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We’re all aware that 2023 was a harsh year for our planet. It was the hottest year on historical record by a substantial margin of +0.15°C over the previous high set in 2016; and it’s most likely the hottest year in the last 100,000 years. However, with many parts of the globe having just experienced their hottest summer on record these last few months, 2024 is well on its way to becoming the hottest year ever. The extreme heat has brought about:
the Philippines, further exacerbated by El Niño. (The old Pantabangan town that was submerged in the 1970s reemerged as the Pantabangan dam’s water level dropped 50m from its normal level of 221m.)
there were also severe droughts such as those experienced in Southern Africa that threatened food security for millions of people and affected livestock (about 9,000 drought-related cattle deaths reported in Zimbabwe);
record-breaking levels for ocean heat and acidification have fueled typhoons and cyclones that had stronger winds and brought heavier rainfall, causing floods and even landslides. Very recent was Super Typhoon Yagi, Asia’s most powerful typhoon and the world’s second most powerful tropical cyclone this year, that wreaked havoc in the Philippines, China (with peak sustained winds of 234kph) and Vietnam (160kph). Metro Manila also suffered its worst flooding in recent years due to Super Typhoon Carina in July. It dumped 471 mm of rain in 24 hours, surpassing the 455 mm rainfall set by Ondoy in 2009. Super Typhoon Carina packed maximum winds of 185kph with gustiness of up to 230kph.
The extremely high temperature is also contributing to the alarming rise is sea level, Antarctic Sea ice loss and glacier retreat. (Here’s a table that captures the major components of the cryosphere and how much potential they have to raise sea levels. Note Antarctica, which can potentially raise sea levels by 58.3 meters. This is why it’s called the “ice locker” of the world. Note also that sea ice and ice shelves are “zero” because they already displace their volume in the sea and, like floating ice cubes, do not raise levels when they melt. Ice shelves, however, despite the small sea level volumes inherent in them, hold back glaciers from sliding into the sea and if they break or calve--as they say, this paves the way for glaciers and ice sheets behind them to slide in).
Today, there is no one and no place on the planet that’s spared from the “unprecedented fury” unleashed by the increasing number and more frequent occurrence of extreme weather events that’s also “supercharged” by climate change.
What scientists have been fearing and warning us on the devastating effects of climate change continue to unfold every single day now, highlighting our own vulnerabilities to the powerful wrath of nature. Our own actions led us to the climate crisis we now face, yet the cost of further inaction to address this crisis head on can only be catastrophic.
What’s more, the 2023 Global Stocktake (GST) reports that the world is not on track on limiting global warming to 1.5°C. (The GST is a core component of the 2015 Paris Agreement that assess each country’s progress on climate action and encourages them to augment their climate goals.) The slow mitigation could have been compensated by adaptation to shield us from the worsening climate change impacts, but the UNEP Adaptation Gap Report of 2023 noted the world is also underfinanced and underprepared from the climate hazards.
A key finding from the recently published 2024 World Risk Report reveals that: “crises and risks are becoming increasingly complex and interconnected. Extreme weather events, conflicts and pandemics overlap and amplify each other. Global trends such as climate change, population growth and political polarization promote multiple crises and intensify their effects.” It’s also disheartening to note that the Philippines remains to be among the top countries most vulnerable to disaster risks as it’s lacking the needed coping and adaptive capacities to mitigate them.
Amidst all these, how then can we secure a decarbonized and regenerative future?
On World Environment Day last June 05, UN secretary general Antonio Guterres continued to warn of urgent climate risks and urged for immediate action from global leaders to secure a livable future within the next 18 months. “The need for climate action is unprecedented, but so is the opportunity, not just to deliver on climate but on economic prosperity and sustainable development. Pulling back from the brink is still just about possible”.
