Changing the climate — by the Young PAP and the SDP

Correction: We have updated the article to reflect that the Young PAP paper proposed a cap-and-trade model to limit carbon emissions alongside the carbon tax.

By Lauren Ong and Liang Lei

ILLUSTRATION: LAUREN ONG

On Feb 8, behind the closed doors of the People’s Action Party’s (PAP) headquarters, members of the Young PAP, environmental advocacy groups and climate professionals gathered to put together a position paper on climate change.

Later that day, the Young Democrats from the Singapore Democratic Party (SDP) opened its proverbial doors — online. It had launched its climate policy paper on a YouTube live stream.

Coincidence? Or by design?

The paper by Young PAP was later released on March 5.

Climate change has become a key talking point, especially since the PM’s National Day Rally speech. It engages the young, resonates with environmentalists and is in step with global movements to save the earth.

Both parties agreed on one problem: Singapore’s dependence on fossil fuels to power its economy and run its vehicles.

In 2016, about 95 per cent of Singapore’s electricity was generated from natural gas and one per cent was from coal and petroleum products. It ranks among the top 30 countries globally for the proportion of fossil fuels in its energy mix.

INFOGRAPHIC: LIANG LEI/ DATA: INDEXMUNDI

The Young PAP paper also highlighted Singapore’s industrial carbon emissions — which contributes to 60 per cent of Singapore’s total output. Both Young PAP and SDP noted Singapore’s deep involvement in fossil fuel trade; SDP stated that Singapore’s still-generous capacity for oil storage shows the Government is far from reeling in its dependence on fossil fuels.

Both political parties offered a slew of solutions, cooked up after consulting environmental experts. While the Young PAP paper had a more conservative approach, the SDP was more critical of the speed at which renewable energy projects were being pursued and Singapore’s dependence on fossil fuels, what it calls big oil.

“We have to take drastic action, bold action to do what is right for the environment. Even if that includes prioritizing the environment and hurting financial interests,” said Mr Kenneth Lin, 25, an industrial design undergraduate and one of the authors of the SDP paper, during its live stream.

Meanwhile, the Young PAP paper wrote: “Our contribution to the climate change movement should be to demonstrate that pursuing a sustainability agenda is compatible with economic viability.”

Rhetoric aside, here are the key proposals both parties made.

1. Electric Vehicles

Electric Vehicles (EVs) were highlighted by Finance Minister Heng Swee Keat in his Budget speech earlier this year. He announced plans to phase out petrol and diesel vehicles by 2040 and replace them with EVs, supplemented by hearty tax rebates for EV owners and the installation of up to 28,000 charging stations islandwide.

In 2016, there were about 100 charging points and 120 electric and hybrid vehicles in Singapore. This has increased in recent years, after car rental firm BlueSG built over 1200 charging points. Energy provider Singapore Power is also aiming to build another 1000 by this year.

RELATED STORY: Budget 2020 Roundup

Young PAP says: Infrastructure for vehicle charging should be built faster to lay the groundwork for EV adoption. It also suggested incentivising the adoption of hybrid cars till 2030 and for the Government to make manufacturers responsible for proper EV battery disposal. This follows the Government’s plan to make electronic goods producers responsible for the collection and treatment of electronic waste by 2021.

The Young PAP paper was published two weeks after the Budget 2020 and can be seen as suggestions for the newly-announced EV plans.

SDP says: Singapore’s land transport should be fully electric by 2050. This was a bold aim when the paper was published, until it was one-upped by Mr Heng in his Budget speech about two weeks later.

“Of course, history has shown us that when we have a good idea, invariably the PAP tries to copy it. But imitation is the sincerest form of flattery,” said SDP chairman Paul Tambyah on the live stream, an unintentional show of clairvoyance.

“Unfortunately, they tend to copy it and water it down.”

SDP suggested that Singapore hit 25 per cent EV adoption by 2020 and 50 per cent by 2040. It also suggested placing charging points at all HDB and public carparks, changing taxi and bus fleets to EVs first and to reduce road tax for EVs.

The paper emphasised that the implementation of EVs, however, is not a one-fix solution as Singapore’s electricity is predominantly generated with natural gas, a form of fossil fuel.

This issue was later raised during the Budget 2020 debate by Non-constituency MP Dennis Tan and Nominated MP Mohamed Irshad. In Finance Minister Heng’s debate round-up speech, he responded that even with the drive towards EVs, Singapore’s land transport policy will continue to prioritize public transport as it is the cleanest form of commute.

2. Renewable energy

In 2018, about 0.8 per cent of Singapore’s electricity is generated by solar power, according to the latest statistics by the Energy Market Authority. The Government aims to multiply our solar capacity by seven times by 2030 and has been test-bedding novel tech like floating solar panels in reservoirs. As of August last year, about 2,000 HDB blocks were outfitted with solar panels.

However, the official stance from the Ministry of Environment and Water Resources has been that Singapore is an “alternative energy-disadvantaged” country, owing to our cloud cover, calm winds and gentle waves.

Another alternative source of energy is the Waste-To-Energy (WTE) plants, which have been meeting three per cent of Singapore’s total electricity demand since the 1970s. Unrecycled waste is incinerated at these plants, generating energy. The NEA has been studying this option to optimise its efficiency.

Young PAP says: More research should be done for renewable energy technology and there should be a framework to incentivise clean energy and further penalize carbon emissions. It maintained the Government’s line that Singapore is unfavourably disposed towards renewable energy due to geographical constraints.

