Remarks by Singapore's Ambassador for Climate Action at Southeast Asia Climate Conversations

A Climate Agenda for Southeast Asia

Distinguished guests, friends and colleagues, good evening.

Let me start with two uncomfortable truths.

Southeast Asia accounts for 6% of global emissions and they are continuing to rise. Southeast Asia is the most climate‑vulnerable region in the world, along with South Asia. In short, we have a serious mitigation problem and a serious adaptation problem.

THE STATE OF MITIGATION IN SOUTHEAST ASIA

Let me start with our mitigation problem.

Southeast Asia is the only major region in the world where growth and emissions have not decoupled.

• The major advanced economies are continuing to grow while reducing emissions.

• In Asia, China's emissions have peaked and are now declining while the country continues to grow.

• In India, emissions won't peak until the 2040s but its emissions are growing slower than its economy.

• In Southeast Asia, unless we decouple growth in GDP and growth in emissions, we will be forced to choose one over the other.  That’s not a choice we want to make.

There are three forces driving emissions in Southeast Asia.

• First, deforestation and land-use change.

  • Agriculture, forestry, and land use account for more than half of Southeast Asia's emissions. ^[1]

  • ASEAN contributes around 30% of global agriculture and land-use emissions. ^[2]

  • Expansion of agriculture, logging, and plantations drives ongoing forest loss.

• Second, the power sector still runs on fossil fuels.

  • Fossil fuels account for three-quarters of ASEAN's electricity generation.

  • Coal alone contributes 44%. ^[3]

• Third, rapid economic growth is driving industrial emissions.

  • As economies industrialise, emissions from manufacturing, cement, steel, and transport are rising.

THE STATE OF ADAPTATION IN SOUTHEAST ASIA

Next, our adaptation problem.

Southeast Asia is the most climate‑vulnerable region in the world, along with South Asia.

• Asia as a whole is warming nearly twice as fast as the global average.

• Some parts of Southeast Asia may experience 60 more days of extreme heat annually by mid-century.^[4]

• Sea level rise around Southeast Asia exceeds the global mean, threatening more than 150 million people living in low-lying coastal areas. ^[5]

• The toll on lives and livelihoods is mounting:

  • Southeast Asia faces approximately 100 climate disasters annually, affecting 80 million people each year.^[6]

• And these costs are not evenly distributed. They fall disproportionately on:

  • vulnerable communities,

  • smallholder farmers, and

  • low-income households.

STRATEGIES TO RESOLVE SOUTHEAST ASIA’S TRILEMMA

Southeast Asia is facing a trilemma.

• First, we must grow. Our 680 million people deserve rising living standards and economic opportunity.

• Second, we must decarbonise. Our energy demand will double by 2040^[7] and how we meet it matters globally, not just regionally.

• Third, we must adapt. Climate change has already begun in our region and will only get worse: rising seas, extreme heat, devastating floods.

• Resolving this trilemma requires governments, industry, and finance to work in concert. And that’s why we are gathered here.

As we prepare for our ASEAN chairmanship next year, Singapore is looking at three areas where we can work together to address the trilemma.

• Carbon markets – to mobilise capital for decarbonisation

• Nature solutions – to tackle Southeast Asia's biggest source of emissions

• Climate resilience – to protect lives and livelihoods amidst climate change

CARBON MARKETS

Let me start with carbon markets.

Southeast Asia has huge potential for decarbonisation projects that can generate high-quality carbon credits.

• Mangrove restoration, peatland protection, and avoided deforestation.

• Methane capture from palm oil mills.

• The phase-out of coal through an emerging class of energy transition credits.

But carbon markets face two challenges that limit their effectiveness.

First, an integrity challenge.

• Some carbon projects in the past have overstated their impact:

  • claiming reductions that would have happened anyway

  • failing to deliver promised results.

• Some buyers exploited this, purchasing cheap, low-quality credits to avoid genuine decarbonisation instead of reducing their own emissions.

• This has eroded trust in the voluntary carbon markets.

Second, a financing challenge.

• Many good decarbonisation projects struggle to secure financing:

  • high upfront costs

  • uncertain revenue streams

  • long payback periods.

The answer is not to abandon carbon markets, but to rebuild integrity so that financing can follow.

• We must continue to work on robust verification of emissions reduction, conservative baselines, and real additionality testing.

Singapore is working with partners to strengthen the supply side, demand side, and infrastructure underpinnings of carbon markets

• We are collaborating with stakeholders such as the Integrity Council for the Voluntary Carbon Market (ICVCM) to improve supply-side integrity in the carbon markets.

• We are investing in technology solutions for better MRV (monitoring, reporting, verification).

• We are signalling genuine demand by procuring high-integrity credits through Article 6 agreements that count towards our national climate targets.

• We are providing clarity to corporate buyers on the responsible use of carbon credits through the international Coalition to Grow Carbon Markets, which Singapore co-chairs with Kenya and the United Kingdom.

