Address of the Chair of Lopez Group of Companies, Oscar Lopez

Delivered by Mr. Richard B. Tantoco
President and Chief Operating Officer of Energy Development Corporation
(EDC is the largest renewable energy developer in the country making the Philippines the no. 2 geothermal country in the world since 1983).

Good afternoon ladies and gentlemen, and good afternoon Chief Justice. I’d like to begin by offering my congratulations to Green Convergence and to the visionary Dr. Angelina Galang for successfully organizing the First Philippine Environment Summit.

I stand before you today representing Energy Development Corporation (EDC), a company that has chosen to go 100% renewable energy. We produce clean energy from geothermal, hydro, wind and solar and today we light 1 in 10 homes in the country, 1 out of every 10 light bulbs in this hall.

An interesting fact about our geothermal operations – the Philippines is the world’s second largest producer of geothermal energy and EDC is the Philippines’ largest producer of that geothermal energy. We go beyond just providing clean energy to millions of homes and businesses because in producing 8,500 gigawatt-hours (GWh) of clean energy, we have also help the country save billions of dollars by displacing hydrocarbons.
At EDC we have made the conscious and ethical choice to stay purely renewable to produce only clean and sustainable energy. We are of the firm belief that doing the right thing and doing our part to ensure a vibrant country in a viable planet for future generations is the right thing to do.

We are also in a very fortunate and unique position where environmental and community stewardship is at the very heart of business sustainability and continuity and not merely the obligatory token corporate social responsibility (CSR) that is done at the peripheries of the business to gain community acceptance. The continued availability of geothermal steam relies on having healthy watersheds and if the watersheds perish so does our business.

You see, geothermal steam comes from rain water that is captured by the forests and absorbed kilometers deep into the earth. Hence, we have invested heavily in forest restoration and biodiversity preservation in order to maintain the robust ecosystem services for the use of all our stakeholders in our geothermal reservation.
Our Binhi Reforestation Program aims to plant 10,000 hectares across the country in 10 years using premium and endangered native trees species; but what I am most proud of about our Binhi initiative is that we have already rescued and secured the 96 critically endangered, native, premium hardwood tree species. We are nurturing these seedlings in our state of the art nursery using Israeli technology in Negros Occidental and we will grow this species back in abundance with the help of partners who share the same commitment for the environment.

In choosing to do so, we achieved multiple gains. We help revive our forests, we ensure business longevity, we create carbon sinks, we restore and preserve biodiversity, and we rescue and secure our natural national heritage for the benefit of future generations. I could go on and on discussing our other programs centered on health, livelihood, education, and environment but instead of doing that I would like to discuss what I call national social responsibility instead of just corporate responsibility in the next 10 minutes.

The energy sector must accept that it is the greatest contributor to climate change and the United States Environment Protection Agency notes that 78% of all carbon emissions in the world come from energy and industrial processes. It is therefore the duty of the energy industry to the global community, that we make the greatest necessary changes to set thing right.

I would like to frame what I’m about to say briefly in terms of imperatives or musts. I believe that there are 3 imperatives that we need to think of as Filipinos and as global citizens. This feels like preaching to the choir but let me say it anyway for the record.

The first imperative is the environmental imperative. We are at the critical point today in the earth’s history where concrete action and committed action must be taken to remove us from the path to environmental destruction that we have been hurdling towards since the dawn of industrialization. The time for us to find solutions for change is long overdue and I’m afraid running out and I am glad to see many fellow Filipinos coming together in a forum like this with hopes of doing so.

That our global climate is changing is undeniable. The global mean temperature has increased by 0.8 degrees centigrade in just less than 2 centuries with no signs of abating from its exponential path. Without concerted action, we could see a 1.5 centigrade increase in as little as 20 years and a 4.1 degrees centigrade total increase by the end of the century. I cannot imagine how much devastation a 2-4 centigrade rise can cause if at 0.8 degrees we already experienced Yolanda.

Let me walk you to the math briefly. According to the Nobel prize winning Intergovernmental Panel on Climate Change, we have already emitted a significant portion of the global carbon budget leaving us with only 600 gigatons (GT) of carbon from the year 2013- 2050. Today according to the World Wild Life Fund for Nature, we emit 47 GT carbon per year and even if you assume that the global economy will grow at 0%, we will hit the tipping point in just 13 years. Scientists have identified the potential effects, melting of the ice caps causing a 100 cm increase in our sea level. If you look at the charts on the polar ice caps from 2.78 million square miles to 1.79 million square miles today, it’s gone down 40% and still people say that the earth isn’t warming.

National Geographic ran a series in November and December and countries like Hongkong, Fiji, Vanuatu, and our own places like Navotas, large parts of Parañaque, and Old Manila, are going to go under water. Fresh water availability will drop 50%, drought will become a matter of course affecting food security for many, and warmer sea temperatures will also drive more extreme weather events and cause the acidification of the ocean thereby reducing fish capture.

Together here with Green Convergence, we all need to act and not kick the can on the road and assume someone else will solve the problem for us.

The second imperative is the moral imperative. As some of you might know that the Philippines is one of the most vulnerable countries in the world to the effects of climate change. What makes us vulnerable is the deadly cocktail of three factors: (1) the presence of hazards, (2) inadequate infrastructure and (3) inadequate resources to reduce the risks and fund adaptation.

