Finance Secretary Carlos G. Dominguez III has underscored the importance of the “blended approach” or sustainable orchestration of grants, investments, and subsidies to make climate finance work for its beneficiaries.
During a ministerial dialogue on climate finance at COP26, Dominguez said that because the funds involved in these three elements come from taxpayers and investors, accountability and transparency should be ensured both on the part of the beneficiary and donor countries.
This is to guarantee the prudent use of the climate finance aid, said Dominguez, who heads the Philippine delegation to the ongoing climate change conference in Glasgow.
As one of the key elements of the blended approach to climate finance, Dominguez said grants should be used to improve the capacity of local communities in climate-vulnerable areas to undertake mitigation and adaptation measures.
He said these grants should come in the form of educational or technical assistance programs to help people conceive and execute localized projects on the ground.
Investments, meanwhile, should focus on programs and projects that will unlock more business opportunities, create new jobs, and lead to energy self-reliance in the long run, Dominguez said.
He said that subsidies, another crucial element of climate finance, will address the financial costs and risks of communities transitioning to a climate-resilient economy.
Communities, for instance, need financial aid during the transition period when they start to gradually shift to renewable energy (RE) sources replacing power plants that use fossil fuels.
“This blended approach should be at the heart of climate finance. Given that such funds come from investors and taxpayers, accountability and transparency must be ensured,” Dominguez said.
“Beneficiary countries need to constantly assure their donors and taxpayers and investors that their money is being used prudently,” he added.
Meanwhile, Dominguez, who is also the Climate Change Commission (CCC) chairman-designate, stressed that the Philippines is firm in its position that those who have emitted and continue to emit the most greenhouse gases must bear the largest financial burden in transition to carbon neutrality.
“The Philippines, however, will not wait for Western nations to get their act together. Climate change is here. It’s happening. We are moving ahead with the implementation of actual projects on the grounds to enable us to meet our commitments,” he said.
He said the “Philippines is determined to move ahead even as other countries hesitate” on carrying out their climate ambition.
Dominguez said among the Philippines' initiatives is the launching of its Sustainable Finance Roadmap to mobilize public and private investments in green projects.
He said the Philippines is also prepared to initiate a landmark project under the Asian Development Bank (ADB)’s Energy Transition Mechanism (ETM) facility to accelerate the country’s transition to RE or clean energy.
The Philippines has also gathered its best scientists through the CCC’s National Panel of Technical Experts (NPTE) to craft and help execute localized programs to fight climate change, Secretary Dominguez said.
As its Nationally Determined Contribution (NDC) to the Paris Agreement, the Philippines has committed to a projected greenhouse gas emission reduction and avoidance of 75 percent from 2020 to 2030 for the agriculture, wastes, industry, transport, and energy sectors.