Speech by SM Teo Chee Hean at the Virtual Temasek International Panel Meeting

Running Together in the Collective Race Against Climate Change

Temasek Chairman, Mr Lim Boon Heng,

TIP Meeting Chairman, Mrs Indra Nooyi,

Distinguished Guests,

Ladies and Gentlemen,

It is a great pleasure to join all of you here today. I will just greet you ‘Good Day’ – I think that is a fairly neutral greeting. We are all in different time zones, but at least we are on the same planet. It is the only one we have, and the one which we are going to talk about protecting today.

Introduction

Today, our focus is on climate change, which is the greatest global challenge of our time. Around the world, we are already facing the effects of climate change, which has affected lives and livelihoods, as well as the way we conduct business, and it will increasingly have security implications.

The theme for today’s session is “The Race to Net Zero”. However, this is not a race between countries, corporates, or people. Climate change is a global problem that no one country, or even a group of countries, can solve on its own. It is a problem that requires a global solution. Governments, corporates, civil society and private citizens – we have to work together. We are all in a collective race, not against each other, but against time to overcome the challenge of climate change.

Our Collective Race Against Climate Change

The latest Intergovernmental Panel on Climate Change (IPCC) report has sounded a “code red” for humanity. According to the report, it is highly likely that the world will reach 1.5oC of global warming by the early 2030s. Global mean sea level rise has accelerated, and is projected to increase by up to 1 metre by the end of the century. This will have a disproportionate impact on low-lying states in the tropics, like Singapore. Beyond sea level rise, every region in the world will also experience more extreme weather. These include frequent and severe droughts, and spells of extreme rainfall and flooding. Drought and deluge, fire and flood – we are already seeing this.

The world needs to redouble our efforts in both climate mitigation and adaptation. We join all countries in support of the Paris Agreement. It is an imperfect agreement, but it is the only blueprint that we have for global climate action. Countries need to continue to consult, collaborate, cooperate and do so consistently, to uphold our collective commitments to this climate compact; and work together to resolve key outstanding issues which remain, such as Article 6 on carbon markets.

We should also grasp this opportunity to work towards a green recovery. As the global economy recovers and rebuilds from COVID-19, countries, corporates and individuals have an opportunity to fundamentally rethink and restructure the way we conduct business and live our lives. COVID has accelerated change. The EU’s COVID-19 recovery plan is a positive example. It requires member states to set aside at least 37 per cent of their requested recovery funds for green initiatives and climate projects, and a further 20 per cent for digital transformation. So, it is not merely to resuscitate, but to re-envision and re-create.

We also need to build greater climate resilience. While mitigation is an important focus, adaptation and resilience are equally important in our race against a rapidly changing climate. This means early warning systems, climate-resilient infrastructure, and preparing for both the physical and non-physical impacts of climate change.

The Singapore Perspective

I chair the Inter-Ministerial Committee on Climate Change in Singapore, where I bring together several of my cabinet colleagues, and we bring together the different demands, pressures, opportunities and impact that climate change will have on us in the economy, on the livelihoods of people, flooding and infrastructure – a whole list of things, and we see how we can best make our contributions to the global climate fight.

Singapore takes climate change and environmental protection very seriously. Climate change is an existential threat to us. We are a small low-lying island city-state – as you know, just 700 plus square kilometres. By 2100, Singapore could experience mean sea level rise of up to 1 metre. When coupled with phenomena such as coastal surges, very high tides and land subsidence, we risk inundation of 16 per cent of our total land area, including much of our coastal areas used for housing, parkland, industry, commerce, airports and ports.

For Singapore, climate change also poses an asymmetrical challenge. We contribute around 0.1 per cent of global greenhouse gas emissions, but we are affected by the other 99.9 per cent, which also seriously impacts us – often more seriously than it impacts larger countries. Therefore, we feel very strongly the imperative to do all that we can, and place the utmost priority on tackling climate change. We have limited alternative energy sources, because we do not have much land and wind, we do not have great rivers and geothermal power. We face particularly stark constraints that we have to navigate and overcome.

Through careful attention to sustainable growth over many decades, Singapore is currently amongst the 20 most carbon-efficient countries in the world in terms of carbon intensity, or carbon emissions per GDP dollar. We will continue to improve our carbon efficiency through a range of measures. We will use local renewable energy potential to the maximum extent possible. We will further encourage and facilitate climate friendly life-style and habits, such as the use of public transport, with the target of reaching a 75 per cent share by 2030. We will build the next generation of super low-energy green buildings. We had decades ago transitioned away from coal and fuel oil to use natural gas, which is the cleanest form of fossil fuels, while we search for more carbon efficient means for power generation.

