IF THERE is a global treaty to curb greenhouse gas emissions, Singapore will have to implement a carbon price to 'send the right price signals', Prime Minister Lee Hsien Loong said on Monday.

This is part of a four-pronged strategy Singapore is adopting to prepare itself for the future energy landscape, said PM Lee at the Singapore Energy Lecture at Suntec city.

Speaking for the first time at this annual event, Mr Lee said that there were key uncertainties about the future that Singapore has to ask itself: Will future energy prices rise significantly? And will there be a new regime on climate change, and what new technologies will emerge?
Singapore is responding by investing in industry knowledge and capabilities, to give the country energy options in the future.

Singapore will 'use market forces and price signals to act in the energy sector', said Mr Lee. It will avoid subsidising energy, and the best approach is to apply a carbon price, whether through a carbon tax or through a cap-and-trade system, which is a form of carbon trading.

'At present, we do not have a carbon tax, but we calculate a shadow price for carbon in our cost-benefit analysis to better inform government policies and decision-making,' said Mr Lee. 'If there is a global regime to curb carbon emissions... then we will have to make the carbon price explicit to send the right price signals', he added.

A price on carbon?