Opening Address by Minister for the Environment and Water Resources Dr Vivian Balakrishnan at the Responsible Business Forum on Sustainable Development at Marina Bay Sands Convention Centre

Mr Anthony Gourlay,
Chief Executive Officer, Global Initiatives

Ms Dorothy Maxwell,
Executive Director, The Economics of Ecosystems and Biodiversity for Business Coalition

Distinguished Guests

Ladies and Gentlemen

Good afternoon, everyone. When I say, it’s a pleasure to be here, I really mean it because I almost could not make it. As you know, I just returned from Warsaw and the talks overran. In fact this is becoming a very bad habit, where the meetings keep overrunning by at least a day and more. Anyway, I left Warsaw after the major sticking points were resolved and I made it back here in time. Since I am just back from Warsaw, I thought I might as well give you an update, on what is really going on at the global front as far as the UN climate change negotiations are concerned.

Pessimism for the UN Climate Change negotiations

2 The first point that I will make, is that I am pessimistic. I am pessimistic that we are going to be able to emerge with a comprehensive agreement that will do enough to resolve the problem. Let me explain why I am pessimistic. Politicians all over the world are actually not stupid people, contrary to popular belief! All of us actually know what the right thing to do is. The problem for most politicians, however, is how to do the right thing for the long term and win the next elections. You see, there is always a tension between doing the right thing for the long term versus doing the expedient thing for the short term. Quite frankly, I think this tension exists in business as well. You can aim for short term profit and an improved figure for your next quarter as opposed to long term sustained viability for your business.

3 Coming back to politics and the climate, it is very tragic that even after disasters like Typhoon Haiyan which affected the Philippines, Palau, Micronesia and Vietnam, and even a year after Hurricane Sandy affecting that bastion of capitalism - New York; despite these disasters, unfortunately, the political centre of gravity has not shifted. Disasters like these are still not enough to materially change public and political opinion to do what needs to be done. So, that is the first point –that there will be disasters and I am not sure at what point that disasters at a global level will be so severe that public and political opinion will change fundamentally.

4 The second reason for my pessimism is that climate change is one of those issues where you can get bogged down with the question of fairness. Most of us who have children will understand childhood bickering. The most potent source of bickering among children is –“It’s not fair, He did it first, not me. He took a bigger portion. He benefited more.” –so, unfortunately, these are valid issues of fairness, but these arguments about fairness are going to bog us down so much that we probably would spend all our time arguing about fairness and not enough time resolving to do what is necessary. So, if you look at the state of play now, we have set up targets, we have said, well, we want to try to keep global temperature rise by less than 2 degrees relative to pre-industrial levels. We set up targets like, by 2015, we want to have a global agreement which will have binding contributions, expected from all of us, and those commitments or actions or contributions, depending on your negotiating prose, will take effect from 2020. We set up institutions, for instance, a Green Climate Fund. We have set up mechanisms, for instance, one of the agreements that we have made over the weekend, was that there would be a Warsaw International Mechanism which will help to decide how to deal with loss and damage that results from global climate change. So, you see, we set up deadlines, we set up institutions, we set up mechanisms, but guess what, all these are empty shells. Unless, we can actually make some tough, hard, real decisions in the next two years, the deadlines, the funds, the mechanisms will just remain negotiating prose. The political capital, the real money is not in there. So, that is where we are at and that is why I am pessimistic. But, I do not want you to leave on a completely downbeat tone. My own sense is that at some point, the world will have faced enough disasters and people would come to their senses and they will put political pressure on politicians to do the right thing. It is just that it may not happen quickly enough.

Singapore’s vulnerabilities

5 Let me now switch focus to a more Singapore centric perspective so that you can better understand the way we look at this global challenge; and the relationship between the environment and the economy. The first thing that I would say is that Singapore is extremely fortunate that our founding Prime Minister, Mr Lee Kuan Yew was a pragmatic green environmentalist, way before becoming green was fashionable. We are talking about five decades ago. Back then, some of the key challenges that he faced –the first was how do we make a living, how do we feed our people? The second challenge he faced was how we live with each other, given that we were an immigrant society, divided by history, language and religion. The third was how we live in a region, which was not always well-disposed towards this little city state, this little red dot. The fourth existential challenge was water. Water was a crucial existential strategic vulnerability. Even today, more than half of our water is imported from the state of Johor. Most people are not aware that the catchment area of the river in Johor which supplies about half of the water to Singapore, is almost twice the size of Singapore. In other words, if you are expecting to just collect and store rain in our reservoirs to supply water, you will need an area four times of our current land area. Now, those of you who have been in Singapore for a sufficient time would know that we are pretty good at managing and reclaiming land. In fact, right now, we are standing on reclaimed land, but there is no way you can reclaim enough land to store and supply enough water. So, the point, I am making is that water was always an existential, strategic vulnerability for Singapore.

