WP Jamus Lim made the call in Parliament to ‘raise and rebate’ a carbon tax to push out what he called the ‘brown’ industries in favour of green ones.
As far as a carbon tax is concerned, everyone agrees that it is is a necessary step to sustain a clean, green and liveable environment. It is a first step towards transforming the Singapore economy into a low-carbon economy. The carbon tax was in fact announced in Budget 2017 and introduced in 2019.
But a carbon tax alone will not transform an economy.
It is overly simplistic for Jamus to think that by making the carbon tax high, people will start to choose green, and the tax will hasten the exit of ‘brown’ industries. The professor failed to take many other important things into consideration including the jobs that will be displaced, that we must care about.
Energy consumption is tied to the economy. The economy is tied to infrastructure. Infrastructure is determined by the kind of investments you would like to attract to Singapore. The investments you attract to Singapore determines the kind of good jobs created for Singaporeans. The jobs created determine the kind of training Singaporeans will need to hold the jobs. These things do not happen overnight.
How do we manage our carbon footprint and stay competitive as an economy?
For example, Singapore is a data hub and many internet companies would like to set up data centres in Singapore. We saw that happen in recent days. This will create many good and desirable jobs for Singaporeans. But data centres require huge amount of energy and this will increase our carbon footprint. Each time Jamus logs into his laptop or uses his smartphone, he is choosing ‘brown’ so to speak.
What can Singapore do to be a competitive economy with good jobs for Singaporeans while still moving on the trajectory towards green?
Carbon footprint and the big ‘brown’ elephant in the room
Let Trade and Industry Minister Chan Chun Sing explain how Singapore will go green as we move towards a post-fossil fuel future. He has a very sharp mind.
In January last year (2020), at the Singapore Perspectives 2020, a student from NUS-Yale asked the Minister what the government was going to be about the ‘big elephant’ in the room, namely, our petrochemical industry. Mr Chan gave a very insightful response.
Do take time to watch this video.
Q (Aidan Mock, Yale-NUS student, member of SG Climate Rally): Climate change has been a big topic that we’ve discussed today. It’s something my peers and I feel really deep anxiety about.
I want to ask how Singapore intends to confront the elephant in the room, which is the large fossil fuel industry that we host, given that we want to be responsible and pull our weight in dealing with the climate crisis as well.
A (Trade and Industry Minister Chan Chun Sing): Yes, we have a big petrochemical industry. But we also have to be realistic. How is our petrochemical industry performing?
Our petchem industry is one of the most efficient, one of the cleanest, in the whole industry.
So we ask the people (at the Paris Climate pact) in the discussion: If tomorrow, we don’t produce, where will all these same petrochemicals be produced?
They will be produced somewhere else in the world, and more likely under conditions which are perhaps more pollutive than the current conditions.
But we do have this issue, notwithstanding that we take our carbon responsibilities very seriously.
Now, when EDB (Economic Development Board) tries to win investments and create jobs for the next generation, we have to take into account not just our land constraints, our manpower constraints, our fiscal constraints, and so on and so forth, we also have to take into account our carbon constraints.
Singapore is a data hub. Many Internet companies, many digital companies, would like to set up their data centres in Singapore. But data centres require huge amounts of energy; huge amounts of energy require huge amounts of carbon budget. Are we able to attract these companies? If we are unable to attract them, what does it mean for our economy, our position as a global hub for the digital services?
Now, these are difficult questions that cannot be answered just because we are philosophically wedded to one consideration and not the rest.
In fact, in all such difficult decisions, we have to ask ourselves: How do we remain competitive as an economy to attract those investments and create new jobs for our people? How do we fulfil our carbon budget obligations, not just for this generation, but for the next generation?
So what can we do to unlock the energy constraint, or rather the carbon constraint, for the next 50 years, so that we can continue to attract industries, create new jobs for our people, yet at the same time, manage our future carbon budget?
The climate change carbon budget is not about 50 or 100 years later, when the sea level starts rising. For us, it is a here-and-now challenge. If we cannot manage that, we can’t even attract the industries to create the jobs for the next generation.
But I think there are many things that we can do. First, think of how we can diversify our energy sources. We have gone from oil and gas to LNG (liquefied natural gas), which is one of the cleanest fossil fuels.
Second, we can significantly try to improve our solar panel coverage. In fact, I think by the end of this year, if I’m not wrong, one in every two HDB flats will have at least some solar panels, and we will try to scale, as much as we can. But we need to manage the demand as well. Finally, are we thinking of a post-fossil fuel future?
Yes, we are. Because we know where the trend of the world is going. We are just one small part of the global economy. ExxonMobil, Shell, and so forth, they are all thinking of a future beyond fossil fuels. How fast we can get there? It all depends on how fast we are able to adopt those technologies.
But when the time comes, it will mean that our economic structures will fundamentally be quite different. It means that the types of jobs that we can create for our own people will be quite different. And all this will not be able to be done overnight, because as you shift the industry structure, we must have a care about the jobs that are being displaced, and these are jobs that many of our people are working in.
So, yes, we are looking at that, and we are thinking of how to make sure that we insulate ourselves against all these difficult problems that may come and confront us, but we can all do something to unlock that energy and carbon puzzle confronting us today.