BNP Paribas Sustainable Future Forum - Dr Amy Khor

Keynote Address by Dr Amy Khor, Senior Minister of State for Sustainability and the Environment, at BNP Paribas’ Sustainable Future Forum on 18 October 2022

Mr Joris Dierckx, Regional Head of Southeast Asia, BNP Paribas

Ladies and gentlemen

Good morning. I thank BNP Paribas for inviting me to be part of today’s sustainable future forum. I understand that this is part of a bigger follow-the-sun forum covering Asia-Pacific to Europe, and to the Americas, where speakers from around the world will share their country’s or company’s experiences on navigating the transition towards net zero. Thank you for the opportunity to share Singapore’s story.

Navigating through uncertainty and disruption

2 We are living in a world facing increasing uncertainty and disruptions. The COVID-19 pandemic has wrought significant impact on the global economy and claimed the lives and livelihoods of many people. Thankfully, the world has demonstrated remarkable capacity to adapt to living with the virus and to emerge stronger. But we are now sailing against what might prove to be even stronger currents: the Russia-Ukraine conflict is fueling global inflation, and recent geopolitical tensions are disrupting supply chains.

3 These significant short to medium term challenges have been exacerbated by extreme weather events such as unprecedented heat waves and dry spells in Europe, the US and China, and record-breaking rains and destructive floods in parts of Asia. Many have lost their lives and livelihoods due to these extreme weather events. Climate change will continue to threaten our access to essential resources and pose a physical risk to communities. Every country must therefore take urgent steps to mitigate and adapt to climate change.

Driving the transition to a low carbon future

4 Sustainable development has always been integral to the Singapore story – we have embraced it since our independence by balancing economic development with environmental protection and social inclusion. Singapore was one of the first countries in the world to form a ministry of the environment. We celebrate our 50th anniversary this year!

5 However, in addressing climate change, Singapore faces unique challenges – we are a low-lying island-state with limited land and alternative energy options. We are also dependent on imports for energy and food. This makes us especially vulnerable to the effects of climate change.

6 Last year, we launched the Singapore Green Plan 2030 to rally collective action to tackle climate change, and commit to ambitious and concrete sectoral targets over the next 10 years that will position us to achieve our long term net-zero emissions aspirations. To succeed in our green transition, we will need to galvanise action from individuals, businesses and community to work in tandem with the government, and also to seize opportunities presented in our decarbonisation journey. Allow me to share some initiatives under the Green Plan to advance sustainable development in Singapore.

Climate Adaptation - Building resilience to climate change

7 To adapt to a changing climate, we are investing in coastal protection features including seawalls and natural barriers such as mangroves. It may cost Singapore $100 billion or more over the next 100 years to safeguard against rising sea levels. At the same time, we are working to improve our drainage system to mitigate inland flooding.

8 With global warming, urban temperatures in Singapore are expected to rise significantly, with daily peak temperatures possibly reaching 40°C as early as 2045. To combat this, we are deploying cool paints in our HDB estates, enhancing greenery, and incorporating climate-sensitive urban design in our new districts to maximise shade and wind flow.

9 Climate change is expected to continue to cause disruptions in global food production and supply. With Singapore importing more than 90 per cent of our food, it is critical that we ensure the resiliency of our food supplies. One of our key strategies is growing local. We have set a “30 by 30” goal – to build up our agri-food industry’s capability and capacity to produce 30 per cent of our nutritional needs by 2030. This is an ambitious goal for Singapore, where less than one per cent of our land is allocated for food farms. We need to grow more with less and adopt innovative farming methods that are highly productive, climate-resilient, and resource-efficient. Our Singapore Food Agency has introduced a $60 million Agri-food Cluster Transformation (ACT) Fund to support farms that wish to adopt productive and sustainable farming systems. $144 million has also been made available as part of the Singapore Food Story R&D Programme to drive research into sustainable urban food solutions, future foods, and food safety science and innovation.

Climate mitigation - Pursuing decarbonisation

10 As part of the global effort to mitigate climate change, Singapore is committed to reducing our carbon emissions. In March this year, we announced our ambition to achieve net-zero emissions by or around mid-century, in line with the Glasgow Climate Pact.

