IE University x RAIA Research Program 2025

This section examines three policies that reflect Grace Fu’s strategic vision and influence: Singapore’s carbon tax framework, the national food security program, and the resilient infrastructure initiatives. 

Taxing Carbon Emissions

Singapore intends to reach net-zero emissions as soon as viable in the second half of the century. To achieve this objective, Singapore adopted a carbon tax on  1 January 2019, launching the first carbon pricing initiative in South-East Asia. The idea of a carbon tax was first introduced by Finland in 1990. The purpose of carbon pricing is to assign financial costs to emissions in hopes of reducing the negative externality and decrease contribution to climate change. This policy has now become very popular when it comes to climate policy with 23 European Nations having implemented carbon taxes with varying rates based on the social cost of carbon. 

The tax in Singapore was designed to accelerate the transition toward a low carbon economy and evaluate signals to reduce reliance on carbon intensive goods and services; incentivizing renewable energy and clean technologies instead. Initially, before Grace Fu became the minister for environment and sustainability the tax started at S$5 per tonne of CO₂-equivalent (tCO₂e) from 2019 to 2023. The tax was relatively low compared to the $75 recommended by the IMF to incentivise achieving net zero by 2050, but this was done to provide industries time to adapt.

 On November 8th 2022, Fu proposed raising the tax for greenhouse gas emissions progressively in phases. She shared that the tax will rise to S$25 per tonne in 2024 and to S$45 per tonne in 2026 with a continued increase over the following years expected to reach between S$50 and S$80/tCO₂e (see Figure 1). In addition to the tax, companies are able to use carbon credits to offset up to 5% of their taxable emissions from 2024. The amount of allowances for each firm is dependent on their performance on internationally recognised efficiency benchmarks and the facility’s decarbonisation plants. 

Figure 1 

This policy supports Fu’s goals as it drives decarbonisation across Singapore and works towards reducing the country’s vulnerability to climate change in terms of helping to stabilize climate patterns, protecting biodiversity, and improving air quality. In Parliament she emphasised that the higher the carbon tax the more incentive for clean energy and carbon efficiency. To support this the revenue generated from the tax will be reinvested into decarbonisation initiatives such as supporting businesses’ shift to low carbon solutions. 

According to Fu’s parliamentary replies, the government does not expect any net revenue gain this decade; instead it will all be redirected into building capacity for carbon capture, clean energy, and support firms in intensive sectors. Importantly, this mitigates Singapore’s exposure to extreme climate risks like urban flooding, rising sea levels, and heat stress. Reducing the carbon emissions ultimately is not just about sustainability for Singapore, but due to their small size and low lying position it is about long term survival. 

Fu sees this policy as an opportunity given Singapore’s small size. The country can catalyse new technology much faster than larger nations through technology, policy, and finance and the carbon tax only pushes companies to do this. Given Singapore’s near total dependency on imported fossil fuels, the increase in renewable energy use addresses this vulnerability to global trade. 

For instance, geopolitical disruptions in the Suez Canal or food and energy export bans from suppliers exposes Singapore to supply chain risk. Reducing this carbon dependence and diversifying its energy mix, it’s more sustainable and strategic. Grace Fu’s strong support for the carbon tax demonstrates this argument by looking at her career. Fu spent a lot of her career working in the private sector, specifically one of the largest shipping ports. She has firsthand knowledge about the vulnerabilities  in the supply chain and knows the consequences of climate change. She is aware of how the supply chain can be disrupted. With this knowledge Fu knows Singapore needs to reduce their dependency and therefore has framed climate action as not only a scientific need, but as a moral obligation to Singaporeans as it affects their survival. 

Enhancing Nutritional Sovereignty 

Singapore banks on three strategies to tackle trade disruptions vulnerability: diversifying its food imports, stockpiling reserves and boosting local production. The 30-by-30 initiative forms part of the ‘Resilient Future pillar’ of the Green Plan 2030. The objective is to ‘build up [the] agri-food industry’s capability and capacity to produce 30% of our nutritional needs locally and sustainably by 2030’. It constitutes a crucial policy to safeguard Singapore from supply fluctuations due to trade disruptions. In the recent years, different phenomena, such as global pandemics (Covid-19), disease outbreaks, geopolitical conflicts, or trade restrictions such as Trump’s tariffs have severely affected the Singaporean supply chain. In particular, the Russian invasion of Ukraine led to supply shortages and rising prices, that  forced  Malaysia to ban exports of chicken to Singapore, threatening food security. More recently, the discovery of African Swine Fever (ASF) cases, a highly-contagious disease, among pigs, shrinked imports from Indonesia, which accounted for 15% of Singapore’s total pork supply. 

Moreover, out of its 720 square kilometers of land, Singapore only dedicates 1% for agriculture use, facing trade-offs between competing land use needs. It is essential to promote an efficient use of land. Singapore targets to achieve this objective through three different measures. 

