NINETEENTH CONGRESS OF THE ) 
REPUBOC OF THE PHILIPPINES 
)
First Regular Session 
)
ot tlu‘ S ' ptai'p
23 HAR14 A 9 38
SENATE
s. no.1992
RtCEiViDlJV.
Introduced by Senator Loren B. Legarda
AN ACT
PROMOTING A LOW CARBON ECONOMY, ESTABLISHING FOR THIS 
PURPOSE AND EMISSION TRADING SYSTEM AND IMPLEMENTATION 
MECHANISM TO ACHIEVE NATIONAL CLIMATE TARGETS
EXPLANATORY NOTE
The climate crisis is increasingly proving to be complex and daunting as we 
experience ourselves the wrath of global warming. It is not an understatement that 
increasing amounts of carbon dioxide and other greenhouse gases are heating up the 
earth's cHmate and that inaction could be catastrophic.
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 seU 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 imder the 
United Nations Framework Convention on Climate Change (UNFCCC) to achieve 
low carbon outcomes. The emissions trading system is included as a market 
mechanism.
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 foregoing, the passage of this measure is earnestly sought.
LEGARDA


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
' I gSHUiatr
;"r/l©fficp of tijc Sr’-?n et.H'y
23 mar 14 A 9 :39
SENATE
s. No. 1992
Rl-CEiVtD BV.
Introduced by Senator Loren B. Legarda
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 by the Senate and House of Representatives of the Philippines in Congress 
assembled:
1 
Section 1. Short Title. - This Act shall be known as the "Low Carbon Economy
2 
Act of 2023."
3 
Sec. 2. Declaration of Policy. - It is the policy of the State to promote sustainable
4 
development and adherence to the internationally agreed frameworks for mitigation
5 
of climate change and decreased vulnerability to its impacts. Towards this end, there
6 
is a need to maximize the contribution of the industrial and commercial sectors in
7 
reducing greenhouse gas emissions (GHG) and minimize the adverse effects of
8 
climate change through the establishment of a policy environment for technological
9 
development and transfer, capacity building, sustainable finance supporting just
10 
transition towards low carbon economy, including the configuration of a nationally-
11 
appropriate market-driven system of tradable GHG allowances, among other options,
12 
to optimize the country's carbon goal-based transformation. The participation of
13 
LGUs, academe, non-govemment stakeholders, especially champions m critical
14 
industries for just transition, banking, and financial institutions, civil society, and the
15 
development partners shall be ensured.
16 
State-of-the-art and emerging low carbon technologies suitable for the
17 
PhiHppine conditions, especially those that will increase the Hvelihoods and


1 
productivity of the sectors concerned, and that will usher in just transition in all GHG-
2 
emitting socio-economic sectors with an emphasis on the energy and transport sector,
3 
including those that will impact to building resilience and investments at the most
4 
vulnerable communities, shall be supported under the Means of Implementation
5 
under the Paris Agreement. Bilateral and multilateral approaches shall be optimized
6 
in ensuring accelerated flow of support to the countiy under this Act
7 
Sustainable mobiHzation of financial resources, technological innovation, and
8 
capacitation of both human resources and institutions, both government and non-
9 
government, shall be a primary support mechanism under this Act.
