On the 28th March 2017, we held our monthly networking session on Carbon Taxes and what it Means to Businesses in Singapore with a positive response of 63 attendees.
On 22 February 2017, Finance Minister Heng Swee Keat announced during the Singapore Budget speech that the government is looking at imposing Carbon Tax come 2019. This means that major refineries such as the Royal Dutch Shell and ExxonMobil could see a 10 to 15 percent hit to profit margins here in their Singapore refineries, as told by an analyst on CNBC.
With carbon tax priced at S$10 to S$20 per tonne of Greenhouse Gas Emissions, businesses generally can expect the increase in operating cost from the proposed tax rate as it represents a 6.4 to 12.7 percent increase from current oil prices. This increase in operating costs may also be passed onto consumers.
Experts caution that such tax could have a regressive impact and hitting low-income end users and businesses harder, and may to a larger extend, widen the inequality gap. However, some experts have commented that while these costs may likely to be passed on to the consumers, the impact appears to be modest for now.
The panelists consist of the following:
Mr Benedict Chia, Director (Strategic Issues), National Climate Change Secretariat
Ms Melissa Low, Senior Sustainability Advisor, Energy Studies Institute
Mr Chia gave an introduction of carbon tax in Singapore and the rationale for carbon pricing. Ms Low shared on the carbon pricing expereineces around the world.
During the panel discussion, some of the questions posed were:
1. What are the factors that contribute to the wide carbon pricing?
2. What happens to the revenue to the carbon tax? Where else should the funds go to?
3. What are some learning points from companies who have been unsuccesful in implementing carbon pricing?