Impact of 3R-Related Policies on Resource Management

Impact of 3R-Related Policies on Resource Management Anthony SF Chiu Professor, De La Salle University Chair, Asia Pacific Roundtable for SCP Sep 11, 211 Bangkok, Thailand 9/3/211 anthony.chiu@dlsu.edu.ph 1 Outline of the Presentation 1. Introduction of SPGESCP 2. Missing Link 3R flow 3. Need for connecting 3R and impact on Policy Options 1

Japan info slides are sourced from Jiro Hiratsuka, MOEJ 24 Natural Resources Input Production (Manufacturing, Distribution, etc.) First: Reduction Reduce waste, by-products, etc. Second: Reuse Use items repeatedly. Consumption Third: Material Recycling Recycle items which cannot be reused as raw materials. Treatment (Recycling, Incineration, etc.) Discarding Fourth: Thermal Recycling Recover heat from items which have no alternatives but incineration and which cannot be recycled materially. Fifth: Proper Disposal Dispose of items which cannot be used by any means. Landfill disposal If the above-mentioned order seems not to contribute to the reduction of the environmental load, exceptions are permitted 3 so that different orders can be adopted. Philippine Macro economic Profile Indicators 26 27 28 29 21 GDP (billion PhP, current prices) 6,31 6,649 7,49 7,679 8,513 GDP (growth %, constant 1985 5.3 7.1 3.7 1.1 7.3 prices) Agriculture 3.8 4.9 3.1. -.5 Industry 4.5 6.8 4.9 -.9 12.1 Services 6.5 8.1 3.1 2.8 7.1 Investment (million PhP) 357,3 385,84 464,221 314,114 - Local (%) 53.5 44.5 6.6 61.2 - Foreign (%) 46.5 55.5 39.4 38.8 - - The Philippine economy grew over the past five years, but not as intense as other Asian countries. - The services sector appears to be have sustained the economic growth of the country. - Investments are weak, specifically foreign investment in 29. NSCB, 211; DTI, 21 2

Socio-economic Indicators Indicators 26 27 28 29 21 Employment rate (%, January) 91.9 92.2 92.6 92.3 92.7 Underemployment (%, January) 21.3 21.5 18.9 18.2 19.7 CPI (2=1) 137.9 141.8 155. 16. 166.1 Inflation rate (%) 6.2 2.8 9.3 3.2 3.8 GNI per capita (US$, current rate) 1,31 1,51 1,77 1,86 2,5 GNI per capita, PPP (current 3,22 3,49 3,67 3,67 3,93 international $) Gini coefficient.458 - -.4484 - - Employment rate show no signs of improvement for the past years. Underemployment is also significant. - Inflation is high and can be a threat to growth. - The Gini coefficient remained high. NSCB, 211; WB, 211; UN Human Development Report 29 GDP & Employment by Economic Sector Economic Sector GDP Share (%) 26 27 28 29 21 Agriculture 18.79 18.4 18.31 18.11 16.79 Industry 32.51 32.42 32.78 32.13 33.55 Services 48.71 49.18 48.92 49.75 49.66 Economic Sector Employment Share (%) Jan-6 Jan-7 Jan-8 Jan-9 21 Agriculture 36.54 31.85 35. 34.57 33.2 Industry 15.7 13.62 14.78 14.17 15. Services 48.38 54.53 5.22 51.25 51.8 - In terms of output, the services sector contributes roughly half of the GDP of the Philippines, followed by the industry and agriculture. [S > I > A] - In terms of livelihood, the services sector generates the most job followed by agriculture and industry. [S > A > I] NSCB, 211; NSO, 211 3

Investment by Economic Sector Economic Sector Investments Share (%) 25 26 27 28 29 Agriculture.33 1.33.48.54.91 Industry 78.4 6.89 68.61 55.13 59.46 Services 21.62 37.78 3.9 44.33 39.62 In terms of investments, investment in the industry sector is on the decline, but still contributes the largest share. [I > S > A] DTI, 21 Philippine Development Plan 211-216 PDP 211-216 emphasizes inclusive growth: sustained growth that creates jobs, draws the majority into the economic and social mainstream, and continuously reduces mass poverty Vision for the Philippines in relation to economy, environment and society: an organized and widely-shared rapid expansion of our economy through a government dedicated to honing and mobilizing our people s skills and energies as well as the responsible harnessing of our natural resources NEDA, 211 4

PDP 211-216 Among the 1-point agenda of the PDP 211-216 related to ENR are: Competitive industry and services sectors Competitive and sustainable agriculture and fisheries sector Accelerating infrastructure development Conservation, protection and enhancement of the ENR NEDA, 211 3. Philippines Resource Base 3.2. Policies for Resource Use and Management 5

