Single title - Regional Project Energy Security and Climate Change Asia-Pacific (RECAP)
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- Singapore’s power mix is dominated by gas (95.5%). The establishment of an LNG regasification plant in 2013 has expanded its access to global sources and, thus, increased energy security. Total dependence on piped gas is to end by 2030.
- Given geographical and geological constraints, the deployment of renewables and civil nuclear is limited. Currently, Photovoltaic (PV) SolarNova by the Economic Development Board (EDB) and the Housing Development Board (HDB); Floating Solar PV by the Public Utilities Board (PUB) and EDB, and Waste-to-Energy (WtE) by National Environment Agency’s (NEA) Integrated Waste Management Facility 2024, are the major sources of RE for electricity generation amounting to about 4% (2016).
- Energy Efficiency (EE) in industry, buildings, transport, household, water and waste (by EDB and NEA) is, thus, Singapore’s key strategy for reducing GHG emissions. Yet, a government regulatory approach to EE may incur high costs and unintended social consequences.
- The deployment of carbon taxes was announced in 2017 as ‘the most economically efficient and fair way to reduce greenhouse gas emissions so that emitters will take the necessary actions’ (2017 Budget). The tax was implemented in 2019 with the enactment of the 2018 Carbon Pricing Act (CPA).
- Pricing carbon through a carbon tax has thus been placed at the foundation of the EE strategy. It is anticipated that taxes will encourage changes in consumption, provide market incentives for the adoption of EE technologies, and stimulate the growth of green industries.
- Carbon taxes will be applied upstream, that is, to direct emitters (power stations, etc). Emitters can opt to improve energy efficiency and reduce emissions or pay taxes. Consumers can opt to use less electricity and save energy (but taxes will not apply downstream). Tax revenue will fund transitional costs as well as measures taken by industries to reduce emissions.
- Thus, it is expected that energy efficiency, low-carbon technology, and reduced emissions will in future ‘grow’ out of carbon taxes.