1. Good morning. It is a pleasure to be here at the fourth edition of the BNP Paribas Sustainable Future Forum. The Forum is a useful platform for leaders in the region to contribute solutions and inspire meaningful action to tackle climate change.
Need for urgent climate action
2. Climate change is the defining issue of our times. To quote the UN Secretary-General, we are in “a battle for our lives.” It is a fight nobody chose and nobody can run away from. But it is a fight we must win decisively, with everything we have. Indeed, the potentially devastating effects of climate change respect no geographical boundaries. To guard against these impacts, massive investments from Governments and societies are needed. A recent report by the Global Commission on Adaptation estimates that US$1.8 trillion is needed in global adaptation spending in the next decade, to avoid the worst effects of climate change, such as pushing over 100 million people below the poverty line by 2030.
3. In the battle against climate change, Singapore’s priority has been to get the science right first and foremost. We set up the Centre for Climate Research Singapore, or CCRS, in 2013. In the last six years, it has grown to be one of the most advanced climate research centres in the region specialising in tropical climate science. From data as far back as 1948, CCRS found that Singapore itself became warmer at twice the average global rate. This can only mean that we are more vulnerable to climate change than global climate models suggest. We will be setting up a new Climate Science Research Programme Office under CCRS to build up critical climate science capabilities across our local research landscape.
4. Science has put up the first red flag that tells us to take this issue seriously. But a robust understanding of climate change must lead to action, not more slogans. As our Prime Minister put it, “We must make this effort. Otherwise one day, our children and grandchildren will be ashamed of what our generation did not do.”
5. The recent forest fires in the Amazon are a visceral reminder of the need to protect our environment even as we grow. Likewise, the forest fires in Indonesia and the return of haze to our region highlight the need for stronger resolve and cooperation among ASEAN Member States, to achieve our vision of a haze-free ASEAN by 2020. The forest fires not only result in smoke haze, affecting social and economic wellbeing in the region; they also release carbon dioxide sequestered in the forests, presenting a major setback to the global fight against climate change. The 2015 fires in Indonesia were found to generate nearly 1 gigatonne of carbon dioxide. This is more than half of the 1.5 gigatonnes that was saved from the increased use of renewable energy globally in 2015.
6. As always, we stand ready to help suppress the fires on the ground. Singapore has offered technical firefighting assistance to Indonesia. The ASEAN Specialised Meteorological Centre, which Singapore hosts, shares information on weather and hotspots, to support measures to reduce forest fires.
7. The private sector’s support is also key. Ten companies have been certified under the Singapore Green Labelling Scheme for Pulp and Paper (SGLS+), one of the world’s most stringent environmental standards, which includes a requirement of zero burning on plantations. 17 companies have also pledged to use sustainable palm oil under the Singapore Alliance for Sustainable Palm Oil (SASPO). I hope more companies will come on board the SGLS+ and SASPO.
Strengthening climate, resource and economic resilience
8. Sustainability has always been a cornerstone of Singapore’s development, from our beginnings as a newly-industrialising state to the “City in a Garden” that we are today. Having had to overcome our lack of natural resources throughout our history, we have found ways to turn constraint into opportunity. (The Singapore government can easily lay claim to be the original green party). However, the spectre of climate change has led us to rethink even our sound approach to the environment. We now approach sustainability in terms of three resiliences that are mutually reinforcing – climate, resource and economic resilience.
9. This is exemplified in our water story. We are one of the most water-stressed countries in the world, and climate change poses even greater threats. Our story started with the aim to ensure security and resilience of our water supply. This drove us to explore used water treatment technologies from the 1970s. After two decades of hard work, we created NEWater, Singapore’s brand of high-grade reclaimed potable water.
