Excerpt of Budget speech by Mr Heng Swee Kiat, Minister for Finance, 20 February 2017
EXCERPT OF BUDGET SPEECH BY MR HENG SWEE KIAT, MINISTER FOR FINANCE, 20 FEBRUARY 2017
A quality living environment
Sustaining a Quality Environment for the Future
Our vibrant and connected city must also be sustainable and resilient. A high-quality living environment endears the city to its residents and visitors.
Around the world, the effects of climate change, and air and water pollution are worsening public health and quality of life. These harmful effects transcend national boundaries. As an island, Singapore is vulnerable to rises in sea level due to climate change. Together with the international community, we have to play our part to protect our living environment. In doing so, we secure a better future not only for ourselves, but for generations to come.
Singapore has joined more than 130 countries, including China, Japan and South Korea, in having ratified the Paris Agreement, re-affirming our commitment to address climate change and reduce emissions. It is in our own interest to support the international coordination required to deal with an issue that affects all countries, and in particular, small island states like ours.
There are different ways to reduce emissions. One is to ensure consumers understand the effects of their actions. So we have energy efficiency labels, like ticks on air-conditioners or refrigerators. Another is to regulate for higher standards. Singapore has good environmental protection standards and the Ministry of the Environment and Water Resources continues to ensure that our regulations are up-to-date. But the most economically efficient and fair way to reduce greenhouse gas emissions is to set a carbon tax, so that emitters will take the necessary actions.
Singapore has studied this option for several years. We intend to implement a carbon tax on the emission of greenhouse gases. We will consult widely with stakeholders, and aim to implement the carbon tax from 2019. The tax will generally be applied upstream, for example, on power stations and other large direct emitters, rather than electricity users.
We are looking at a tax rate of between $10 and $20 per tonne of greenhouse gas emissions. This is in the range of what other jurisdictions have implemented. It will create a price signal to incentivise industries to reduce their emissions, complementing the regulatory measures which we are also introducing. It will help us to achieve our commitments to reduce emissions under the Paris Agreement, do so efficiently and at as low a cost to the economy as possible. This may also spur the creation of new opportunities in green growth industries such as clean energy. Revenue from the carbon tax will help to fund measures by industries to reduce emissions. The impact of the carbon tax on most businesses and households should be modest.
The Government has started industry consultations and will continue to reach out. Public consultations will begin in March. The final carbon tax and exact implementation schedule will be decided after our consultations and further studies. We will take into consideration the lessons from other countries and prevailing economic conditions in Singapore in implementation. We will also provide appropriate measures to ease the transition.
For the full speech, please go to https://www.singaporebudget.gov.sg/.