Delivered in Parliament on 1 Feb 2021
The climate situation is a looming crisis that has been growing in urgency for some time. United Nations (UN) Secretary-General António Guterres highlighted the severity of the problem during the Climate Ambition Summit in December 2020: The world is 1.2 degrees Celsius hotter than before the Industrial Revolution, and if current trends continue, global temperatures will rise by 3 degrees Celsius by the end of this century. Mr Guterres noted that the G20 nations have spent 50% more of their respective stimulus packages on fossil fuel production and consumption, than on low carbon energy. He called on all leaders worldwide to declare a state of climate emergency in their countries until carbon neutrality is reached, noting that some 38 countries have already done so.
As a tropical island state, Singapore is particularly vulnerable to rising sea levels and changes in weather patterns resulting from climate change. Given the way our economy is intertwined with the global economy, disruptions resulting from climate change in other parts of the world could have a deleterious effect on our country as well, for example on our food security. The Government has already recognised all these risks. It is thus important for Parliament to acknowledge that our country is in a climate emergency, in order to further focus our national priorities on mitigating and adapting to climate change.
Rebuilding the economy with green characteristics
The ongoing Covid-19 pandemic has hit the global economy hard. However, the crisis has also provided an opportunity for us to reshape our fractured economy. We have a chance to develop industrial sectors which are less destructive to the environment and thus enhance our overall resilience.
We can rebuild our economy to be “greener” by introducing and improving measures such as:
(i) the provision of grants, loans and tax relief directed towards green transport, the circular economy and clean energy research;
(ii) financial support to households and businesses for energy efficiency improvements and renewable energy installations; and
(iii) new funding and programmes to create jobs and stimulate economic activity in green industries.
There are other steps that we can take towards reshaping our economy in this fashion. The Government is aiming to fully electrify transport by 2040. Can we be a bit more ambitious and bring forward our timeline to 2030? Norway is aiming to reach this milestone by 2025, and the UK and Germany have aimed to do the same by 2030. In fact, Norway is very much on track to do so and has just become the first country in the world where electric car sales outstrip those powered by other means. Our 10-year COE system makes it easier than in most countries to have a fully electric automobile fleet sooner.
In the last few weeks, we have seen an outpouring of support for the conservation of Clementi and Ulu Pandan Forests. Rather than using our limited remaining forests for urban development, we should look into first redeveloping existing industrial land and golf courses instead.
Raising a Green workforce
Our workers are the backbone of our economy. It is crucial that we find ways to leverage on our manpower resources and develop a talent pipeline for the Green Economy. The hard reality is many industries, particularly those in the fossil fuel-related sectors will be hard hit. Royal Dutch Shell’s pivot away from crude oil towards a low-carbon slate of fuels will cost Singapore 500 jobs and half of the processing capacity on Pulau Bukom in the next three years, while ExxonMobil, BP and Chevron will be cutting their global workforces as well. Keppel Offshore and Marine recently announced that it will be pivoting away from its offshore rig business to clean energy, in large part due to depressed global oil demand. More than 10,000 workers will be impacted by this move, and it remains unclear how many will end up losing their jobs.
The International Labour Organisation (ILO), in its Guidelines for a just transition towards environmentally sustainable economies and societies, recommended several active labour market policies, such as:
(i) helping enterprises and workers transition to the green economy by facilitating access to jobs, employment and training;
(ii) giving particular attention to workers at risk of unemployment in industries affected by climate change, including those in the informal economy; and
(iii) introducing well-targeted subsidies that allow workers to acquire skills through work experience and on-the-job training.
In this vein, I propose extending the Special Employment Credit scheme to provide time-limited wage support to all Singaporean workers who are taking up their first job in the Green Economy. This will incentivise companies to expand their ventures in the Green Economy and hire and train workers in this growing industry.
In order to formulate more effective policies, it is important that we improve the quality and quantity of statistical data on the Green Economy. Such data is necessary for us to assess the impact of climate-related policies on our economy, health and social inclusion, so that we can fine tune and adjust them.
Green Public Purchasing and Sustainability Reporting
The Government should take the lead in promoting more sustainable practices through Green Public Purchasing (GPP). One of the ways it can do so is in making sustainability a criteria in more public sector procurements. This will provide industry with incentives to develop environmentally-friendly works, products and services. It could also lead to savings in public expenditure, especially if full life-cycle costs of contracts, and not just the purchase price, are considered during the procurement process. Enhancing GPP practices will also equip public officers with more knowledge and experience to meet evolving environmental challenges.
