Keynote Speech by National Environment Agency Chief Executive Officer Andrew Tan at the 2nd International Singapore Compact CSR Summit 2010
Ladies and Gentlemen
A very good afternoon to all of you.
A Black Swan in Our Midst?
It is well recognised that climate change is the most pressing long-term challenge to mankind. Although our understanding of this complex phenomenon is still incomplete, the overall weight of scientific opinion is that the earth is getting warmer, in part due to the natural variations in the earth’s surface temperatures, but more significantly, by mankind’s activities, such as the burning of fossil fuels and deforestation.
Based on the IPCC’s projections from its various climate models - I say “various models” because there is no one model that can provide an accurate forecast – global surface temperatures may rise between 1.1 to 6.4 degrees Celsius and sea levels may rise between 18 to 59 cm by the end of the 21st century. For those of you interested to know the impact of each degree rise in temperature, you can read Mark Lynas’ book “Six Degrees: Our Future on a Hotter Planet” which attempts to bring together some of the latest findings.
Climate change has been described as the ultimate “black swan” –a term coined by Nicholas Taleb to describe an outlier event that may seem highly improbable but with disastrous consequences. Some would argue that the effects of climate change are already being felt today, in the form of retreating glaciers, extreme weather patterns and loss of biodiversity. But whichever side you stand, the fact of the matter is climate change has now added a new uncertainty to the global landscape which countries, cities, businesses and communities must now grapple with.
The Long Road from Copenhagen to Cancun
Even as we speak, international delegates are meeting in Tianjin, China, to discuss the preparations for the Cancun meeting in Mexico at the end of the year. None of us are holding our breath that there will be a breakthrough at Cancun. Indeed, the road to Cancun has been a difficult one, partly because of the lack of political will, and partly, because no one can agree how to translate the principle of “common but differentiated responsibilities” into a global agreement. To be fair, the financial crisis has made the political and economic tradeoffs even starker. And as the global economy recovers, many countries in the West are still not out of the woods, consumer sentiment is weak and unemployment rates are high.
Notwithstanding, at the last UNFCCC meeting in Copenhagen, more than 130 members of the international community associated themselves with a non-binding political accord – in the want of a better agreement - to limit the rise of global temperatures to 2 degrees Celsius. Cancun will see further discussions on how developed and developing nations will share the burden of reducing emissions, funding for mitigation and adaptation for the most vulnerable countries, financing mechanisms, reducing emissions from deforestation and forest degradation (REDD), and measurable, reportable and verifiable (MRV). But we will not be anywhere near legally binding global reductions on emissions.
Instead, we will witness a flurry of bilateral deals to promote cooperation on clean and renewable energy, a trend seen among major emitters such as between the US and China, China and India, as well as between the EU and several of its partners. A global agreement hinges upon the major emitters coming to an agreement. Altogether, the top 25 emitters account for 80 per cent of global emissions. Already, China has overtaken the US as the world’s largest emitter and India follows third, although its per capita emissions remains low compared to Western countries. But until then, we may see a patchwork of bilateral and multi-lateral agreements, both at the international and national levels. While this is better than nothing, it could also lead to many different rules and practices until a global compact comes into force.
Asia’s Future Outlook Hinges upon Managing Uncertainties, Including Climate Change
The debate over how best to share the burden of climate change takes place at a time when the West is still recovering from one of its worst financial crisis while Asia, led by China and India, are enjoying faster growth rates. Barring unforeseen circumstances, Asia is likely to play a crucial part in the global recovery, particularly with the rise of China and India. But Asia is a diverse landscape comprising different geographies, histories, cultures and economies at various stages of development. Regional mechanisms are still relatively weak and confidence building mechanisms and institutional capacity still nascent.
Notwithstanding the urgency of tackling climate change, the most pressing issue for the region remains that of political stability and economic growth. The two are, of course, inter-related. There can be no economic growth without political stability, and vice versa. It is absolutely important that the governments of the region continue to focus on promoting stable conditions for their economies to flourish, investing in education, infrastructure and providing employment opportunities. There is also a need to address subsidies for fuels and food that could distort the market.