10. We continue to pursue more efficient means of producing water almost at will, whether it is energy used for desalination, or space and time to process drinking water from our reservoirs. While all these will ensure better climate resilience, this new paradigm got us to see the water issue from a different perspective too. We also see the water issue from the angle of resource resilience, by closing the water loop and recycling every possible drop of used water. In doing so, we retain every drop of water within the circular economy of our water sector. We have also leveraged our expertise in water management to become one of the best and busiest hydrohubs in the world. In the process, we created 14,400 good jobs and S$2.5 billion of economic value-add annually. The water industry has become a major economic ecosystem for Singapore.
11. We are now applying the lessons of our water story to other key resource streams such as energy, food, and materials. We are making a major push towards the circular economy, and shifting from the “take-make-use-throw” mind-set to one of “reduce, reuse, and recycle.” This is a key thrust to position Singapore’s economy for a resource and carbon-constrained future. My Ministry recently launched Singapore’s inaugural Zero Waste Masterplan and introduced the Resource Sustainability Act to close our resource loops, starting with e-waste, packaging waste, and food waste.
12. Let me now touch on our policy measures to strengthen climate resilience.
13. We are investing significantly in adaptation measures. Since 2011, we have spent around S$1.8 billion on drainage improvement works to bolster our flood resilience. We will spend another S$400 million to upgrade our drains over the next two years. To protect against rising sea levels, we have raised minimum land reclamation levels, and require new buildings and developments to be built at least 4 metres above mean sea level. At the national level, we will embark on long-term plans to strengthen our coastal defences. We are studying innovative solutions, such as the use of polders and reclaiming a series of islands offshore. This will be a costly undertaking, perhaps requiring S$100 billion or more over the next 50 to 100 years. But it is necessary for our island nation’s survival.
14. We are also doing our part on climate mitigation. We know that we contribute only 0.11% of global emissions, and may not move the needle in the fight against climate change. But we are as committed as anybody to fulfilling our ambitious climate pledge, with a comprehensive suite of measures to reduce emissions across all sectors.
15. We are the first country in Southeast Asia to introduce a carbon tax this year, with no exemptions. The carbon tax sends an economy-wide price signal to incentivise emissions reductions in the most efficient way. We are prepared to spend more than the estimated S$1 billion in carbon tax revenues collected in the first five years, to help companies invest in energy- and carbon-efficient technologies.
16. Being an alternative-energy disadvantaged nation means that we have had to think and work harder to decarbonise our energy sector. We took early action to switch to natural gas, the cleanest fossil fuel, for our electricity needs. We are also maximising our solar deployment. To overcome our land constraints, we are investing in innovative solar technologies such as floating solar PV systems on our reservoirs and at sea. These will number among the world’s largest when completed.
How businesses can thrive in a resource-constrained and low-carbon future
17. The battle against climate change is complex and requires multiple solutions; there is no silver bullet. Although effective government policies are key to enabling and accelerating efforts to tackle climate change, the private sector must do its part, as a responsible driver of economic growth. Businesses must move away from business-as-usual, and transform the way we do things today.
18. The first step is to be clear-eyed about the business impacts of climate change. Companies must factor both the risks and the opportunities of climate change into their long-term growth strategies. This means holistically reassessing the entire value chain, from production, to consumption, disposal and recovery.
19. According to the CDP, the world’s largest companies face almost US$1 trillion in climate risks, with a quarter stemming from write-offs of stranded assets. But opportunities also abound to develop new solutions and growth industries which benefit society. The International Finance Corporation estimates that in Asian cities alone, US$20 trillion is needed in climate-related investments by 2030. For example, clean hydrogen and carbon capture technologies are nascent today, but can potentially disrupt how we use and even reuse energy. Hence, we need to rethink our business models and processes, and early movers will have the advantage.
20. I am glad that businesses are stepping up. Many corporate leaders shared their climate action initiatives in the 2nd September Business Times article, “Going Green, Saving Gaia.” These include quantifying their organisation’s carbon footprint and climate risks, leveraging new technologies such as Internet of Things, and adopting green workplace habits.
