The carbon tax that Singapore will implement from 2019 will mainly affect large polluters, but households are also expected to feel the knock-on effects.
The carbon tax, levied on facilities that produce 25,000 tonnes or more of greenhouse gas emissions in a year, will initially be $5 per tonne of emissions, to give companies time to adjust. However, the Government will review the carbon tax rate by 2023, with plans to increase it to between $10 and $15 per tonne of emissions by 2030, Finance Minister Heng Swee Keat said on 19 February 2018.
The impact on households will be smaller – a 1% increase in total electricity and gas expenses on average, he added. But households will get help in the form of additional utilities rebates through the GST Voucher U-Save scheme. Eligible HDB households will each receive $20 more per year, from 2019 to 2021.
Revenue from the tax will fund green initiatives, via two existing schemes: the Productivity Grant (Energy Efficiency) and the Energy Efficiency Fund.
A carbon tax is a tool commonly used around the world to control the amount of earth-warming greenhouse gases released into the atmosphere. It incentivises emitters to cut their greenhouse gas emissions and improve energy efficiency.
Professor Euston Quah, Head of the Economics Department at the Nanyang Technological University, welcomed the adoption of the carbon tax, calling it timely. He said: “It sends a signal to those whose activities cause damage to society, whether in the form of human health or environment, that they must be responsible for their actions.”
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Source: The Straits Times, 20 February 2018