ICJ’s climate ruling may spur scrutiny of S’pore carbon tax, firms’ climate action plans

(Photo credit: AFP)

Source: The Straits Times

The world’s top court on July 23 issued a landmark ruling making it clear that countries must curb their planet-warming emissions.

Those who do not are liable to pay damages even if they are not party to the Paris Agreement – the world’s climate pact – the International Court of Justice (ICJ) said in the 140-page document.

The Straits Times unpacks the key thrusts of the advisory opinion and what they could mean for Singapore and South-east Asia.

How effective are the ICJ advisory opinions in spurring change?

While non-binding, previous advisory opinions by the ICJ have led to change.

This has sparked hope among climate observers that the latest advisory opinion could refocus global attention on the urgency of tackling climate change, especially in the current geopolitical climate, which is not conducive to environmental action.

“Amid turmoil in geopolitics and economic uncertainties, the court has reaffirmed the obligation of states to also protect the environment,” said former Singapore climate negotiator Rueban Manokara, who is now with conservation group World Wide Fund for Nature (WWF).

One example of an ICJ ruling that had a tangible impact is when the court issued an advisory opinion on the Chagos Islands in 2019. The sovereignty of the archipelago in the Indian Ocean had been disputed by Britain and Mauritius, a former British colony.

Mauritius had advocated that the ICJ look into this issue. The court found that Britain’s claims on the islands were wrongful, preventing Mauritius from being fully independent.

This prompted Britain to enter into negotiations with Mauritius, leading to an agreement in May 2025, when Britain signed a deal to hand the Chagos Islands to Mauritius, said the Singapore front of the World’s Youth for Climate Justice (WYCJ).

The WYCJ is a youth coalition advocating that climate change and human rights be addressed by the top court.

Associate Professor Jolene Lin, director of the NUS Asia-Pacific Centre for Environmental Law, told ST: “The power of this opinion is that it gives a lot more legal foundation... to (argue) that states owe an obligation to cut emissions, even if they have withdrawn from the Paris Agreement.”

What impact could the advisory opinion have for Singapore?

Singapore’s contribution to global emissions is small, at about 0.11 per cent. Its historical emissions are low as it is a young country.

But given its status as a finance and petrochemical hub, Singapore could come under greater scrutiny.

International Energy Agency data has also shown that in terms of per capita emissions, or the carbon footprint of each person, Singapore ranks 22nd out of 148 countries.

With the ruling, the ICJ has made it clear that states can be held responsible for pollutive actions of companies, especially those that contribute to fossil fuel production, consumption and financing.

Singapore has emitted “significant amounts of greenhouse gases because of our bunkering and industrial activities”, noted Prof Lin.

She added: “There can be climate litigation emerging where corporations and financial institutions are being sued for continuing to finance fossil fuel extraction and production.”

The WYCJ’s Singapore chapter said: “Singapore may be in breach of its obligations in international law for failing to take adequate measures against emitting companies located here.”

Singapore’s carbon tax, levied on large emitters here, is one way that the country is trying to curb the amount of greenhouse gas emissions.

In 2024, the tax rate rose from $5 per tonne of emissions to $25 per tonne. The rate will go up to $45 a tonne in 2026 and 2027, with a view to reaching between $50 and $80 a tonne by 2030. 

But Mr Sean Tseng, an adjunct senior research fellow at the NUS Faculty of Law, noted that Singapore’s carbon price could be more closely scrutinised.

Mr Tseng said: “One key question to ask may be: What carbon prices do we need to be consistent with the emission reductions needed to meet the goals of the Paris Agreement?”

The International Monetary Fund recommends a minimum carbon price of US$75 (S$97) for high-income countries.

Foreign companies in which Singapore or Singaporeans have ownership stakes could also be implicated in legal action taken against the other country for its failure to take adequate climate action, added the WYCJ Singapore chapter.

“This would affect the energy, agricultural and manufacturing sectors,” it said.

