Is there any truth in WP’s Jamus Lim’s claim that our carbon tax coverage is too limited?

In last week’s setting, climate change was amongst one of the topics raised, discussed, debated. What was interesting was that a bunch of PAP MPs had filed this. Namely, members of the Government Parliamentary Committee (GPC) for Sustainability and the Environment filed the parliamentary motion to speak on climate change and its impact on Singapore.

Yup, first of its kind on the issue.

Members of the Government Parliamentary Committee (GPC) for Sustainability and the Environment include MPs Hany Soh, Louis Ng and Poh Li San. (Source: PAP)

The motion reads: “That this House calls on the Government, in partnership with the private sector and the people of Singapore, to deepen and accelerate efforts to mitigate and adapt to climate change, and to embrace sustainability in the development of Singapore.”

Mr Ng, who chairs the GPC for Sustainability and the Environment, said climate change “is an existential threat that we cannot ignore”.

WP’s MP Jamus Lim claims that coverage of our carbon tax is too limited

In his speech on the motion, MP Jamus Lim voiced his support for a carbon tax, but said Singapore’s is set too low – far short of most recommendations and even compared with actual rates currently imposed worldwide – and its coverage too limited.

Other than advocating for a (much, much) higher carbon tax, Lim also commented that the existing coverage of our carbon tax is too narrow.

“Moreover, the existing carbon tax is limited to just the largest industrial facilities—those emitting in excess of 2,000 tons of CO2—and effectively covers just around 30 to 40 companies. Not only would this excessively conservative target fail to generate the sort of volume reductions required, it also concentrates the tax burden on a small set of firms. Even if these firms account for the vast majority of emissions, the narrow coverage is inconsistent with public finance principles.”

SM Teo Chee Hean setting the record right, “Carbon tax in Singapore is one of the most comprehensive in the world”

Senior Minister Teo Chee Hean, who chairs the Inter-Ministerial Committee on Climate Change, also rose to speak on the motion. He mainly wanted to respond to criticisms that coverage of our carbon tax is too limited or narrow.

The truth is the carbon tax in Singapore is one of the most comprehensive in the world, covering about 80 per cent of emissions.

Nope, not limited or narrow at all.

“I would like to make one clarification on carbon tax because there seems to be a fundamental misunderstanding, even among normally well-informed Members of this House, on carbon tax in Singapore. There has been a comment that the carbon tax in Singapore is very narrowly focused and only affects a few industries. In fact, the carbon tax in Singapore is one of the most comprehensive in the world.

If one looks at it, you can see that we have chosen to apply the carbon tax at key nodes of carbon emissions in Singapore so that this tax will flow through evenly to the rest of the economy. This makes the implementation of the carbon tax and the administrative load on companies, especially small and medium enterprises (SMEs), very low. By selecting these key nodes and applying the carbon tax there, for example the power companies and the key emitters in industry, we have been able to cover 80% of emissions in Singapore, and this is an extremely effective way of doing so.

The remaining 20%: the highest proportion of the remainder actually comes from transport fuel emissions, which are already fairly substantially taxed in Singapore.

So our coverage is even higher than 80% when one talks about the carbon tax coverage. I just wanted to make this clarification so that there is no misunderstanding in this house about how we have implemented the carbon tax.”

You can read SM Teo’s full response here.

 

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