In March 2020 in the midst of the COVID-19 pandemic, we submitted our enhanced 2030 Nationally Determined Contribution (NDC), and our Long-Term Low-Emissions Development Strategy (LEDS), under the Paris Agreement. Our enhanced NDC commits us to an absolute peak emission level of 65 million tonnes of carbon dioxide equivalent around 2030. Our LEDS aims to halve these emissions from our peak, to 33 million tonnes of carbon dioxide equivalent by 2050, and achieve net zero emissions as soon as viable thereafter. We have taken a realistic and practical but ambitious approach to setting this target, taking into account the best available science and technology, and taking concrete action behind our targets. For example, to be ready for sea-level rise, we have raised the minimum land reclamation level in Singapore by an additional metre since 2011, to bring the minimum reclamation level of new land to 2 metres above the highest ever recorded tide in Singapore. We are also conducting detailed studies for the coastal protection that will be needed. We estimate that this will require around S$100 billion over the next 50 years, until the end of the century.

Working Together for Net Zero

We intend to review our emission targets over time, and continue to stretch ourselves to do more to contribute to climate action. Corporate and international partnerships will be key in enabling progress. Today, I would like to outline three key areas that these partnerships should focus on, namely (i) international collaboration; (ii) technology transformation; and (iii) green growth.

International Collaboration

First, international collaboration. An international framework of cooperation is essential for everyone to play a part to tackle climate change. Multilateral rules and consensus ensure that first-movers are not disadvantaged, while bilateral and plurilateral agreements create win-win outcomes.

As a small country, Singapore has benefitted from international cooperation in other domains, such as trade, intellectual property, transportation and finance. Similarly, global climate efforts can benefit from mutual cooperation and multilateral action.

We have tried to play our part. Singapore has often been called upon to facilitate discussions under the United Nations Framework Convention on Climate Change (UNFCCC) and its implementation rules, to forge consensus among countries with different interests and concerns. We sit amongst the Alliance of Small Island States (AOSIS) countries and with the developing countries in the Group of 77, and we also meet with our more developed and bigger partners in the world. This allows us to have a span of understanding on what the concerns are across the different groups. So, we are often asked to try to mediate between them and to chair some of the meetings. For example, our previous Minister for the Environment and Water Resources Mr Masagos Zulkifli played key roles co-facilitating the topic of mitigation at COP-24 in Katowice in 2018, and the key outcomes of COP-25 in Madrid in 2019. In the maritime and aviation arena, which has fairly large emissions of their own, we work closely with international bodies to facilitate the greater adoption of sustainable aviation fuels and high-quality marine fuels.

Singapore also actively builds partnerships to galvanise action and share knowledge. This is shaped by our own experience as a developing country where the most valuable assistance we received was the know-how, expertise and experience that other countries were prepared to share with us. Solving the climate problem also requires countries to develop and share innovative solutions and collectively push the boundaries, both on policy and technology. I will speak about the boundaries of policy and technology later on.

Through the Singapore Cooperation Programme (SCP), we have trained more than 130,000 government officials from 180 countries, territories and intergovernmental organisations in areas including sustainable development, urban planning and water management. In 2018, we established a specific Climate Action Package under the SCP to help build capacity in developing countries in areas such as climate science, flood management and disaster risk reduction.

Singapore is also actively involved in developing the international frameworks for carbon markets. Carbon markets are a key way of matching the abatement potential from resource-endowed countries, with those who have more inherent limitations, and are important for efficient international decarbonisation. At the request of the COP-26 Presidency, our Minister for Sustainability and the Environment, Ms Grace Fu, is now co-facilitating Ministerial consultations on Article 6 of the Paris Agreement, for creating international rules pertaining to carbon markets.

We are also leveraging our position as a business hub to develop a regional market in carbon services and green financing. DBS Bank, Singapore Exchange Limited, Standard Chartered and Temasek have jointly established the Climate Impact X, which aims to be the trusted global exchange and marketplace for high-quality carbon credits, in particular nature-based solutions. This is a key step in creating a carbon services hub that will include upstream and downstream activities, bringing together private and public funds to work in concert to support green efforts in the region and beyond.

Our Government agencies, Enterprise Singapore and the Monetary Authority of Singapore, have also jointly established Infrastructure Asia, an open platform to help our region to meet its infrastructure needs in an environmentally sustainable way. This will help to achieve lasting and more equitable development.

Technology Transformation

Second, let me speak about technology transformation. This is particularly relevant to Singapore as a small resource-scarce country, to allow us to break free of our inherent constraints. Singapore is working with our corporate sector and international partners to develop and deploy new technologies and innovations to reduce our reliance on carbon. Let me talk a little about urban transport, and then say a little bit about how we have tried to marry policy and technology together in addressing our urban transport problem.

