Carbon tax adopted by Singapore

By Brian Collett — Singapore is to become the first nation in south-east Asia to introduce a carbon tax.

The decision represents a reversal of the policy of a few years ago when the government rejected carbon taxation.

The measure, due to take effect from 2019, will demand between S$10 and S$20 ($7.15-$14.30, £5.70-£11.40, €6.70-€13.40) for every tonne of greenhouse gas emitted.

Although the levy is being called a carbon tax, the same charge will apply to methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

 Singapore has 40 to 50 heavy polluters, including oil refineries run by Royal Dutch Shell and ExxonMobil. 

Leonard Ong, tax partner at the international business consultancy KPMG, called the proposal “a step in the right direction for Singapore”. 

He said: “With carbon emissions issues becoming of increasing concern, it is only right that Singapore, as a responsible global city, should take the lead in this region and aim to avoid an excessive carbon footprint.”

 Observers point out that Singapore, with a population of just over five million, is responsible for only 0.11 per cent of global emissions. However, the significance is that, if Singapore shows that a rich nation can compete and grow while tackling climate change, the example to world will be invaluable.

 Responsible business practice in Singapore could be a particular example to neighbours such as fast-growing Indonesia and oil-producing Malaysia.

Why has the city state done a U-turn? The big factor seems to be an awareness of the risk of the surrounding rising sea levels caused by climate change. And, of course, Singapore made commitments during the 2015 Paris climate change conference.