Loss of economic competitiveness is the usual argument to counter a carbon tax. But in this year's Budget, the Government showed its resolve to push ahead with such a tax, as it moves to keep its pledge to significantly cut Singapore's carbon emissions per dollar of GDP by 2030.
First payable from 2020, the tax of $5 a tonne of carbon emitted will hit mainly large polluters in the petroleum refining, chemicals and semiconductor sectors. They contribute 80 per cent of Singapore's total greenhouse emissions. But these companies are expected to pass on their higher costs to smaller businesses and households.