SINGAPORE - Helping Singapore businesses and workers grasp opportunities in the green economy was a key issue discussed in Parliament on Wednesday (Jan 12), with 19 MPs sharing their thoughts on how this can be achieved in a five-hour long session.

They discussed ways to create more jobs in the sustainability sector and further the nation's ambitions to become a major green financial hub under the second motion on climate change moved by the Government Parliamentary Committee (GPC) for Sustainability and the Environment.

These should be achieved together with the private sector, civil society and community to advance Singapore's inclusive transition to a low-carbon society, the GPC said.

The Straits Times highlights the suggestions raised by MPs.

Carbon tax

A carbon tax is a means of assigning costs to the release of planet-warming emissions that are driving climate change, such as carbon dioxide.

By putting a price on the release of these gases, firms will be incentivised to reduce their emissions by becoming more energy-efficient, investing in lower-carbon technology, or by incorporating more renewable energy in their fuel mix.

During the debate, MPs, including Mr Louis Ng (Nee Soon GRC) and Ms Foo Mee Har (West Coast GRC), noted that Singapore's current carbon tax rate was too low.

Mr Ng said Singapore's carbon tax has the "highest potential to reshape incentives and motivate action", and called on the Government to increase the rate and to expand it to more firms.

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.

Singapore's carbon tax now applies to all facilities producing 25,000 tonnes or more of greenhouse gas emissions in a year, covering 30 to 40 large emitters that contribute 80 per cent of Singapore's greenhouse gas emissions.

Mr Ng said this threshold should be lowered, so all firms emitting more than 2,000 tonnes of emissions also pay a carbon tax.

"This would, after all, be in the spirit of a whole-of-nation fight against climate change. Emitters, small and large, have a role to play," he said.

Other MPs, such as Mr Saktiandi Supaat (Bishan-Toa Payoh GRC), acknowledged the need to raise the carbon tax, but asked for it to be done in a carefully calibrated manner to reduce impacts on businesses.

Carbon credits

MPs pointed to the pros and pitfalls of allowing the use of carbon credits by emitters in Singapore to offset their emissions.

A carbon credit refers to one tonne of carbon dioxide (CO2) that is removed from the atmosphere (a forestry restoration project), or prevented from being produced (a renewable energy plant).

These credits can be bought by an emitter elsewhere to offset its own emissions.

If this is allowed, it would mean that a company here would have the option to pay another entity to reduce emissions in another jurisdiction where it may be cheaper to do so.

Nominated MP Koh Lian Pin, who heads the National University of Singapore's Centre for Nature-based Climate Solutions, said the Republic is located in a region with a rich bounty of natural habitats, such as forests and peatlands, that can help reduce the amount of planet-warming carbon dioxide in the atmosphere.

"Nature-based carbon projects, such as mangrove conservation and restoration, can also deliver many other benefits for local communities and biodiversity," said Professor Koh.

Moreover, nature-based carbon projects are "low-hanging fruits" that allow mankind to turn off one tap of our carbon emissions by ending deforestation, and start to remove carbon dioxide from the atmosphere through reforestation, he said.

The burning of fossil fuels and land use changes from deforestation and the removal of natural habitats are key drivers to modern climate change.

But Prof Koh, Associate Professor Jamus Lim (Sengkang GRC) and Mr Gan Thiam Poh (Ang Mo Kio GRC) urged caution about the use of carbon offsets, pointing out that some carbon offset projects may not deliver real benefits to the environment.

Prof Koh said users of carbon credits must also have in place concrete policies, plans and actions to transition to a lower carbon economy to ensure that they are not relying solely on offsetting to reduce their net carbon emissions.

Prof Lim added: "While it is impossible to perfectly police greenwashing attempts, the Government should not be complicit in lending a stamp of approval to firms that are simply pronouncing adherence to such standards for the purposes of going through the motions or, worse, marketing reasons."

Sectors of growth in the green economy

MPs also pointed out key areas in the green economy that Singapore could benefit from.

Ms Hany Soh (Marsiling-Yew Tee GRC) said green roles that will soon be in higher demand include engineers in the built environment, sustainability consultants, and green finance and investment managers.

Mr Don Wee (Chua Chu Kang GRC) noted that accountants and auditors must be equipped with the knowledge and skills to cover emerging tasks such as sustainability reporting, managing climate-related risks, and advising their companies on embedding sustainability in the firm's strategy and decisions.

