Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ________ 
Introduced by HON. EDGAR M. CHATTO 
First District, Bohol 
EXPLANATORY NOTE 
According to the Intergovernmental Panel on Climate Change (IPCC), human 
activities are estimated to have caused approximately 1.0°C of global warming above pre-
industrial levels, with a likely range of 0.8°C to 1.2°C. Global warming will likely reach 
1.5°C between 2030 and 2052, if it continues to increase at the current rate. Climate-
related risks to health, livelihoods, food security, water supply, human security, and 
economic growth are projected to increase with global warming of 1.5°C and increase 
further with 2°C. Amidst this looming scenario, our economy is growing at a considerable 
pace. The challenge before us then is to accelerate economic growth without 
compromising      our environment.  
As part of the Philippines’ commitment to the Paris Agreement on Climate Change, 
the country submitted its Nationally Determined Contribution (NDC) on 15 April 2021, 
which sets a 75-percent greenhouse gas (GHG) emission reduction and avoidance       from 
2020 to 2030. 
The Philippines’ NDC supports the country’s national development objectives and 
priorities including transformation of its socio-economic sectors towards a climate and 
disaster-resilient and low carbon economy.  This bill is essentially built on the principles of 
the NDC, and the same time encourages low carbon just transition. 
The National Climate Change Action Plan (NCCAP) identified the establishment 
of a national system for the archiving, reporting, monitoring, and evaluation of 
greenhouse gas (GHG) emissions as      support for better planning for climate change 
adaptation and mitigation actions. Other climate change programs such as the National 
Climate Risk Framework (NCRMF) and Climate Change Expenditure Tagging (CCET) 
were also      established. 
Upon the recommendation of the NDC Steering Committee and in consultation 
with the industrial sector, the Department of Environment and Natural Resources (DENR) 
shall set an annual cap on the GHG      emissions of entities. To cushion the impact of a cap   
, this bill allows      trading      of credits. Entities with  excess GHG      emissions may buy 
allowances from the market, while those      with less GHG      emissions may sell their 
allowances to the market. This trading mechanism allows for a pseudo-financial market 
with the additional benefit of maintaining the target emissions in the economy.  
The NDC espouses market- and non-market-based approaches under the United 
Nations Framework Convention on Climate Change (UNFCCC) to achieve low carbon 
outcomes.  The emissions trading system is included as a market mechanism. 
March 20, 2023
4:05 pm
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Undoubtedly, the above system would accelerate the reduction of GHG 
emissions, encourage the use of low carbon technologies, and ensure benefits to 
consumers from trading in allowances.  
In view of the above, the passage of this bill is earnestly sought. 
EDGAR M. CHATTO 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ________ 
Introduced by HON. EDGAR M. CHATTO 
First District, Bohol 
AN ACT 
PROMOTING A LOW CARBON ECONOMY, ESTABLISHING FOR THIS 
PURPOSE AND EMISSION TRADING SYSTEM AND IMPLEMENTATION 
MECHANISM TO ACHIEVE NATIONAL CLIMATE TARGETS 
Be it enacted in the Senate and House of Representatives of the Philippines in Congress 
assembled: 
ARTICLE 1 
General Provisions 
SECTION 1. Short Title. - This Act shall be known as the “Low Carbon Economy 
Act of 2022.” 
SECTION 2. Declaration of Policy. - It is the policy of the State to promote 
sustainable development and adherence to the internationally agreed frameworks for 
mitigation of climate change and decreased vulnerability to its impacts. Towards this end, 
there is a need to maximize the contribution of the industrial and commercial sectors in 
reducing greenhouse gas emissions (GHG) and minimize the adverse effects of climate 
change through the establishment of a policy environment for technological development 
and transfer, capacity building, sustainable finance supporting just transition towards low 
carbon economy, including the configuration of a nationally-appropriate market-driven 
system of tradable GHG      allowances, among other options, to optimize the country’s 
carbon goal-based transformation. The participation of LGUs, academe, non-government 
stakeholders, especially champions in critical industries for just transition, banking, and 
financial institutions, civil society, and the development partners shall be ensured.  
State-of-the-art and emerging low carbon technologies suitable for the Philippine 
conditions, especially those that will increase the livelihoods and productivity of the 
sectors concerned, and that will usher in just transition in all GHG-emitting socio-
economic sectors with an emphasis on the energy and transport sector, including those 
that will impact to building resilience and investments at the most vulnerable 
communities, shall be supported under the Means of Implementation under the Paris 
Agreement. Bilateral and multilateral approaches shall be optimized in ensuring 
accelerated flow of support to the country under this Act.  
Sustainable mobilization of financial resources, technological innovation, and 
capacitation of both human resources and institutions, both government and non-
government, shall be a primary support mechanism under this Act.  
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SECTION 3. Definition of Terms. - For the purposes of this Act, the following terms 
are defined:           
 
