January 13, 2022
SINGAPORE – A higher carbon price will spur large emitters in Singapore to cut their carbon footprint, but adjustments to the country’s carbon tax must be done carefully to give firms time to adapt and stay competitive, said two ministers on Wednesday (Jan 12).
Speaking during a parliamentary debate on Singapore’s green transition, Trade and Industry Minister Gan Kim Yong said the correct carbon price will guide investment decisions and spur companies to decarbonise.
“But it will also come with higher costs for businesses and consumers. We should calibrate and pace the adjustment carefully, to give companies sufficient time to adapt and stay competitive,” he added.
A higher carbon tax will also have an indirect impact on households, he noted.
“The Government will consider how we can help ease the cost increase, especially for lower-income households,” said Mr Gan, citing past schemes such as the U-Save utilities rebates and a programme that provides eligible households with vouchers to offset the cost of energy-efficient appliances.
Singapore’s current carbon tax rate, which will be in place until 2023, is $5 per tonne of emissions. The revised rate for 2024 will be announced during next month’s Budget, which will also indicate what to expect up to 2030.
Nineteen MPs spoke during the roughly five-hour debate on the private members’ motion, which was moved by six PAP MPs – Ms Poh Li San (Sembawang GRC), Mr Gan Thiam Poh (Ang Mo Kio GRC), Ms Nadia Samdin (Ang Mo Kio GRC), Mr Louis Ng (Nee Soon GRC), Ms Hany Soh (Marsiling-Yew Tee GRC) and Mr Don Wee (Chua Chu Kang).
The motion urges the Government to enhance green financing, create more green jobs, and strengthen corporate accountability. This, said the MPs, should be done “in partnership with the private sector, civil society and community, redits from projects elsewhere that either prevent the release of emissions (renewable energy projects) or absorb them (forest conservation projects) – will complement Singapore’s toolkit for meeting its climate commitments, added the minister.
The latest motion follows the first one that was debated in February last year, which saw the House agreeing that climate change was a global emergency and the Government should accelerate efforts to mitigate its impact.
Ms Poh said the green sector is developing rapidly in response to the climate emergency.
“There are many new and exciting opportunities in the green economy, particularly in green financing, and many new job roles in the sustainability sector,” added the deputy chairman of the Government Parliamentary Committee for Sustainability and the Environment.
“Central to our transition to a green economy, our priority is to ensure Singaporeans are not left behind as the world progresses towards a sustainable future and economy,” Ms Poh said.
“We need to create fulfilling opportunities in a region with a growing sustainability sector and equip Singaporeans with the relevant skill sets and experience. We need to help our businesses get ahead of the curve in sustainability.”
In a Facebook post on Wednesday evening, Prime Minister Lee Hsien Loong said that as with all transitions, trade-offs such as temporary cost increases and disruptions are unavoidable.
“But not going green is not an option,” he said. “Tackling climate change takes a whole-of-nation effort. We have to act now to avoid paying a much higher price later.”