- Carbon credits continue to play a key role in the global transition towards net zero.
- Singapore’s progressive climate policies and initiatives are attracting carbon services companies to the city-state.
Officially declared the hottest year on record, 2023 left communities around the world grappling with the aftermath of devastating storms, floods and wildfires. Amid this crisis, countries are in a race against time to limit global temperature rise to 1.5°C.
At the COP28 climate change summit in Dubai, nearly 200 countries pledged to “move away from fossil fuels” in what was seen as a landmark decision. However, this transition also brings challenges, especially for industries that rely heavily on fossil fuels and energy-intensive processes.
Building trust in carbon credits
Carbon credits form a key piece of the puzzle in meeting global climate goals. Promising climate technologies like low-carbon hydrogen are not yet commercially viable, so achieving full decarbonization in hard-to-reach sectors will take time. As an innovative financing mechanism, carbon credits allow companies to mobilize funds to support emissions reduction projects.
However, the world is grappling with securing reliable, high-quality carbon credits. According to Reuters, various investigations have raised serious concerns about its reliability, resulting in its value plummeting. Companies are approaching carbon markets more cautiously given the potential reputational risks of credit purchases.
Against this backdrop, countries such as Singapore are actively contributing to global efforts to instill confidence in carbon credits, paving the way for broader adoption of sustainable practices around the world. Masu. To boost its research and development efforts, Singapore has taken a further step to promote scientific research on nature-based solutions through the Center for Nature-Based Climate Solutions at the National University of Singapore.
Increasing transparency in carbon markets is critical, and Singapore’s Climate Action Data Trust (CAD Trust), a joint venture involving the Singapore government, the International Emissions Trading Association (IETA) and the World Bank, is committed to supporting Singapore’s Emphasis on support. CAD Trust operates as an open-source metadata platform that uses blockchain technology to create a decentralized record of carbon market activity. Its main purpose is to prevent double counting, enhance high environmental integrity, and increase the reliability of carbon credit data. The decision to base CAD Trust in Singapore was born out of the recognition that transparency and governance are rooted in its DNA.
“Singapore is already a significant player in the global financial and commodity trading space and has demonstrated its ability to handle complex market systems. This experience will be invaluable as we navigate new challenges.” different carbon markets. ” — Dinesh Babu, CAD Executive Director
CAD Trust sees Singapore’s proactive efforts as demonstrating a deep commitment to sustainability. This commitment is evident in Singapore’s Memorandum of Understanding (MoU) and agreements related to carbon credit projects across South Asia, Southeast Asia, Oceania and Africa, which align seamlessly with the goals of the Paris Agreement.
Additionally, Singapore is leading the way by partnering with prominent carbon credit programs such as Gold Standard and Verra’s Verified Carbon Standard. They will work together to define the roles of national registries and credit program registries, establish protocols for the exchange of information, and develop a “harmonized approach” to implementing and complying with regulations under Article 6 of the Paris Agreement. A handbook has been created that provides an overview of the
In December 2023, Bhutan became the first national registry to be fully integrated with the CAD Trust metadata layer, transforming the efficiency and transparency of the Himalayan kingdom’s climate mitigation efforts.
Why Singapore is the best place for companies to support global carbon markets
Singapore has successfully attracted over 100 carbon market and services companies, establishing itself as the home of the city-state in Southeast Asia. This not only strengthens the country’s position as a regional nexus for carbon services, but also has the potential to foster the development of scalable and innovative solutions in other parts of the world. At COP28, Singapore’s Sustainability and Environment Minister Grace Foo reiterated the country’s dedication to becoming a responsible global citizen.
“It is particularly important for Singapore to spark innovation, leverage technology and bring together stakeholders to meet climate goals,” she said.
Calyx Global, a carbon credit rating company whose clients include major companies such as Meta and Salesforce, has established a dedicated team in Singapore focused on software and product development. Duncan van Bergen, co-founder of Calyx Global, said: “Singapore’s commitment to climate change and carbon reduction, as well as the level of technology-minded talent, make Singapore a great place for our continued growth. It has become a natural place.”
Mr Van Bergen acknowledged Singapore’s strategic position in a dynamic region that serves as a thriving source of high-quality carbon credits. He pointed to the growing demand for carbon services in Southeast Asia, where businesses are faced with the dual challenge of adapting to new regulations and meeting rising consumer expectations for significant corporate action on climate and sustainability. confronting.
Singapore’s expertise in carbon services and pioneering move to introduce Southeast Asia’s first carbon tax in 2019 were also attractive to Calyx Global. Mr Van Bergen praised the country’s forward-thinking approach, including establishing the foundations of the CAD Trust.
“We have customers across Asia who wish to participate in carbon markets, but are hesitant due to the potential reputational risk of accidentally purchasing poor quality credits,” van Bergen said. he said. “They come to our platform to gain a deeper understanding of the full range of credit so they can buy with more confidence.”
“Singapore is not only driving industry growth, but also practicing participatory leadership, which will accelerate progress.” — Duncan Van Bergen, Co-Founder, Calyx Global
Looking to the future
Singapore is committed to becoming a leading global player in the ongoing fight against climate change by continuing to promote international cooperation in carbon credits and leading the development of global efforts to build confidence in carbon markets. We are working hard to become a leading player. These efforts are essential to ensuring that the goals outlined in the Paris Agreement are achieved.
Find out more about how Singapore is leading the way in the carbon market.
This post was created by Insider Studio Cooperation with Singapore Economic Development Board.