10 
Sec. 3. Definition of Terms. - For the purposes of this Act, the following terms are
11 
defined:
12 
(a) "The Paris Agreement" shall refer to a legally binding international treaty on
13 
climate change adopted by 196 Parties at the 21st Session of the Conference of the
14 
Parties (COP 21) in Paris, on 12 December 2015 and entered into force on 4
15 
November 2016, with a goal to limit global warming to well below 2, preferably
16 
to 1.5 degrees Celsius, compared to pre-industrial levels;
17 
(b) "Low Emission Development Strategy (LEDS)" shall refer to a national, high-
18 
level, comprehensive, long-term strategy, developed by domestic stakeholders,
19 
which aims at decoupling economic growth and social development from GHG
20 
growth;
21 
(c) "Low Carbon Technology" shall refer to the means of equipment, methods,
22 
knowledge and other modalities for low-carbon or carbon-free;
23 
(d) "Sustainable Development" shall refer to development that meets the needs of
24 
the present without compromising the ability of future generations to meet their
25 
own needs;
26 
(e) "Just Transition" shall refer to maximizing the social and economic opportunities
27 
of climate action, while minimizing and carefully managing any social disruption,
28 
pohtical and social risks - through effective social dialogue among aU groups
29 
impacted, and respect for fundamental labor principles and rights;
30 
(f) "Common but Differentiated Responsibilities and Respective Capabilities
31 
(CBDRRC)" shall refer to the principle recognizing that each country vary in
32 
terms of contributions to global environmental degradation, and acknowledging


1 
that developed countries should bear primary responsibilities in the international
2 
pursuit of sustainable development, including the pressures put by their societies
3 
to the environment, their command on technologies and financial resources, and
4 
their contribution to the largest proportion of historical and ciurent GHG
5 
emissions;
6 
(g) "Climate Justice" shaU refer to the allocation of burdens and benefits among
7 
individuals, nations and generations;
8 
(h) "Net Zero Economy" shall refer to the means of cutting greenhouse gas emissions
9 
to as close to zero as possible, with any remaining emissions re-absorbed from the
10 
atmosphere, by oceans and forests for instance;
11 
(i) "Carbon Dioxide Equivalent" shall refer to the quantity of carbon dioxide that
12 
makes the same contribution to global warming as a given amount of greenhouse
13 
gas, taking into account the global warming potentials published by the
14 
Intergovernmental Panel on Climate Change;
15 
(j) "Greenhouse Gas (GHG)" shall refer to the following gases covered imder the
16 
2006 Intergovernmental Panel on Climate Change (IPCC) guidelines: carbon
17 
dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur
18 
hexafluoride, or any other anthropogenically-emitted gas that is estimated by the
19 
Philippine Greenhouse Gas Inventory Management and Reporting System
20 
(PGHGIMRS) agencies to contribute to global warming;
21 
(k) "Covered Sector" shall refer to the industry and commercial sectors and/or, to
22 
sectors as may be determined appropriate by the oversight body;
23 
(1) "Levels of GHG Inventory" shall refer to different levels as prescribe by the
24 
DENR-EMB such as global, national, community, sectoral, entity, product, facility
25 
and projects; and
26 
(m) "Sector/ s" shaU refer to the sectors prescribed under the IPCC guidelines used
27 
as basis for the Philippine NationaUy Determined Contribution (NDC), including:
28 
agrictdture, forestry and other land use, waste, industrial processes and product
29 
use (IPPU), energy, and transport.
30 
ARTICLE 2
31 
Philippine Greenhouse Gas Inventory Management and Reporting System
32 
(PGHGIMRS)


1 
Sec. 4. Institutionalization of the PGHGIMRS. - The PGHGIMRS under Executive
2 
Order (EO) No. 174, s. 2014 is hereby institutionalized, to facilitate the GHG inventory
3 
management and reporting system in relevant government agencies to enable the
4 
country to transition towards a climate-resilient pathway for sustainable
5 
development.
6 
Sec. 5. Implementing Agency. - The Climate Change Commission (CCC) shall be
7 
the overall lead in the implementation of the PGHGIMRS. It shall be responsible to :
8 
a. Provide direction and gmdance in the accounting and reporting of GHG
9 
emissions from identified key source sectors in order to develop and maintain
10 
centralized, comprehensive, and integrated data on GHGs in all levels of
11 
inventory particularly community-level and entity-level;
12 
b. Develop a system for the archiving, reporting, monitoring, and evaluating
13 
GHG inventories in aU key levels; and
14 
c. Provide and facilitate continuous capacity building initiatives in the conduct of
15 
GHG inventories to ensure the apphcation of updated methodologies.
16 
GHG data analytics generated under this measure shall be a reference for the
17 
successive enhancement of the NDCs, especially in identifying poticies and measures
18 
that could be pursued economy-wide, respecting sectoral challenges and
19 
opportunities for transformation, including human resources and cost or capital
20 
requirements appropriate for government and non-government and industry
21 
stakeholders.
22 
Sec. 6. Sectoral Agencies. - The following shall be the lead sectoral agencies for
23 
the GHG inventories:
24 
a. Department of Agriculture (DA) and the PhiHppine Statistics Authority (PSA)
25 
for the agriculture Sector;
26 
b. Department of Energy (DOE) for the energy sector;
27 
c. Department of Environment and Natural Resources (DENR) for the waste,
28 
industrial processes, and the forestry and other land-use sectors; and
29 
d. Department of Transportation (DOTr) for the transport sector.
