Jamus Lim on Carbon Pricing (Amendment) Bill

A steady increase in the carbon tax as proposed in a new Bill may bind policymakers’ hands to a schedule that could be detrimental to economic performance, said MP Jamus Lim in Parliament on Tuesday (Nov 8). He suggested allowing the carbon tax to vary over time, adhering to a central rate but being up- or down-weighted by the Monetary Authority of Singapore’s (MAS) evaluation of the current state of the economy. This would strike a balance between safeguarding the economy and jobs, while protecting the environment. Assoc Prof Lim also said monetary policy can complement the green transition. For example, MAS could consciously include green bonds in its potential portfolio of securities that it buys and sells when it conducts monetary policy. He also repeated a previous suggestion for an Export-Import Bank that could provide financial support for SMEs in the green transition. All these moves, he said, would go a long way towards ensuring buy-in from those affected by the carbon tax.