The Big Read: Can a higher carbon tax lead S'pore to the promised green land?
Back in 2019, when the Republic became the first South-east Asian country to implement a carbon tax — touted as a cost-effective way to combat global warming — many viewed the rate of S$5 per tonne of carbon emissions as too low. The low rate is meant to give businesses time to adjust to a carbon tax, the Singapore authorities had said. Still, the rate is “alarmingly insufficient and meagre” when compared with global recommendations of S$100 by 2030 for advanced economies, said Mr Shawn Ang, a 23-year-old NTU undergraduate and spokesperson for Students for a Fossil Free Future (S4F), a coalition championing the elimination of fossil fuels.
Prof Euston Quah, who specialises in environmental economics at NTU, however, argued for adjustments to the carbon tax to be spread out over a longer time period, beyond 2030. A longer runway with fewer drastic increases in carbon tax prices would give companies time to adjust to the changes, said Prof Quah, who is the Albert Winsemius Chair Professor of Economics. Prof Quah said that if companies are unable to adapt quickly to the carbon tax by adopting decarbonisation technology, the tax hikes may end up driving inflation.
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