Singapore Takes The Lead In Implementing Carbon Credit System

With its latest move to launch a carbon credit system, the island nation aims to further spur climate action from private and public sectors.

Carbon Credits - How Does it Work?

The carbon credit system, also known as carbon trading, allows companies and individuals to buy, sell or trade carbon credits. One carbon credit represents one tonne of carbon dioxide or its equivalent greenhouse gases. Entities that emit less than their allotted carbon limit can sell their excess credits to those who emit more. This provides a financial incentive for reducing emissions while allowing flexibility.

Singapore's system will be modeled after existing cap-and-trade programs globally. Key authorities like the National Environmental Agency (NEA) and Energy Market Authority (EMA) are working to set up the necessary infrastructure and regulations. Emission reporting, verification and credit issuance procedures will follow international best practices to ensure transparency and environmental integrity.

Piloting With Voluntary Phase

Singapore will first launch a voluntary pilot phase of the carbon credit system later this year. This will allow interested companies and sectors to test out credit trading on a small scale before the mandatory phase kicks in. Participants in the pilot can generate early credits that can be banked for future compliance.

The pilot phase is aimed at ironing out any operational or technical challenges. It will also help familiarize participants with carbon accounting, credit issuance and transactions. Valuable lessons from the pilot will be used to refine the program before full-scale mandatory implementation across key emission-intensive sectors.

Singapore Takes The Lead In Implementing Carbon Credit System: https://www.coherentmi.com/blog/singapore-takes-the-lead-in-implementing-carbon-credit-system-14