Tuesday, September 02, 2008

Climate change and more government regulations

While the UNFCCC had a meeting in Accra last week, there was also a big conference in Manila last week, August 27, on "Energy, Climate and Food Security Conference", the program you can view at http://www.policy.aim.edu/downloads/Energy,%20Climate,%20and%20Food%20Security%20Conference/Programme_Final.pdf

The main sponsoring organizations were the Asian Institute of Management-Policy Center, Konrad Adenauer Foundation (KAF), International Alert (UK) and the World Food Program (WFP). About 300 people came including media, quite a big and well-organized conference.

The second session was on "Climate Security" and 2 of the 3 speakers were climate alarmists: a Japanese academic from Waseda U, and from International Alert, The 3rd speaker was a provincial Governor, he talked about what his government did, little alarmism discussed.

I did not stay long, but I caught the presentation of the first speaker on the 3rd session, "Food security", a guy from the WFP and he talked as alarmist as the 2 speakers in the previous session. Things like "with global warming, we expect more food security problems".

Among the new "fight global warming" moves and proposals here in the Philippines are the creation of a new bureaucracy called "Climate Change Commission" -- with its full army of commissioners, employees, travels and conferences, offices, etc. It's still in Congress debates. Another is requiring local corporations to reforest xx hectares before their business registration can be renewed. A friend who told me about this was working in a local environmental group "Haribon", and I guess they could be making money since they are positioning as "mediators", they will reforest some denuded mountains in behalf of those corporations, for a good fee I guess. I don't know of other new government regulations and interventions, but there should be more.

Tree planting and reforestation is fine, but it should not be made mandatory that will further increase the operating costs of enterprises. If the cost of reforestation are tax deductible, that should be fine. But if government taxes and fees remain high, then government creates another regulation to increase the operating costs of companies, that's additional distortion in the economy.

If tree planting and reforestation is a "must do", then companies that engage in forest plantation either for the wood industry or for eco-tourism (say develop mountain resorts) should be spared of paying corporate income tax (currently at 35% of profit) and other fees. But you don't hear such kind of move from the government. Only new and additional regulations and costly compliance.

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