Aspect Policy RA 7279: Urban Development and Housing Act of 1992 Land/ Forestry EO 318: Promoting Sustainable Forest Management in the Philippines RA 6657: Comprehensive Agrarian Reform Law EO 481: Promotion and Development of Organic Agriculture in the Agriculture & Philippines Fisheries RA 855: Philippine Fisheries Code of 1998 RA 8435: Agriculture and Fisheries Modernization Act of 1997 RA 7942: Philippine Mining Act of 1995 Mining RA 776: People s Small-Scale Mining Act of 1991 RA 9367: Biofuels Act of 27 Energy RA 9513: Renewable Energy Act of 28 Water resource Air quality PD 167: Water Code of 1976 RA 841: National Water Crisis Act of 1995 DAO 22-8: Coastal Environment Program RA 9275: Clean Water Act of 24 RA 8749: Clean Air Act of 1999 DAO 2-18: Chemical Control For Ozone Depleting Substances Climate change RA 9729: Climate Change Act of 28 Ecotourism EO 111: National Ecotourism Strategy Oil pollution RA 9483: Oil Pollution Compensation Act of 27 RA 93: Ecological Solid Waste Management Act of 2 Waste RA 6969: Toxic Substances and Hazardous and Nuclear Wastes Control Act of 199 Fiscal Framework The General Appropriations Act (RA No. 1147) is the summary that shows the allocation of government expenditure for a given fiscal year. 211 budget: PHP 1,,387,764, or USD 23,373,59,718 6

Percentage 211/9/3 Budget for Management of ENR 3.8%.113% 1.23% Others Agriculture 94.857% Energy Forestry, Land, Mineral, and Water PHP 51,456,313, or USD 1,21,375,27 (5.14%) allocation for the resource use and management in the Philippines General Appropriations Act of 211 Comparison of Budget Allocation Funds allocated for use and management of resources (%) 45 4 35 3 25 2 15 1 Percentage of total expenditure Monetary Terms(Billions, USD) 5 Philippine s Vietnam Malaysia European Union 5.14 25.18 4.17 42.5 1.2 6.3 2.98 European Union allocates primarily on the preservation of environment Vietnam allocates a huge portion of its budget in agriculture Philippines and Malaysia s allocation is similar in terms of proportion to total expenditure 7

Oligopoly Energy Minerals Water Market Structures Similar to Perfect Competition Agriculture Forestry Land Sectors are classified based on the volume of market players and market structure assumptions Oligopolistic markets assumes few players and many barriers for new firms Perfectly competitive markets assumes huge volume of players and firms has no market influences 3. Philippines Resource Base 3.4. Measuring Resource Intensity (attempt) 8

The Basic MFA Model TMR FHF Imports Immigrants DMI DE Air, Water Economic Processing Stocks Water Vapour Exports DPO Emigrants TDO DHF DHF Domestic Environment Source: WRI et al.,2; Rapera, Corazon MEASURES USED INPUT Total Material Requirement (TMR) Direct Material Input (DMI) = Domestic Extraction (DE) + imports OUTPUT Domestic Processed Output (DPO ) Total Domestic Output (TDO) = Domestic Processed Output (DPO ) + DHF BALANCE Net Addition to Stocks (NAS) = DMI + Air and Water Exports DPO Water Vapour Domestic Hidden Flows (DHF) Foreign Hidden Flows (FHF) Direct Material Output (DMO) Total Material Output (TMO) Imports and Exports Air, Water, Water Vapour 9

Social and Economic Indicators Total Materials Requirement (TMR) TMR/capita TMR/GDP Direct Material Inputs (DMI) DMI/Capita Imports / Capita Hidden Flows/Capita Classification of Materials Domestic Non - Renewable Energy Carriers Metal Ores Industrial Minerals Construction Materials Excavation Renewable Plant Biomass Animal Biomass Soil Erosion. Imports Non - Renewable Energy Carriers Metal Ores Industrial Minerals Construction Materials Excavation Renewable Plant Biomass Animal Biomass Semi-Manufactures Final Products Hidden Flows Imported Raw Materials Imported Semi-Manufactures 1

DOMESTIC PRODUCED NON - RENEWABLE 98 99 1 2 3 4 5 6 7 8 Energy Carriers X X X X X X X X X X m m m Industrial Minerals X X X X X X X X X X X Construction Materials RENEWABLE X X X X X X X X X X X Agriculture X X X X X X Forestry X X X Livestock X X X X X X Fish X X X X X X HIDDEN FLOW Soil Erosion Excavation 9 1 IMPORTS 98 99 1 2 3 4 5 6 7 8 NON - RENEWABLE Energy Carriers X X X X X X X X X X m m m Industrial Minerals X X X X X X X X X X X Construction Materials RENEWABLE X X X X X X X X X X X Agriculture X X X X X X Forestry X X X Livestock X X X X X X Fish X X X X X X SEMI- MANUFACTURES FINAL PRODUCTS HIDDEN FLOWS Excavation Soil Erosion 9 1 11