11 To incentivise emissions reductions across all sectors, Singapore will be raising our carbon tax progressively from the current S$5 per tonne to S$50 to S$80 per tonne (or USD$3.60 per tonne to USD$36 to USD$58 per tonne) by 2030. This will strengthen the impetus and certainty for businesses to invest in needle-moving decarbonisation technologies, and support the transition to a low-carbon economy.

12 We also aim to transform our industry, economy and society to be more energy efficient, by tapping on low-carbon energy sources and emerging low-carbon technologies. For example, the Energy Efficiency Fund supports a wide range of energy efficiency efforts in the industrial sector. We will also be phasing out internal combustion engine vehicles and have all vehicles run on cleaner energy by 2040, and work with industries to pilot technologies like carbon capture, utilisation and storage, and low-carbon hydrogen. We are also exploring hydrogen as an alternative energy source, and port companies – PSA and Jurong Port – have teamed with Sembcorp Industries, Singapore LNG Corporation, City Gas, Chiyoda Corporation and Mitsubishi Corporation to study the movement, import and storage of hydrogen.

13 At COP-26, Singapore and Norway successfully co-facilitated Article 6 of the Paris Agreement on carbon market rules, which outlines creating an international carbon market to help countries meet emissions-reduction targets. Singapore aims to be a leading carbon services and trading hub, and putting a price tag on the externality of carbon supports this aim. We are working with the private sector to develop a trusted and robust market for carbon credits. We are also building carbon services and trading capabilities in Singapore. These efforts, coupled with Singapore’s robust legislative, commodities trading and financial services foundation, will put us in a good position to grow an internationally trusted carbon services and trading hub. The carbon services and carbon credits trading will also present new opportunities which companies can seize to create good, green jobs for Singaporeans.

14 As an international financial centre, Singapore is also well-placed to catalyse the flow of capital towards sustainable development, not just in Singapore, but in Asia. Today, Singapore is ASEAN’s largest market for green and sustainability-linked bonds and loans, accounting for about half the market. The Monetary Authority of Singapore (MAS) has been driving Singapore’s Green Finance Action Plan to develop green finance solutions and markets for a sustainable economy. For instance, through the Sustainable Bond Grant Scheme (SBGS) and the Green and Sustainability-linked Loan Grant Scheme (GSLS), the MAS supports corporates to invest in green assets, projects and more sustainable practices. These schemes defray the costs of issuing these instruments in line with international standards that ensure the integrity of green or sustainability claims.

Importance of international cooperation

15 Climate change is an existential challenge that no one country can solve alone. Regional and international cooperation is key.

16 Singapore is committed to facilitating regional and international cooperation to further the sustainability agenda. For example, the Global Centre for Maritime Decarbonisation was formed last year with funding from the Maritime and Port Authority and six partners, namely BHP, BW, DNV Foundation, Eastern Pacific Shipping, Ocean Network Express, and Sembcorp Marine to support the decarbonisation of the maritime industry.

17 On the bilateral front, I am happy to note that Singapore and France enjoy a strong partnership in addressing climate change. Singapore’s Maritime and Port Authority of Singapore (MPA) and French shipping giant CMA CGM have recently initiated a collaboration to develop solutions for maritime decarbonisation, digitalisation and innovation. Singapore and France also signed a partnership on digital and green economy cooperation earlier this year. Under the initiative, both countries will develop a workplan on joint projects in various sectors, including agri-food technologies. This will support public-private partnerships and private sector-led approaches that harness green and digital technologies. Indeed, both Singapore and France share a common goal in sustainable development, and we look forward to more collaborations in future.

Conclusion

18 To conclude, every country has a unique path to net zero. As a small city-state with limited land and alternative energy sources, Singapore’s trade-offs are much starker than what most countries face. How soon we can achieve net-zero emissions will depend on factors such as global advancement in low-carbon technologies, feasibility of clean energy imports, and the establishment of well-functioning carbon markets. These will require technological advances, as well as regional and international cooperation.

19 The financial sector has an important role in raising awareness of sustainability issues, whether through funding of research and development of low carbon solutions, or supporting businesses in their green transition. Countries will require technology and innovations to deliver needle-moving solutions. Private sector finance will hold the key to unlock this potential. As business leaders, you have the resources and know-how to make a positive impact in our collective journey towards sustainability.

20 We will need collective action from individuals, businesses, community and the Government, to create a win-win situation for all. Thank you once again for inviting me to share about Singapore’s transition to a low carbon future. I wish all of you a very meaningful forum.