a. “The Paris Agreement” shall refer to a legally binding international treaty on 
climate change adopted by 196 Parties at the 21st Session of the Conference of the 
Parties (COP 21) in Paris, on 12 December 2015 and entered into force on 4 
November 2016, with a goal to limit global warming to well below 2, preferably to 
1.5 degrees Celsius, compared to pre-industrial levels;1 
b. “Low Emission Development Strategy (LEDS)” shall refer to a national, high-level, 
comprehensive, long-term strategy, developed by domestic stakeholders, which 
aims at decoupling economic growth and social development from GHG      
growth;2 
c. “Low Carbon Technology” shall refer to the means of equipment, methods, 
knowledge and other modalities for low-carbon or carbon-free;3 
d. “Sustainable Development” shall refer to development that meets the needs of the 
present without compromising the ability of future generations to meet their own 
needs;4 
e. “Just Transition” shall refer to maximizing the social and economic opportunities 
of climate action, while minimizing and carefully managing any social disruption, 
political and social risks – through effective social dialogue  among all groups 
impacted, and respect for fundamental labor principles and rights;5 
f. “Common but Differentiated Responsibilities and Respective Capabilities 
(CBDRRC)” shall refer to the principle recognizing that each country vary in terms 
of contributions to global environmental degradation, and acknowledging that 
developed countries should bear primary responsibilities in the international 
pursuit of sustainable development, including the pressures put  by their societies 
to the environment, their command on technologies and financial resources, and 
their contribution to the largest proportion of historical and current GHG      
emissions;6,7 
g. “Climate Justice” shall refer to the allocation of burdens and benefits among 
individuals, nations and generations;8 
h. “Net Zero Economy” shall refer to the means of cutting greenhouse gas emissions 
to as close to zero as possible, with any remaining emissions re-absorbed from the 
atmosphere, by oceans and forests for instance;9 
i. “Carbon Dioxide Equivalent” shall refer to the quantity of carbon dioxide that 
makes the same contribution to global warming as a given amount of greenhouse 
gas, taking into account the global warming potentials published by the 
Intergovernmental Panel on Climate Change; 
 
1https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-
agreement#:~:text=The%20Paris%20Agreement%20is%20a,compared%20to%20pre%2Dindustrial%20lev
els. 
2 https://www.transparency-partnership.net/sites/default/files/giz2013-en-climate-leds.pdf 
3 Lv, Jinfang & Qin, Shusheng. (2016). On Low-Carbon Technology. Low Carbon Economy.  
4 https://www.un.org/sustainabledevelopment/development-agenda/ 
5 https://www.ilo.org/global/topics/green-jobs/WCMS_824102/lang--en/index.htm 
6 Principle 7 of the Rio Declaration on Environment and Development. (1992). Report of the United Nations 
Conference on Environment and Development. 
https://www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A
_CONF.151_26_Vol.I_Declaration.pdf. Page 2. 
7 Yuli Chen (January 2021), Reconciling common but differentiated responsibilities principle and no more 
favourable treatment principle in regulating greenhouse gas emissions from international shipping. 
8 https://www.ipcc.ch/report/ar6/wg2/downloads/IPCC_AR6_WGII_SummaryForPolicymakers.pdf 
9https://www.google.com/url?q=https://www.un.org/en/climatechange/net-zero-
coalition&sa=D&source=docs&ust=1658204786035965&usg=AOvVaw383PaeSmA9t-KOEhh57qYj. 


 
j. “Greenhouse Gas (GHG)” shall refer to the following gases covered under the 
2006 Intergovernmental Panel on Climate Change (IPCC) guidelines: carbon 
dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur 
hexafluoride, or any other anthropogenically-emitted gas that is estimated by the 
Philippine Greenhouse Gas Inventory Management and Reporting System 
(PGHGIMRS) agencies to contribute to global warming;  
k. “Covered Sector” shall refer to the industry and commercial sectors and/or, to 
sectors as may be determined appropriate by the oversight body; 
l. “Levels of GHG Inventory” shall refer to different levels as prescribe by the 
DENR-EMB such as global, national, community, sectoral, entity, product, facility 
and projects; and 
m. “Sector/s” shall refer to the sectors prescribed under the      IPCC      guidelines 
used as basis for the Philippine Nationally Determined Contribution (NDC), 
including: agriculture, forestry and other land use, waste, industrial processes and 
product use (IPPU), energy, and transport.   
 