These are basic and necessary pre-conditions for regional governments to tackle longer-term challenges such as climate change, food security and resource scarcity, all of which are increasingly inter-related. With the preoccupation on developing their economies, it is perhaps not surprising that climate change is still relatively low on the national agenda for many countries. Awareness of the subject is also limited by the lack of regional climate models and expert studies on the impact of climate change.
Indeed, one of the most comprehensive studies thus far on the Southeast Asian region has been undertaken by the Asian Development Bank (ADB) in April 2009 . Entitled “The Economics of Climate Change in Southeast Asia”, the report highlighted that Southeast Asia is one of the world’s most vulnerable regions to climate change due to its long coastlines, high concentration of population and economic activity in coastal areas, and heavy reliance on agriculture, natural resources, and forestry. The ADB has called for action on the following areas:
- Water Resources
- Coastal & Marine Resources
How should the region respond? I believe we should view climate change as both a challenge and opportunity. By channelling resources to the above priority areas taking into account the need to mitigate and/or adapt to climate change, regional countries can prepare themselves for a more sustainable pathway to growth. The two are often seen in mutually exclusive terms, but a balance can be sought. Through more energy efficient infrastructure, leveraging on cleaner energy sources such as wind, solar and hydroelectric power, and encouraging environmentally friendly practices, the region can also build up its long term resilience to any future energy, food and water crisis. Indeed, countries like China, India, Japan and Korea have all seen the potential of promoting green growth to provide both a solution for their own challenges as well as create a new engine of growth for their economies.
Singapore’s Response to Climate Change
Singapore can play a useful role in all aspects of the emerging climate change, food, energy, and water nexus. At the international level, Singapore is actively involved in the international negotiations in ensuring a positive outcome at Cancun and future UNFCCC meetings. As a small country accounting for just 0.2 per cent of the world’s emissions, Singapore believes that small alternative-energy disadvantaged countries with large populations should not be unduly penalised for their high population densities and high per capita emissions.
At the regional level, Singapore is exploring with ASEAN member countries under the ambit of the ASEAN Working Group on Climate Change studies to investigate the possible impacts of climate change in the region. The success of the effort will depend on the availability of data and cross-sharing of information. Greater access to experts from within and outside the region will also be essential.
At the national level, Singapore has implemented a number of measures to mitigate and adapt to climate change. In 2007, at the National Environment Agency (NEA), we embarked on the first phase of a vulnerability impact study, which we concluded earlier this year. The results showed that the average daily temperature in Singapore could increase by between 2.7 to 4.2oC by 2100 and the mean sea level around Singapore could rise by 24 to 65 cm by 2100. These findings are within the range of our expectations and consistent with global projections by the IPCC. These findings are not the last word as climate science is a complex and evolving subject. We will improve our understanding as more information and data become available and climate change models become more robust. Going forward, NEA will also be building up its expertise in climate science and working with our regional counterparts.
In terms of mitigation actions, Singapore has committed itself to a 16 per cent reduction in carbon emissions below Business-As-Usual in 2020, contingent on a legally-binding global agreement and all countries implementing their commitments in good faith. This is a stretch target that will require much effort on our part. An inter-agency effort is underway to promote greater energy efficiency in the industry, buildings, households, transport and power generation sector. The lessons learnt here could be replicated in other parts of the region that are urbanising.
Singapore has also embarked on the second phase of the vulnerability impact study to look into the impact of climate change on energy demand of buildings, public health and biodiversity. A whole-of-government working group has also been formed to look at the specific adaptation measures. It should be noted that our current land reclamation levels are already set at 1.25 m above the highest high tide if sea levels were to rise by the projected 18 cm to 59 cm based on IPCC AR4. We would be happy to share relevant parts of these findings with our regional counterparts.
