On Friday, February 18th, Singapore announced that it was raising its carbon tax rate from S$5 per tonne of emissions to S$25 per tonne by 2024 and eventually between S$50 and S$80 by 2030. This represents a significant step forward, giving climate impact a tangible cost and forcing companies and consumers to reflect upon and fiscally compensate for their carbon footprint. A recent report by PwC and World Economic Forum (WEF) shows that an internationally agreed minimum carbon price could cut emissions by 12% with little cost to economies.
But despite this, if we are to have a chance of reaching net zero by 2030, companies cannot simply wait for the government to impose penalties from above, but rather must make proactive choices themselves, not simply reducing but also working to offset their carbon emissions.
The logic behind this is simple. Recent research suggests that humans have already emitted around 2500bn tonnes of carbon dioxide since 1850, burning through over 86% of the allotted carbon budget needed to stay under the 1.5C of warming pledged under the Paris Agreement. While a carbon tax might encourage companies to make greener choices—adopting new technologies or swapping fuels— simply reducing emissions without offsetting them is unlikely to do enough to salvage the carbon budget. Not only this, but lauding a carbon tax as the pinnacle point in the effort to redress climate change brings with it the concomitant risk that businesses will simply pay their carbon tax and be done, investing no further money in green initiatives or actions.
The fact that Singapore is reported to be considering buying carbon credits and allowing businesses to buy international carbon credits to offset up to 5% of their taxable emissions from 2024, is further evidence of the increasing recognition that reaching net zero will require a dependency on alternatives other than a carbon tax.
Creating a carbon trading center
Singapore is moving in the right direction with such initiatives, priming itself to become a center for carbon trading. Under the “Green Economy” pillar of the Green Plan, the creation of a carbon trading and services hub will encompass “green finance, sustainability, verification, credits trading and risk management.” Singapore has established itself as a global leader in efforts to create a “carbon economy” and the introduction of a carbon tax in 2019 is evidence of this. However, it is crucial that corporations do not see carbon tax as a reason to deny taking proactive action. Carbon tax is not the final solution, but a positive first step.
This is why solutions like our Carbon Neutrality Token (CNT™) are key in addressing the urgent climate crisis. Not only do we currently provide the only platform that facilitates international carbon credits trading, our CNT™ also allows access to best in class, authenticated carbon credits, which enables companies to actively go above and beyond balancing out their carbon emissions and thus solidify their commitment to salvaging the environment.
We know that as carbon offsetting becomes increasingly key in the fight against climate change, and as regulation tightens around such schemes, it is important for institutional investors to have absolute confidence in the quality of the exchange they choose. MetaVerse Green Exchange’s CNT™ token solves the problem of ‘double-counting’ in the voluntary carbon markets by preventing the carbon emission reduction from being counted as part of the Nationally Determined Contributions (NDC) in both the host country as well as the carbon credit investor’s country. Investors can thus be sure that their efforts are legitimate, protected against charges of ‘green-washing’, and that the carbon credits they purchase are of high-quality, therefore ensuring carbon reduction integrity.
While a carbon tax represents a positive first step in the fight against climate change, reaching our net-zero target as soon as possible will require us to not simply reduce but also offset our emissions. We encourage companies to affirm the MVGX mission and start making a proactive effort today.