ARTICLE 2      
Philippine Greenhouse Gas Inventory Management and Reporting System 
(PGHGIMRS) 
 
SECTION 4. Institutionalization of the PGHGIMRS. - The PGHGIMRS under 
Executive Order (EO) No. 174, s. 2014 is hereby institutionalized, to facilitate the GHG 
inventory management and reporting system in relevant government agencies to enable 
the country to transition towards a climate-resilient pathway for sustainable development. 
 
SECTION 5. Implementing Agency. - The Climate Change Commission (CCC) 
shall be the overall lead in the implementation of the PGHGIMRS. It shall be responsible 
to: 
a. Provide direction and guidance in the accounting and reporting of GHG 
emissions from identified key source sectors in order to develop and maintain 
centralized, comprehensive, and integrated data on GHGs in all levels of 
inventory particularly community-level and entity-level; 
b. Develop a system for the archiving, reporting, monitoring, and evaluating GHG 
inventories in all key levels; and 
c. Provide and facilitate continuous capacity building initiatives in the conduct of 
GHG inventories to ensure the application of updated methodologies. 
 
GHG data analytics generated under this measure shall be a reference for the 
successive enhancement of the NDCs, especially in identifying policies and measures that 
could be pursued economy-wide, respecting sectoral challenges and opportunities for 
transformation, including human resources and cost or capital requirements appropriate 
for government and non-government and industry stakeholders.   
 
SECTION 6. Sectoral Agencies. - The following shall be the lead sectoral agencies 
for the GHG inventories: 
 
a. Department of Agriculture (DA) and the Philippine Statistics Authority (PSA) 
for the agriculture Sector; 
b. Department of Energy (DOE) for the wnergy sector; 
c. Department of Environment and Natural Resources (DENR) for the waste, 
industrial processes, and the forestry and other land-use sectors; and 
d. Department of Transportation (DOTr) for the transport sector. 
 


 
The Department of Science and Technology (DOST), Department of Health (DOH), 
Department of Public Works and Highways (DPWH), and Department of Tourism (DOT) 
shall also be considered in ensuring close collaboration of the sectors concerned in 
informing transformative options under the NDC.  
 
The CCC shall invite the concerned local government units (LGUs), academe, and 
private and public institutions to participate, complement, and assist in the 
implementation of the PGHGIMRS and this Act. 
 
The PSA may assist other lead agencies in the conduct of the sectoral GHG 
inventories. 
 
The Department of the Interior and Local Government (DILG), as an oversight 
agency for local governments, shall ensure the compliance of local governments through: 
 
i. Issuance of guidelines for accounting community-scale GHG emissions, 
managing community-scale GHG inventories, and mainstreaming the 
results and findings thereof in the Comprehensive Development Plan 
(CDP) and subsequent programming processes, in coordination with the 
CCC; 
ii. Provision of continuous capacity building to local governments related to 
the foregoing; 
iii. Incorporation in the Seal of Good Local Government mechanism of the 
compliance of local governments; and 
iv. Monitoring of the compliance of local governments 
 
The DENR, Department of Trade and Industry (DTI), and Securities and Exchange 
Commission (SEC) shall serve as oversight agencies in ensuring the compliance of entities 
in the preparation and management of entity-level greenhouse gas inventories, the 
reporting of mitigation measures addressing the results and findings of the foregoing, and 
monitoring and reporting thereof through the issuance of relevant policies and guidelines, 
and continuous capacity building. 
 
SECTION 7. Responsibilities of the Lead Agencies for National GHG Inventories. 
- The lead agencies shall be responsible for the following: 
 
a. Conduct, document, archive, and monitor sector-specific GHG inventories; 
b. Report sector-specific GHG inventories/emissions to the CCC based on the 
agreed reporting scheme; and 
c. 
Perform such other functions as may be necessary for the implementation of 
this Act. 
 
