EIGHTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES
First Regular Session
SENATE
S.B. NO. 992
ol t!)c fer fi'torp
*19 
AUG 28 P6 ’•46
1 nr.-'
Introduced by Senator Maria Lourdes Nancy S. Binay
AN ACT
PROMOTING A LOW CARBON ECONOMY AND ESTABLISHING AN 
EMISSIONS CAP-AND-TRADE SYSTEM IN THE INDUSTRY SECTOR TO 
REDUCE 
GREENHOUSE 
GAS 
EMISSIONS 
AND 
PROTECTING 
THE 
CLIMATE
EXPLANATORY NOTE
Article II, Section 16 of the 1987 Philippine Constitution provides:
"The State shall protect and advance the right of the people to a 
balanced and healthful ecology in accord with the rhythm and 
harmony of nature."
Climate change is happening now and the impacts encompasses beyond 
increasing temperature but also extreme weather events, and disturbing 
ecosystems and communities all over the world. Everything that we value and 
depend on from water, energy, transportation, wildlife, agriculture, and human 
health are currently experiencing the negative effects of our changing climate. All 
of these changes are happening and emerging as we continue to add heat­
trapping greenhouse gases to the atmosphere.
Therefore, this proposed bill seeks to encourage the use of new climate change- 
related technologies under a cap and trade system that will promote a low 
carbon economy and quicken the reduction of greenhouse gas emissions, and 
provide assistance to small farmers in their times of need by establishing a


mandatory crop insurance program in order to ensure agricultural productivity 
and food security in our country.
In view of the foregoing, the passage of this measure is earnestly sought.
MARIA LOURDES NAMcY S. BINAY 
Senator


EIGHTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES
First Regular Session
SENATE
S.B. NO. 992
<0(lur o( ll)c fei'crttnip
*19 AUG 28 P6 ;46
RLCli* 1 1 :0
Introduced by Senator Maria Lourdes Nancy S. Binay
AN ACT
PROMOTING A LOW CARBON ECONOMY AND ESTABLISHING AN 
EMISSIONS CAP-AND-TRADE SYSTEM IN THE INDUSTRY SECTOR TO 
REDUCE 
GREENHOUSE 
GAS 
EMISSIONS 
AND 
PROTECTING 
THE 
CLIMATE
Be it enacted by the Senate and House o f Representatives o f the Phiiippines in 
Congress assembied:
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Section 1. Short Tide. -  This Act shall be known as the "Low Carbon
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Economy Act."
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Sec. 2. Deciaration o f Poiicy. -  For purposes of this Act, the following shall
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have the corresponding definitions:
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(a) "Carbon Dioxide Equivalent" shall refer to the quantity of
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greenhouse gas that makes the same contribution to global
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warming as one (1) metric ton of carbon dioxide, as
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determined by the Department of Environment and Natural
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Resources (DENR) Secretary, taking into account the global
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warming potentials published by the Intergovernmental
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Panel on Climate Change;
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(b) "Greenhouse Gas" shall refer to the following gases: carbon
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dioxide, 
methane, 
nitrous 
oxide, 
hydroflourocarbons,
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perflourocarbons, 
sulfur 
hexafluoride, 
or 
any 
other


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anthropogenically-emitted gas that is determined by the 
DENR Secretary to contribute to global warming; and 
(c) "Covered Sector" shall refer to the industry and commercial 
sectors.
Sec. 4. Emission Reduction Measures/Targets. -  Emission reduction 
measures shall be adopted by the DENR Secretary to achieve maximum 
technologically feasible and cost-effective reductions in 
greenhouse gas 
emissions.
Annual emission reduction targets shall be set for each calendar year by 
the President, through the Department of Environment and Natural Resource in 
collaboration with the Department of Trade and Industry, upon consultation with 
other agencies having jurisdiction over sources of greenhouse gases.
Sec. 5. Cap on Greenhouse Gas Emissions, -  To achieve the emission 
targets set pursuant to this Act, a cap shall be imposed on the greenhouse gas 
emissions of the covered sector with the -
(a) Highest greenhouse gas emissions; and
(b) Most cost-effective opportunities to reduce emissions.
Sec. 6. Allowances. -  The DENR Secretary shall, each year, issue a 
quantity of greenhouse gas emissions allowances equivalent to the emissions 
allowed under the cap imposed for such year. Each such allowance shall 
authorize the emission of one (1) metric ton of carbon dioxide, or in the case of 
a global warming pollutant other than carbon dioxide, a carbon dioxide 
equivalent. Such an allowance does not constitute a property right.
Sec. 7. Distribution o f Allowances. -  The allowance shall be distributed by 
the DENR Secretary to the covered sector by allocation.


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Sec. 8. Trading System. -  There shall be established a trading system 
under which allowances issued under this Act may be sold, exchanged, 
purchased or traded by any person or entity.
Sec. 9. Monitoring. -  The DENR Secretary shall ensure that greenhouse 
gas emissions and the use of allowances issued under this Act are accurately 
tracked, reported and verified, to ensure that the cap-and trade system 
established under this Act is fully implemented.
The initial database on greenhouse gas emissions by covered sectors shall 
be established within six months from the effectivity of this Act.
Sec. 10. Enforcement -  In case of excess greenhouse gas emissions by 
an entity during any calendar year, the entity shall:
(a) Submit allowances for such emissions during the following 
calendar year; and
(b) Pay a civil penalty.
Sec. 11. Penalties. -  For each quantity of excess greenhouse gas 
emissions constituting carbon dioxide or one carbon dioxide equivalent, the 
amount of civil penalty shall be twice the market price for an allowance at the 
end of the calendar year in which the excess emissions occurred. The DENR 
Secretary shall establish the method of determining such market price.
Sec. 12. Climate Reinvestment Fund. -  There is established a fund known 
as the Climate Reinvestment Fund, hereafter referred to as the Fund. The fund 
shall consist of the amount of civil penalties assessed under Section 11 of this 
Act. It shall be administered by the DENR to be used exclusively for activities 
addressing global warming.


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Sec. 
13. 
Appropriations. -  The amount necessat7 for the initial 
implementation of this Act shall be taken from existing allocations of the DENR. 
Thereafter such sums as shall be necessary to carry out the provisions of this Act 
shall be included in the annual General Appropriations Act.
Sec. 14. Implementing Rules and Regulations. -  The Department of 
Environment and Natural Resources and the Department of Trade and Industry, 
in coordination with other relevant and appropriate government agencies, are 
hereby empowered to issue the implementing rules and regulations necessary for 
the implementation of this Act within sixty (60) days after its approval. Failure to 
issue rules and regulations shall not in any manner affect the executor nature of 
the provisions of this Act.
Sec. 15. Separability Clause. -  If for any reason any section or provision of 
this Act is declared by the Court as unconstitutional or invalid, the other sections 
or provisions thereof shall not be affected thereby.
Sec. 16. Repealing Clause. -  All laws, ordinances, rules and regulations 
and other issuances or parts thereof, which are inconsistent with this Act, are 
hereby repealed or modified accordingly.
Sec. 17. Effectivlty Clause. -  This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette or in at least two (2) newspapers of 
general circulation.
Approved,