30 
The Department of Science and Technology (DOST), Department of Health
31 
(DOH), Department of Public Works and Highways (DPWH), and Department of


1 
Tourism (DOT) shall also be considered in ensuring close collaboration of the sectors
2 
concerned in informing transformative options under the NDC.
3 
The CCC shall invite the concerned local government units (LGUs), academe,
4 
and private and public institutions to participate, complement, and assist in the
5 
implementation of the PGHGIMRS and this Act.
6 
The PSA may assist other lead agencies in the conduct of the sectoral GHG
7 
inventories.
8 
The Department of the Interior and Local Government (DILG), as an oversight
9 
agency for local governments, shall ensure the compliance of local governments
10 
through:
11 
i. Issuance of guidelines for accounting community-scale GHG
12 
emissions, managing community-scale GHG inventories, and
13 
mainstreaming the results and findings thereof in the Comprehensive
14 
Development Plan (CDP) and subsequent programming processes, in
15 
coordination with the CCC;
16 
ii. Provision of continuous capacity building to local governments related
17 
to the foregoing;
18 
iii. Incorporation in the Seal of Good Local Government mechanism of the
19 
compliance of local governments; and
20 
iv. 
Monitoring of the compHance of local governments
21 
The DENR, Department of Trade and Industry (DH), and Secmities and
22 
Exchange Commission (SEC) shall serve as oversight agencies in ensuring the
23 
comphance of entities in the preparation and management of entity-level greenhouse
24 
gas inventories, the reporting of mitigation measures addressing the results and
25 
findings of the foregoing, and monitoring and reporting thereof through the issuance
26 
of relevant poHcies and guidelines, and continuous capacity building.
27 
Sec. 7. Responsibilities of the Lead Agencies for National GHG Inventories. The lead
28 
agencies shall be responsible for the following:
29 
a. Conduct, document, archive, and monitor sector-specitic GHG inventories;
30 
b. Report sector-specific GHG inventories/emissions to the CCC based on the
31 
agreed reporting scheme; and


1 
c. Perform such other functions as may be necessary for the implementation of
2 
this Act.
3 
Sec. 8. Reports. - The CCC shall submit to the President and to both Houses of
4 
Congress an annual report on the status of the implementation of the PGHGIMRS.
5 
The PGHGIMRS shall prepare a report or a technical annex to the Biennial
6 
Transparency Report on the National GHG Inventory of certain inventory year/s in
7 
accordance with the timeline identified during the inventory planning stage under the
8 
Section 2 of Rule II of the Adopted Implementing Rules and Regulations of the EO174
9 
s. 2014.
10 
Sec. 9. National GHG Inventory. - The PGHGIMRS shall endeavor to use the 2019
11 
Refinement of the 2006 EPCC Guidelines for National Greenhouse Gas Inventories,
12 
with consideration to the national circumstances of the country, including apphcable
13 
flexibilities accorded to Non-Annex I Country Parties of the Paris Agreement, which
14 
includes the Philippines.
15 
ARTICLE 3
16 
Nationally Determined Contribution (NDC)
17 
Sec. 10. Components of the Philippine NDC. - The NDC serves as the long-term,
18 
multi-decadal roadmap on GHG mitigation and chmate-resihence of the Philippines,
19 
with a goal to achieve a balance between anthropogenic emissions by sources and
20 
removals by sinks of greenhouse gasses in the second half of this century, on the basis
21 
of equity, and in the context of sustainable development and efforts to eradicate
22 
poverty, in observance of the fundamental consideration of climate change adaptation
23 
as the core strategy of the Phitippines on climate action.
24 
Pursuant to the Phitippines' commitment under the Paris Agreement, the
25 
Government shall prepare, communicate and maintain successive NDCs . It shall
26 
communicate an NDC to the UNFCCC every five (5) years.
