Speech by Senior Minister Teo Chee Hean at Ecosperity on 6 May 2025

Keynote Address by Senior Minister and Coordinating Minister for National Security Teo Chee Hean at Ecosperity on 6 May 2025

Asia’s Climate Battle: Mobilising Regional Action for a Sustainable Future

Mr Lim Boon Heng, Chairman of Temasek Holdings,
Excellencies,
Ladies and Gentlemen,

We meet at a time of deepening global uncertainty.

The international trading order has been upended. Supply chains are being redrawn. Global leadership is in flux, giving rise to a more arbitrary, protectionist, and dangerous world.

As a result, countries are reassessing their priorities, placing renewed emphasis on economic resilience, self-sufficiency, and strategic autonomy.

Under these circumstances, it is not surprising to hear calls for climate ambition to be rolled back or at least deferred. Governments and businesses are under pressure to focus on immediate concerns: preserving jobs, securing supply chains, and deepening reserves in anticipation of potential shocks.

But we must be clear-minded. Those of you who run organisations know that long-term success requires both a firm grasp on the demands of today, and a steady eye on the needs of tomorrow.

Asia: Epicentre of the climate battle

The reality is that climate change will not wait for the world to find its footing. Nature sets the pace, not us, and will not wait for countries and business to act. The impact of climate change is increasingly apparent, and Asia will be among the hardest hit.

If global temperatures continue to rise at the current rate, Asia’s economic future will be in severe jeopardy if we do not do anything. The Asian Development Bank estimates that Asia could see losses of up to 41% of GDP by 2100, under a high emissions scenario.¹ Southeast Asia will be hit particularly hard. By 2030, three quarters of Southeast Asian cities could face regular flooding, potentially displacing tens of millions.² Heat and extreme weather will disrupt food supplies, raise health issues, and strain public systems. It is clear that our region will bear the full brunt of climate impacts.

Yet, it is also here, in Asia, that the fight against climate change will be won or lost. Our region is not just vulnerable to the crisis. We are integral to solving it.

In a reversal of historical emission levels, Asia today accounts for more than half of global CO₂ emissions.³ In contrast, the US and Europe combined now contribute only a quarter of global emissions.⁴ And as the economics of renewables improves, if the US and Europe continue to deploy more renewables, their share of global emissions will continue to fall.

Nevertheless, emissions per capita in the US are about triple that of Asia. Europe’s are about one-and-half times Asia’s. And this reflects the energy consumption of each of these regions.⁵ So, while Asia is expected to account for 90% of the world’s future growth in energy demand,⁶ this growth is a necessary consequence of improving people’s lives, reducing poverty, and ensuring that underserved communities get access to reliable electricity. This also means that, without mitigation, Asia’s emissions trajectory is likely to be upward, if the demand for energy continues to grow. It is within our hands to shape this.

The way in which Asia sources for our energy – whether from fossil fuels or renewables – and how we decarbonise, will shape not only our own trajectory, but that of the entire world.

Regional collaboration for a low-carbon future

So, what should the path forward for Asia be?

One set of actions prioritises mitigation solutions that are already available, can reduce emissions, and also strengthen economic competitiveness. Here, the green choice already coincides with the economic choice. These are should-do, must-do, no-regrets moves. Examples include energy efficient building systems, vehicular and industrial electrification, and large-scale solar and wind deployments. This set of actions will continue to grow. As green technologies mature, their economics will improve, and market players will respond because it is in their inherent commercial interest to do so.

Another set of actions involves governments, businesses, and investors collaborating to close the gap between what is green and what makes economic sense. In other words, for jurisdictions and stakeholders with different comparative advantages to put these complementarities to use by working with each other.

If Southeast Asia can work more closely together – across governments, businesses, and investors – we will be able to realise a low-carbon future. Let me touch on just three areas where deeper collaboration can drive growth, resilience, and climate action.