6 There was a further environmental constraint. Because we are so small, my backyard is your front yard, your side gate is my side gate. Because we are so small, we did not have the luxury of polluting some place and ignoring it. So, the way, we dealt with waste, the way we dealt with smoke, the way we dealt with haze, pollution, the toxins, by necessity, from the point of inception of Singapore, we have never had the luxury of ignoring externalities, of saying, dump it, burn it, leave it, forget about it, we won’t notice it. In Singapore, we had to do an entire life cycle approach to the way we use and dispose all our materials. 50 years ago, Mr Lee said we won’t use coal to power our electricity generating stations. 50 years ago, when Singapore was much poorer, when coal was the primary way of generating electricity, for a country like Singapore to say we won’t do that, because we still want to see blue skies, that is being well ahead of your time. I am giving you this historical backdrop and this appreciation of our vulnerability in order to help make sense of our current policies. Does Singapore still need to make a living? Yes. Do we need your companies to succeed? Yes. Do we need you to remain viable for the long term and be capable of generating jobs for our people? Yes. Are we still a little red dot in Southeast Asia, exposed to both politics and environmental forces of the region? The answer is yes.

Long term, comprehensive, integrated master plans essential

7 So, what is our approach? Over the last couple of years, you would have heard of many master plans. For instance, in 2009, we had the Sustainable Singapore Blueprint. This was a document that emerged from consultation with several ministries; it is actually a Whole-of-Government document. We set targets on environmental protection; on energy efficiency; on industrial policies; on how we are going to keep Singapore sustainable and viable, both economically and environmentally, over the next 20 to 30 years. This was generated in the year 2009. The point about this report was that it is based on the concept that the environment and the economy are not opposite poles and are not trade-offs between each other. But that, Singapore needs a viable economy and the way to ensure that for the long term is to have sustainable development in a secure, viable and liveable environment.

8 Let me give you an example. Increasingly, companies make decisions on where to site their operations, or even more relevant, where to site their headquarters –in a place where talent is available. And talent tend to accumulate or to congregate in places where the quality of life is appealing.

9 Let me give you more examples that most of you in the audience can identify with. Frankly, most of you probably spend half of your time on an airplane travelling in the region or further afield. But, my objective is to make Singapore a compelling place where your wife and your children or your parents would want to be based in. This is a safe and secure place, clean air, clean water, water which you turn on your tap, add formula milk and then feed with your children with no hesitation; where your children can go to school without having to deal with drugs and guns; where your parents can go to hospital and get top quality care. So the point that I am trying to make, is that if I can make Singapore a compelling place for your family, then I have you. Because, where your wife and family and children are, that is where the company headquarters is going to be.

10 Another example of our master plan that you would have been aware over the last few days, the URA has published the latest draft of our land use master plan and we do this every decade or so. You will see this concept that despite limited resources –land, parks, water, roads - our objective is to make the best of those resources in order to create a compelling wonderful place to live. More importantly, it also signals to Singaporeans that we may be small but we are not constrained. Innovative plans, synergistic plans, an approach which encapsulates quality of life, the environment and business can create a virtuous cycle in which Singapore can continue to grow and thrive in a sustainable way for the long term.

11 A few months ago, you heard about our transport plans –doubling the rail network, improving cycling access, etc. Again the point is that if we are to aim for a low carbon future, one key part that needs to be optimised is public transport. Public transport has to become the preferred first choice for people to move around in our city. That will also improve our carbon performance significantly. So the point I am making is that you will see in Singapore the last few years and in the years to come, the formulation of multiple master plans which take all the different ingredients in order to generate long term viability in a synergistic comprehensive way.

12 In the case of water, we have taken a strategic vulnerability and we have converted it into a strategic opportunity. Because we have always been painfully aware of our vulnerability in water, we have committed to achieving self-sufficiency well before 2061. Why, 2061? Because, 2061 is when the agreement with Malaysia runs out. Now, the entire dynamic changed just one decade ago. Why and how did it change? Because of reverse osmosis and semi permeable membranes. Now, we didn’t invent reverse osmosis. But nevertheless, ten years ago, the application of reverse osmosis allowed us to recycle water and to desalinate water at a viable price. That has given us great confidence that we are well on our way to achieving our target of self-sufficiency before 2061. The fact that we were able to take technology, prototype it, upscale it and show that it works means that today we have Singaporean companies competing for business opportunities all over the world to solve water problems and their calling card is “I come from Singapore, I have a track record”. So you see, even in this space, we have shown you how we can take a vulnerability and exercise imagination and innovation and create business opportunities. So this is the way which we need to keep approaching our environmental challenges and converting them into opportunities.