How could the advisory opinion affect climate targets set by countries?

Countries are given the discretion under the Paris Agreement to determine their own climate change targets and climate policies. This means that countries have the flexibility to decide how ambitious these plans are.

But with the ICJ ruling, countries may be forced to set more stringent targets for cutting emissions.

This is because the advisory opinion calls on nations to take more due diligence in laying out the “highest possible ambition to realising the temperature goals under Paris”, said Mr Tseng.

“A reappraisal of current and successive (climate targets) may well be warranted – not only for Singapore, but for all nations,” he added.

In assessing if a country’s climate targets are ambitious, a country’s level of development, circumstances and historical emissions should be considered, added Mr Manokara, who is global lead of the carbon finance and markets task force at WWF.

Under the climate pact, countries agreed to strive to limit global warming to “well below” 2 deg C above pre-industrial levels. They also agreed to try to limit this warming to 1.5 deg C, to avoid harsher climate impacts.

Countries must set progressively stronger climate change targets for themselves every five years in order to limit warming to these temperature thresholds.

The latest set of climate change targets for 2035 was officially due in February. Only over 20 countries, Singapore included, have submitted them to the UN so far.

In its climate ruling, the ICJ said the primary goal should be the 1.5 deg C target, not the 2 deg C one.

The year 2024 was the first year when global temperatures exceeded 1.5 deg C above pre-industrial levels. While that is one year of data, global warming is forecast to breach the 1.5 deg C Paris limit by the early 2030s, said the UN climate science body.

But climate scientist Winston Chow from Singapore Management University said that if the world reaches net-zero emissions by 2050, there is still hope of limiting warming to this threshold.

“There is still hope to get back down to a liveable world if we get our act together,” said Professor Chow at the 2025 Bloomberg Sustainable Business Summit on July 30.

“Coming up with a new (target) might lead to a more uncertain, confused world, and give the opportunities to people who are for delay and for denial... to muddy the waters and reduce the momentum for any sort of action.”

Will the advisory opinion spur more climate lawsuits in South-east Asia?

The region is highly vulnerable to climate-change impacts, from increasingly powerful typhoons to deadly heatwaves.

It is possible for countries in South-east Asia to consider bringing accountability lawsuits against developed countries, said NUS’ Prof Lin.

This is because the advisory opinion clearly states that reparations and compensation can be sought, she said.

Prof Lin noted that there are several ongoing cases in South-east Asia related to air pollution and climate change.

“The advisory opinion will, I think, play some role in any of the determinations of these cases,” she added.

For example, in 2022, residents of a small island off Jakarta – at threat of being swallowed up by rising seas – hauled Swiss cement corporation Holcim to court for its significant contribution to climate change. Holcim is one of Switzerland’s largest emitters.

Pari Island, home to 1,500 people, was partially inundated 10 times in 2023 by exceptionally high tides.

The residents are demanding Holcim compensate them for climate damage suffered, finance flood-protection measures and commit to deeply cut its emissions.

NUS Law’s Mr Tseng said it will be interesting to see if the landmark opinion leads to climate youth activists pursuing governments for climate inaction, as seen in South Korea and Japan. In 2024, a South Korean court ruled that the country’s limited climate targets violated the Constitution as they did not sufficiently protect the basic rights of the people.

At the same time, South-east Asia is not only a victim of climate change. While the region is not a historical emitter unlike the US, China and Europe, its emissions are rapidly rising.

WWF’s Mr Manokara said: “As the region develops further, more will be expected from South-east Asian countries to do more for the climate.”

He added that the advisory opinion could spur countries in the region to work together on climate change, such as on the Asean power grid – a regional initiative aiming to have countries trade renewable energy resources – or on carbon credits.

By protecting forests at risk of being cut down, the saved carbon emissions can be sold as carbon credits.

Mr Manokara said: “South-east Asia’s forests can (also) be a powerful tool to combat climate change.”