Advancing the regional energy transition

First, regional grids. Southeast Asia has immense renewable potential – solar, wind, hydro, and geothermal resources are abundant. Yet the uptake remains limited, because poor grid connectivity prevents clean energy from reaching where it is needed most. As the saying goes, “there is no transition, without transmission”. This is within countries, like large, archipelagic Indonesia, and also between Southeast Asian countries.

An integrated ASEAN power grid is part of the answer. By connecting national grids, we can trade renewable energy across borders. This will cut fossil fuel reliance and also importantly, strengthen regional energy resilience at a time when world markets are prone to gyrations.

We are already making progress. Last year, electricity trade under the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project doubled from 100 to 200 megawatts.⁷ This is really quite small in the scheme of things, but it is a useful pathfinder of what can be achieved. Singapore has also progressed agreements to trade green electricity with our neighbours, including Indonesia, Vietnam, and Malaysia.

The regional energy transition requires more than just better grid connectivity, but it is a key enabler. With continued investment and cross-border cooperation, an ASEAN grid could lift GDP by up to 4.6% and create thousands of green jobs.⁸

Unlocking Financing

Second, we must close the financing gap. If renewables are going to power our green future, then financing will be needed to “power” the transition to that future. Financing is critical for clean energy deployment, infrastructural adaptation, and the transformation of economies. Without sufficient financing, the drive to decarbonise will sputter.

Unfortunately, Southeast Asia faces a significant financing gap for green investments, this is estimated at over US$210 billion annually through to 2030.⁹ Many governments in our region face budget pressures. The private sector has resources to deploy, but is understandably wary about the risks and returns of green investments.

To move forward, Asia needs innovative financial solutions involving stronger public-private partnerships. Blended finance can be a powerful tool, as it helps to de risk investments and makes projects more attractive to commercial investors.

To kickstart this, Singapore has launched the Financing Asia’s Transition Partnership, or FAST-P, which aims to mobilise up to US$5 billion to finance green projects. We have seen encouraging progress. The Monetary Authority of Singapore will provide an update on this tomorrow.

We hope this spurs businesses, investors, and governments to go further to crowd in capital from within the region, and direct it toward credible green projects.

This will help Southeast Asia close its large green financing gap, accelerate the low-carbon transition, spark innovation, and create jobs for a sustainable future.

Realising the region’s carbon market potential

In much the same way that a regional grid will help unlock the region’s green energy potential, the development of high-integrity carbon markets can help unlock another area of potential for the region: nature-based carbon solutions.

Southeast Asia is home to some of the world’s richest ecosystems – 15% of the world’s tropical forests, more than a fifth of the world’s mangroves, and 23 million hectares of peatlands.¹⁰ Recently, the Integrity Council for the Voluntary Carbon Market (ICVCM) – a well-known international organisation for carbon credit supply side integrity – approved several methodologies to support high integrity carbon credits that reduce emissions from deforestation and forest degradation in developing countries. This shows that credible nature-based carbon credits are possible.

Carbon credits can also help drive energy decarbonisation. Asia’s existing coal fired power plants, if left operational, will consume about two-thirds of the carbon budget available for the world to meet the 1.5 degrees Celsius target. Carbon credits, in the form of transition credits, can be a powerful lever to improve the economics of coal plant phase out. Singapore supports this effort through the Transition Credits Coalition (TRACTION), convened by the Monetary Authority of Singapore.

For carbon markets to work, trust in the integrity of these markets is key. This is why Singapore is committed to working closely with governments, businesses, standards bodies, and international organisations to develop global standards and frameworks that uphold quality and integrity. We want to set a high bar for the credits we support, and lead the way towards credible carbon markets.

Conclusion

Let me close with some final thoughts on what I see as the overall trajectory of climate action.

I began chairing Singapore’s Inter-Ministerial Committee on Climate Change in 2011 – almost 15 years ago. The scientific evidence has become clear over this period, and is overwhelmingly accepted: human activities are accelerating climate change. The climate journey has never been smooth, especially with the US pulling out of the Paris Agreement again. But there are good reasons for us, Singapore, a small island nation, with limited natural and alternative energy sources, to strive harder for a green future. Let me explain why.

