Natural gas and transitioning to renewable fuels: considerations from industrial policy

Abstract

The Philippines is committed under the Paris Agreement to reduce greenhouse gas emission (GHG). In formulating its intended national contribution program, the government is starting with the energy sector by reducing reliance on coal as the primary fuel in electricity production as it transitions to the use of renewable fuels, such as wind and solar. Given the relatively high cost of renewables at this point, the Philippines is envisioning natural gas (NG), whether imported or indigenous, as a substitute fuel for coal in the interim. Some aspects of recent industrial policy approaches are considered to make this fuel substitution feasible.

JEL classification: Q4, O25