We look forward to stepping up collaboration with our ASEAN neighbours to build a vibrant carbon market ecosystem in the region.

NATURE SOLUTIONS

Next, nature-based solutions.

For Southeast Asia, nature offers the greatest mitigation potential, while also strengthening resilience to climate impacts.

• Mangroves protect coastlines from storm surges and erosion.

• Peatlands store carbon and stabilise local climates.

• Forests regulate rainfall and stabilise water supplies

• Sustainable agriculture improves crop yields, farmer incomes, and resilience to heat and drought.

Southeast Asia holds vast untapped nature-based carbon removal potential.

• We have about a quarter of the world's forest carbon capacity, over a third of the world’s mangroves, and nearly all its tropical peatlands.^[8]

But nature is under-invested in Southeast Asia.

• The region needs US$54 billion annually by 2030 for nature-based solutions but is getting only US$8 billion.^[9]

There are three reasons why nature is under-invested.

• First, most of nature’s value is not priced.

  • the carbon sequestered by a mangrove forest,

  • the flood protection it provides, or

  • the nursery habitat it offers to fisheries

    • – none of these appear on any balance sheet

• Second, nature has a measurement challenge.

  • The outcomes of nature projects are complex, variable, and difficult to quantify.

  • How much carbon does a particular mangrove stand sequester?

  • What happens to emissions if the restored forest is disturbed ten years from now.

• Third, most nature projects are not bankable.

  • Their governance is complex, involving multiple stakeholders.

  • Their revenue models are thin, their returns are long-duration.

  • And their transaction costs are high relative to project size.

The solutions lies in environmental integrity, innovative financing, and demand mobilisation.

• Environmental integrity through better measurements.

  • Investment in remote sensing, ground data, and models built for Southeast Asia's ecosystems.

  • The more certain we are about the carbon numbers, the lower the risk premium  and the more capital will flow.

  • Innovations like blended finance coupled with carbon credits.

  • Use public and philanthropic capital to de-risk projects to catalyse multiples of commercial capital.

• Singapore is already using blended finance to de-risk renewable energy and sustainable transport projects across Asia. Could the same structure potentially work for mangrove restoration and peatland protection?

• Demand mobilisation through buyer coalitions and offtake agreements.

  • To developers confidence: if you build a credible project, someone will pay for it.

What does success look like in the nature space?

• When a mangrove restoration project in Southeast Asia is as financeable as a new industrial park.

• That is what ASEAN needs to work together on.

CLIMATE RESILIENCE

Last but not least, climate resilience.

Relative to its needs, Asia is the most underserved by adaptation finance.

• Estimates suggest that the Asia-Pacific requires up to US$400 billion annually for climate adaptation. 

• Actual flows in 2021-22 were US$34 billion; that is less than one dollar flowing for every twelve dollars needed.^[10]

Adaptation finance is held back by three limitations.

• First, the returns are diffused

  • A sea wall protects the factory, the fishing village, the public road, and the neighbourhood behind it.

  • The investor who built it cannot charge most of those beneficiaries.

• Second, the returns are public goods.

  • Early warning systems, flood maps, drainage upgrades, heat action plans – once provided, everyone benefits whether they paid or not.

• Third, the returns are difficult to count

  • Adaptation pays off as disasters that do not happen. And what does not happen never appears on a balance sheet.

  • There is no revenue line for a flood that was avoided.

  • There is no return‑on‑investment calculation for a heat wave that did not kill workers.

Adaptation is a system problem. We cannot solve it in silos. We need a systemic response. 

• Singapore has been consulting with partners across the ecosystem—governments, corporates, financial institutions—on designing a holistic, systemic approach.

• A systemic response comprises five interconnected priorities.

First, good national adaptation plans.

• A good national adaptation plan addresses three things:

  • identifies the climate risks,

  • specifies the investments needed, and

  • assigns responsibilities – what government will fund and deliver, what the private sector can be incentivised to do, and where public‑private partnership is needed.

• Some ASEAN countries like Thailand, the Philippines, and Vietnam have already submitted plans.  Singapore is preparing its first national adaptation plan.

• If governments can credibly present adaptation as an investment proposition, they can tap on capital markets. 

  • A notable example is the Tokyo Resilience Bond — the first bond certified under the Climate Bonds Standard. At EUR 300 million, it was oversubscribed seven times.^[11]

Second, corporate transition plans that integrate climate resilience.

• Many companies have started to assess physical climate risks at key facilities, but most still miss the transboundary effects that can affect business continuity across their supply chains.^[12]

• Companies need to map climate risks across their:

  • upstream suppliers

  • logistics corridors and

  • the infrastructure their operations depend on.

• Once risks are mapped, companies must decide how to respond:

  • build resilience into operations

    • o   diversify suppliers or.

    • secure insurance

Third, price physical climate risk into financial decisions.

• Financial firms must integrate physical climate risk into their investment and lending decisions. 

  • A loan to a coastal developer in a flood‑prone region should reflect the asset’s climate exposure over its lifetime.