SDP says: Singapore should embrace not only solar but also wind and hydroelectric power. According to the Young Democrats, the heavy presence of the oil and gas industry in Singapore might be one reason the PAP is “reluctant” to make the switch to renewable energy.

The country is among the top 10 exporters of refined products in Asia and in 2014, was refining 1.5 million barrels of oil per day, it said.

The Young Democrats proposed placing solar panels at more locations like walkways and footpaths, and increasing funding to improve their efficiency. Singapore could also lease land in other countries to build the island’s renewable energy infrastructure, just like how it offshored its water supply and military training areas. To sweeten the deal, the paper proposed selling the energy back to the host countries at discounted rates.

Building up Singapore’s energy infrastructure overseas is novel, but cross-border energy solutions are not without precedence. Singapore’s Energy Market Authority has said it will explore regional solutions for the island’s future energy needs. Singapore is already plugged into the Association of Southeast Asian Nations (ASEAN) Power Grid, a regional plan to connect ASEAN member states with a unified energy system. There is talk of increasing renewable energy trade through this system in the future.

Last year, Singapore firm Sun Cable also announced plans to import solar energy generated in Australia through building 3800-kilometre long submarine power cables.

3. Carbon tax

Singapore rolled out a carbon tax in 2019 after Finance Minister Heng first announced it in 2017. It covers around 40 companies and 80 per cent of Singapore’s total carbon emissions. The current asking price is S$5 per tonne of emissions, with the possibility of increasing to S$15 by 2030.

Globally, 57 governments have carbon pricing programmes, either through carbon taxes or emissions trading systems, as of June last year.

Young PAP says: The carbon tax should increase twenty-fold, to S$100 per tonne. Steep, but it drew inspiration from the price tags set by Finland and Sweden, where a tonne of greenhouse gas emission costs S$97.37 and S$176.66.

The Young PAP also proposed that the Government consider a cap-and-trade model in addition to the carbon tax, citing trials in China and the United States. In a cap-and-trade system, a limit on the total amount of carbon emissions is set by the government. Firms then trade permits between themselves to determine how much each firm gets to emit.

SDP says: Do not increase the carbon tax for now. That may not please environmentalists, but SDP reasoned that further increases will not be effective unless there is a way to prevent taxed firms from passing the cost to consumers.

Singapore’s coordinating body for climate policies, the National Climate Change Secretariat, states that the expected cost passed to HDB households range from S$0.30 to S$1.10 a month. Experts have said that the cost of the carbon tax will likely be passed to consumers, although companies such as Tuas Power has said that it will absorb the tax for residential consumers.

4. Finance and the private sector

After the retail energy market was liberalized in 2018, households have the option of buying electricity from firms that buy carbon credits to account for their emissions. These carbon credits are emissions “saved” from efficiency programmes elsewhere. However, there is currently no monetary incentive for households to make such a choice.

In November last year, the Monetary Authority of Singapore (MAS) invested $2 billion in firms that promote sustainability in their operations, as part of the Green Bond Grant Scheme. The Scheme, now named the Sustainable Bond Grant Scheme, was to make Singapore a global green finance hub.

Young PAP says: Rules for the Sustainable Bond Grant Scheme should be tightened to ensure that money is spent on worthwhile projects, defined as work done “on any internationally-recognised green/social/sustainability bond principles or framework”.

Although applicants need their projects cleared by independent auditors before being eligible for the grant, there remains concern about the lack of standardised and compulsory regulations governing sustainability projects.

The Young PAP paper also called for the Scheme to further support small- and medium-sized enterprises (SME) in their sustainability efforts. This follows a move by MAS to lower the minimum grant under this scheme from S$200 million to S$20 million to cater for smaller projects in February 2019.

On data transparency, the Young PAP paper pushed for greater accountability from the private sector, through an energy monitoring plan where companies report their energy management plan to NCCS. It also suggested that carbon emission tracking be made compulsory for companies with net revenue of above $10 million, and for such data to be made available to the public.

In February, MP for Nee Soon GRC Louis Ng asked if the amount of carbon tax paid by each company could be released. Minister for Environment and Water Resources Masagos Zulkifli said such scrutiny was not "productive or correct".

SDP says: Parliament needs to check the books of GIC Private Limited, one of Singapore’s sovereign wealth funds. The paper stated that the firm should “adopt good corporate governance and maximum transparency and accountability” through submitting annual reports that include investment activities and its efforts in environmental, social and corporate governance matters.

This echoes calls SDP has made in the past for the two state-linked investment firms, GIC and Temasek holdings, to be more transparent in their bookkeeping.

To address the recurring transboundary haze issue, SDP proposed a ban on local banks from financing companies involved in causing forest fires in Indonesia and Malaysia.

It also vowed to strictly enforce Singapore’s Transboundary Haze Pollution Act, enacted in 2014 to criminalize activities contributing to transboundary haze in Singapore. Its extraterritorial jurisdiction has raised the eyebrows of some commentators and foreign governments. There are currently companies under investigation but no one has ever been charged under the Act.

SDP calls for “less braggadocio, more effective action” and PAP aims for a “holistic approach” that hinges on the “involvement of the whole-of-society” — varying tones that echo the degree of ambition both parties have in their respective position papers, loud enough even for those who did not read the papers in depth.

It seems that SDP blames Singapore’s lacklustre climate policies on PAP’s “lack of decisive and expeditious action” on climate change. While it remains to be seen if PAP would likewise turn up the heat on climate change, it appears that the opposition party wants to fight it out on the public stage.

During the party’s live stream, SDP chairman Paul Tambyah said: “You can be pretty sure that climate change is an issue which is going to come up in the election.”

“We will hold PAP accountable.”