SECTION 8. Reports. - The CCC shall submit to the President and to both Houses 
of Congress an annual report on the status of the implementation of the PGHGIMRS. The 
PGHGIMRS shall prepare a report or a technical annex to the Biennial Transparency 
Report on the National GHG Inventory of certain inventory year/s in accordance with the 
timeline identified during the inventory planning stage under the Section 2 of Rule II of 
the Adopted Implementing Rules and Regulations of the EO 174 s. 2014.   
 
SECTION 9. National GHG Inventory. - The PGHGIMRS shall endeavor to use 
the 2019 Refinement of the 2006 IPCC Guidelines for National Greenhouse Gas 
Inventories, with consideration to the national circumstances of the country, including 


 
applicable flexibilities accorded to Non-Annex I Country Parties of the Paris Agreement, 
which includes the Philippines. 
 
ARTICLE 3      
Nationally Determined Contribution (NDC)  
 
SECTION 10. Components of the Philippine NDC. - The NDC serves as the long-
term, multi-decadal roadmap on GHG mitigation and climate-resilience of the 
Philippines, with a goal to achieve a balance between anthropogenic emissions by sources 
and removals by sinks of greenhouse gasses in the second half of this century, on the basis 
of equity, and in the context of sustainable development and efforts to eradicate poverty, 
in observance of the fundamental consideration of climate change adaptation as the core 
strategy of the Philippines on climate action. 
 
Pursuant to the Philippines’ commitment under the Paris Agreement, the 
Government shall prepare, communicate and maintain successive NDCs. It shall 
communicate an NDC to the UNFCCC every five (5) years. 
 
The NDC shall include, but not be limited to, the following components: 
a. GHG emissions avoidance measures and mitigation potential; 
b. Mitigation co-benefits in adaptation, sustainable development, and poverty 
reduction; 
c. 
Means of implementation such as through finance, capacity building, 
technology transfer and development; 
d. Gaps and needs; and 
e. 
System for monitoring, evaluation, and reporting to enable participation of 
relevant stakeholders to address challenges and meet the objectives of 
inclusive just transition. 
 
It must endeavor to indicate the Philippines’ strategic directions and measures to      
build resilience and balance the investments and opportunities for just transition, by 
leveraging on the capacity of local governance units to transform the socio-economic 
conditions of the people, up to the smallest units of governance, through the Means of the 
Implementation espoused under the Paris Agreement.       
      
SECTION 11. The NDC Steering Committee. - The  CCC shall be the overall lead in 
the development, implementation, and monitoring and evaluation of the NDC, with the 
following agencies as members, to comprise the NDC Steering Committee:  
 
a. National Economic and Development Authority (NEDA) - lead agency for the 
economy-wide GHG emissions modelling vis-a-vis gross domestic product 
(GDP) projections, integration in the Philippine Development Plan (PDP) that is 
spatially articulated through the National Spatial Strategy, and sectorally 
articulated through PDP chapters, and ensuring vertical coherence through 
Regional Development Plans and corresponding regional development 
strategies; 
b. Department of Agriculture (DA) - lead agency for the agriculture sector; 
c. 
Department of Energy (DOE) - lead agency for the energy sector; 
d. Department of Environment and Natural Resources (DENR) - lead agency for 
the waste, industrial processes and product use (IPPU) and forestry and other 
land use (FOLU), in coordination with Department of Human Settlements and 
Urban Development (DHSUD); 
e. 
Department of Transportation (DOTr) - lead agency for the transport sector; 


