The agreement between Singapore and Bhutan marks a significant step in accelerating climate action by facilitating increased funding for mitigation efforts. By leveraging the framework established under Article 6 of the Paris Agreement, both countries can engage in cooperative approaches to reduce greenhouse gas (GHG) emissions while benefiting from the financial incentives of carbon markets. This collaboration enables Bhutan to generate high-quality carbon credits through its conservation and reforestation efforts, which Singapore can then use to meet its climate targets more cost-effectively. As a result, Bhutan gains additional financial resources to invest in sustainable development and climate resilience, reinforcing its commitment to carbon neutrality.
This deal not only strengthens bilateral cooperation but also sets an example for other nations seeking innovative pathways to achieve their climate goals. By ensuring that carbon credits meet rigorous environmental integrity standards, the agreement helps maintain the credibility of international carbon markets. Furthermore, it promotes sustainable land-use practices, afforestation, and conservation projects that enhance carbon sequestration. With increased funding channeled into these initiatives, Bhutan can further expand its efforts in protecting forests, biodiversity, and ecosystem services, which are critical in mitigating climate change.
For Singapore, this agreement aligns with its strategy to achieve net-zero emissions by 2050. By sourcing carbon credits from Bhutan, Singapore can offset emissions that are difficult to eliminate domestically while supporting global decarbonization efforts. This cooperation highlights the importance of cross-border climate finance, demonstrating how developed and developing nations can work together to achieve mutual benefits. This deal reinforces the effectiveness of Article 6 in unlocking climate finance, fostering international partnerships, and driving large-scale emissions reductions that contribute to global climate action.
In a statement, the Ministry of Trade and Industry (MTI) said the framework will focus on the transfer of carbon credits generated from carbon mitigation projects. Project developers can leverage this to develop carbon credit projects that are aligned with the Article 6 rulebook, it added.
The agreement, signed by Singapore’s Minister for Sustainability and the Environment and Minister-in-charge of Trade Relations Grace Fu and Bhutan’s Minister of Energy and Natural Resources Gem Tshering, is seen to boost both countries’ climate ambitions by directing financing towards additional mitigation efforts.
“The carbon mitigation projects authorised under the Implementation Agreement will promote sustainable development and deliver tangible benefits to local communities, such as creation of jobs, improved access to clean water, enhanced energy security, and reduction of environmental pollution,” MTI said.
This cooperation marks Singapore’s first implementation agreement with a carbon-negative country.
“This collaboration strengthens our shared vision for a greener and more sustainable future, and accelerate the global green transition,” Fu said.
