Philippine President Ferdinand R. Marcos, Jr. has directed the Department of Environment and Natural Resources (DENR) to draft a national carbon market policy framework intended to mobilize green investments in line with the country's international climate commitments.

Under Executive Order (EO) No. 127, signed on Oct. 13, the DENR was given 30 days to draw up the operational guidelines, subject to approval by a newly created inter-agency body.

Speaking at a news briefing, Palace Press Officer Clarissa A. Castro said the policy framework aims to establish national standards for trading carbon credits under Article 6 of the Paris Agreement as well as in voluntary carbon markets.

"The order aims to support the Philippines' commitments under the Paris Agreement, attract funding and investment for climate programs, and open opportunities for environmental projects," Ms. Castro said. "The executive order establishes a framework for the carbon market and does not impose a new carbon tax," she added.

The EO creates an inter-agency committee on carbon markets, the Climate Change Commission serving as chair and the Department of Finance as vice-chair. The structure pairs the government's climate policy commission with its finance department in reviewing and approving how carbon crediting will operate nationwide.

According to the directive, establishing transparent rules for credit issuance, registry tracking, and benefit-sharing will allow environmental projects — such as reforestation, renewable energy, sustainable agriculture, and waste management — to generate critical climate finance. For project developers and credit buyers alike, those are intended to spell out how credits are created, recorded, and monetized under a single national standard.

Once the framework is drafted, the DENR will submit it to the committee, which will also have 30 days to review and approve the guidelines to ensure full operational transparency across all carbon crediting activities.

The EO will take effect immediately upon its publication in the Official Gazette or in a newspaper of general circulation.

Article 6 of the Paris Agreement, the 2015 global climate accord, provides for voluntary cooperation among countries in pursuing emission-reduction targets, including through internationally transferred carbon credits. Voluntary carbon markets operate alongside these mechanisms, enabling companies and other non-state actors to purchase credits on a voluntary basis.

With the DENR's drafting clock and the committee's review window both now set in motion, the milestones to watch are the publication of the draft guidelines and the committee's subsequent decision — the steps that will determine how the framework functions in practice.

— Erika Mae P. Sinaking

Source: BusinessWorld