27 
The NDC shall include, but not be limited to, the following components:
28 
a) GHG emissions avoidance measures and mitigation potential;
29 
b) Mitigation co-benefits in adaptation, sustainable development, and
30 
poverty reduction;
31 
c) Means of implementation such as through finance, capacity building,
32 
technology transfer and development;


1 
d) Gaps and needs; and
2 
e) System for monitoring, evaluation, and reporting to enable participation of
3 
relevant stakeholders to address challenges and meet the objectives of
4 
inclusive just transition.
5 
It must endeavor to indicate the PhLlippines, strategic directions and measures
6 
to build resilience and balance the investments and opportunities for just transition,
7 
by leveraging on the capacity of local governance units to transform the socio-
8 
economic conditions of the people, up to the smallest units of governance, through
9 
the Means of the Implementation espoused under the Paris Agreement.
10 
Sec. 11. The NDC Steering Committee. - The CCC shall be the overall lead in the
11 
development, implementation, and monitoring and evaluation of the NDC, with the
12 
following agencies as members, to comprise the NDC Steering Committee:
13 
a) National Economic and Development Authority (NEDA) - lead agency for the
14 
economy-wide GHG emissions modelling vis-a-vis gross domestic product
15 
(GDP) projections, integration in the Philippine Development Plan (PDP) that
16 
is spatially articulated through the National Spatial Strategy, and sectorally
17 
articulated through PDP chapters, and ensuring vertical coherence through
18 
Regional Development Plans and corresponding regional development
19 
strategies;
20 
b) Department of Agriculture (DA) - lead agency for the agriculture sector;
21 
c) Department of Energy (DOE) - lead agency for the energy sector;
22 
d) Department of Environment and Natural Resources (DENR) - lead agency for
23 
the waste, industrial processes and product use (IPPU) and forestry and other
24 
land use (FOLD), in coordination with Department of Human Settlements and
25 
Urban Development (DHSUD);
26 
e) Department of Transportation (DOTr) - lead agency for the transport sector;
27 
f) Department of Foreign Affairs (DFA) - lead agency to facilitate, along with the
28 
CCC, coordinating with the development partners viable, country-driven,
29 
needs-based technical assistance, as may be recommended by agencies
30 
concerned, consistent with the PDP and other investment and resilience-related
31 
and the multi-decadal climate action planning and programming framework;


1 
g) Department of Finance (DOF), to coordinate on matters concerning fiscal
2 
policies related to climate change and monitor and report measures on climate
3 
finance, including recommendations on matters related to receiving donations
4 
and/or grants by the CCC under RA10174;
5 
h) Department of Budget and Management (DBM), to ensure annual
6 
appropriations for implementation of unconditional PAMs;
7 
i) Department of Labor and Employment (DOLE), to ensure that the provisions
8 
of this Act are ahgned with the Green Jobs Act;
9 
j) Department of Science and Technology (DOST), to facilitate innovation options
10 
through technology development and transfer appropriate to the conditions of
11 
the subnational units and relevant stakeholders, linking said initiative towards
12 
enhancing human capital development in coordination with industries, higher
13 
education institutions, LGUs, among others;
14 
k) Department of the Interior and Local Government (DILG), to facihtate
15 
coordination with the various subnational governance units to ensure they
16 
contribute to the continuing enhancement and implementation of the NDCs,
17 
especially on informing transformative options for investment and resihence
18 
building purposes, consistent with local development opportunities and
19 
priorities, as may be incorporated in their respective GDPs, Annual Investment
20 
Plans (AIPs), and Local CUmate Change Action Plan (LCCAPs);
21 
1) Department of Health (DOH), to lead in the determination of low-carbon
22 
investments, efficient transformation of the health sector consistent with
23 
energy just transition and sustainable consumption and production, and health
24 
co-benefits measurement of climate mitigation in other sectors;
25 
m) Department of PubHc Works and Highways (DPWH), to integrate the poHcies
26 
and measures imder the Build-Build-Build Program, and ensure the
27 
mainstreaming of policies and regulations on infrastructure component of the
2 8 
NDC for implementation industry-wide and by the LGUs, in coordination with
29 
the DILG;
30 
n) Department of Tomism (DOT), to consider nature-based solutions in
31 
developing, promoting, and monitoring tomism enterprises consistent with
32 
whole of ecosystem approaches, creation of green jobs, and sustainable


1 
consumption and production that benefit the various LGUs, for inclusive and
2 
responsible, climate-aligned tourism sector;
3 
o) Department of Human Settlements and Urban Development (DHSUD), to
4 
effectively and efficiently link local investment and transformation through the
5 
NDC alignment with the various local plans under its jurisdiction, to ensure
6 
integrated low carbon development and sustainable development options
7 
under the New Urban Agenda, especially the vulnerable communities;
8 
p) The Department of Trade and Industry (DTI), together with the Board of
9 
Investments (BOI), to ensure investment opportunities of the local industries,
10 
especially the micro, small, and medium enterprises (MSMEs), are considered
11 
in the just transition mechanism under the NDC; and
12 
q) The Education Sector, namely the Department of Education (DepEd) and
13 
Commission on Higher Education (CHED), to ensure the proper information,
14 
education, and communication (lEC), contribute to research development,
15 
extension, and innovation and assist in the implementation of this Act.
