The Pathway to Paris: A Commentary on the Carbon Pricing (Draft) Bill
The following is an excerpt from the pathway to paris: a commentary on the carbon pricing bill, which is a joint collaboration between ELSA and the NTU ASE Club, NUS BES Student Committee, and I’dECO – the Yale-NUS Sustainability Movement. The full PDF version can be found here: http://bit.ly/elsaco2pricing
In line with Singapore’s Climate Action Plan, the Singapore Government announced its intent to implement a carbon tax on the emission of greenhouse gases at the 2017 budget. Pursuant to that plan, which would put Singapore on the roadmap to meeting its Nationally Determined Contributions (NDC) to the Paris climate agreement to reduce Singapore’s emissions intensity by 36% from 2005 levels by 2030 to stabilize at 65MtCO2e, the Government has drafted enabling legislation in the form of the Carbon Pricing (Draft) Bill (CPB).
It is heartening to see that Singapore has embarked on this journey towards climate action, beginning with this year being designated as the Year of Climate Action. The CPB is undoubtedly a milestone and important pillar in achieving our Paris NDC. However, we believe that Singapore can do more to set itself apart as a leader in the sustainability sector in Asia.
Further, we have identified certain issues in the CPB legislation itself which could be improved upon to further promote accountability, transparency, and efficiency in the implementation of the carbon tax regime. Additionally, we have included further policy recommendations to enhance and multiply the effect of the carbon tax regime on our carbon footprint. We have, in total, proposed 14 recommendations to enhance the CPB and the subsequent implementation of the carbon tax:
- Recommendation 1 – Carbon price escalator
- Recommendation 2 – Entity as the basic unit of account, not facility
- Recommendation 3 – A simpler taxation scheme
- Recommendation 4 – Reliefs and remissions to be publicly justified and granted by the Agency
- Recommendation 5 – Race to the top
- Recommendation 6 – Governance Advisory Panel
- Recommendation 7 – Free access to relevant Codes of Practice and Singapore Standards
- Recommendation 8 – Safeguards to protect I3P independence and professionalism
- Recommendation 9 — A Carbon Pricing Appeals Board with professional experts from relevant fields
- Recommendation 10 — A Public Register for Appeal Board decisions
- Recommendation 11 — No statutory restriction of appeals to the High Court
- Recommendation 12 — High Court and Court of Appeal hearings to be public by default
- Recommendation 13 — A whole-of-Government Footprint Fund to shrink our CO2 footprint
- Recommendation 14 — Singapore as an identifiable green hub in the region
We would like to record our gratitude to everyone who has contributed to this process, including our Professors (Joseph Chun and Jolene Lin from NUS Law, and Douglas Kysar from Yale Law), Melissa Low from the Energy Studies Institute, and all others who have contributed in a way or another.
We hope that this analysis of the draft CPB and our proposed recommendations will stimulate discussion in the research and policy-making communities and help inform Singapore’s efforts to put a price on carbon.
Recommendation 1 – Carbon price escalator
We propose that the carbon price should be gradually tapered upwards (by increasing the carbon price by SGD 5/tonne annually) to at least USD 50/tonne by 2030.
Recommendation 2 – Entity as the basic unit of account, not facility
We propose that the basic unit of account should be the business entity that owns the facilities concerned, and that the carbon thresholds for taxation be reckoned on the entity level.
Recommendation 3 – A simpler taxation scheme
We propose that carbon price should be administered through a simple taxation scheme, where the carbon price is charged based on verified emission values, should be used, to reduce the costs of transaction and administration.
Recommendation 4 – Reliefs and remissions to be publicly justified and granted by the Agency
We propose that Section 23 reliefs and remissions should be justified with proper reasons, and that these reasons be made public, on the NEA website. Further, the grant of such reliefs and remissions should only be granted by the Agency (NEA).
Recommendation 5 –Race to the top
We propose that the amount of GHG emitted by each entity, as well as the carbon intensity of the entity should be posted on the EMA website to inform consumers, and to facilitate consumer choice.
We propose that the GHG emissions of all other registered facilities and taxed entities to be made publicly accessible on the NEA website.
Recommendation 6 – Governance Advisory Panel
We propose that the adoption, amendment, and repeal of all definitions in the Main Act, regulations, guidelines, guidelines, and codes should be made in consultation with a standing Governance Advisory Panel (GAP) made of leading experts of relevant fields to advise the Minister on the latest developments and the good governance of the CPB system. Records of the proceedings of the GAP should also be made public through the NEA website.
Recommendation 7 – Free access to relevant Codes of Practice and Singapore Standards
We recommend that all adopted COPs, including SSs, should be made freely available on NEA’s website.
Recommendation 8 – Safeguards to protect I3P independence and professionalism
We recommend that formal professional standards for independent third party verifiers should be established. Further, a regulatory body for the profession should also be considered. Finally, a rotation scheme should be established and enforced to prevent capture.
Recommendation 9 — A Carbon Pricing Appeals Board with professional experts from relevant fields
There should be a standing Carbon Pricing Appeals Board, formed of professional experts from relevant fields. All appeals would be heard by this Board, which would be appointed by, but functionally independent of the Minister, and bring professional expertise to every appeal.
Recommendation 10 — A Public Register for Appeal Board decisions
The Ministry of Environment and Water Resources (MEWR) and the National Environment Agency (NEA) should create a public register hosted on either or both their respective websites to provide information on appeals filed and Appeal Board decisions, as this will develop the case law relating to carbon pricing.
Recommendation 11 — No statutory restriction of appeals to the High Court
The High Court should determine whether it should accept any appeal from the Appeals Panel by promulgating an Order in the Rules of Court. There should be no statutory restriction in the CPB itself.
Recommendation 12 — High Court and Court of Appeal hearings to be public by default
Hearings in the High Court and Court of Appeal should be heard in public, especially where they concern questions of law.
Recommendation 13 — A whole-of-Government Footprint Fund to shrink our CO2 footprint
The revenue from carbon tax should form a special Footprint Fund, and be combined with other existing funds, such as National Environment Agency’s (NEA) Energy Efficiency Fund and the Economic Development Board’s (EDB) Productivity Grant, to provide funding for schemes tackling carbon emissions in a direct or indirect manner.
Recommendation 14 — Singapore as an identifiable green hub in the region
Singapore, as part of its Paris contributions, should engage in capacity building and knowledge transfer of its domestically developed technologies regionally and globally through its research centres.