Carbon Services And Climate Finance
CARBON SERVICES AND CLIMATE FINANCE
The finalisation of Paris Agreement Article 6 rulebook at COP-26 provides the foundation for both private and public actors to leverage carbon markets to meet their climate goals. As an aspiring carbon services and trading hub, Singapore is well placed to seize new green growth opportunities in this space.
Beyond opportunities in carbon exchanges to facilitate trading, the growing carbon market is expected to drive demand for goods and services related to low-carbon project development, project financing, trading, consultancy, and measurement, reporting and verification (MRV). Based on a study commissioned by Economic Development Board (EDB) and Enterprise Singapore (ESG), Singapore can leverage its position as an established professional services, trading, and financial hub, as well as its proximity to South East Asia that is one of the largest carbon credit sources and is seeing growing demand for carbon services as it seeks to decarbonise, to develop as a carbon services and trading hub. It is estimated that this could create a projected gross value added (GVA) of US$1.8-5.6 billion, depending on international climate change developments.
We are studying the new opportunities arising from Singapore’s development as a carbon services and trading hub, how we could leverage this to add value to our economy and create good jobs for Singaporeans, and how we can anchor these economic opportunities in Singapore. Notwithstanding, we have been facilitating the growth of the carbon services ecosystem in Singapore by encouraging existing firms and new entrants to expand their capabilities and use Singapore as a regional gateway for carbon services. Interest has been picking up.
- Today, Singapore is home to more than 70 organisations providing carbon services, which is the highest concentration of service providers in South East Asia, as global companies and local ecosystem players putting in resources to establish and anchor their new carbon services platforms in Singapore. We are also advancing research in nature-based solutions through the NUS Centre for Nature-Based Climate Solutions, which focuses on improving the environmental integrity and project credibility of nature-based solutions. This will allow us to tap the enormous potential for nature-based solutions in South East Asia.
Why are we interested in growing Singapore as a carbon services and trading hub?
Carbon credits provide a decarbonisation pathway for hard-to-abate sectors and represent an opportunity to support emissions reductions globally. Companies are also increasingly looking to manage their climate impact and decarbonise. Hence, it is likely that the demand for carbon services and trading will grow, and this is a promising growth area for Singapore that could create good, green jobs for Singaporeans.
Singapore is well-placed to be a leading carbon services and trading hub. Singapore’s robust legislative framework, and position as an established professional services, trading, and financial hub, put us in a good position to support the development of an internationally trusted carbon services and trading ecosystem in Asia. Being an international aviation and shipping hub also makes Singapore an attractive carbon credits trading destination for international sectoral schemes such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
Southeast Asia holds the highest density of carbon prospecting for nature-based climate solutions such as reforestation and blue carbon . Being a part of this region, this can make us well-placed to provide services to originate, finance and trade carbon credits from and in the region.