 
f. 
Department of Foreign Affairs (DFA) - lead agency to facilitate, along with the 
CCC, coordinating with the development partners viable, country-driven, needs-
based technical assistance, as may be recommended by agencies concerned, 
consistent with the PDP and other investment and resilience-related and the 
multi-decadal climate action planning and programming framework; 
g. Department of Finance (DOF), to coordinate on matters concerning fiscal 
policies related to climate change and monitor and report measures on climate 
finance, including recommendations on matters related to receiving donations 
and/or grants by the CCC under RA 10174; 
h. Department of Budget and Management (DBM), to ensure annual 
appropriations for implementation of unconditional PAMs; 
i. 
Department of Labor and Employment (DOLE), to ensure that the provisions of 
this Act are aligned with the Green Jobs Act; 
j. 
Department of Science and Technology (DOST), to facilitate innovation options 
through technology development and transfer appropriate to the conditions of 
the subnational units and relevant stakeholders, linking said initiative towards 
enhancing human capital development in coordination with industries, higher 
education institutions, LGUs, among others; 
k. Department of the Interior and Local Government (DILG), to facilitate 
coordination with the various subnational governance units to ensure they 
contribute to the continuing enhancement and implementation of the NDCs, 
especially on informing transformative options for investment and resilience 
building purposes, consistent with local development opportunities and 
priorities, as may be incorporated in their respective CDPs, Annual Investment 
Plans (AIPs), and Local Climate Change Action Plan (LCCAPs); 
l. 
Department of Health (DOH), to lead in the determination of low-carbon 
investments, efficient transformation of the health sector consistent with energy 
just transition and sustainable consumption and production, and health co-
benefits measurement of climate mitigation in other sectors;  
m. Department of Public Works and Highways (DPWH), to integrate the policies 
and measures under the Build-Build-Build Program, and ensure the 
mainstreaming of policies and regulations on infrastructure component of the 
NDC for implementation industry-wide and by the LGUs, in coordination with 
the DILG; 
n. Department of Tourism (DOT), to consider nature-based solutions in 
developing, promoting, and monitoring  tourism enterprises consistent with 
whole of ecosystem approaches, creation of green jobs, and sustainable 
consumption and production that benefit the various LGUs, for inclusive and 
responsible, climate-aligned tourism sector;  
o. Department of Human Settlements and Urban Development (DHSUD), to 
effectively and efficiently link local investment and transformation through the 
NDC alignment with the various local plans under its jurisdiction, to ensure 
integrated low carbon development and sustainable development options under 
the New Urban Agenda, especially the vulnerable communities;  
p. The Department of Trade and Industry (DTI), together with the Board of 
Investments (BOI), to ensure investment opportunities of the local industries, 
especially the micro, small, and medium enterprises (MSMEs), are considered 
in the just transition mechanism under the NDC; and 
q. The Education Sector, namely the Department of Education (DepEd) and      
Commission on Higher Education (CHED)     , to ensure the proper information, 
education, and communication (IEC), contribute to research development, 
extension, and innovation and assist in the implementation of this Act.  
 


 
The Members of the CCC Advisory Board and the National Panel of Technical 
Experts (NPTE) under Republic Act No. 9729, as amended, and other government 
agencies and stakeholders      in the areas of coastal resources, health, agriculture, water, 
forestry, biodiversity, environment, ecosystem, energy, education, tourism, trade, 
infrastructure, and settlement, among others, shall participate in the development and 
implementation of the NDC. 
 
To ensure alignment among development plans and climate change strategies, the 
NEDA and CCC shall be responsible for harmonizing and ensuring the complementation 
of NDC with national and local development planning instruments. The NEDA shall 
integrate the NDC into the Philippine Development Plan. The CCC and DILG shall assist      
LGUs in the integration of the NDC in the LCCAPs, Local Development Plans (LDPs), and 
Comprehensive Land Use Plans (CLUP). 
 
The NDC Steering Committee shall formulate the NDC policies and measures based 
on the best available science and in keeping with robust development and transformative 
aspirations of the country, consistent with national circumstances. 
 
The CCC, along with the national government agencies (NGAs) concerned, shall 
establish a local NDC Steering Committee to jumpstart and sustain local-based 
transformative strategies in alignment with the NDC, subject to the issuance of policy 
guidance following multi-sectoral consultation, especially with the Regional Development 
Councils (RDCs) under the supervision of the NEDA.  
 
Specifically, the RDCs shall be considered points of convergence for low carbon 
development at the regional or subnational levels that inform pathways for 
transformation, including optimization of investment options, as may be aligned with 
physical and socio-economic challenges due to climate change impacts.  
 
Parallel effort shall be the formation of local counterparts for scientific and 
technological advice to said Sub-National Steering Committees to be comprised of the 
members of the NPTE and field units of the DOST, subject to the issuance of policy 
guidance by the CCC and DOST, especially with regard to engaging the Higher Education 
Institutions (HEIs) /State Universities and Colleges (SUCs) through  CHED.  
 
The CCC should formulate and implement robust communication and advocacy 
strategies, in coordination with relevant government and non-government stakeholders, 
across levels of governance, to ensure that the low carbon development directions are 
communicated effectively to inspire convergence at the broadest scope possible, up to the 
smallest unit of governance. 
 