First, politics. Despite the ebbs and flows across election cycles and administrations, the trend has been towards more global collaboration and cooperation. Climate sceptics and climate zealots still battle it out. But the conversation has shifted from whether humans are responsible:– to who should act and how much, rather than whether we should act at all. In Singapore, we are not climate zealots, we are not climate sceptics, we are climate realists. We cannot be sure what other countries will or will not do. But we will secure Singapore’s future – by doing our part and collaborating with the world to reduce emissions; by readying our economy to grasp the new opportunities in a low-carbon world; and by preparing to protect ourselves from the effects of a warmer world, effects such as sea level rise.

Second, economics. Green technology has advanced dramatically in the last two decades. Several of these technologies are now mature and mainstream, and make economic sense on their own – they are not just cleaner but lower cost. These technologies continue to march forward. This means that the economics will tip further in favour of greener choices. Countries and businesses realise this, which is why, despite political perturbances, there is now much greater momentum to decarbonise than just a decade ago.

Third, nature. Climate change is no longer a future threat; it is already here. Every country, all of us, can see this – drought, fires, floods, loss of crop yields, more severe storms. Climate change will not wait for us to be ready. The longer we delay, the more abrupt and harder our transition will be. That is why Singapore is moving forward.

Singapore is committed to achieving our transition, and supporting regional efforts to do so. We recently submitted our 2035 Nationally Determined Contribution to the United Nations. We were one of only 20 countries out of the 195 Parties to the Paris Agreement to have done so. We are committing to reduce our emissions to between 45 and 50 million tonnes of carbon dioxide equivalent by 2035. This is actually a very small amount of global emissions, accounting for 0.1% of global emissions, but we are committed to it. This keeps us on a steady path towards our goal of net zero emissions by 2050, and signals our resolve to work with businesses and our partners in the region to transition to a low carbon future.

Asia, and Southeast Asia, have the potential, the capacity, and the impetus to make this transition sooner rather than later. Let us move forward together, with resolve, to shape a more sustainable future for our region, Asia, and the world.

Thank you.

¹Asian Development Bank (ADB). ADB Says Climate Change Could Reduce GDP in Developing Asia and the Pacific by 17% by 2070. https://www.adb.org/news/adb-says-climate-change-could-reduce-gdp-developing-asia-and-pacific-17-2070

²UN University. Climate change in south-East Asia: Where are we and what are we bound for? https://ourworld.unu.edu/en/climate-change-in-south-east-asia-where-are-we-and-what-are-we bound-for

³Our World in Data. Annual CO2 emissions by world region. https://ourworldindata.org/grapher/annual-co-emissions-by-region?time=latest

⁴Our World in Data. Annual CO2 emissions by world region. https://ourworldindata.org/grapher/annual-co-emissions-by-region?time=latest

⁵Our World in Data. Per capita CO₂ emissions. https://ourworldindata.org/grapher/co-emissions-per capita?tab=table

⁶McKinsey Global Institute. Asia on the cusp of a new era. https://www.mckinsey.com/mgi/our research/asia-on-the-cusp-of-a-new-era

⁷Energy Market Authority. Singapore Doubles Power Import Capacity Under LTMS-PIP Phase 2. https://www.ema.gov.sg/news-events/news/media-releases/2024/singapore-doubles-power-import capacity-under-ltms-pip-phase-2

⁸Recessary. ASEAN power grid could drive economic growth, halve air pollution, study finds. https://reccessary.com/en/news/asean-market/regional-power-grid-interconnections-benefits-asean countries

⁹Farmonaut. Bridging the Climate Finance Gap: Southeast Asia’s $1 Trillion Challenge for Sustainable Development by 2035.

¹⁰Biological Conservation. Vol.296. August 2024. The future of Southeast Asia's biodiversity: A crisis with a hopeful alternative; Reporting ASEAN article, 28 September 2023. Southeast Asia's Peatlands, Seen Through the Haze; FAO 2023, The world's mangroves 2000–2020.