Calibrating the costs and benefits of Singapore's carbon tax
Higher carbon taxes will aid the drive towards a greener economy, but care must be taken in pacing the increases and setting the rates in view of the trade-offs and Singapore’s constraints.
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An oil refinery on Pulau Bukom as seen from Sentosa. Carbon abatement is costly in Singapore, and the carbon tax has to be set within the country’s geographical and technological constraints, say the writers.
PHOTO: ST FILE
Euston Quah and Tan Tsiat Siong
In last week's Budget speech, it was announced that Singapore's carbon tax will be raised from the current $5 a tonne of emissions to between $50 and $80 by 2030. The large hike, which might have come as a surprise to many, is clearly indicative of Singapore's resolve in transitioning into a green economy, even though we contribute a meagre 0.1 per cent to global greenhouse gas emissions.
Leading the region in climate action by raising our carbon tax is a bold move, partly motivated by our vulnerability to climate change as an island state, and our intention to position ourselves as a carbon services hub in the future, which could attract investments and create job opportunities.