21. One concrete action that companies can take is to adopt an internal carbon price. The Task Force on Climate-Related Financial Disclosures says that internal carbon pricing “can be used as a planning tool to help identify revenue opportunities and risks, as an incentive to drive energy efficiencies to reduce costs, and to guide capital investment decisions.” According to the CDP, there has been a fourfold increase in the number of companies adopting an internal carbon price in 2014 to over 600 in 2017, with around 140 companies in Asia doing so.
The financial sector plays a pivotal role in enabling climate action
22. As a catalyst and driver of economic trends, the financial sector in particular, is pivotal in ensuring that capital flows are directed to sustainable projects and meet the burgeoning demand for sustainable solutions.
23. First, financial institutions can leverage their vast capital networks to spur climate-friendly investments and lending and as a result, drive future growth. The global green bond market is growing at a fast clip, reaching US$168 billion in 2018, with US$48 billion issued in the Asia-Pacific.
24. In Singapore, we are making decisive moves to support the growth of sustainable financing. The Monetary Authority of Singapore introduced the Green Bond Grant Scheme in 2017 to spur the use of capital markets instruments for green financing. To date, over US$4.5 billion, or S$6 billion, of green bonds have been issued here. The scheme was expanded this year to include social and sustainability bonds, and renamed as the Sustainable Bond Grant Scheme.
25. To support capacity-building, and accelerate the growth of green bond markets in Asia, MAS signed a Memorandum of Understanding with the International Finance Corporation in 2018. Under the MOU, we have held workshops to enhance the awareness and knowledge of green bonds, benefitting financial institutions, companies and government agencies in the region.
26. From 1980-2016, Southeast Asia suffered US$150 billion in economic losses from natural disasters, of which only 10-20% was insured. Being keenly aware of the increasing risks posed by climate change, the ASEAN+3, with support from the World Bank, established the Southeast Asia Disaster Risk Insurance Facility, or SEADRIF, in 2018. Singapore is proud to host SEADRIF, the first regional facility to provide climate and disaster risk financing and insurance solutions, and strengthen the financial resilience of participating ASEAN member states.
27. Second, by adopting environmental, social and governance, or ESG, principles in their investment frameworks, financial institutions send a strong signal that stakeholders across the value chain must take climate change seriously. This month, US fund manager Alliance Bernstein announced a collaboration with Columbia University’s Earth Institute to create a first-of-its-kind curriculum for investment professionals, focusing on the financial risks of climate change. This can deepen understanding of climate risks in the wider financial sector.
28. Named by Euromoney as the 2018 “World’s Best Bank for Sustainable Finance,” BNP Paribas has led by example on working with its clients to encourage sustainable business practices. Last year, BNP Paribas issued the first green loan in the Asia-Pacific to a Singapore-based shipping company, paving the way to transform the maritime sector. In April this year, our local banks decided to cease financing new coal plants in the region. This shows that we do not support investments which generate short-term profits, but harm future generations in the long run.
29. To respond to climate change, we must act now and we must act together. Opportunities for green growth are ripe for the taking. We need to muster the collective efforts of the public and private sectors, to move decisively towards a sustainable future. Singapore is committed to doing our part, and we are happy to partner you in ambitious climate action.
30. To conclude, the impacts of climate change respect no geographical boundaries. Scientists at CCRS have projected that sea level rise will continue, even if the whole world succeeded in stopping further global temperature rise in the next decades. We are fortunate that, unlike many island states in the world, Singaporeans need not be despondent about climate change. Indeed, if climate change is a fight, nobody wins a fight by being despondent.
31. We are optimistic because history shows that every government in Singapore is one that does not kick the can down the road. Indeed, each has always enabled successive governments to build on its work. This is why long term plans to enable Singapore to adapt to challenges on the horizon can be delivered. It was so when we were a mudflat and transformed into a metropolis. And it is and will be so as we make Singapore not just liveable, but also sustainable, by strengthening our climate, resource and economic resilience. In Singapore, we are confident it can be done.