Singapore plans to impose a carbon tax in the next two years in an effort to reduce greenhouse gas emissions.
That means power producers and large carbon emitters will have to pay a tax for each tonne of carbon they release.
The government states the carbon price “will generally be applied upstream, for example, on power stations and other large direct emitters, rather than electricity users”.
It is considering setting a tax rate of between $10 (£5.78) and $20 (£11.55) per tonne of greenhouse gas emissions.
The impact of the tax on most businesses and householders is expected to be “modest”.
Revenue from the tax will be used to fund measures by industries to cut emissions.
The government’s National Climate Change Secretariat adds: “A carbon tax will enhance Singapore’s existing and planned mitigation efforts under our Climate Action Plan and stimulate clean technology and market innovation. It will create a price signal to incentivise industries to reduce their emissions, complementing other regulatory measures.”
It is consulting with stakeholders and the public on its proposals.
EU Member States this week approved plans to reform the trading scheme for cutting carbon emissions.