• Financial institutions that do not price physical climate risk into their portfolios are carrying hidden liabilities.

Fourth, blended finance structures to catalyse private capital.

• As with marginally bankable decarbonisation projects, blended finance that synergises public, private, and philanthropic capital is the way to go for adaptation.

• Governments can take the lead in setting up such vehicles to improve the bankability of adaptation projects and crowd-in private capital. 

Fifth—and foundational to all the above—make adaptation measurable.

• In mitigation, we have a universal unit – tonnes of carbon dioxide reduced or removed – so investments, targets, and accountability can all be framed around this.

• Adaptation has no equivalent.

  • A sea wall built, a drainage system upgraded, a heat action plan implemented – we have no shared metric to aggregate or compare these efforts across projects and sectors.

• Governments, corporates, and financial institutions must collectively invest in climate risk data and analytics to make adaptation measurable.

CLOSING

Let me conclude.

The issues before us for discussion: carbon markets, nature solutions, and climate resilience are not abstractions. 

They are real for hundreds of millions of our people:

• Farmers in the Mekong Delta abandoning rice fields as saltwater advances inland.

• Jakarta's urban poor lose days of work with every flood.

• Coastal communities in the Philippines rebuilding homes with their own savings, one typhoon at a time

They are adapting, but without the finance and technology to do it faster, cheaper, and at scale.

Today, as we discuss, let us focus on concrete moves.

• What needs to change in policy, in capital deployment, in your own institutions?

• To make carbon markets, nature solutions, and climate resilience work at scale.

If we get this right, we strengthen our region's competitiveness and safeguard the lives and livelihoods of hundreds of millions of our people.

^[1] Project Drawdown. (2025, October 28). New report provides roadmap for reducing emissions in the food, agriculture, and land use sector across Southeast Asia. https://drawdown.org/news/new-report-provides-roadmap-for-reducing-emissions-in-the-food-agriculture-and-land-use-sector

^[2] Alliance Magazine. (2025, November 11). Southeast Asia emissions highest from food, agriculture and land use. https://www.alliancemagazine.org/blog/southeast-asia-emissions-highest-from-food-agriculture-and-land-use-philanthropy-funded-research-finds/

^[3] ASEAN Centre for Energy. (2025). ASEAN Energy Statistics Leaflet 2025. https://storage.googleapis.com/aceweb-bucket-261225/files/publication/1766846350_ASEAN-Energy-Statistics-Leaflet-AESL-2025_Report.pdf

^[4] Climate Tracker Asia Team. (2024, December 3). Observed climate trends in Southeast Asia. Climate Tracker Asia. https://climatetracker.asia/observed-climate-trends-in-southeast-asia/

^[5] Affandi, M. L. A., Din, A. H. M., Rasidi, S., Pa'suya, M. F., & Ng, K. W. (2024). Sea level rise estimation and projection from long-term multi-mission satellite altimetry data around the Southeast Asian Region. International Journal of Remote Sensing, 45(24), 9033–9063. https://doi.org/10.1080/01431161.2023.2297179

^[6] Wertz, J., Clark, A., & Hui, M. (2025, December 4). Deadly floods' $20 billion toll shows Asia's rising climate risk. Bloomberg. https://www.bloomberg.com/news/articles/2025-12-04/deadly-floods-20-billion-toll-shows-asia-s-rising-climate-risk

^[7] International Energy Agency. (2024). Southeast Asia Energy Outlook 2024. https://iea.blob.core.windows.net/assets/ac357b64-0020-421c-98d7-f5c468dadb0f/SoutheastAsiaEnergyOutlook2024.pdf

^[8] Southeast Asia Climate and Nature-based Solutions Coalition. (2024). Southeast Asia climate and nature-based solutions coalition [Presentation]. NBF Asia Investment Forum 2024. https://unfccc.int/sites/default/files/resource/%5BSCENE%5D%20NBF%20Asia%20Investment%20Forum%202024_SCeNe%20Coalition.pdf

^[9] United Nations Environment Programme. (2026). State of finance for nature. https://www.unep.org/resources/state-finance-nature

^[10] Climate Policy Initiative. (2025, September). Bridging the adaptation finance gap in Asia: Practical recommendations to address the barriers to adaptation finance in Asia. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Policy-Brief_Bridging-The-Gaps-in-Adaptation-Finance-in-Asia.pdf

^[11] Institute for Energy Economics and Financial Analysis. (2026, February 8). Actions to unlock adaptation financing can shield Southeast Asia from climate shocks (Insight brief). Institute for Energy Economics and Financial Analysis.

^[12] Boston Consulting Group. (2025, November 5). The CEO’s Guide to Withstanding Weather Disruptions. https://www.bcg.com/publications/2025/the-ceos-guide-to-withstanding-weather-disruptions; World Business Council for Sustainable Development. (2026, April 9). Getting Ahead of Physical Risk. https://www.wbcsd.org/resources/getting-ahead-of-physical-risk/