Speech by Minister for the Environment and Water Resources Dr Vivian Balakrishnan at the Intergovernmental Panel on Climate Change Regional Outreach Event

Prof Jean-Pascal van Ypersele,
Vice-Chair of the Intergovernmental Panel on Climate Change

Distinguished Guests

Ladies and Gentlemen

Introduction
A very good morning to all of you, and welcome to Singapore. I was going to say "a warm welcome" to Singapore, but realised that may be politically incorrect for this conference. But, nevertheless, I am glad to see so many of you here. To be honest, I was a bit surprised. I expected a small clique of people who are only focused on climate change.

Climate change is a difficult issue. It is characterised by complex science, which is not easily understood by everyone, and is confounded by politics. This makes it all the more imperative to discover the facts, explain the science and to contemplate both the long-term and short-term implications in a rational way.

Extreme weather events are occurring or apparently occurring more frequently, and with greater intensity. Let me just cite some examples. The United States of America experienced two of its deadliest and costliest storms in the past 10 years - I am referring to Hurricane Katrina[1] and Superstorm Sandy. Closer to home, in November last year, we witnessed the devastation caused by Typhoon Haiyan which killed at least 6,200 people in the Philippines. This year, the world recorded its warmest month in May since records began in 1880[2]. Only a few months ago, Singapore and regional countries like Malaysia and Indonesia recorded our longest dry spell, joining countries like Australia, Brazil, and the US in battling drought. A warming climate will open new sea routes during summer through what has in the past been impenetrable ice. Just last year, for the first time in history, the first container ship vessel made its way from the Chinese port of Dalian to Rotterdam Port in Europe through the Northern Sea Route in the Arctic. This will have major implications on global trade and shipping; and for Singapore, a critical sea port on the maritime Silk Road between Europe and Asia, this has profound implications.

Of course I appreciate the fact that not each and every single episode of extreme weather events can be simplistically attributed in a cause-and-effect way to long-term climate change. Things are not so simple. I also appreciate the fact that a major component of the increased costs of each disaster is due to poor planning, sub-standard infrastructure, and exploitative and unfair development paradigms. And the fact that human beings seem intent on putting ourselves in harm's way - we seem to like to live in areas of greatest tectonic activity and greatest weather turbulence. If we do not prepare adequately, the costs will be escalated if and when a disaster occurs.

Nevertheless, the statistical and scientific evidence continues to escalate. Climate change is real and there are real implications for us. Even if you are a deep skeptic, I think you would have to appreciate the incontrovertible fact that atmospheric carbon dioxide concentrations are at unprecedented highs, both in terms of absolute levels and rates of increase. These are truly times when we are sailing in uncharted territory.

As a low-lying and densely populated island city-state, Singapore is acutely aware of its vulnerabilities to climate change. We have witnessed for ourselves the increases in both the frequency and intensity of rainfall, as well as higher mean temperatures and longer periods of dry spells.

Climate change will require a collective and sustained effort by the global community. I hope that we can make good progress at the international climate change negotiations in Peru this year and Paris next year. But, and I speak quite frankly as a person who has been involved in negotiations for several years,we cannot take a positive outcome for granted. Our region remains highly vulnerable and will remain highly vulnerable for the foreseeable future. Therefore, there is an urgent need for us to update our understanding of our climate systems and how this will impact on our future livelihoods and security. Frankly, from the point of view of Singapore, we will not be able to alter the trajectory of the world by our actions; we are price-takers not makers. So, a lot of our focus has to be on adapting to climate change and making sure that we are resilient no matter what happens.

Uncertainties in climate change will always remain
To decide what is adequate and effective is not straightforward and not a trivial matter. I wanted to make three points today, all focused on uncertainties: the first being the uncertainty inherent in the science; the second, the uncertainties with the economics of climate change; and the third, the uncertainties surrounding the political process.

Let me move on to the first point, on scientific uncertainties. Climate science has advanced rapidly in the last few decades and many of you in this room have played a key role. With better technology, measurements, recording, and analytical tools, we now have a better idea of what is going on and the changes that are occurring across the world today. We also have a better appreciation and understanding of the climate system dynamics, and we certainly have more advanced and sophisticated climate projection models. These have enabled scientists, like many of you in this room, to gain new insights and expand the field of knowledge.