It is not just about electric vehicles, trains or decarbonising the internal combustion engine, but taking a holistic system-level approach to see how we can deal with urban transport. Apart from facilitation and encouraging the use of public transport, which is a very important part of the whole system, that means move as many people as possible for their daily trips onto public transport – we talked about 75 per cent modal share, we also now have a policy of zero growth in our vehicle population since 2018. For the last three years, we have not allowed any growth in our vehicle population. This followed three decades of allowing only carefully controlled vehicle population growth in line with our city planning and available road space. We did not allow the growth rate of vehicles to go beyond what was the available road space in Singapore. Now, because we are already reaching the limits of road space in Singapore, we have a zero vehicle growth policy. Apart from the zero vehicle growth policy and shifting people to public transport, we also curb congestion and car use. Here, we use a technology. We started off four decades ago with a totally manual system. Now, we are into our third generation of the Electronic Road Pricing system, which will more accurately and dynamically price car use and congestion. We are also ambitiously pushing for the electrification of our vehicle fleet by 2040.

I put electrification at the end, because I think the greatest benefits in reducing emissions actually come from modal transformations, and also from having an efficient way of allocating road space and the use of cars. Electrifying cars is a subset of the rest of it. It will not help the rest of it if we have electrified cars, but we still have most of the city population using cars, and most of the time, the cars are stuck in traffic jams everywhere. That does not contribute a great deal in reducing emissions, or for that matter, improving the life of the city. So, we have taken a holistic policy plus technology approach to address the issue of urban transportation.

For power generation, we have also invested heavily in solar energy, which for us is currently the most technically and economically viable form of renewable energy in Singapore. Singapore officially opened its first large-scale solar floating farm at an inland reservoir in July 2021, and a floating offshore solar farm, one of the world’s largest that is equivalent in size to five soccer fields, in March 2021. We do not have a lot of land, but whatever we have, we try to preserve for green spaces or active economic use, so what we have left are water bodies – our water reservoirs for drinking and our limited sea space. We are also looking into the feasibility of vertical deployment of photovoltaic panels on building facades, which could be a gamechanger given Singapore’s built up urban environment. We probably have more vertical areas than we have horizontal areas in Singapore, so if we can use the vertical areas well and photovoltaics reach that level of efficiency and price competitiveness, that will be a great help for us.

We are also exploring emerging technologies such as carbon capture, utilisation and storage, and low-carbon hydrogen. In a sign of the times to come, we saw the first clean hydrogen powered cauldron at the recent Tokyo Olympics. Our Japanese friends are very keen on clean hydrogen. As technology evolves and the cost comes down, there is significant long-term potential for hydrogen deployment in Singapore. Applications include domestic power generation, and fuelling vessels that transit through our busy maritime hub. We are very excited by these opportunities, and are looking for partners to harness them.

Green Growth

Third, green growth. For climate action to be lasting, it needs to be embedded in our economy and business activities. We need to develop the green economy as the new engine of growth, so that energy – human entrepreneurial energy – can be directed to solve the problems of mitigation and adaptation. We encourage our partners to use Singapore as a green hub to develop such innovative and sustainable solutions. Our Research, Innovation and Enterprise (RIE) 2025 Plan, which has a budget of S$25 billion (or US$18.5 billion) over the next 5 years, includes a significant portion for Urban Solutions and Sustainability, what we call the Science of Cities. We will continue to make ourselves available as a “living lab” for companies and researchers to test-bed new clean energy solutions that can be proliferated globally to cities around the world.

In capturing the green economy, companies and workers will have to make adjustments – sometimes very painful ones. This is the case for major energy and chemical companies in Singapore, many of which have their own corporate net zero targets by 2050. They are looking not only to reduce their emissions in Singapore through technology, but also to pivot their business towards less emissive processes, products and services. Singapore is actively partnering them on this transition, and searching out new opportunities with them. Neste, the world’s largest producer of renewable diesel and sustainable aviation fuel, is here in Singapore. It is expanding its production capacity here, and creating new jobs, recognising our position as a transport hub and a welcoming home for investments in green technology. We are trying to restructure and reinvent our economy and industry to move towards green growth.

Many countries now recognise the importance of putting a price on carbon, so that producers and consumers can internalise the externalities of carbon emissions and adjust their choices accordingly. Singapore introduced a carbon tax in 2019, and we are reviewing our post-2023 carbon tax trajectory. We will seek a carbon tax level that encourages green innovation and growth, while ensuring that our economy will remain competitive and can transition smoothly.

Conclusion

Addressing the climate crisis is indeed a race to net zero. However, this is not a race between countries or people, but a collective race to save the only planet we have, in which we challenge and support each other to push the boundaries together. Singapore will contribute to international efforts to tackle this global problem, and we look forward to partnering with countries and companies, with all of you, in this collective endeavour, and we seek your advice and thoughts as well.

I look forward to a fruitful exchange of ideas and experiences at today’s meeting.

Thank you very much.