GPP in Singapore has already been introduced via the Public Sector Taking the Lead in Environmental Sustainability initiative. Under this initiative, public sector agencies have been encouraged to put in place environmental sustainability measures like energy efficiency, water efficiency and recycling. Other green factors which can be considered in public procurement could include reducing single-use plastics, data centre efficiency and reduction of food wastage in catering.
There is increased demand for corporate performance metrics on a range of environmental, social and governance (ESG) issues, as more investors seek to align their stock holdings with their issue interests and values. In the biggest survey of its kind ever done, the UN Development Program’s “People’s Climate Vote” found that more than 60% of the 1.2 million respondents aged between 18 and 59 see the climate situation as urgent, with 58% of those above 60 affirming. We can thus expect more investors placing environmental issues as a priority.
The Singapore Exchange introduced sustainability reporting in 2016 for listed companies. This complements existing reporting requirements, and shows the risk posed by ESG factors, managed for future returns. However, no such requirement is placed on private companies. ACRA could consider requiring simplified environmental sustainability reporting for private limited companies with a revenue of over $100 million and with more than 200 employees. The Government could also provide grants to incentivise SMEs to also submit sustainability reports. This will aid our local firms in their ventures overseas, where they may face increasingly stringent demands for sustainable business conduct, and help them to be more globally competitive. We should equip our local firms before they are affected by such de facto barriers to trade.
Addressing our energy needs sustainably
It is vital that we look into improving our energy efficiency, towards reducing our consumption of fossil fuels and emissions of carbon dioxide and other greenhouse gases (GHGs). Much has already been put in place by way of the Energy Conservation Act of 2013.
I would now like to talk specifically about energy efficiency in the power industry, which produces 39.7% of GHG emissions in Singapore. Singapore’s total registered power generation capacity was 12,582 MW in 2020, while the highest peak system demand since 2005 has been 7,404 MW. This currently leaves a spare capacity of some 5,178 MW in the system.
Combined cycle gas turbines (CCGTs) operate at a lower thermal efficiency when partially loaded. For example, the Alstom GT26 Gas Turbine CCGT, of which there are several in Singapore plants, has a thermal efficiency of 59% at full load but suffers a 14% points drop in efficiency at a 30% part load.
Given that the power industry is the single largest source of Singapore’s GHG emissions, even a small energy efficiency gain will reap a significant GHG abatement. Based on Energy Market Authority (EMA) data, the average thermal efficiency of power plants in Singapore in 2019 was about 50%. Can efficiency be increased by operating gas turbines at a higher average part load?
For example, a 4% points improvement in thermal efficiency of power plants will reduce CO2 emissions by 1.65 million tons of CO2 equivalent (MtCO2e), or about 5% of Singapore’s 2050 CO2 reduction target. It will also save almost $100 million a year in natural gas costs at current prices.
In this regard, I would like to know if the EMA has looked into what impact the power generation sector’s overcapacity has on energy efficiency of power generation in Singapore, and whether it has explored ways to increase average part loads and therefore improve the thermal efficiency of our power plants. Given the completely deregulated market mechanisms that are currently in place, I acknowledge that this will be a challenging task. However given the potential benefits to be gained, surely we can find a way towards a win-win situation. For example, is it possible to maintain the present deregulated system but revert to some form of efficiency-driven central load dispatching?
Driving innovation through decentralisation
The final point I wish to make is on creating an innovation-oriented sustainability strategy. Environmental protection has traditionally been the domain of governments, which set the regulatory framework and push it down to industries and households to comply. However, as Yale environmental studies professor Daniel Esty, pointed out in his article, Red Lights to Green Lights, this command and control framework is now widely recognised as slow and inefficient. The government does most of the work of spotting problems, analysing causes of various harms, spelling out standards and requiring specific technologies to be adopted by particular industries. But an over-reliance on the government as the central actor leads to high costs, avoidable inefficiencies and disincentives for innovation.
Instead, more government incentives should be put in place to encourage broad engagement in environmental problem-solving that draws on all stakeholders, including companies, entrepreneurs, academics, civil society activists and ordinary citizens in the pursuit of a sustainable future. These practical incentives will induce innovation and help embed a “green mindset” in all firms and households.
Conclusion
Mr Speaker, while I acknowledge that Singapore has taken many steps to mitigate and adapt to the effects of climate change, the urgency of the problem grows stronger with each passing day. I have suggested today some ways to enhance our efforts to integrate more environmentally-friendly and sustainable practices in our firms and households.
Given the urgency of the climate situation, I call for the House to acknowledge that a state of a climate emergency exists in Singapore.
Sir, I thank Mr Louis Ng for taking this Motion and I support the amendments to the Motion proposed by the Member for Hougang, Mr Dennis Tan.