In recent years, I’ve been actively speaking about the global Journeyto Net Zero through these three phases namely: (1) reducing the current level of greenhouse gas emissions of 59 gigatons per year (based on the 2023 IPCC Synthesis Report) and seeing emissions peak by 2025; (2) then eliminating all GHG emissions and getting to Net Zero by 2050; (3) and then finally reducing the concentration of GHGs in the atmosphere and achieve net negative emissions. The ultimate goal here is to solve the climate crisis that, by all accounts, is undeniably real and in urgent need of action. We have a narrowing time frame of the next 25 years to make our every action count and avoid irreversible damage to our planet. There is no other way to go but Net Zero.
Progress through Phases One to Three in the Journey to Net Zero has many facets beyond just energy. It spans agricultural practices, food production, waste management practices, building designs, construction materials, industrial processes, deforestation, f-gases used in refrigeration and many others, all of which present opportunities for the private sector to help scale up their decarbonization ambitions. Unlocking these opportunities require more creativity, innovation, thinking out of the box, and even seeing around corners.
On the other hand, the key elements of the energy transition involve these five cornerstones:
All these will have immense implications for the central role of the electricity grid. The most important point is that by 2050, we will need five times the electricity we use today; and we will need 10 to 12 times the clean energy in use today.
For the FPH (Lopez) Group, our diverse portfolio of clean and renewable energy sources allows us the best opportunity to shepherd our country’s energy transition to Net Zero. Aligned with the Philippine Energy Plan, we’ve set our target to grow our low carbon energy portfolio to 13,000 MW by 2030, of which 9,000 MW will be from renewable energy. At Energy Development Corporation, we’ve embarked on a multi-year well-drilling operation to expand output for our various geothermal power plants to ensure a more steady and reliable supply from one of the few renewable energy sources capable of delivering power on a 24/7 basis. We’ve also lined up our expansion and growth projects in hydro, solar and wind that we will be pursuing in the next few years.
Still, we recognize the importance to keep the lights on during this energy transition, more so with the imminent depletion of our Malampaya natural gas reserves. We’ve completed our LNG terminal situated at the First Gen Clean Energy Complex and ushered our floating storage and regasification vessel, the BW Batangas, into the Batangas Bay. Our LNG facility is ready to make up for any shortfall in Malampaya production and to continue to power our natural gas plants. This early though, we are looking at new technologies and alternative fuels to repower our natural gas plants, consistent with our own commitment to Net Zero by 2050.
As we clean up our energy grid, we are also working to scale up energy efficiency as the “first fuel” and encourage its use everywhere. Today these efforts are still sparse and fragmented but have great potential to reduce carbon emissions and bring real cost savings and enhance the bottom lines of our customers. We’ve been developing our own arsenal of solutions such as rooftop solar, remote energy monitoring systems that allows consumers real-time updates of energy consumption, energy efficiency audits and energy solutions for commercial and industrial establishments, and distributed microgrids and resilient power solutions that can deliver reliable electricity, all with the view to address the many pain points experienced by consumers.
In navigating this energy transition, we are also advancing our regenerative mission as we bear in mind the need to provide electricity to many more Filipino households who have never been fortunate enough to have 24/7 electricity in their lives. Our FP Island Energy microgrids started lighting up the lives of more than 2,135 households in three islands of Haponan, Lahuy and Quinalasag in Camarines Sur in December 2021, a few days before Christmas. This access to 24/7 electricity has allowed residents to engage in small businesses such as ice-making for their daily fish catch, printing services, mobile charging, internet access and online banking services. Teachers now use computers and printers in delivering lessons and school materials, and we’ve even donated Knowledge Channel’s portable media library to some schools so students get to participate in more on-demand, interactive learning.
Beyond creating a future-ready energy system, our being among the top five countries on the world’s climate vulnerability list necessitates that we prepare Philippine cities, communities, and infrastructure for resilience in a climate-changed world. The impacts of the climate crisis as well as climate action that will be demanded of everyone are among the forces in history that are in no way linear. These are forces that will transpire “gradually and then suddenly”. If we’re not prepared and conveniently ignore it, we’ll be overwhelmed and not recognize the world around us in the coming thirty years. The science tells us we no longer have a choice. We need to act in a systematic and collaborative way if we want to succeed and make serious headway in tackling other issues like hunger, poverty, and the other pressing Sustainable Development Goals of our time. Trying to solve those will be futile if we don’t build for the resilience we need and if we don’t ultimately solve the climate crisis.