SECTION 12. Allocation of funds. - The aforementioned agencies shall allocate 
from their annual appropriations adequate funds for the implementation of their 
mandates, including training and capacity building, under this Act, subject to support 
under the mechanism of the Means of Implementation of the Paris Agreement. 
 
SECTION 13. Annual Report on the NDC Implementation. - The CCC and NDC 
Steering Committee shall submit to the President and to both Houses of Congress, not 
later than 30 March of every year following the effectivity of this Act, a progress report on 
the implementation of the NDC, and recommend legislation, where applicable and 
necessary. 
 
 


 
ARTICLE 4      
Local Climate Change Action Plan (LCCAP)  Quality Assessment Review 
System 
 
SECTION 14.  LCCAP. - Pursuant to Section 14 of RA 9729, the LGUs are the 
frontline agencies in the formulation, planning, and implementation of LCCAPs in their 
respective areas consistent with the Local Government Code, the National Strategic 
Framework on Climate Change (NSFCC), and the National Climate Change Action Plan 
(NCCAP).  
 
The LCCAP shall describe strategic policy measures of the LGUs to reduce/avoid 
greenhouse gas emission (mitigation actions) and increase the community’s resilience 
(adaptation actions) to the negative impacts of climate change.  
 
Further, the LCCAP shall indicate the transformative opportunities present in 
LGUs towards green or low emission technological capacity building innovations that will 
support long-term low emission industrial development, livelihoods, ecosystems and 
environment, and well-being of the people, especially those most exposed to climate 
hazards. The modification of baseline information consistent with the best available 
science shall be pursued to inform the investment planning and programming aligned 
with the multi-decadal climate considerations, especially the location of human 
settlements and vital infrastructure programs of the government, including those pursued 
through public-private partnerships (PPP) approach. 
 
The LGUs and HEIs concerned shall be supported in the development and review 
of the LCCAPs, as priority impacts under this Act are those attributed to holistic and 
inclusive mobilization of resources and opportunities of the LGUs, with concomitant 
connection to building resilience for sustainable development up to the smallest units of 
governance.   
 
SECTION 15. Establishment of a LCCAP Quality Assessment Review System 
(QAR). - The  CCC together with the DILG shall formulate and institutionalize the LCCAP      
QAR and establish a means of implementation and institutionalization for both agencies. 
 
The LCCAP QAR process would provide an opportunity to provide a feedback 
mechanism to LGUs to improve on their LCCAP ensuring its responsiveness to local 
hazards and risks, and be able to shift towards resilience, and socio-economic 
transformation through low carbon and sustainable pathways. 
 
The CCC together with DILG, shall formulate and disseminate a mechanism or 
instrument of quality assurance, after due consultation with relevant stakeholders. 
Further, the CCC and DILG shall identify relevant NGAs, SUCs and HEIs, and other 
stakeholders, which shall conduct and implement the quality assurance mechanism that 
may be established.  
 
ARTICLE 5      
Climate Change Expenditure Tagging (CCET)  
 
SECTION 16. Institutionalization of the CCET as an Audit Tool to Track Climate 
Change Adaptation and Mitigation Projects and Programs. - The CCET jointly 
administered by the CCC and the DBM pursuant to Joint Memorandum Circular 2015-01 
at the national level, and with the DILG pursuant to Joint Memorandum Circular 2015-01 
at the local level, is hereby institutionalized. All annual expenditure programs of the 


 
government related to low carbon development, including those designed to increase 
climate and disaster resilience, shall be tagged and reported to determine the allocative 
efficiency of domestic funds towards those ends. A mechanism for reporting allocation and 
expenditure shall be issued jointly by the CCC, DBM, the DILG, Office of Civil Defense 
(OCD), and other relevant agencies. The Commission on Audit (COA), subject to audit 
rules and regulations, shall produce timely reports on findings of climate expenditure 
audit. 
 
Such allocation and expenses tagged shall be part of the assessment for the 
country's low carbon needs that are aligned to the NDC. Any funding gaps should be 
addressed using the climate finance mechanisms under the Paris Agreement, as may be 
pursued bilaterally or multilaterally, in coordination with the CCC, DFA, DOF, NEDA, 
DBM and other agencies concerned. 
 
The progress of the CCET, both at the national and local levels, shall be reported to 
the Office of the President, the Senate and the House of Representatives by the CCC in 
accordance with the reportorial requirement under RA 9729, as amended.  
 