16 
The Members of the CCC Advisory Board and the National Panel of Technical
17 
Experts (NPTE) under Republic Act No. 9729, as amended, and other government
18 
agencies and stakeholders in the areas of coastal resources, health, agriculture, water,
19 
forestry, biodiversity, environment, ecosystem, energy, education, tourism, trade,
20 
infrastructure, and settlement, among others, shall participate in the development and
21 
implementation of the NDC.
22 
To ensure alignment among development plans and climate change strategies,
23 
the NEDA and CCC shall be responsible for harmonizing and ensuring the
24 
complementation of NDC with national and local development planning instruments.
25 
The NEDA shall integrate the NDC into the Philippine Development Plan. The CCC
26 
and DILG shall assist LGUs in the integration of the NDC in the LCCAPs ,
27 
Local Development Plans (LDPs), and Comprehensive Land Use Plans (CLUP).
28 
The NDC Steering Committee shall formulate the NDC policies and measures
29 
based on the best available science and in keeping with robust development and
30 
transformative aspirations of the country, consistent with national circumstances.
31 
The CCC, along with the national government agencies (NGAs) concerned,
32 
shall establish a local NDC Steering Committee to jimipstart and sustain local-based


1 
transformative strategies in alignment with the NDC, subject to the issuance of poHcy
2 
guidcuice following multi-sectoral consultation, especially with the Regional
3 
Development Coimcils (RDCs) under the supervision of the NED A.
4 
Specifically, the RDCs shall be considered points of convergence for low carbon
5 
development at the regional or subnational levels that inform pathways for
6 
transformation, including optimization of investment options, as may be aligned with
7 
physical and socio-economic challenges due to climate change impacts.
8 
Parallel effort shall be the formation of local counterparts for scientific and
9 
technological advice to said Sub-National Steering Committees to be comprised of the
10 
members of the NPTE and field units of the DOST, subject to the issuance of poHcy
11 
guidance by the CCC and DOST, especially with regard to engaging the Higher
12 
Education Institutions (HEIs) /State Universities and Colleges (SUCs) through
13 
CHED.
14 
The CCC should formulate and implement robust communication and
15 
advocacy strategies, in coordination with relevant government and non-govemment
16 
stakeholders, across levels of governance, to ensure that the low carbon development
17 
directions are communicated effectively to inspire convergence at the broadest scope
18 
possible, up to the smallest unit of governance.
19 
Sec. 12. Allocation of funds, - The aforementioned agencies shall allocate from
20 
their aimual appropriations adequate funds for the implementation of their mandates,
21 
including training and capacity building, under this Act, subject to support imder the
22 
mechanism of the Means of Implementation of the Paris Agreement.
23 
Sec. 13. Annual Report on the NDC Implementation. - The CCC and NDC Steering
24 
Committee shall submit to the President and to both Houses of Congress, not later
25 
than 30 March of every year following the effectivity of this Act, a progress report on
26 
the implementation of the NDC, and recommend legislation, where appticable and
27 
necessary.
28 
ARTICLE 4
29 
Local Climate Change Action Plan (LCCAP) Quality Assessment Review System
30 
Sec. 14. LCCAP. - Pursuant to Section 14 of RA 9729, the LGUs are the frontline
31 
agencies in the formulation, planning, and implementation of LCCAPs in their
32 
respective areas consistent with the Local Government Code, the National Strategic
10


1 
Framework on Climate Change (NSFCC), and the National Climate Change Action
2 
Plan (NCCAP).
