SPEECH BY MR S ISWARAN
SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY
AT THE GLOBAL CLIMATE CHANGE AND SUSTAINABILITY CONFERENCE
14 OCTOBER 2008, 10.00 AM AT RAFFLES HOTEL EAST INDIA ROOM
The Right Honourable The Lord Mayor of the City of London Alderman David Lewis
Your Excellency Paul Madden, British High Commissioner
Mr Anthony Hobley, Head of Norton Rose’s Global Climate Change and Carbon Finance team
Distinguished Guests,
Ladies and Gentlemen
Good morning and let me first extend a very warm welcome to The Lord Mayor Alderman David Lewis and his delegation to Singapore. I am also very happy to be here to address this distinguished audience today on climate change and sustainability. Norton Rose, which established an office in Singapore in 1982, is an established international legal practice advising on climate change and carbon finance markets. Hence it is apt and timely that Norton Rose is organising a conference to discuss the issue of climate change, which is the world’s greatest environmental challenge today.
The Global Challenge of Climate Change
The UN Inter-governmental Panel on Climate Change (IPCC) has assessed that warming of the climate system is “unequivocal”, and that this will have a far-reaching impact on sea levels, weather-related disasters, biodiversity, agriculture and water resources, and on our lifestyles and those of our children. It is, therefore, in our profound collective interest that we work towards a solution to sustain the world we live in.
Countries that are Parties to the UN Framework Convention on Climate Change, or UNFCCC, are now engaged in complex negotiations to develop a global architecture that will foster long-term cooperative action on climate change. This is not an easy task, especially in the face of a global economic slowdown. Unlike localised atmospheric pollutants such as sulphur dioxide, CO2 emissions that contribute to the greenhouse effect constitute a “Global Commons” problem. The solution hence must be collective, with all parties playing a commensurate role.
Singapore’s Role as a Global “Green” Citizen
For Singapore, our small size, low wind speeds, lack of major river systems and high urban density, inevitability constrain our ability to switch from fossil fuels to low-carbon alternative energies such as geothermal, wind, hydroelectric, solar, and nuclear energy. In this sense, we are an “alternative energy disadvantaged” country that has few options apart from fossil fuels.
Though Singapore accounts for only 0.2 per cent of global CO2 emissions, we are prepared to do our part for an international agreement as a responsible member of the global community.The concept of sustainable development is also not new to us. Indeed, it is an integral part of our national DNA.Since our independence in 1965, we have adopted an environmentally sensitive approach to national development through innovative solutions in the areas of urban planning, transport, housing, and waste and water management.
We have increased the use of natural gas to produce electricity, as it emits less CO2 than fuel oil per unit of energy.We have also encouraged the use of advanced co-generation and tri-generation facilities with greater efficiencies. We have implemented tough policies, like controlling our vehicle population with Certificate of Entitlements (COEs) and traffic volumes through Electronic Road Pricing, which the London Congestion Charge is modelled on. Our waste is incinerated , which provides about 2 per cent of our electricity and reduces landfill emissions of methane. Even the landfill on SemakauIsland has been designed to minimise environmental impact.It doubles up as a recreational and nature conservation area.
In addition, Singapore recognises the potential of clean technologies to reduce emissions at the global level. To grow the clean energy sector here, we have allocated significant Government funding to facilitate R&D and test-bedding. Over the past two years, we have also attracted manufacturing and R&D projects from major renewable energy firms such as Renewable Energy Corporation and Vestas. Technological improvements in this sector will lower prices over time, and increase the adoption of renewable energy worldwide.
Role of Emissions Trading in Addressing Climate Change
Given the magnitude of the global task ahead, there is scope for the private and public sectors to collaborate to tackle CO2 emissions.For a start, emission trading is one such market mechanism to optimise emissions reduction across sectors and countries. This has been a useful means for developed countries to supplement their domestic mitigation actions and achieve their Kyoto Protocol targets. The prospect of carbon revenue streams will also motivate industries in developing countries to adopt less carbon-intensive processes.
It is encouraging that the international carbon market has grown impressively in the last few years. It is now worth over €40 billion in 2007, an increase of 80 per cent from 2006. The growth of the carbon market in the Asia Pacific has also been significant, with the establishment of new regional carbon products and exchanges in China, India, Japan, Singapore, Hong Kong and Australia. Private sector financing through the carbon market is critical to mobilise the large sums required for climate change mitigation and adaptation.
Singapore as Regional Carbon Services Hub
Singapore is keen to grow our carbon services cluster, and to serve as a regional carbon price discovery centre and trading hub. We possess sound legal, regulatory and financial institutions, a business-friendly environment, and modern infrastructure and communications to support the growth of this sector. To encourage offshore trade, emissions trading by companies under the International Enterprise Singapore’s Global Trader Programme have been eligible for concessionary tax rates since last year. In July this year, the Singapore Mercantile Exchange was also launched to trade derivatives in commodities, energy and carbon, deepening the commodity trading and risk management infrastructure here. In addition, Singapore is located near large sources of Clean Development Mechanism (CDM) projects in the region such as Indonesia, Malaysia, China and India. These factors have helped Singapore anchor premier international emissions trading events here.These include Carbon Forum Asia, which will be held from 12 to 13 November, and the Singapore Energy Conference (4 to 5 November), which will be another platform to discuss climate change and emissions trading.
Through these international events, we aim to attract a vibrant cluster of companies and organisations across the carbon value chain, including project consultants and developers, financial and legal services, R&D institutes of higher learning, technology providers, traders and fund managers. Growing the carbon services sector will also help Singapore-based companies undertake emission reduction projects. Currently, Singapore has four CDM projects awaiting UN approval, with carbon credits potentially worth S$235 million.Several more are in the pipeline. To facilitate more firms developing CDM projects, the National Environment Agency recently launched a S$500,000 documentation grant to co-fund the upfront paperwork costs.
Conclusion
To sum up, enhancing the liquidity and operation of carbon markets can lower the cost of emissions abatement, provide much-needed private financing, and support international efforts to address climate change. To this end, today’s conference, by creating a platform for carbon services firms, organisations and Singapore-based companies to discuss emissions trading and climate change, supports Singapore’s efforts to grow our carbon services cluster and contributes to this global objective. I wish you a successful conference and fruitful discussions ahead.