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A centralized global carbon program was given the green light at COP29. What does this mean for S’pore?
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A centralized global carbon program was given the green light at COP29. What does this mean for S’pore?

What other important issues need to be resolved?

Mr Manokara said the main issues to be decided at COP29 were whether to allow the cancellation of carbon credits. If the countries hosting the carbon project cancel the credits they sold and count them towards their own reduction targets, there is a risk that the same carbon credit will be claimed by both parties.

And if the loans have to be canceled because they violate indigenous people’s land rights, for example, that would raise questions about how environmentally sound the project actually is.

“This uncertainty may lead both host and recipient countries to wait for clarity on this issue before participating in this mechanism,” Mr. Manokara said. Investor confidence may also be affected.

How will these affect carbon trading in Singapore?

Singapore has launched carbon trading partnerships with more than 20 countries; Cooperation with two countries (Papua New Guinea and Ghana) turned into agreements.

This means companies subject to the carbon tax here can buy carbon credits from projects in Ghana and Papua New Guinea to offset up to 5 percent of their taxable emissions. St. in September.Singapore and Ghana open applications for carbon projects In areas including clean stoves and electric vehicles.

One Interview with ST on October 30, Sustainability and Environment Minister Grace Fu said Singapore will continue to pursue bilateral trade but these partnerships will receive guidance from the UN mechanism. He noted that a consistent approach would bring greater clarity to the market.

“I think most parties would say why don’t we follow the standards that (the UN mechanism) has, even though it’s still bipartisan,” he said.

Ms. Fu added: “The parties we deal with know that we need the loans to be international and recognized, because that way you can get more investors to participate, more borrowers to participate, and that way your loans can gain more value in the future market.”

Singapore’s carbon trading agreements already reference the UN system; carbon trading implementation agreements require a portion of revenues to go towards adaptation in the host country and a portion of total credits to be cancelled.

Mr Levallois said that while UN credits would be more formal and reliable, ratifying UN carbon market rules would not be an instant game changer for the carbon services sector.

“When (the UN carbon market) is finally ready, we need to continue to see the market create a greater source of demand for these credits.

“It will take a few more years before a Singapore company falling under the carbon tax will have more options and be able to benefit from lower prices for credits,” he said.

“The launch (of the UN carbon market) is a positive development for Singapore’s ambition to become a carbon services hub,” Mr Manokara said.

He added that this is another way for countries and individual companies to access reliable and compliant loans that will help them achieve net zero targets.