How Trading Hot Air Can Cool The Planet

Andrew Wilfred explores the case for tapping our neighbours for carbon credits.

- Andrew Wilfred

Since Singapore in 2022 committed itself to a net-zero emissions target by 2050, there have been concerned discussions regarding how it might achieve this target.

Almost certainly, after all other plans have been executed, the nation will have to rely on carbon credits to take it through the last kilometre on this net-zero journey. Although we may be able to source carbon credits from verifiable sources all over the world, such as Colombia, Senegal, and Ghana, a rich source of potential credits may come from our nearby Asean neighbours.

CREDIT WHERE CREDIT IS DUE

While carbon markets have been around for a decade, they have come to the fore since COP 26 in 2021, where parties agreed to a landmark deal that addresses international cooperation in carbon markets. While carbon credits and trading are relatively new among Asean nations, the potential for the global market has been estimated by some sources to be as small as US$600 billion (S$801 billion) or as large as US$2.5 trillion by 2050.

This would, however, depend largely on whether countries implement compliance schemes. If globally countries implemented compliance schemes, the internal credit market could potentially be smaller as a lot of credits may not be traded but instead be focused on fulfilling carbon compliance requirements.

NOT ALL CREDITS ARE CREATED EQUALLY