thus creating an incentive to find the lowest – cost, most efficient ways to reduce emissions. It is clear that most governments, especially in industrialized countries, will end up relying primarily, or even exclusively, on this sort of market-focused approach, and that it will provide a national and global context for business action on climate change. EU ETS (European Emission Trading System) operates in carbon market; prices are dictated by energy price fluctuations and the economic downturn. This scheme makes the buyer pay a charge for polluting, which the seller is being rewarded for polluting less. Basically, the EU ETS helps avoid air pollution and increases profitability to those companies who pollute less than the cap. And according to a study made by The Climate Group thinktank and commissioned by the German Marshall Fund of the United States lobby group, to date, initial fears that the scheme would damage the competitiveness of European firms, contribute to job losses, and encourage some carbon-intensive businesses to leave the EU have proved unfounded. Most of the companies in the carbon emission market like Tesco and Johnson & Johnson, said that they had not relocated their operations, reduced their workforce, or lost market share as a result of carbon pricing. The problem of how to address climate change is equally perplexing, in part because of the diffuse chain of causality and extensive time delays involved. Emissions entering the atmosphere today might have negligible impacts in the short run, but could only contribu directly to dangerous greenhouse gas (GHG) levels 100 years or more in the future. The best technological fixes are not yet commercially available, and thus, we don’t know how much they will cost to deploy. And the sheer variety of human activities that result in emissions poses its own challenges. Despite this issue’s many complexities, public support for action on climate change is wide and growing. Many nations have already adopted mandatory limits on CO2 emissions including the Philippines; so have numerous states, cities and companies in the industrialized world. Thus, the debate over the cap and trade system in particular is moving beyond the question, should we do it? To the multiple questions of how to design it. And here again, there are disagreements: over the percentage of emissions rights that should be given free to companies versus auctioned off; over the pave and severity of emissions reductions; and over the appropriate use of the proceeds by the governments.