The continuing capacity building for CCET shall be pursued through convergent 
approaches of all the stakeholders, especially of the non-government stakeholders, to 
contribute to identifying critical climate programs and projects that need to be funded, 
including monitoring and evaluating institutional and support mechanisms under the 
CCET.  
 
ARTICLE 6      
National Integrated Climate Change Database and Information Exchange 
System (NICCDIES)  
 
SECTION 17. Institutionalization of the NICCDIES as a Primary platform on 
Climate Change Information. - Notwithstanding existing and related mandates of other 
agencies, the CCC shall issue guidelines to accelerate its utilization, including engaging 
agencies, academia, and the private sector o populate the data sets therein, and instituting 
a feedback mechanism to enhance content, access, and continuous improvement to 
support long-term, national driven, people and planet-centric climate governance in the 
country. 
 
ARTICLE 7 
Cap and Trade System      
 
SECTION 
18. 
Emission 
Reduction 
Measures/Targets. 
- 
Emission 
avoidance/reduction measures shall be geared towards equitable implementation of just 
transition using nationally-appropriate carbon market and non-market approaches. This 
shall be adopted upon the recommendation of the NDC Steering Committee, after careful 
study and consultation, to achieve maximum technologically-feasible and cost-effective 
avoidance/reduction strategies, programs, and projects to meet the carbon goal 
considered in this Act, with direct impact to low carbon industrial productivity and 
sustainable development.  
 
Annual emission avoidance/reduction targets, including the sector/s and levels to 
be covered10, shall be set for each calendar year by the President, through the 
recommendation of the NDC Steering Committee, with supporting investment and social 
 
10  (i.e. power only, or power and selected industries; facility- or company-specific) 


 
safeguards roadmap, and upon consultation through multi-stakeholder, whole of 
government, and whole of society approaches.  
 
SECTION 19. Cap on Greenhouse Gas Emissions. - To achieve the emission 
targets set pursuant to this Act, a cap shall be imposed on the GHG of the covered sector 
with the -  
 
a. Highest GHG; and 
b. Most cost-effective opportunities to avoid/reduce emissions, to include 
considerations for externalities and social protection; 
 
SECTION 20. Allowances. - The DENR, upon the recommendation of the NDC 
Steering Committee and further upon appropriate consultation, shall issue annually a 
quantity of GHG      emissions allowances equivalent to the emissions allowed under the 
cap imposed for such year. Each allowance shall authorize the emission of one metric of 
carbon dioxide, or in the case of global warming pollutants other than carbon dioxide, a 
carbon dioxide equivalent.  
 
SECTION 21. Distribution of Allowances. - The allowance shall be distributed by 
the DENR to the covered sector by allocation. 
 
SECTION 22. Carbon Trading System. - There shall be an established and 
interoperable central registry, trading and reporting system under the DENR11, which 
allowances issued under this Act may be sold, exchanged, purchased, or traded by any 
person or entity, subject to policy guidelines to be issued upon due consultation. 
 
Notwithstanding the foregoing, non-market approaches consistent with just 
transition strategies needed to accelerate the attainment of low carbon economy, shall be 
pursued, subject to further review and consultation process, along with the mechanisms 
concerning carbon market activities in this Act. 
 
ARTICLE 10      
Transparency and Reporting 
 
SECTION 23. Submission of National Reports to the UNFCCC. - The Philippines, 
as a Non-Annex I Party to the UNFCCC, shall submit national reports mandated under the 
Convention and its Paris Agreement, especially the National Communications and 
Biennial Transparency Reports, in accordance with capacities and provision of timely and 
appropriate means of implementation. These reports shall incorporate those outputs and 
reports mentioned in the previous sections, as appropriate. 
 
SECTION 24. Role of the CCC. - The CCC shall develop systems for transparency 
and reporting, including measurement, reporting, and verification, and enhance existing 
institutional arrangements to ensure continued and timely preparation of national reports, 
in coordination with relevant government agencies, observing whole-of-society and 
participatory processes. 
 
11 Based from the Recommendations for Institutional Arrangements under the Assessment Report of the 
Accelerating Climate Investment in the Philippines (ACIP) Project Pillar 3: Readiness for Carbon Pricing; 
rationale for DENR is because of the following: 
● 
DENR-EMB regulates emissions from power plants and industrial facilities under the Clean Air Act;  
● 
Their expertise (particularly Climate Change Division of DENR-EMB) relating to emissions 
offsetting, having acted as the Designated National Authority (DNA) for the Clean Development 
Mechanism (CDM) and point of contact on activities concerning Japan’s bilateral Joint Crediting 
Mechanism (JCM). 