Singapore has been actively investing in the R&D and test-bedding of alternative clean energy. With limited scope for wind, geothermal and tidal energies, solar energy is the alternative energy source that presents more opportunities. The Clean Energy Programme Office under the Economic Development Board (EDB) has launched a Clean Energy Research and Test-bedding Programme to support the test-bedding of clean energy applications in government buildings. Singapore is also a living laboratory to test new technologies and new business models to accelerate the deployment of exportable low-emission technologies. The Electric Vehicle (EV) Taskforce co-chaired by the Energy Market Authority (EMA) and the Land Transport Authority (LTA), and the Intelligent Energy Systems Taskforce chaired by EMA are looking into possible urban solutions for the deployment of electric vehicles and smart grids respectively.
For the business community, NEA has recently launched the Energy Efficiency National Partnership (EENP) that will pave the way for companies consuming more than the equivalent of 15 GWh of energy per year to report on their energy usage and set voluntary targets. The EENP seeks to help companies build up the necessary capabilities before the mandatory energy management practices come into effect. We will also be reviewing our incentive schemes and exploring long-term energy efficiency financing options to cater to the needs of companies.
Thus, Singapore is moving ahead with its efforts to address climate change even as a global agreement is still being discussed. With its clean and green credentials, Singapore is well positioned to carve a niche for itself in the region as a highly dense and compact city that is liveable and sustainable. Through its recent urban solutions initiative, we hope that we can provide and share our expertise in the clean environment to other cities with similar aspirations.
The Business Case for Climate Change
At the global level, we are seeing greater buy-in from the business community. A recent survey by Ernst & Young titled “Action amid uncertainty: the business response to climate change” found that despite challenging economic conditions and regulatory uncertainty, global executives believe that the climate change agenda will significantly impact and drive their business performance and strategy over the next few years. 300 global corporate executives from 16 countries with at least $1 billion in annual revenue participated in the survey conducted in early 2010. The majority of respondents felt that corporate climate change activities are being driven by evolving customer demands and that equity analysts are now considering climate change related factors in the valuations of their companies.
Greater consumer sophistication, awareness and expectations have also made CSR an issue that Singapore companies cannot afford to ignore. CSR can widen a company’s understanding of potential risks and opportunities while securing the benefits that come with enhanced reputation, improved relationships with key stakeholders, and better financial results through CSR’s contribution to innovation, investment, enterprise and competition. It is no coincidence therefore that many CSR programmes have widened to cover a firm’s response to climate change.
Some companies in Singapore are already ahead of the curve. For instance, Merck Sharp & Dohme set the target of reducing its energy use by 7 per cent this year as part of its energy efficiency plan. Separately, in the Carbon Disclosure Project 2009 Asia ex-Japan report, published by the Association for Sustainable & Responsible Investment Asia (ASrIA), two Singapore-based companies - Capital Land and City Developments Limited (CDL) - were highlighted as providing benchmark reports for the property sector, not just in Singapore but across the region. In 2008, CDL was honoured to be the first and only developer accorded the inaugural Building and Construction Authority (BCA)’s Green Mark Champion Award, in recognition of sustained commitment towards CSR and achieving outstanding track record in environmental sustainability. We hope that over time, such practices will be the norm for businesses in Singapore.
In conclusion, tackling climate change is both a complex challenge and an opportunity. But precisely because it so complex and multi-faceted, everyone should play their part. With resource scarcity, concerns over food, water and energy security merging with climate change, the case for promoting sustainable development has become even more compelling today.
Asia now stands at a cross-road in its development where it has a choice between following the old model of industrialisation or embarking on a greener, more sustainable pathway that makes good economic and environmental sense. In this regard, Asia can set a good example for other emerging markets by taking a lead and creating new opportunities for growth. Governments, businesses and communities should take advantage of these developments - and help shape a better future not only for this generation, but the next.
Source: National Environment Agency