However, despite all these advances, significant uncertainties and information gaps still exist. There is still a large area of known anomalies and possibly an even larger area of unknown unknowns in the science of climate change. You know even better than I do, that making predictions of Mother Nature are virtually impossible with the level of precision that human beings often demand. We can close these gaps, but we cannot eliminate them. What this means is that any policies and decisions that we make to address climate change will have to recognise that we are making these decisions on the basis of the best that science can offer, but even science will have gaps. Knowledge will be updated and decisions will have to be reviewed and changed as time goes on. If you take an absolutist approach, and wrongly assume that science will have all the answers now, you will find certain parts are proven wrong later on. The danger then is that you will lose credibility; the public will throw the baby out with the bath water and say that you are all completely wrong and therefore we do not need to do anything at all.

This brings me to my second point, which is on the uncertainties related to the economics of climate change. Much of our economic activity in the world today involves the use of fossil fuels. It has been so, since the Industrial Revolution and it has been going on for two and a half centuries. But, in addition to the combustion of fossil fuels, we have also had land use change, which is particularly relevant to our part of the world - deforestation on an industrial scale. It is this and the burning of peat land which is releasing huge amounts of carbon dioxide, adding to the levels already in the atmosphere.

I found it ironic that low carbon technologies already exist. Actually, you do not need a major breakthrough in technology today. The problem today is misaligned economics, not a lack of science and technology. That is what keeps us trapped in a high carbon trajectory. Economic uncertainty also makes it more difficult to convince people. Let me give you an example. I quote the Fourth Assessment Report of IPCC, and it states “high agreement and medium evidence that it will cost us between a 1 per cent gain to a 5.5 per cent decrease of global GDP[3] to achieve stabilisation levels between 445 - 710 ppm CO2 equivalent by 2030”. Does anybody understand that sentence? You see my point. This may be factually accurate, but it washes over public consciousness. The truth is, even if we improve our models and the level of precision of these statistics, it will still wash over public consciousness.

Nevertheless, we should not let these uncertainties and difficulties result in policy paralysis. The reality is that we can never fully know the extent that future carbon abatement technologies will impact our mitigation efforts and how the global economy and societies will evolve in the long-term. So, the key is to work with what we have now. From a policymaker's point of view, there are a set of 'no-regret' policies that we can implement now, in order to achieve substantial emission reductions. For instance, we can all continue to invest in research and development into low carbon and clean energy systems. We can all mandate energy efficiency standards, because after all, energy efficiency saves money immediately. We could also have a world in which fossil fuel subsidies are removed. It is ironic that we spend far more as a global economic system subsidising fossil fuels rather than investing in alternative energy systems. These are just some examples which have been highlighted in IPCC’s latest report.

My third point has to do with political uncertainties. From an economic point of view, there is little doubt that the most effective way to deal with climate change is through a global, legally binding agreement. Of course, we hope that we will make progress by 2015. Actually, if you are an economic purist, you will probably tell me that the most elegant economics answer is to have a revenue-neutral carbon tax apply globally. But, as all of you involved in the negotiations know, it is not so simple. We will not get there so quickly. The UNFCCC negotiations have been bogged down by one big question - this question of fairness between the 'old' developed world and the newly developing countries, who also want our day in the sun and to become rich and use the technologies and the trajectory that developed countries took. There is also this issue of fairness between large and small; between continental-sized countries and island states; between countries which are richly endowed and have the potential to use alternative energy versus states like ours which are alternative-energy disadvantaged.

The point I am making is that fairness, which is a deep human obsession, is also a key sticking point in us arriving at a global legally-binding agreement. Therefore, our belief is that there is a need to develop an agreement that recognises and accommodates the diversity of unique circumstances confronting all countries, and to find a way to encourage every country to do its best. Climate change is a global problem and we need all countries to do their part. If in the name of fairness, we all stay on the starting line and do not make any progress, all of us will be worse off. I am glad to see that in the last few months, there are some promising signs. The US has announced its Clean Power Plan and China has also announced its plans to introduce a cap on its emissions. All these are positive tentative steps, but on their own, these steps would not be enough.

Many stakeholders, especially government agencies and business owners, would be very uncomfortable and hesitant to operate in the face of these three uncertainties that I have mentioned - the science, the economics and the politics. Because, from the business point of view, what you want is certainty and a level playing field. The risk of being overtaken by scientific discoveries and new technologies; the risk that economic assumptions and policy incentives will change and the risk that the politics will also change very rapidly - all these uncertainties weigh on the minds of business owners and investors. Nevertheless, I am glad that there is a growing body of investors who do understand that their own long-term interests lie in pursuing sustainable development and responsible business practices. I want to thank those business owners who have been positive and supportive of this cause.