EXPORTS 98 99 1 2 3 4 5 6 7 8 NON - RENEWABLE Energy Carriers X X X X X X X X X X m m m Industrial Minerals X X X X X X X X X X X Construction Materials RENEWABLE X X X X X X X X X X X Agriculture X X X X X X Forestry X X X Livestock X X X X X X Fish X X X X X X SEMI- MANUFACTURES FINAL PRODUCTS HIDDEN FLOWS Excavation Soil Erosion 9 1 X X X X X X Total Material Requirement (TMR) Indicators 12,,, 1,,, 8,,, TOTAL MATERIAL REQUIREMENT (TMR) 1,62,226,83 4 3,. 9,752,562,296 9,386,591,289,473,45,2 2,5. 8,868,35,32 8,825,429,997 8,428,739,811 8,292,22,33 2,. TOTAL MATERIAL REQUIREMENT INDICATORS 2,553.92 2,353.93 2,47.3 2,21.7 1,938.82 2,251.85 2,94.62 1,883.95 6,,, 1,5. 4,,, 1,. 2,,, 5. 13.85 17.5 115.38 14.29 96.15 16.84 118.7 14.1-1999 2 21 22 23 24 25 26 27 28 TMR - 1999 2 21 22 23 24 25 26 27 28 TMR per Capita TMR per GDP 12

Direct Materials Input (DMI) Indicators 16,, 14,, 12,, 1,, DIRECT MATERIAL INPUT (DMI) 117,698,44 11,171,128 19,24,571 19,15,573 147,311,292 134,918,55 136,47,448 139,68,153 35. 3. 25. DIRECT MATERIALS INPUT (DMI) INDICATORS 3.77 3.82 29.64 27.22 31.55 3.45 29.49 29.3 8,, 2. 6,, 15. 4,, 1. 2,, 5. 1.36 1.32 1.39 1.29 1.56 1.55 1.55 1.62-1999 2 21 22 23 24 25 26 27 28 DMI - 1999 2 21 22 23 24 25 26 27 28 Commodity per Capita (DMI per Capita) DMI per GDP Energy Resource Intensity Data 5 45 4 35 3 25 2 Energy to GDP (TOE/Php) Oil to GDP (BBL/Php) Electricity to GDP (KWh/Php) 15 1 5 1999 2 21 22 23 24 25 26 27 28 29 1999 2 21 22 23 24 25 26 27 28 29 Energy to 41.5 4.4 38.2 36.1 35.1 33.3 31.8 3 28.5 28.6 27.7 GDP (TOE/Php 1M) Oil to GDP 14.1 12.8 12.1 11.5 1.8 9.8 9.1 8.2 7.9 7.5 7.3 (BBL/Php 1,) Electricity to GDP (KWh/Php) 45.1 46.5 47.5 46.9 48.8 48.5 46.7 44.5 43.6 42.9 43.3 Source: Department of Energy 13

Effect to GDP and Importance for the Poor (Informal Sector?) The agriculture, fisheries and forestry classification in GDP reflects an increasing trend on the total value of resources consumed. With respect to total GDP, it resembles a downward sloping trend with much of the impact felt on the last year of the period covered. While food production shows a steady rise, its contribution to GDP becomes less through time. Effect to GDP and Importance for the Poor (Informal Sector?) The same declining trend may be observed in the electricity, gas and water category while the opposite may be seen in mining and quarrying where its contribution to GDP rises. Other components of GDP may have had greater contribution to the economy than the former (services sector). 14

Effect to GDP and Importance for the Poor (informal sector?) Percentage Share of Selected Value Added Accounts to Total GDP (in %) 25.% 2.% 15.% 1.% 5.%.% 2 1 2 2 2 3 Agriculture, Fisheries and 2.16 2.6 19.84 19.62 19.6 18.79 18.4 18.31 18.11 16.79 Forestry Mining and Quarrying 1.2% 1.48% 1.65% 1.59% 1.65% 1.47% 1.74% 1.7% 2.5% 2.26% Electricity, Gas and Water 3.31% 3.3% 3.25% 3.18% 3.11% 3.14% 3.13% 3.24% 3.11% 3.15% 2 4 2 5 2 6 2 7 2 8 2 9 21 BAS; NSCB Effect to GDP and Importance for the Poor (Informal Sector?) While the contribution of the Agriculture, Fisheries and Forestry to GDP has gone low, employment has mildly followed the same trend with slight decreases from 32.77% in 22 to 31.75% in 28 With regard to poverty incidence, fishermen and farmers account for the highest percentages for all categories, slightly going up in 26 with 49.9% and 44%, respectively. 15

