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How Are Countries Budgeting for the Environment?
Budgeting for the Environment in the Philippines, by Isagani Serrano, President, Philippine Rural Reconstruction Movement (PRRM), a co-convenor of Social Watch Philippines (SWP) and Alternative Budget Initiative (ABI)

Published in the e-Newsletter of the International Budget Partnership
Nov-Dec 2013 No. 75

Link: http://internationalbudget.org/newsletters/newsletter-75-2/

International Budget Partnership
Typhoon Haiyan hit the Philippines in November 2013, and by 12 December it had left behind 5,982 dead, 1,779 missing, 27,022 wounded (National Disaster Risk Reduction and Management Council), about 4 million displaced, and estimated damages amounting to more than PHP 35.5 billion — making it the deadliest Philippine typhoon on record. This super typhoon revealed the country’s level of vulnerability and adaptive capacity and exposed a serious governance weakness: policies on the environment and climate change are not adequately supported by budgets.

While catastrophic natural events such as this are not necessarily preventable, growing evidence points to global climate change as a substantial factor in the increasing frequency and severity of weather events. Climate change is now profoundly affecting the Philippines — already among the countries worldwide deemed most at risk for climate change impacts. Despite some progress made toward the UN Millennium Development Goals (MDGs), particularly on environmental sustainability, the Philippines continues to face huge environmental challenges. Since the country’s carrying capacity has been breached and is under severe stress, public finance cannot continue as usual. Ensuring that adequate public funds are allocated to efforts to protect the environment and address climate change issues — and that those funds are spent effectively — is essential to ensuring sustainable development. But this isn’t just about the Philippines, many developing countries are facing the double whammy of limited public resources and increasing costs for climate change mitigation and adaptation.

Current Budget Allocations for Climate Change

How is the budget and public finance system in the Philippines addressing environmental and climate concerns? In a regional review, the Asian Development Bank estimated that the Philippines would need to spend approximately 0.2-0.6 percent of its annual Gross Domestic Product (GDP) on climate change adaptation (services and activities to help individuals and communities that bear the brunt of the negative impacts of climate change), and a further 0.6 percent of the annual GDP for mitigation (activities to reduce the carbon emissions that contribute to climate change) within the energy, transport, and industrial sectors.

In the Philippine 2013 Budget, and in the 2014 Budget now being formulated, spending is well below that recommended for climate change adaptation and just over half of the amount for mitigation. This is true even though the government has placed these issues at the top of its agenda, developing such climate-sensitive policies and legislation as the Climate Change Act of 2009 (CCA), the National Climate Change Action Plan for 2011-2028, People’s Survival Fund, and the Disaster Risk Reduction Management Act of 2010, among many others.

In response, the 2013 Alternative Budget proposed by Social Watch Philippines/Alternative Budget Initiative has tried to make the 2013 National Budget CCA-sensitive in that its proposals reflect the MDGs and environmental and climate issues that truly matter to the poor and excluded, as well as to the whole nation. Moving forward, if the Philippines is going to mount an adequate response to the challenges brought by climate change, these two budgets must align more closely.

In addition to the legislation described above, appropriations and expenditures for climate and environment issues, though below required levels, are increasing. There have been a couple of firsts related to the Department of Environment and Natural Resources’ budgets: their combined budgets account for more than one percent of the total budget, and they have adopted bottom-up budgeting and public consultation as part of the budget process. However positive these signs are, though, they fall short of the radical changes that are needed to meet the urgent climate challenge.
Meeting environmental and climate challenges will require a reformed public finance system that adequately funds and responds to the Philippines’ climate sensitive needs. There needs to be appropriate budget allocations — along with transparency, participation, and strong oversight — in order to steer government action and hold it to account in the face of this monumental challenge.

What Does a Climate-Sensitive Budget Look Like?

PRRM recognizes that the poor living in rural areas are the most vulnerable to climate change as flooding and loss of land productivity can devastate the lives of those with few assets and limited capacity to respond. Because of this we are working to promote green budgets that invest public funds in critical areas that can increase the capacity of the poor to adapt to their rapidly changing circumstances and mitigate the effects of climate change. So what should budgets and development plans consider in tackling poverty and climate change?

They must:

  • ensure such basic services as universal education and health care;
  • ensure food security through sustainable agriculture, forestry, and fisheries;
  • provide for green jobs and full employment;
  • support the shift to renewable/sustainable energy systems;
  • ensure clean production and clean consumption;
  • provide for ecological waste management;
  • stabilize population levels;
  • provide for community engagement in efforts to find local solutions to environmental problems;
  • ensure good governance and public participation at all levels; and
  • ensure adequate resources and infrastructure for realizing these priorities.

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