Singapore is taking action to address climate change
Let me now quickly turn to Singapore. We acknowledge that climate change involves uncertainties. But, we are even more cognisant, because we are a low-lying island city-state, that inaction and paralysis are not viable options. Since our independence in 1965, long before environmental sustainability and being green became fashionable, long before climate change became a global issue, the Singapore Government had very deliberately and persistently ensured that our aggressive push for economic development would be accompanied by environmental protection and making sure that we will be clean, green, safe and sustainable. For us, the environment and economy are not trade-offs between each other, but a positive virtuous cycle. It always amazes me that this posture was formulated five decades ago when we were much poorer and under greater stress and challenged on the developmental front, than we are today.

We need to continue to build on our pioneers' legacy and we need to do even more, because climate change should add a greater sense of urgency than what we have today. Our foreign friends - for those of you who flew in, when you look at the island of Singapore, two things would have struck you - first, the density and height of our buildings in our city. About 90 per cent of us live in high-rise buildings. But the other important thing that you may have noticed is that because we are dense and high, we have also been able to ensure that almost half of our land is covered in greenery. This is because we have invested heavily in long-term sustainable urban planning. We have intensified the use of our land in order to conserve our greenery. We have invested heavily in public transport infrastructure and capped our vehicular growth. We pay the highest prices for cars in the world, at great political cost. We switched from fuel oil to natural gas - which is still the cleanest form of fossil fuel - for the generation of over 90 per cent of our electricity. We price energy and water at full cost with no subsidies. Last year, we introduced the Energy Conservation Act (ECA) to motivate large energy users to manage, measure and report their energy consumption in order to improve their energy efficiency. We provide grants to incentivise the adoption of more energy efficient technologies. Looking ahead, we plan to raise the adoption of solar power in our system to 350 Mega-Watt-peak (MWp) by 2020. This may not seem like a very large number at this point in time, but given the amount of cloud cover, given the limited extent of the land that we have on which solar panels can be installed, this is still a challenge.

These are some of the key initiatives that I have outlined. But, I also want to say that because we are realist, we recognise that even with the best of intentions, it is likely that the world will not do enough to stop the progression of climate change. Therefore, in Singapore, we also have to look at adaptation. One key example that I would like to raise is reclamation. A significant proportion of our land - around 20 per cent of our land has been reclaimed. Our reclaimed land used to be set at a platform level of 1.25m above the highest historical tide level. In 2011, we changed our policy to add another metre to that. So, now, all reclaimed land will stand at 2.25m above the highest recorded tide level. Bearing in mind the fact that every cubic metre of sand has to be imported, making a decision like this has tremendous economic cost. But we do so, because we recognise that we have to pay a premium to deal with future uncertainties. When the sea levels rise by one metre, then at least, getting ourselves an additional metre of buffer will give us some level of protection. If it does not, then I will say that Singapore will have extra sand banks in the future, that is a long-term insurance policy.

I hope I have given you some idea of the way that we deal with climate change, from the perspective of a small vulnerable city state. We applaud the work of the IPCC. What they are doing is absolutely critical;to discover the science, to explain the science and to add a sense of urgency both to the public and policymakers. But we recognise that it is likely that the world will not do enough. Hence, although we will do our part as a responsible member of the global community, we will also have to do our part to look after our citizens; to prepare for a warmer, more uncertain world, in which resilience will be key and essential.

I hope I have given you enough food for thought and also an idea of how we look at this issue. Thank you for being in Singapore. Thank you for your work. You may rest assured of our fullest support and cooperation in the decades to come. Thank you very much.

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[1] Hurricane Katrina in August 2005 took more than 1,800 lives in Florida, Louisiana, Mississippi and Alabama, and caused an estimated damage of approximately USD$81 billion; In 2012, Superstorm Sandy resulted in at least 286 people dead across 7 countries, and the total estimated damage (as of March 2014) was about USD$68 billion.

[2] According to the National Oceanic and Atmospheric, the combined average temperature over global land and ocean surfaces for May 2014 was the record highest for this month, at 0.74°C (1.33°F) above the 20th century average of 14.8°C (58.6°F).

[3] Figures taken from IPCC AR4 Chapter 5 Table 5.2 Estimated global macro-economic costs in 2030 and 2050. Costs are relative to the baseline for least-cost trajectories towards different long-term stabilisation levels.

Source: Ministry of Environment and Water Resources