Clean Development Mechanism (CDM) allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to 1 tonne of CO . CERs can be traded and sold by industrialised countries to a meet a part of their emission reduction targets under the Kyoto Protocol (KP).

Singapore’s commitment to climate change is consistent with its good record on environmental issues. Singapore has been a signatory to the UNFCCC since 1997 and acceded to the KP of the UNFCCC on 12 Apr 2006. Greenhouse gas (GHG) emission reductions from projects implemented in Singapore can therefore be used to offset emissions of other countries, such as Japan and the EU.

The National Environment Agency (NEA) is Singapore’s Designated National Authority (DNA) for CDM.

NEA’s role is to issue a Letter of Approval (LoA) to CDM projects that meet Singapore’s sustainable development criteria. The LoA supports the registration of the project by the UNFCCC. In the LoA application to the DNA, the project idea note (PIN) must be submitted with the project design document (or PDD) for validation. The PIN will demonstrate how the project meets Singapore’s sustainable development criteria in terms of:

  • Environmental Sustainability: meeting NEA’s Environmental Protection requirements, standards and regulations, and producing real and measurable reductions in GHG emissions;
  • Economic Sustainability: utilising more efficient or environment-friendly technology than common industrial practice;
  • Social Sustainability: helping to improve quality of life such as creating job opportunities.

NEA also administers the CDM Documentation Grant, which aims to encourage companies to develop CDM projects in Singapore. Co-funding would be provided for up to 50% of the qualifying cost of engaging a carbon consultant to develop a new methodology and PDD, and 30% of the qualifying cost of engaging a carbon consultant to develop a PDD that uses an existing approved methodology. The maximum amount of funding to any CDM project is capped at S$100,000.

With latest estimates from the International Energy Agency showing GHG emissions at alarming record levels in 2010, every action must be taken to cut emissions immediately. According to UNFCCC, CDM, if properly harnessed, can potentially achieve worldwide emission reductions of more than 1 billion tonnes by the end of 2012. Development of CDM projects in Singapore should be one of the viable ways forward for Singapore to support sustainable development while continuing to meet its reduction targets.