"Accountants must be equipped to prepare sustainability reporting as more stakeholders and investors adopt environmental, social and financial performance metrics. Likewise, auditors need to get themselves ready to verify such information," he added.

To help accountants flourish in the green space, the Institute of Singapore Chartered Accountants (ISCA) - the national accountancy body with more than 33,000 members - will be rolling out courses and certification programmes that will include sustainability reporting.

Ms Soh added that there is also a lot of scope for students to become "green entrepreneurs" and come up with new innovations to further sustainability solutions in the area of food security.

In Minister for Trade and Industry Gan Kim Yong's response to the motion on Wednesday, he noted that in the long term, opportunities lie in low-carbon technologies, such as hydrogen, sustainable aviation and maritime fuels, smart electricity grids, and sustainable food.

"We are investing research and development resources into these areas, which we will need for our own living and livelihoods. In the process, we hope to build new economic engines out of them," added Mr Gan.

Green jobs and talent pipeline

Ensuring that Singaporeans have the right skills to meet the demands of a green economy was also discussed, with MPs throwing up suggestions such as rolling out sustainability-linked university courses or SkillsFuture courses that will help mid-career professionals gain the relevant skills.

Mr Gan said: "As Singapore pursues our sustainability goals, many green jobs will be created that will require new green skills.

"A traditional car mechanic will need to learn how to repair an electric vehicle. A power engineer will need to learn about hydrogen, solar, and other renewable energies. An investment manager will need to learn about sustainability standards and green financing."

Ms Poh Li San (Sembawang GRC) suggested that major updates and changes are made to courses and modules in educational institutions, along with green projects that should be integrated into all disciplines.

Meanwhile, Ms Rachel Ong (West Coast GRC) said there is a need to close the current employability gap between undergraduates in green courses and employment in relevant sectors.

For example, employment rates for students in environment engineering were one of the lowest compared with other engineering graduates in National University of Singapore (NUS) and Nanyang Technological University (NTU), according to the 2020 Graduate Employment Survey. Therefore, it would be necessary to work with the private sector and institutes of higher learning to close the employment gap.

In addition, curriculum for up-and-coming green sectors can be further enhanced in institutes of higher learning in consultation with industry players to better understand the skill sets that are needed.

Ms Poh also urged Enterprise Singapore and SkillsFuture Singapore to work closely with the labour unions to equip senior workers with relevant skill sets for green jobs so as to minimise job displacement as companies transit into the green economy.

Mr Dennis Tan (Hougang) pointed out that workers in carbon-intensive industries, including fossil-fuel-related sectors, should not be left behind as the economy goes green.

"We need to ensure that corporate accountability is not just about reporting their greening efforts, but how they are ensuring their own green transition includes bringing the many workers within and not lead to mass retrenchments."

Impact of green transition on SMEs

The GPC for Sustainability and the Environment had previously raised its concerns about how local businesses can survive and thrive as sustainability becomes more integrated into the global market.

Ms Foo said while sustainability efforts among companies here have picked up, the lack of understanding of environmental sustainability and related concepts has been a barrier to galvanising strong action.

She cited last year's Ecosperity Week, where it was revealed that 250 chief executives of firms which have made net-zero commitments were unsure of how to reach their goals.

"There remain many companies, especially our SMEs (small and medium-sized enterprises), which have yet to come on board the green economy bandwagon.

"Many consider sustainable practices as regulatory requirements. They lack the understanding of their impact on their business and how to make the green transition, yet this is one of the most significant business opportunities that they can tap for future growth," said Ms Foo.

Mr Derrick Goh (Nee Soon GRC ) observed that businesses will experience higher operating costs and capital expenditures as they look to lower their carbon footprint. The higher costs can come from changes in regulations - such as energy-efficiency requirements and the carbon tax - as well as supply chain disruptions.

He also said companies will need the expertise to properly measure their carbon footprint and emissions, and getting this done is "not easy even for a sophisticated corporate".

Mr Wee noted that sustainability reporting is an emerging area, and companies will need references and resources to guide them in their disclosures.

He noted that ISCA is also developing a series of guides to share best practices on green and sustainable finance.

Those guides will include a road map to guide professional accountants on obtaining green finance for their organisations if those fit into their corporate business strategy, and guidance on how businesses can disclose their green finance policies and initiatives.

"With such assessment, this will allow companies to better approach banks for the financing of their sustainability projects. It leads to a virtuous cycle of sustainability," added Mr Wee.