3 
The LCCAP shall describe strategic policy measures of the LGUs to
4 
reduce/avoid greenhouse gas emission (mitigation actions) and increase the
5 
community's resiMence (adaptation actions) to the negative impacts of climate change.
6 
Further, the LCCAP shall indicate the transformative opportunities present in
7 
LGUs towards green or low emission technological capacity building innovations that
8 
will support long-term low emission industrial development, hvelihoods, ecosystems
9 
and environment, and well-being of the people, especially those most exposed to
10 
climate hazards. The modification of baseline information consistent with the best
11 
available science shall be pursued to inform the investment planning and
12 
programming aligned with the multi-decadal climate considerations, especially the
13 
location of hxunan settlements and vital infrastructure programs of the government,
14 
including those pursued through public-private partnerships (PPP) approach.
15 
The LGUs and HEIs concerned shall be supported in the development
16 
and review of the LCCAPs, as priority impacts under this Act are those attributed to
17 
holistic and inclusive mobiUzation of resources and opportunities of the LGUs, with
18 
concomitant connection to buildmg resilience for sustainable development up to the
19 
smallest units of governance.
20 
Sec. 15. Establishment of a LCCAP Quality Assessment Review System (QAR). - The
21 
CCC together with the DILG shall formulate and institutionahze the-LCCAP QAR and
22 
establish a means of implementation and institutionalization for both agencies.
23 
The LCCAP QAR process would provide an opportunity to provide a feedback
24 
mechanism to LGUs to improve on their LCCAP ensuring its responsiveness to local
25 
hazards and risks, and be able to shift towards resilience, and socio-economic
26 
transformation through low carbon and sustainable pathways.
27 
The CCC together with DILG, shall formulate and disseminate a mechanism or
28 
instnunent of quality assurance, after due consultation with relevant stakeholders.
29 
Further, the CCC and DILG shall identify relevant NGAs, SUCs and HEIs, and
30 
other stakeholders, which shall conduct and implement the quality assurance
31 
mechanism that may be established.
32 
ARTICLE 5
11


1 
Climate Change Expenditure Tagging (CCET)
2 
Sec. 16. Institutionalization of the CCET as an audit tool to track climate change
3 
adaptation and mitigation projects and programs. - The CCET jointly administered by the
4 
CCC and the DBM pursuant to Joint Memorandum Circular 2015-01 at the national
5 
level, and with the DILG pursuant to Joint Memorandum Circular 2015-01 at the local
6 
level, is hereby institutionalized. AU annual expenditure programs of the government
7 
related to low carbon development, including those designed to increase climate and
8 
disaster resihence, shah be tagged and reported to determine the allocative efficiency
9 
of domestic funds towards those ends. A mechanism for reporting allocation and
10 
expenditure shall be issued jointly by the CCC, DBM, the DILG, Office of Civil
11 
Defense (OCD), and other relevant agencies. The Commission on Audit (COA),
12 
subject to audit rules and regulations, shall produce timely reports on findings of
13 
climate expenditure audit.
14 
Such allocation and expenses tagged shall be part of the assessment for the
15 
country's low carbon needs that are aligned to the NDC. Any funding gaps should be
16 
addressed using the climate finance mechanisms imder the Paris Agreement, as may
17 
be pursued bilateraUy or multilaterally, in coordination with the CCC, DFA, DOF,
18 
NED A, DBM and other agencies concerned.
19 
The progress of the CCET, both at the national and local levels, shall be
20 
reported to the Office of the President, the Senate and the House of Representatives
21 
by the CCC in accordance with the reportorial requirement under RA 9729, as
22 
amended.
23 
The continuing capacity building for CCET shall be pursued through
24 
convergent approaches of aU the stakeholders, especially of the non-govemment
25 
stakeholders, to contribute to identifying critical climate programs and projects that
26 
need to be funded, including monitoring and evaluating institutional and support
27 
mechanisms under the CCET.
