Speech by Mr. Derrick Goh, MP for Nee Soon GRC, on the Private Member’s Motion: Towards a Low-carbon Society
Mr Speaker, Sir, experts noted that the recent COP26 Climate Conference to secure a net-zero Carbon footprint fell short of actions but help move the world forward.
In Singapore, a Clean and Green Global City has always been a national focus since our founding as a nation. We have always been doing our part such as setting up a Climate Action Package in 2018 and more recently, putting forward the Singapore Green Plan 2030 which we discussed in this House.
In joining the debate on this Motion, there are two key areas I would like to touch on: One, factors to consider in our Green transition plans; and Two, seizing opportunities in the Green economy.
These are areas that will pave a clear glide path in our journey towards achieving our net-zero ambitions and eventually set a time-bound commitment, along with strengthening our position on climate leadership.
Key to an effective green transition is about having a good implementation plan. This requires a clear-headed recognition that a greener world and Singapore will come at a cost. Therefore, we need to navigate this well. It was apparent at COP26 that such trade-offs are not easy to make and Singapore will face similar challenges in our transition journey.
A good implementation is about our Government leading these efforts which are effective in reducing real carbon footprint and done smoothly, so that the unintended effects on our society are mitigated. A holistic plan would entail: one, a balanced approach in carbon pricing; two, eliminating the regressive effects; and three, accelerating efforts on identifying enablers, which is about stepping up awareness and education on carbon emissions and greener alternatives.
As we transition towards a green economy, the immediate concern of many households and businesses is about having to bear higher costs to adopt more sustainable and low-carbon practices. This will be taking place against the backdrop of other forms of global trends that are driving cost increases, such as supply chain disruptions, a topic we debated passionately about.
As businesses look to lower their carbon footprint to meet the expectations of stakeholders, they will experience higher operating costs and capital outlay. Domestically, higher costs can also arise from changes in regulations, such as energy efficiency requirements and the Carbon tax. Externally, as the world decarbonises, energy costs will rise.
Given this, the implication is not to stop or slow down our decarbonisation efforts but to ensure that we provide support to households and businesses in their journey to become more sustainable. As such, with the impending revision of Singapore’s carbon tax regime, the Government should adopt a balanced approach to carbon pricing with subsequent increases paced.
While a higher carbon tax can drive reductions in carbon emitting activities, it is important that Carbon pricing be tiered to match against the greener alternatives available or abatement efforts. This is to allow households and businesses in particular SMEs, to make rational transitions.
Higher businesses costs could be temporary during transition and eventually make our businesses fitter in the longer term. But transitions do take time, and our Government could consider adding “carrots” as part of a total package over and above the tax regime, such as Green rewards or financing incentives for households and businesses to accelerate behavioural changes.
As carbon taxes can have regressive effects on the vulnerable segments of our society who spend a higher proportion of their income on basic services such as electricity bills, such negative effects need to be addressed. I hope that as a higher carbon tax is being contemplated, the Government can provide some assurance that relief will be granted in the same way we cushion for GST increases.
Singapore’s transition plan towards a low-carbon society should be an inclusive one. If we are to achieve a greener way of life, it is important to scale up awareness and educational programmes for households and businesses. This enabler is key to move from rhetoric of mere targets to real actions.
Many initiatives we do today, such as our Smart Nation or Zero-Waste Nation programmes, fits nicely into our green movement. Such programs reinforce our green efforts, such as accelerating digitalisation, will lead to a paperless society and reduced waste will help go towards reducing carbon footprint.
There is also scope to create more awareness on enablers as well as actionable steps to galvanise actions. Shops and residents in our neighbourhood want to be green and want to know how much carbon they produce. This is where Government can help facilitate through sharper awareness programmes, through providing carbon footprint calculators and alternatives to facilitate individual action.
Given the global urgency to act quickly for a net zero carbon future, Singapore can and should seize the exciting opportunities that exist before us. We can improve the lives of our citizens and contribute to the global good along with creating new business opportunities.
As an international services hub for finance, consulting, accounting, trading and legal amongst others, we are well-positioned to help the region and the world. This will also create many exciting green business opportunities.
It is often said in business, what you want to manage, you first need to measure. While this is a critical step, the task of any company to determine its baseline carbon footprint or emission is not easy, even for a sophisticated corporate. The Greenhouse Gas Protocol requires the measurement of not just this but also the indirect emissions from a company’s activities known as Scope 2 and from the value chain known as Scope 3, which is even more complex to measure. What I am saying is that measurement is not easy and companies here and the region will need expertise to get this done.
Financial services is also an area where Singapore can make an impact. Investors globally have demonstrated willingness to offer loans at favourable rates while demand is also set to increase as organisations look to also finance decarbonisation efforts and projects. This demand will spur the supply and diversity of products in the international financial marketplace, such as sustainability linked loans, green bonds, green investment funds, as well as transition financing to support decarbonisation plans.
Another key opportunity will be for Singapore to position itself as a carbon services hub. Even though carbon credits are recognised as part of the climate solution in the Kyoto Protocol since 1997, in reality, the Voluntary Carbon Market (VCM) is still at a nascent stage. Today the carbon markets globally remain illiquid and fragmented as they face challenges such as the lack of strong governance, differing standards and grey areas such as the verifiability of projects. These impact market confidence. Market participants wonder if the carbon credits purchased really deliver carbon reductions.
As such, the opportunities before us are real given the pent-up demand. I believe this is where Singapore can play a distinctive leadership role as a trusted global financial and services hub with strong regulatory regime, market infrastructure and services sector expertise. Our brand name for excellence will provide us the platform to create a carbon services hub where participants can buy and sell carbon credits that are of integrity. This would mean the need for an ecosystem such as carbon accounting and Monitoring, Reporting and Verification Services (MRV) here and in the region.
In Singapore, there will be a need for more professionals in a carbon services hub ecosystem. This will spur our services sector to leverage existing skillsets in areas such as trading, product structuring, measurement and certification to apply in the carbon space to support clients in their decarbonisation efforts. All these will lead to the creation of new jobs in Singapore and in the region.
As such, I am glad that the Government is exploring the use of carbon schemes such as the enablement of large carbon emitters in Singapore to purchase high quality international carbon credits to offset their liabilities. With innovative solutions, Singapore-based international carbon exchanges can also participate in this transition which has other spin-off benefits like spurring greener projects such as R&D in clean hydrogen, developing carbon sinks and clean energy farms in the region.
Mr Speaker, Sir, in summary, Singapore is well-positioned to contribute towards a greener future to help achieve our net zero ambitions on carbon.
We can achieve this by implementing measures in a balanced approach. Transitions will require sacrifices and trade-offs by individuals and businesses, but the positive impacts created and the opportunities that can be seized will be bountiful.
In addition, the future is an exciting one as there are many green growth opportunities for Singapore to scale while at the same time riding this wave to drive economic growth.
Watch the speech here.