Carbon tax is generally levied on the use of fossil fuels. Such a tax is necessary if sustaining a clean and green environment to live in is a priority. It also will aid in helping Singapore achieve its low-carbon goals.
In Singapore, carbon tax will be levied on the emitters of greenhouse gases, such as power-generation firms. During the budget of 2017, the minister of finance announced that Singapore would introduce carbon taxes from the year 2019.
Carbon tax will affect facilities emitting greenhouse gasses that are 25,000 tonnes or greater per year. These firms will have to pay S$5 per tonne of greenhouse gas emitted during the first phase (2019 to 2023). In 2023, the rate of carbon tax will be reviewed. The rate will then be increased to between S$10 and S$15 per tonne by 2030.
The actual impact of carbon tax on gas or electricity expenses in a home is negligible. On average, it is expected to be about S$0.30 a month for a 1-room (HDB) flat. An executive HDB flat will see a rise in energy expenses to the tune of S$1.10 a month.
The government is encouraging households to adopt habits that will further reduce energy consumption. Some of those habits include:
To reduce energy consumption, the Singapore government wants to help households adjust and will give you U-Save rebates for an additional 3 years. HDB homes that qualify will get S$20 extra per year between 2019 and 2021. This additional rebate is expected to offset any increases in gas or electricity expenses that arise from the addition of carbon tax.
First, the government plans to apply the carbon tax further upstream at facilities like power generation companies and other large emitters. Companies will have the choice of either paying the carbon tax or reducing their emissions.
Next, companies will be encouraged to become more energy efficient and reduce electricity consumption. The carbon tax that is collected can fund programmes within industries to cut down emissions and offer measures to make the transition easy.
And lastly, reduced emissions will lead to a cleaner environment. Through the process of emission reduction, companies will start using their resources more efficiently. And once this is achieved, more opportunities will arise in the field of clean technology.