Carbon Tax Revenue Used to Fund Transitional Measures by Industries to Reduce Emissions

Prof Koh Lian Pin asked the Minister for Sustainability and the Environment (a) to date, how much carbon tax revenue has been used to fund transitional measures by industries to reduce emissions; and (b) whether the Government will consider expanding the use of carbon tax revenue in ways that benefit wider society and align with the Singapore Green Plan 2030 including the upskilling of workers to capitalise on emerging green sectors and jobs, and ground-up initiatives of Singapore green groups that support urban sustainability, climate actions and nature conservation.

As a principle, the Government does not ring-fence sources of fiscal revenue for specific purposes. This ensures that the Government has flexibility in allocating resources to priority areas with the most important spending needs.

Singapore’s carbon tax was introduced in 2019 to incentivise emission reductions across all sectors and support the transition to a low-carbon economy. We expect to collect carbon tax revenue of about $1 billion in the first five years. To reduce carbon emissions, we are prepared to spend more than this amount on worthwhile projects which deliver emissions abatement.

To support our industries in improving energy and carbon efficiency, we have increased the funding support of incentive schemes such as the Resource Efficiency Grant for Energy and the Energy Efficiency Fund. We have also earmarked funds under the Research, Innovation and Enterprise 2025 plan for the research, development and demonstration of sustainable urban solutions, as well as emerging low-carbon technologies that can drive deeper decarbonisation.

The Singapore Green Plan 2030 is our whole-of-nation movement to promote sustainable development and drive climate action. It sets out ambitious and concrete sectoral targets over the next decade. These are major undertakings that require significant resources and investments, and the carbon tax revenue alone would not be sufficient. For example, to encourage active mobility and reduce vehicular emissions, we are setting aside more than $1 billion to expand the Islandwide Cycling Network to over 1300km in length by 2030. We have also set up the Coastal and Flood Protection fund, with an initial injection of $5 billion, to help protect Singapore against rising sea levels.

As Prof Koh alludes to, the Green Plan must also support our people to thrive in the green economy and encourage them to mount sustainability initiatives in the community. Under the "Green Economy" pillar of the Green Plan, we will invest in Singaporeans and help them upskill to take on new jobs in green sectors such as green finance, sustainability consultancy and carbon services and trading. We have also launched the SG Eco Fund to encourage ground-up sustainability initiatives in the community, including those that support climate action and nature conservation. We will continue to partner Singaporeans in building a more liveable, resilient and sustainable future.