We also need to be cognizant of the changing demands of consumers. The UNDP-Oxford University “Peoples’ Climate Vote 2024”, which is the biggest global standalone survey on climate change across 77 countries representing 87 percent of the global population, is undeniable evidence that people everywhere support bold climate action:
And more than half of the global population responded that they think of climate change more regularly (daily or weekly):
All these beliefs are embedding themselves into consumer buying habits, the companies that people are now choosing to work for, global supply chains, the availability of financing and insurance for assets and projects, and even social acceptability, to name a few.
The combined effects of all these forces are being seen in how companies and brands are reorienting around decarbonization goals. The Science Based Targets Initiative (SBTi) reported that todate, some 9,015 companies are already taking ambitious climate action, of which 6,158 have science-based targets, and 3,482 have net-zero commitments.
We see similar shifts among financial institutions, investors, insurance companies, sovereign wealth funds and large pension funds. There is increasing prioritization of climate-related risks and opportunities as part of their financial planning and climate strategies, and the application of internal carbon pricing in scenario analysis as they make investment decisions. Many governments are also strengthening their climate policies and targets while more countries are introducing carbon pricing instruments like emissions trading system, carbon taxes, and carbon trading.
At the COP 28 last December 2023, negotiators from all over the world worked overtime to deliver a new plan to address the mounting crisis posed by human-induced climate change. Key was the agreement to “transition away from fossil fuels in energy systems” as well as to support vulnerable nations most impacted by climate change through pledges to a loss and damage fund. There was also progress on the $100.0 Billion pledged by developed nations to finance climate mitigating and adaptation initiatives in developing countries. The Global Goal on Adaptation was also included to encourage “accelerating the use of ecosystem-based adaptation and nature-based solutions.”
For the Philippines, we see our government’s efforts for a more systematic and comprehensive approach to climate action through the Department of Environment and Natural Resources (DENR) and the Climate Change Commission (CCC). Following the submission of our country’s Nationally Determined Contribution (NDC) in April 2021, the National Greenhouse Gas (GHG) Inventories for 2015 and 2020 were completed, and with stakeholder support, the NDC Implementation Plan and the National Climate Change Action Plan were developed with focus on food security, water sufficiency, ecosystem and environmental stability and human security.
Complementing the government blueprint are planned regulations to align the private sector to this course, given that businesses contribute largely to the national GHG footprint. The Securities and Exchange Commission (SEC) is set to mandate sustainability reporting for public listed companies based on the prescriptions of the International Financial Reporting Standards (IFRS) S1 and S2 while the Bangko Sentral ng Pilipinas (BSP) circulars 1128 and 2022-042 require financial institutions to integrate environmental and social risk managements systems in the assessment of credit risks. In Congress, there are proposed legislations such as the Climate Accountability Bill that calls for corporate litigation for greenwashing, climate denialism and missed global carbon targets, while the Low Carbon Economy Bill mandates a decarbonization plan from the carbon emitters from the major sectors and corresponding investments to meet carbon reduction targets.
It’s evident that decarbonizing and scaling up a green electricity grid over the next twenty-five years is the greatest energy transition in the history of mankind. It’s not just changing the electricity system but building a new global energy system with components we have never built before and at a massive scale. This will need nothing short of collaborative action among various players and well-coordinated and timely action on the part of regulators who must ensure energy security and be well-versed on the elements that make for a successful and just energy transition.
We recognize though that it takes more than energy security and the energy transition to stabilize the distressing state of the climate. While addressing the climate crisis feels such a daunting task, we remain optimistic and encourage as we see a myriad of sectors of society coming together and taking collective action. Our Mission “to forge collaborative pathways to a decarbonized and regenerative future” continues to guide our path and we reaffirm our commitment to work together with all stakeholders, including the Net Zero Carbon Alliance to rally more businesses and organizations across all sectors to achieve our Net Zero ambition.