Transboundary Haze –a recurrent problem

13 Let me end with a third example which again defines our attitude to the environment. In June this year, we had our worst incident of tranboundary haze. Those of you who were here in Singapore, there were many photographs showing the landmark sight of Marina Bay Sands fading into obscurity - that has almost become a trademark of that episode. Why did that happen? That occurred because businesses got it wrong. You see, my friends, it only costs, about five US dollars to equip one man with a jerry can of diesel to burn one hectare of peat land so that the land can be cleared to plant oil palm. We can argue about whether it is five dollars or four dollars. That is a fraction of the amount of money which you need, if you were to pay a crew to bring chainsaws, cut down, transport those logs out and prepare the ground for cultivation. That difference in the economics is so compelling, that it is almost impossible to get companies to do the right thing for the long term. The short term economics are far too powerful.

14 Then what about governments? Well, there are laws in Indonesia against clearing the forest this way. There is not a shortage of laws. What about the politicians? The President of Indonesia is against deforestation and irresponsible behaviour of this kind. How do I know that? And I say this with all sincerity. You heard the President. The President of Indonesia does not issue apologies lightly. I am sure and I am convinced that this is not a problem that he wants. After he intervened, there were some actions taken on the ground and you saw the situation improve rapidly. We are grateful to him. But the point is this situation will recur because the primary forces for irresponsible behaviour aimed at short term gain still exist.

15 So the question is –what is the long term solution? And here I want to point out that we will always need three pillars to work. The three pillars are government, businesses and people.

16 Governments have to continue to formulate policies, long term master plans and to implement and enforce these plans and policies. That includes investigating and prosecuting companies and people who are clearly transgressing the laws. Governments have to create a sense of long term stability and regulatory certainty. Because without that regulatory certainty, climate change at a global level or transboundary haze at a regional level will not be resolved. Because, at the end of the day, as companies, you all know how to make money, but one key thing which you demand from governments is to tell you our rules, be certain, be stable and do not create legislative or policy or regulatory uncertainty. Because everyone can make money if the rules are clear and there is a level of playing field. I believe that all businesses want governments to have consistent long term policies.

17 There is one more thing which governments have to do, and that is to invest in research and development. That is the reason why we have the National Research Foundation in Singapore. We have continued to put money aside to support research and development in the environment and life sciences; in interactive and digital technology. Because research and development with long time spans are best supported by governments. We have to establish research institutes; to provide academic tenures to professors and researchers and then to have a system in which intellectual property is generated and protected. So that, there is an incentive to take those discoveries, prototype them, prove that they work in Singapore and then sell them to the rest of the world.

18 Let me turn to businesses. I believe businesses have to make money. Yes, the bottom line is you still have to be viable. But what we need is for companies to take the long term view, not just the quarterly profit, but, how will you maintain your account in this part of the world for a very long time. If you have got concession to a piece of land; remember that it is the people and the natural heritage and the resources of that land; which are all your responsibility. Look after that¬¬, not just for the sake of this amorphous thing called the environment but for your own long term interest. We need companies to truly add value and not to take a short cut to make an extra buck today and then forget about the future. Please take the long term view.

19 Finally, people and non-governmental organisations. People need to be empowered to make the right choices. That is why we need to insist on transparency and support the non-government organisations –CIFOR, WWF, and a whole host of local and international bodies. Because they will insist on transparency; provide the facts; enable and empower consumers to make informed decisions. Today, most of us are not aware of the sources, the origins of the products that we use; of how they were produced and the impact of the production processes on our children’s’ future. But increasingly, I believe, people are going to want answers and the fact that they demand these answers will put political pressure on politicians to make the right decisions and on businesses to do the right thing for the long term.

20 So, I am sorry that I took longer than I intended. But I hope that I gave you an idea of what is happening on the global level. We need political will to be exercised and for political capital and real money to be invested to deal with this challenge of climate change. I hope you will understand how in the case of Singapore, our very vulnerability has made us acutely conscious of environmental impacts since our conception as a sovereign state almost 50 years ago. We need a long term commitment by governments, empowered people and responsible businesses to create a virtuous cycle in which both the environment and economy can be sustained. I thank you all for your support and I hope you will help us all do the right thing for the long term.

Source: Ministry of the Environment and Water Resources