Comparison of Singapore's Carbon Tax Trajectory from 2028 with Recent International Developments
Ministry of FinanceSpeakers
Summary
This question concerns whether Singapore's post-2028 carbon tax trajectory has been assessed against international developments and when businesses will receive clarity on post-2027 rates, raised by Mr Mark Lee. Chairman of the Inter-Ministerial Committee on Climate Change Gan Kim Yong replied that the Government is reviewing the trajectory for 2028 and beyond and will announce future rates in advance of the previously announced $50 to $80 per tonne target by 2030. He noted that the Government is taking a pragmatic and calibrated approach by considering decarbonisation technology progress, cost impacts on businesses, and international climate developments. He added that the Government is closely monitoring other countries' decarbonisation progress alongside Singapore's own commitments. Finally, he emphasized that Singapore's commitments depend on global action, and targets and carbon price trajectories will be reviewed if global momentum slows significantly to protect international competitiveness.
Transcript
102 Mr Mark Lee asked the Prime Minister and Minister for Finance (a) whether the Government has assessed how Singapore's carbon tax trajectory from 2028 onwards compares with recent international developments; and (b) when businesses can expect greater clarity on the post-2027 carbon tax rate to support investment planning and maintain Singapore's competitiveness.
Mr Gan Kim Yong: I speak as Chairman of the Inter-Ministerial Committee on Climate Change which coordinates Singapore's carbon tax policy.
The carbon tax plays an important role as a price signal to support and encourage businesses and consumers to improve energy and carbon efficiency, and to invest in lower-carbon solutions.
We have previously announced a range of $50 to $80 per tonne by 2030. As I mentioned during the Committee of Supply debate earlier this year, the Government is reviewing the carbon tax trajectory for 2028 and beyond and will announce future rates in advance. We are taking a pragmatic and calibrated approach. We will consider the progress of decarbonisation technologies, the cost impact on our businesses and international climate developments. We are also tracking closely the progress of other countries in meeting their decarbonisation commitments, and Singapore's own progress towards our internationally committed decarbonisation goals.
We had declared explicitly, when we made these commitments under the United Nations Framework Convention on Climate Change, that they were contingent on other countries also doing their part to mitigate climate change. If the global push for climate action slows down significantly, we will need to review the ambition and timing of our decarbonisation targets to ensure that they remain realistic and will not undermine our international competitiveness. That would have an implication for our carbon price trajectory.