In a recent development, Sri Lankan President Ranil Wickremesinghe and Singapore's Prime Minister, Lee Hsien Loong, came together for the signing of a memorandum of understanding (MOU). This agreement focuses on cooperation for impactful carbon credits, with a specific emphasis on adhering to the guidelines set forth by the Paris Agreement.
View from Adam's Peak, Sri Lanka.
The Ministry of Trade and Industry (MTI) of Singapore issued a statement on 22 August outlining the scope of this partnership. The collaboration aims to facilitate the exchange of insights and practices related to carbon credits between the two nations. This includes sharing expertise on national regulatory frameworks, policies governing greenhouse gas mitigation, and efficient resource management.
Under the MOU, Singapore and Sri Lanka are set to collaboratively establish a legally binding implementation agreement. This agreement will serve as the foundation for the creation of a bilateral framework that enables the international transfer of carbon credits, as outlined in Article 6.2 of the Paris Agreement.
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The agreement itself will encompass a detailed set of criteria and processes for carbon credits. This alignment with the Paris Agreement ensures that the initiative remains in harmony with global efforts to combat climate change.
The practical implications of this collaboration are substantial. Singaporean companies that are liable for carbon taxes will be able to offset a significant portion of their taxable emissions by procuring carbon credits from eligible projects.
Beyond immediate benefits, the collaboration between Singapore and Sri Lanka also extends to the identification of joint projects and the exploration of opportunities to work together in carbon markets with third countries.
MTI’s Permanent Secretary for Development, Dr Beh Swan Gin, emphasised the broader impact of this initiative: ‘Singapore and Sri Lanka’s cooperation on carbon credits aims to advance climate action. This MOU enables both countries to make progress on our respective climate targets while enabling mutually beneficial outcomes, such as creating new jobs in the green economy and enhancing biodiversity protection.’ Singapore has previously forged similar agreements with 12 other countries, signalling its commitment to global sustainability.
President Wickremesinghe's visit to Singapore highlights the growing cooperation between the two nations. Strengthened by shared values and goals, this collaboration is positioned to drive meaningful progress in the world of climate action.
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