In a bid to meet its climate targets, Singapore has started talks on carbon markets to buy carbon credits from Morocco and other countries including Ghana, Indonesia, Colombia, and Brunei.
Singapore is currently in talks with more than 20 countries to set up carbon credit projects which aim to offset greenhouse emissions. Each credit allows its owner to emit one tone of carbon dioxide and other greenhouse gasses.
The measure seeks to encourage companies to accelerate their decarbonization efforts since polluting companies have to pay money for extra credits while companies that have succeeded in cutting their emissions can sell their excess credit and generate profit.
But trading carbon credits can also be done between countries and that reflects on the greenhouse gas accounting of each country.
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In 2020, Singapore’s CO2 emissions from fossil fuels and industry per capita were almost seven-fold that of Morocco, reaching 7.78 tones per capita compared to 1.75 tones per capita for Morocco.
Given the significant gap between the two countries’ emissions, Morocco might provide carbon credits to Singapore and generate profit from the trade. However, both countries have to control their carbon emission levels with respect to the international guidelines set to track climate change worldwide.
In July, Morocco and Singapore agreed to cooperate in achieving emission targets. At the end of a three-day visit to Morocco, Singapore’s Foreign Minister Vivian Balakrishnan signed a memorandum of understanding with his Moroccan counterpart Nasser Bourita. According to The Straits Times, the MoU laid the foundation for carbon trade between the two countries.
By selling Singapore carbon credits, Morocco would support its partner’s efforts to meet net zero by 2060. The southeast Asian country is currently working on reinforcing its carbon-control measures such as carbon credit and carbon taxes while reducing its reliance on fossil fuels, increasing its generation of renewable energy, and adopting carbon capture technology.
According to S&P global commodity insights, the Singapore government has announced plans to raise carbon taxes from $3.7/mtCO2e (metric tons of carbon dioxide equivalent) in 2022 to $18.60/mtCO2e in 2024 and 2025. The measure seeks to strengthen the national carbon market.
“Singapore’s stated goal of becoming a vibrant global carbon hub takes [it] a step closer to fruition with the carbon tax,” cofounder of carbon trading platform AirCarbon William Pazos told S&P Global. “It creates native demand for carbon and a clear minimum price signal.”
SOURCE: Morocco news