28 
ARTICLE 6
29 
National Integrated Climate Change Database and Information Exchange System
30 
(NICCDIES)
31 
Sec. 17. Institutionalization of the NICCDIES as a Primary platform on Climate
32 
Change Information. - Notwithstanding existing and related mandates of other
12


1 
agencies, the CCC shall issue guidelines to accelerate its utilization, including
2 
engaging agencies, academia, and the private sector to populate the data sets therein,
3 
and instituting a feedback mechanism to enhance content, access, and continuous
4 
improvement to support long-term, national driven, people and planet-centric climate
5 
governance in the coxmtry.
6 
ARTICLE 7
7 
Cap and Trade System
8 
Sec. 18. Emission Reduction Measures/Targets. - Emission avoidance/reduction
9 
measures shall be geared towards eqmtable implementation of just transition using
10 
nationally-appropriate carbon market and non-market approaches. This shall be
11 
adopted upon the recommendation of the NDC Steering Committee, after careful
12 
study and consultation, to achieve maximum technologically-feasible and cost-
13 
effective avoidance/reduction strategies, programs, and projects to meet the carbon
14 
goal considered in this Act, with direct impact to low carbon industrial productivity
15 
and sustainable development.
16 
Aimual emission avoidance/reduction targets, including the sector/s and
17 
levels to be covered, shall be set for each calendar year by the President, through the
18 
recommendation of the NDC Steering Committee, with supporting investment and
19 
social safeguards roadmap, and upon consultation through multi-stakeholder, whole
20 
of government, and whole of society approaches.
21 
Sec. 19. Cap on Greenhouse Gas Emissions. - To achieve the emission targets set
22 
pursuant to this Act, a cap shall be imposed on the GHG of the covered sector with
23 
the -
24 
a) Highest GHG and
25 
b) Most cost-effective opportunities to avoid/reduce emissions, to include
26 
considerations for externalities and social protection;
27 
Sec. 20. Allowances. - The DENR, upon the recommendation of the NDC
28 
Steering Committee and further upon appropriate consultation, shall issue annually
29 
a quantity of GHG emissions allowances equivalent to the emissions allowed under
30 
the cap imposed for such year. Each allowance shall authorize the emission of one
31 
metric of carbon dioxide, or in the case of global warming pollutants other than carbon
32 
dioxide, a carbon dioxide equivalent.
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1 
Sec. 21. Distribution of Allowances. - The allowance shall be distributed by the
2 
DENR to the covered sector by allocation.
3 
Sec. 22. Carbon Trading System. - There shall be an established and interoperable
4 
central registry, trading and reporting system under the DEMR, which allowances
5 
issued under this Act may be sold, exchanged, purchased, or traded by any person or
6 
entity, subject to policy guidelines to be issued upon due consultation.
7 
Notwithstanding the foregoing, non-market approaches consistent with just
8 
transition strategies needed to accelerate the attainment of low carbon economy, shall
9 
be pursued, subject to further review and consultation process, along with the
10 
mechanisms concerning carbon market activities in this Act.
11 
ARTICLE 10
12 
Transparency and Reporting
13 
Sec. 23. Submission of national reports to the UNFCCC. - The Philippines, as a Non-
14 
Aimex I Party to the UNFCCC, shall submit national reports mandated under the
15 
Convention and its Paris Agreement, especially the National Communications and
16 
Biennial Transparency Reports, in accordance with capacities and provision of timely
17 
and appropriate means of implementation. These reports shall incoiporate those
18 
outputs and reports mentioned in the previous sections, as appropriate.
19 
Sec. 24. Role of the CCC. - The CCC shall develop systems for transparency and
20 
reporting, including measurement, reporting, and verification, and enhance existing
21 
institutional arrangements to ensure continued and timely preparation of national
22 
reports, in coordination with relevant government agencies, observing whole-of-
23 
society and participatory processes.
24 
Sec. 25, Means of Implementation for Transparency and Reporting. - The necessary
25 
means of implementation for transparency and reporting, especially provisions for
26 
hardware, software, and human resource requirements, shall be accessed and
27 
provided in accordance with resources made available to Parties to the UNFCCC and
28 
reasonable domestic resources.
29 
ARTICLE 11
30 
The Role of LGUs, DepEd, HEIs and SUCs in the implementation of this Act
31 
Sec. 26. Devolution of Role to LGUs. - Pursuant to Executive Order No. 138
32 
otherwise known as the Mandanas-Garcia Ruling which fully transfers the delivery
14


1 
of basic services to LGUs, LGUs should integrate climate change adaptation and
2 
mitigation measures in their local plans and programs.
