The Big Read: Can a higher carbon tax lead S’pore to the promised green land?

SINGAPORE — In 2019, when the Republic became the first Southeast Asian country to introduce a carbon tax — touted as a cost-effective way to tackle global warming — many considered the S$5 rate per tonne of carbon emissions as too low. .

The rate, which currently covers facilities producing around 80% of Singapore’s total carbon emissions, puts the island at the bottom end of the carbon tax scale, well below other countries like Sweden (S$186). and Switzerland (S$137.55). The low rate is intended to give businesses time to adjust to a carbon tax, Singapore authorities said.

Yet the rate is “alarmingly insufficient and meager” compared to global recommendations of S$100 by 2030 for advanced economies, said Mr Shawn Ang, a 23-year-old student and spokesman for Students for a Fossil Free Future (S4F), a coalition advocating for the elimination of fossil fuels.

“Such a low rate indicates political inertia and is extremely inconsistent with Singapore’s ambitions to achieve net zero, which was previously targeted for ‘as soon as possible’,” added the third-year environmental science and environmental science undergraduate. Political Science from Nanyang Technological University (NTU).

However, the impending increase in the carbon tax, which will be raised to a “more respectable level” of S$25 per tonne in 2024 and even more in subsequent years, will give Singapore a place alongside serious users of the tax. on carbon, said Dr. Vinod Thomas, visiting professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore (NUS). Dr Thomas is also an economist and former vice president of the World Bank, which oversaw the organization’s flagship reports on climate and the environment.

The tax will be further increased gradually to reach S$45 per ton in 2026, with a view to reaching S$50-80 per ton by 2030.

The higher rates – which were announced during the budget statement to Parliament on February 18 – have been welcomed by S4F and other environmentalists, such as SG Climate Rally, a youth-led movement for climate justice. However, they noted that even with the incremental increases, the carbon tax rate will still remain below the recommended global benchmark for advanced economies.

“This announcement has given us renewed hope and faith that collectively Singapore is ready to do what is necessary and what is right to mitigate climate change, even if it comes at short term costs,” said Mr. Ang.

In his budget speech, Finance Minister Lawrence Wong said the increase will help Singapore “act decisively” in achieving its new ambition to reach net zero emissions by mid-century. .

Previously, the Republic aimed to halve its emissions by 2050, before reducing to net zero in the second half of the century.

Ms Melissa Low, a researcher at the NUS Institute for Energy Studies, pointed to public sentiment as one of the possible reasons why the government increased the carbon tax beyond its initial indication of 10 to 15. Singapore dollars per tonne by 2030.

“I think the government is hearing from a lot of stakeholders, including young people and MPs, on the levy increase… Perhaps the many pledges on Singapore’s green plan have signaled to the government that we have need a higher carbon tax, otherwise things won’t move,” she said.

The Green Plan is a “pan-national movement” setting out Singapore’s green goals through 2030.

Ms Grace Fu, Minister of Sustainable Development and Environment, said the hike is meant to send a signal to businesses that carbon emissions have an explicit cost on the environment. They will now find it useful to adopt sustainable measures to reduce their carbon tax, she said at a forum at the Singapore University of Social Sciences (SUSS) on February 19.

While many view the impending carbon tax hike as inevitable, given heightened concerns about climate change in recent years, some observers have pointed out that consumers and businesses could feel the pinch in the form of prices and higher costs.

With the carbon tax here to stay and grow further, TODAY examines its effectiveness, who bears the brunt of the tax, and what else needs to be done to move the needle on carbon emissions.


About three decades after Finland became the first country to introduce the carbon tax in 1990, about 30 other countries had implemented a nationwide carbon tax system since last year, Bank data shows. world.

The taxes levied by the various countries, in total, covered 2.93 gigatonnes of carbon dioxide equivalent and accounted for 5.4% of global greenhouse gas emissions for the past year.

The carbon tax is one of two popular carbon pricing mechanisms adopted globally.

The other is the cap and trade system which limits the total level of greenhouse gas emissions that emitters can emit. Those who emit less can sell their additional allowances, or carbon credits, to bigger emitters.

According to the World Bank’s online Carbon Pricing Dashboard, 45 national jurisdictions and 34 subnational jurisdictions use carbon pricing mechanisms, covering around 20% of global greenhouse gas emissions from last year .

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