According to the United Nations Office for Disaster Risk Reduction, we have recorded a total 274 climate related disasters in our country in the last 20 years with a sharp increase in the last 5 years. That is why we are a founding member of the V20 composed of the 20 countries that are most vulnerable to the effects of climate change.

The Philippines is current chair of this group and is among the V20 countries that face an average of about 50,000 climate related deaths per year. That number is expected to rise exponentially by 2030. Economically, our country faces escalating annual loses of at least 2.5% of potential GDP loss that is PhP360B pesos or PhP150,000 per person. The moral imperative I talk of is two-fold; (1) that we recognize that the impacts of climate change will be the most severe and costly to those in our country with the least resources. Climate change will hit the poorest of the poor the hardest and when it does they will have the least resources and be the least capable also of reacting. (2) For each marginal increase in carbon, the impact on us Filipinos is amplified given our intrinsic vulnerability. We, therefore, have a moral obligation to curb our own carbon emissions given how vulnerable we are as a country and how exponentially vulnerable our less fortunate brothers and sisters are.

Some of those in industry will try to divert your attention and point you to the lowest part of this graph and they will say “As a country, we are one of the lowest emitters, so let’s just go ahead and emit more carbon”. Others will say “Give us our time to industrialize; others had theirs. Allow us our chance to pollute”. While both maybe argued, they set aside and conveniently ignore the most crucial fact that we Filipinos are among the most vulnerable to the effects of climate change and every marginal ton and gigaton of carbon will have a magnified, amplified, intensified impact on the vulnerable people of our vulnerable country.

The third imperative and final imperative I’d like to talk about is the national energy policy imperative. It flows from the first two and it talks about choosing right for our future. Today our energy mix from power generation is roughly 25% from renewable, 24% from natural gas that emits less than half the carbon as coal, and 43% from coal. However, we are headed towards a 70-75% share of energy generation from coal by 2025 as a result of what I call is the illusory least cost mindset. On an X plant basis, coal is the cheaper option now especially with the recent crash in global coal prices; but what other countries may have saved in energy costs by taking the fast and cheap route is being overtaken rapidly by the mounting social and environmental costs that they did not foresee or that they chose to ignore.

The truth is, coal has costly externalities in addition to just the X plant price and this has not been priced to the least cost illusory equation. The World Health Organization estimates that more than 1 million premature deaths occur every year because of outdoor air pollution caused largely by burning coal. The illnesses span from respiratory to cardiovascular to neurological conditions. In May of 2015, the IMF released its study that revealed a subsidy to fossil fuels of $5.3 trillion in 2015 alone or about 10 million dollars per minute every day.
This amount is due to the environmental and health costs not included in the prices of coal and thus they are called externalities and are erroneously not counted in calculating the cost of a kilo watt per hour. In coal, its life cycle – from extraction, transport, processing, and combustion – generate wastes, harmful to health and environment.
A report specifically on the Philippines done by Harvard University and released this 2016 on the impacts of the existing 13 coal plants and the planned 29 new ones to be built in the Philippines shows and estimated 960 premature deaths each year due to cardiovascular and respiratory diseases. And it cautions that if the new coal fired plants are to be developed, premature deaths will rise to 2,410 people per year. So we must learn from the mistakes of other countries whose over reliance on supposedly cheap coal is costing them trillions of dollars in externalities. We need to factor in those costs into the equation as we make our choices. Failing to do so would encumber future generations with the cost of our poorly guided choices.

In conclusion, I’d like to answer one quick question which is “how do we take action?” The Philippine government’s COP21 commitments including that of undertaking the greenhouse gas emissions reduction of 70% by 2030 is a critical step in the right direction; but together we must now hold both ourselves and our government accountable for such climate commitments. We must also argue for a firm policy that establishes a target miss of power generation between coal, natural gas, and renewables. We also need to incentivize renewables and prioritize their links to the grid. It is time to really think about and secure a safer and cleaner future for our children, their children, for our people particularly the least fortunate who are most vulnerable to the impacts of climate change.

We have a long hard road ahead of us but with the right level of determination and commitment, the switch to renewables or cleaner energy is possible. While difficult, it is not impossible and as Nelson Mandela once said “It always seems impossible just about until it’s done”.

Let me just tell you the few bright spots on the horizon to give you some encouragement. A group called the RE100 composed of the world’s 100th most influential companies committed to 100% renewable electricity. Among them are the iconic brands Google, Coke, P&G, BMW, Marks & Spencer’s, H&M, Philips, Starbucks, and many others.

Last year, investments in RE reached a record high of $329B, mostly contributed in clean energy projects in China, Africa, USA, Latin America, and India. The state of Hawaii has set an even loftier goal with an energy mix composed of 97% fossil fuel today; they are taking concrete steps to make a complete turnaround in favor of 100% renewable by 2050. A supportive state legislature has set the framework to enable Hawaii to achieve their goal. On the side of business and finance there are also some positive developments. Very large financial institutions such as the World Bank and the California Teachers’ Retirement Fund have said that they will no longer fund coal. The World Business Council for Sustainable Development has tallied close to $34 trillion of finance and investments that they will either divest or no longer fund coal. The largest companies in the world have begun to divest all of its coal investments.

So worldwide, countries, policies, legislators, local governments, companies, banks, funds, developers, groups, individuals, and NGOs are making the choice to low or no carbon development.

I believe it is the best thing to do; I believe it is the right thing to do. If the others can do it why can’t we? If it should be done, why aren’t we?

Maraming salamat and a good day to all of you.


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