Exploring Options for a Sustainable Future Amid Complex Challenges
Singapore’s path to achieving net-zero emissions by 2050 may hinge on leveraging carbon credits or adopting nuclear energy, said Senior Minister of State for Finance and Transport, Chee Hong Tat, on Monday (5 Dec). Speaking at the 37th Singapore Economic Roundtable hosted by the Institute of Policy Studies (IPS), Chee expressed doubts about fully decarbonising the economy without external solutions.
“I am not confident we can bring emissions down to zero entirely. To achieve net-zero, some reliance on carbon credits will be unavoidable,” he noted, emphasising the necessity of preparing for such measures. Chee’s remarks follow Singapore’s recent declaration of its 2050 net-zero target.
Limited Local Energy Options
During the discussion, Chee highlighted that solar energy, despite significant investments, is expected to remain a minor contributor to Singapore’s energy mix. Additionally, importing renewable energy from the region and exploring hydrogen usage are being actively considered.
Nuclear power, while a potential solution, faces hurdles. “The technology must be safe for urban environments like Singapore, and societal acceptance is equally critical,” Chee stated, doubting its near-term feasibility.
Balancing Growth and Sustainability
Chee emphasised the importance of sustainable growth to overcome resource constraints. Carbon credits, he argued, allow for continued economic expansion while offsetting emissions. “Without economic growth, we wouldn’t even have the resources to purchase carbon credits,” he pointed out.
Maintaining a stable regulatory framework is also crucial, he added, criticising populist policy suggestions such as windfall taxes and variable carbon tax rates. “Uncertainty discourages businesses from committing to long-term investments,” Chee explained.
Challenges for Long-term Investors
Hsien-Hsien Lei, CEO of the American Chamber of Commerce, raised concerns about the affordability of housing and cost of living, which could deter long-term investments. “Inflows of ‘fast money’ have displaced opportunities for committed investors,” Lei said, hinting at potential interest in relocating to regions like the Middle East.
In response, Chee clarified that Singapore manages speculative capital through measures like the Additional Buyer’s Stamp Duty, aiming to sustain an ecosystem favourable to long-term growth.
As a city-state with limited resources, Singapore’s ability to welcome immigrants while fostering sustainable development remains a delicate balancing act.