3 
Sec. 27. Role ofDepEd, HEls, and SUCs. - Pursuant to RA 9729, the DepEd shall
4 
integrate climate change into the primary and secondary education curricula and/or
5 
subjects, such as but not limited to, science, biology, sibika, history, including
6 
textbooks, primers, and other educational materials, basic climate change principles
7 
and concepts.
8 
HEIs and SUCs should integrate chmate change as part of the ciuricula for all
9 
college courses in order to provide tertiary level students with sufficient grounding
10 
on said subject.
11 
ARTICLE 12
12 
The Role of the Private Sector and Non-Government Stakeholders
13 
Sec. 28. Role of the Private Sector and Non-Government Stakeholders. - To ensure
14 
inclusive and consultative nature of the processes and systems towards low carbon
15 
economy, just transition, multi-stakeholder, whole of government and whole of
16 
society approaches to build consensus on nationally-appropriate just transition
17 
arrangements shaU be considered.
18 
In this regard, representatives of critical industries, groups of innovators,
19 
academics, civil society, people's organizations, financial institutions and
20 
intermediaries, and other related entities shall be enjoined to participate in the
21 
dehberations and decision-making activities imder this Act, subject to appropriate
22 
guidelines to be formulated by the NDC Steering Committee, through the
23 
endorsement of the CCC.
24 
ARTICLE 13
25 
Polluters-Pays Principle for GHG Emissions
26 
Sec. 29. Enforcement - The DENR, in coordination with the agencies concerned,
27 
shall formulate immediately upon approval of this Act a system of enforcement and
28 
indemnification or appropriate sanctions consistent with the "polluters pay
29 
principle." The DENR shall establish the method of determining such market price, in
30 
coordination with the CCC, DOF, DH/BOI, and NED A.
31 
Sec. 30. Monitoring, - The DENR shall ensure that greenhouse gas emissions and
32 
the use of allowances issued under this Act are accurately tracked, reported, and
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1 
verified, aligned with Article 10 of this Act, to ensure that the cap-and-trade system
2 
established under this Act is fully implemented.
3 
Sec. 31. Penalties. - For each quantity of excess GHG emissions constituting
4 
carbon dioxide or one carbon dioxide equivalent, the amount of civil penalty shall be
5 
twice the market price for an allowance at the end of the calendar year in which the
6 
excess emissions occurred. The DENR shall establish the method of determining such
7 
market price.
8 
Sec. 32. Climate Reinvestment Fund. - There is an established fund to be known
9 
as the Climate Reinvestment Ftmd, hereafter referred to as the CRF . The CRF shall
10 
consist of the amount of civil penalties assessed under Section 34 of this Act. It shall
11 
be administered by the DENR to be used exclusively for activities addressing global
12 
warming, subject to the recommendation of the NDC Steering Committee to ensure
13 
alignment with the policies and measures of the NDC.
14 
ARTICLE 14
15 
Miscellaneous Provisions
16 
Sec. 33. Appropriations. - The amount necessary for the initial implementation
17 
of this Act shall be taken from existing allocations of the agencies concerned.
18 
Thereafter, such sums as shall be necessary to carry out the provisions of this Act shall
19 
be included in the annual General Appropriations Act.
20 
Sec. 34. Implementing Rules and Regulations. - The CCC, in coordination with the
21 
NDC Steering Committee agencies, shall draft and issue implementing rules and
22 
regulations necessary, in coordination with other relevant and appropriate
23 
government agencies within sixty (60) days after its approval.
24 
Sec. 35. Separability Clause, - If for any reason any section or provision of this
25 
Act is declared by the Court as xmconstitutional or invalid, the other sections or
26 
provisions thereof shall not be affected thereby.
27 
Sec. 36. Repealing Clause. - All laws, ordinances, rules, and regulations, and
28 
other issuances or parts thereof, which are inconsistent with this Act, are hereby
29 
repealed or modified accordingly.
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1 
Sec. 37. Ejfectivity, - This Act shall take effect fifteen (15) days after its complete
2 
publication in the Official Gazette or in two (2) newspapers of general circulation.
Approved,
17