Effect to GDP and Importance for the Poor (Inf Sec?) Selected Macroeconomic Indicators.6.5.4.3.2.1 2 21 22 23 24 25 26 27 28 % of Employed in Agriculture to Labor Force 32.77% 32.45% 32.25% 32.79% 32.26% 32.2% 31.75% % of Agriculture, Fisheries and Forestry to GDP 19.78% 2.16% 2.6% 19.84% 19.62% 19.6% 18.79% 18.4% 18.31% Poverty Incidence of Farmers 46.6% 42.4% 44.% Poverty Incidence of Fishermen 5.8% 43.6% 49.9% Philippine Statistical Yearbook (PSY); NSCB Material Flow Accounts (MFA) of Japan Products (7) Resources (718) Imports (788) Natural resources and the like input [Direct Material Input] (1,912) Domestic resources (1,124) Total material input (2,13) Net addition to stock(1,17) Exports(132) Energy consumption(42) Food consumption(127) (Unit: million ton) Generation of waste and the like (6) Reduction(241) Final disposal (56) Returned to nature (84) Amount of cyclical use [reuse+recycle] (218) The material flow accounts for FY2 roughly show: 1) Total material input is about 2.1 billion tons 2) Amount of cyclical use (reuse + recycling) is 218 million tons 3) Amount of final disposal is 56 million tons 32 16

1 yen per ton 211/9/3 Three Indicator Based on MFA Resource Productivity (input) Cyclical Use Rate (cycle) Final Disposal Amount (output) 33 5 Input: Resource Productivity 25 39, yen per ton (4% improvement from FY2) 1975 198 1985 199 1995 2 25 21 215 Resource Productivity = GDP DMI* (Input of natural resources and the like) *DMI: Direct Material Input 34 17

Million tons per year % 211/9/3 Cycle: cyclical use rate 15 1 5 14 % (4% improvement from FY2) 1975 198 1985 199 1995 2 25 21 215 Cyclical Use Rate = Amount of cyclical use (reuse + recycling) DMI + Amount of cyclical use 35 Output: Final Disposal Amount 15 28 million tons (5% reduction from FY2) 1 5 1975 198 1985 199 1995 2 25 21 215 Final Disposal Amount = Final disposal amount of waste 36 18

Measures by national government Secure material cycle in nature Change lifestyle [Re-style] Promoting businesses relating a Sound Material-Cycle Society Realize Safe and secure treatment and disposal of waste Establish the basis for supporting a Sound Material-Cycle Society 37 Measures by local governments make efforts in community making, including sorted collection and appropriate management of waste, promotion of 3Rs, and improvement of waste treatment facilities cooperate with business and private organizations, including NPOs and NGOs, to assist local residents to change their lifestyles (as a coordinator and main animator of the efforts of the community) recommend environment conscious green products and services or products made in the local area take the initiative in green purchasing, implementation of an environment management system (as a business organization) formulate the fundamental plan to promote the establishment of a SMCS in the local area 38 19

Material Flow Accounts by local government Some prefectures are developing their MFA (ex. Aichi Pref.) Material Organic feed,seeds,etc. Resources Resources 53 (Macadam, iron, etc) 32 (Petroleum,coal,etc) Provisions to process,fertilizer, Natural Resources 9 Consumption Other of fuel (1) 29 [Section 1] Consumption of resources 18 9 9 [Section2] Manufacturing of products 88 Ship of Bring of To discharge final final 6 products products (2) 27 (2) 33 [Section 3] Sell and purchase 94 [Section 4] New Stock Consumption Stock of construction, infra-structure and machinery New stock 72 Discharge 5 Consumption(Provisions taken) 1 5 Reduction of waste by management Management and Disposal 15 3 Final disposal of waste 8 Recycled resources (4) Fossil Material 18 Fuel Valuables (3) Recycled resources 7 ship and bring between Aichi prefecture and other region over bring 3 (Petroleun,coal,etc.) (1)Growth of agricultural products by photosynthesis,over bring of primary or secondary products,inflow of water to concrete,etc (2) Ship includes Export and Bring includes Import. (3)Valuables:articles that can be bought (4)Recycled resources:waste(invalid articles)reutilised 39 Please visit our website: http://www.aprscp.net Or e-mail us at: Thank you very much! anthonysfchiu@gmail.com Please Participate in the UNEP-IGES mini Roundtables and events at The 1 th Asia Pacific Roundtable for Sustainable Consumption and Production Jogyakarta, Indonesia 9-11 November 211 2