Singapore announces a plan to implement a carbon tax
The Singapore government has recently announced its intent to implement a carbon tax on greenhouse gas (GHG) emissions from 2019. This policy move aims to create a price signal on GHG emissions to incentivise emitters to factor in the costs of their GHG emissions in their business decisions, and encourage companies to innovate and improve their energy efficiency. This will enhance Singapore’s existing and planned mitigation efforts under its Climate Action Plan, and will stimulate clean technology and market innovation.
As part of the Paris Agreement, Singapore has pledged to reduce its emissions intensity (emissions per dollar of GDP) by 36% below 2005 levels by 2030, and to stabilise its emissions with the aim of peaking around 2030. Singapore’s Climate Action Plan sets out four strategies to achieve this goal:
i. improving energy efficiency,
ii. reducing carbon emissions from power generation,
iii. developing and deploying cutting-edge low-carbon technologies, and
iv. encouraging collective action among government agencies, individuals, businesses, and the community.
The carbon tax will generally be applied upstream, for example, on power stations and other large direct emitters. For stationary emissions, the government is looking at a proposed threshold of 25,000 tCO2e of greenhouse gas (GHG) emissions annually. The Singapore government is looking at a tax rate of around S$10 and S$20 per tonne of carbon dioxide-equivalent GHG emissions (S$10-20/tCO2e). The Singapore government plans to consult with stakeholders on the implementation details of the carbon tax.
Learn more about the carbon tax here.