Its latest interim report, gathered from discussions with the coalition’s 30-plus members and experts involved in coal transition and carbon markets, identifies risks and suggests practical solutions based on these studies.
Gillian Tan, the authority’s chief sustainability officer, said part of the coalition’s work is understanding buyers’ considerations. These include what they look for in carbon credits, and what attributes they want transition credits to have.
“We want to make sure that we can build a robust pipeline of high integrity credits that the market trusts, where you can feel confident that carbon emissions have genuinely been reduced,” she said.
Ms Tan added that a balanced supply and demand is also important in building a scalable market.
NEED FOR GUIDELINES
The central bank is now working towards a comprehensive playbook that can be used across Asia by next year’s COP.
Sharad Somani, partner and head of environmental, social and governance consulting at business advisory firm KPMG Singapore, said there is a need for a set of guidelines to ensure the integrity and trust of the system, and that the supply of credits is credible.
There must also be a demand for such credits, he added. This means stakeholders at COP summits – such as the ongoing COP29 in Baku, Azerbaijan – must push for bilateral deals on the Paris Agreement, crediting mechanism to drive market demand, he said.
Under Article 6 of the agreement, countries can transfer or sell carbon credits earned from the reduction of greenhouse gas emissions to help other nations meet their climate targets.
“We (also) have to have a proper documentation process, to ensure that every credit that has been generated is documented and extinguished. This is where I believe that transition credits will come to maturity – only when we can match demand, supply and technology,” Mr Somani said.
Singapore also said it has aligned itself with the European Union and China on definitions of green or transition activities based on science.
This world-first taxonomy will make it clearer for investors to know what activities they can put their money in for greener outcomes.