First, the development of high-tech agricultural facilities, with innovative methods of production and new technologies, constitute a core feature of the initiative. Cutting-edge technologies include smart sensors to monitor temperatures, CO₂ or humidity levels; LEDs growth lights for an optimized light exposition, combined with AI and IoT systems. Automation is also implemented with innovations such as robotic arms or rotating systems. New methods of production include hydroponics, aquaponics or aeroponics as well as indoor, vertical or terrace farming. Farming on rooftops and terraces offer many advantages. The use of natural light reduces energy costs, while growing vegetables inside greenhouses prevents pests proliferation and avoids using chemicals or pesticides. Combined with closed-water systems, it drastically reduces water consumption. 

Then, investing in capital represents a key enabler of the project. R&D projects, alongside educational programs are conducted to train the current agri-food workforce, but also future generations. The challenge posed by the growth of the industry requires these new and higher value jobs to acquire multidisciplinary expertises in science, engineering, and info-communications. World-class universities such as the National University of Singapore (NUS) or the Nanyang Technological University (NTU) offer both undergraduate and graduate programs in bioengineering or environmental engineering, among others. The Singaporean Food Agency also launched in April 2021 a $60 million Agri-Cluster Transformation (ACT) Fund to which farmers have until 31 December 2025 to submit their applications, directly targeting the agricultural workforce. 

Last, the emergence of direct and indirect outlets for locally-produced foods marks a key step in the development of a market for sustainable food. It is essential to help tech farms be economically viable, as the agri-tech sector faces higher costs compared to regional competitors. Agricultural start-ups can supply Singaporeans without intermediaries, through retail platforms or in supermarkets. The tech farms’ profitability is also sustained by incentives from government agencies to encourage Singaporeans to buy and consume local, such as labels and recognition programs in supermarkets or restaurants. 

Adapting the Climate-Vulnerable Infrastructure

The climate resilient infrastructure policy aims to make vulnerable infrastructures, both public (streets, roads, drainage systems) and private (office buildings) resilient. This refers to the ability to reduce the magnitude and duration of disruptive events. Infrastructure should be able to anticipate, absorb, adapt to, and recover from harmful occurrences. Singapore banks on two strategies to enhance infrastructure resiliency: prevent both inland and coastal floods and mitigate the Urban Heat Island (UHI) effect. 

The first objective of the policy is to protect Singaporeans from floods, both coming from the coastline and/or due to heavy rainfalls. Singapore is extremely vulnerable to sea level rise and could witness a sea level rise of up to 2 meters by 2150. The second objective, is to tackle in land flooding as the mean annual rainfall in South-East Asia is expected to increase by 2.6to 13.4%. To mitigate these possible consequences government authorities have decided to pursue various solutions. 

The first solution is implementing Nature Based Solutions (NBSs), such as sea walls, earthen bunds, revetments, or mangroves. NBSs refers to actions that address societal challenges through the protection, sustainable management, and restoration of ecosystems. Then, the government has introduced a holistic ‘Source Pathway Receptor’ which aims to adapt the drainage system, focusing on integrating the drains, canals, areas that generate stormwater runoff, and regions where flooding may occur (Figure 2). Within this receptor they also explored a multi layered reservoir system consisting of underground caverns, detention tanks, and stormwater tunnels designed to store and release excess rainwater. These enhanced structures act as buffers during intense rainfalls and reduce the risk of flash flooding in low lying areas, while offering benefits, such as freeing up surface area for future urban development, creating opportunities to reuse water, and potentially integrating energy generation systems. 

The third objective of this policy is mitigating against the Urban Heat Island (UHI) effect. This phenomenon occurs when ‘air temperatures are higher in a city than in its surrounding countryside’. One of the causing factors of the UHI effect is the lack of vegetation that has been replaced by buildings with lower albedos, and creates higher heat absorption rates. As climate change progresses, temperatures are predicted to rise by 0.6°C–5.0°C by 2100. Consequently, mitigating against the UHI effect is a priority as it affects the standards of living for Singaporeans. 

To combat against the UHI effect the government has chosen to adopt NBSs. The Green Plan 2030 includes several targets that promotes NBSs, such as developing 130ha new parks and enhancing 170ha of existing ones or planting 1 million more trees before 2030. Similarly the government will also improve the existing infrastructure to combat the problem through greening. This means increasing vegetation and natural elements in urban areas to lower temperatures and mitigate heat retention caused by concrete and asphalt. The SkyRise Greenery initiative aims to green facades, terraces and rooftops. The adoption of more reflective materials on cool roofs and surfaces help reflect the sun’s energy and decrease the air temperatures. 

Technology also plays a crucial role in studying the effects of urban heat. In 2021, Singapore launched the Cooling Singapore 2.0 Project, of which a core component is the Digital Urban Climate Twin (DUCT). It consists of an hypothetical alternative that can stress Singapore’s response to future climate change threats. DUCT is a virtual model of Singapore that studies future climatic scenarios to adapt the infrastructure and mitigate urban heat’s consequences. This innovation strengthens previous mitigation measures, involving technology for modeling purposes.

IExRAIA Summer Research Program:

This article is an excerpt from a report on Grace Fu produced as part of an RAIA research program on climate leaders. For a full picture of Ruto’s climate leadership, including the sources, read the full report. This project was fully financed by IE University’s IE School of Politics, Economics and Global Affairs.

Author: Pilar Gonzalez & Gaspard Brabant

Editor: Ángel Rodríguez Moreno

Project Leads: Roxane de Bergevin & Stefani Obradovic