Singapore’s carbon tax debate is less about missed forecasts and more about design realities. As highlighted by Professor Johan Sulaeman, the oft-cited S$1 billion revenue was never official, raising a more important question: why are actual projections structurally lower? Transitional allowances and the use of international carbon credits are softening the effective carbon price, particularly for emissions-intensive, trade-exposed sectors. While this cushions competitiveness, it also dilutes near-term impact. For carbon pricing to drive meaningful transition, these allowances must be progressively tightened in both scope and quality. Otherwise, persistently low effective prices risk weakening incentives for decarbonisation and delaying Singapore’s broader climate ambitions.