 
 
SECTION 25. Means of Implementation for Transparency and Reporting. - The 
necessary means of implementation for transparency and reporting, especially provisions 
for hardware, software, and human resource requirements, shall be accessed and provided 
in accordance with resources made available to Parties to the UNFCCC and reasonable 
domestic resources. 
 
ARTICLE 11      
The Role of LGUs, DepEd, HEIs and SUCs in the implementation of this Act 
 
 
SECTION 26. Devolution of Role to LGUs. - Pursuant to Executive Order No. 138 
otherwise known as the Mandanas-Garcia Ruling which fully transfers the delivery of 
basic services to LGUs, LGUs should integrate climate change adaptation and mitigation 
measures in their local plans and programs. 
 
SECTION 27. Role of DepEd, HEIs, and SUCs. - Pursuant to RA 9729, the      
DepEd shall integrate climate change into the primary and secondary education curricula 
and/or subjects, such as but not limited to, science, biology, sibika, history, including 
textbooks, primers, and other educational materials, basic climate change principles and 
concepts.  
 
HEIs and SUCs should integrate climate change as part of the curricula for all 
college courses in order to provide tertiary level students with sufficient grounding on said 
subject. 
 
ARTICLE 12      
The Role of the Private Sector and Non-Government Stakeholders 
 
SECTION 28. Role of the Private Sector and Non-Government Stakeholders. - To 
ensure inclusive and consultative nature of the processes and systems towards low carbon 
economy, just transition, multi-stakeholder, whole of government and whole of  society 
approaches to build consensus on nationally-appropriate just transition arrangements 
shall be considered.  
 
In this regard, representatives of critical industries, groups of innovators, 
academics, civil society, people’s organizations, financial institutions and intermediaries, 
and other related entities shall be enjoined to participate in the deliberations and 
decision-making activities under this Act, subject to appropriate guidelines to be 
formulated by the NDC Steering Committee, through the endorsement of the CCC.    
 
ARTICLE 13      
Polluters-Pays Principle for GHG Emissions 
 
SECTION 29. Enforcement. - The DENR, in coordination with the agencies 
concerned, shall formulate immediately upon approval of this Act a system of enforcement 
and indemnification or appropriate sanctions consistent with the “polluters pay principle”. 
The DENR shall establish the method of determining such market price, in coordination 
with the CCC, DOF, DTI/BOI, and NEDA. 
 
SECTION 30. Monitoring. - The DENR shall ensure that greenhouse gas 
emissions and the use of allowances issued under this Act are accurately tracked, reported, 
and verified, aligned with Article 10 of this Act, to ensure that the cap-and-trade system 
established under this Act is fully implemented. 


 
 
SECTION 31. Penalties. - For each quantity of excess GHG 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 shall establish the method of determining such market 
price.  
 
SECTION 32. Climate Reinvestment Fund. - There is an established fund to be 
known as the Climate Reinvestment Fund, hereafter referred to as the CRF. The CRF      
shall consist of the amount of civil penalties assessed under Section 34 of this Act. It shall 
be administered by the DENR to be used exclusively for activities addressing global 
warming, subject to the recommendation of the NDC Steering Committee to ensure 
alignment with the policies and measures of the NDC. 
 
ARTICLE 14      
Miscellaneous Provisions 
 
SECTION 33. Appropriations. - The amount necessary for the initial 
implementation of this Act shall be taken from existing allocations of the agencies 
concerned. Thereafter, such sums as shall be necessary to carry out the provisions of this 
Act shall be included in the annual General Appropriations Act. 
 
SECTION 34. Implementing Rules and Regulations. - The CCC, in coordination 
with the NDC Steering Committee agencies, shall draft and issue implementing rules and 
regulations necessary, in coordination with other relevant and appropriate government 
agencies within sixty (60) days after its approval.  
 
SECTION 35. 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. 
 
SECTION 36. 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. 
 
SECTION 37. Effectivity. - This Act shall take effect fifteen (15) days after its  
complete publication in the Official Gazette or in two (2) newspapers of general 
circulation. 
 
 
Approved,