Opening Remarks by Singapore's Ambassador for Climate Action at Ecosperity Conversations 2025

21 FEB 2025

Opening Remarks by Singapore's Ambassador for Climate Action at Ecosperity Conversations 2025

Drivers of Climate Action: Politics, Economics, Nature

Ladies and gentlemen, good morning.

Let me start by posing a question. Which of these recent developments do you think is the most significant for the future of climate action?

  • One, the announcement by the United States that it is withdrawing from the Paris Agreement.

  • Two, the global average levelised cost of electricity from solar energy coming down to half that from fossil fuels.

  • Three, the average global temperature crossing 1.5 degrees Celsius in 2024, the hottest year on record.

These three developments represent the three forces driving climate action globally: politics, economics, and nature.

  • They will pull in different directions and their significance will vary over time.

  • It is easy to fixate on whatever dominates the media cycle – and politics tends to dominate. But the future of climate action must be seen through a wider lens.

  • Those countries and businesses that do this well will be better prepared for the low-carbon but climate-impaired world of the future.

Let me touch on each of the three driving forces.

POLITICS

Recent political developments in the United States have clearly posed challenges for climate action.

  • The United States will be withdrawing from the Paris Agreement for the second time.

  • President Donald Trump has declared a “national energy emergency” and promised to boost oil and gas production.

  • The Administration has ordered a freeze on funds from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, potentially putting a halt to billions of dollars in tax credits for clean energy programmes.

However, there are also a number of positives.

  • Climate action in the US is also influenced by policies in the various states and initiatives at the city level.

  • Late last year, California passed legislation to streamline approval processes for geothermal exploratory drilling projects. This could help accelerate the deployment of geothermal energy in the state.

  • A coalition of more than 5000 public sector, business, and community leaders from across states and cities – called “America Is All In” – has come together to lead climate action at the sub-national level. It comprises more than 350 local governments.1

  • Even at the federal level, the picture is more nuanced. The Administration is supportive of nuclear energy, having committed to keeping existing power plants open, and investing in innovative small modular reactors.

  • Could it be that the stronger drivers of energy policies in the US are security and affordability rather than a love for fossil fuels per se?

So, it’s a complex political dynamic. The interplay between federal and state policies, and between economic and political considerations bears close watching.

But it is fairly safe to say that, on balance, political developments in the US represent a clear step back for climate action.

It is not just the United States – political support for climate action has weakened in other countries too.

  • In Europe, the global trend-setter for climate action, environmental concerns have taken a back seat somewhat, amid voters’ anxieties arising from the war in Ukraine and frustrations with the higher cost of living.

  • In 2019, a Eurobarometer poll suggested that EU citizens considered climate change to be the second most important issue. Last year, climate change was fifth.2

  • This shift was especially noticeable during the European elections last year, even among younger voters.

  • Closer to home, Indonesia’s special envoy for climate change and energy questioned why Indonesia should comply with the Paris Agreement if the US did not.

  • I expect other countries to be asking themselves the same thing.

We cannot rule out some countries lowering their climate ambitions because of the position taken by the US.

  • Only 13 out of 195 countries submitted their 2035 climate pledges by the 10 February deadline set by the United Nations. Singapore was among the thirteen.

  • It remains to be seen whether those who have not submitted will pull back their commitment to climate action.

But some countries have taken a different path, committing to ambitious decarbonisation targets.

  • The EU has not submitted its 2035 targets. But it is on track to reduce emissions by 51% by 2030 from 1990 levels, just slightly short of its ambitious target of a 55% reduction.

  • The 2035 targets that have been submitted to-date are fairly ambitious. Relative to 1990 levels:

➢ The United Kingdom has committed to reduce its emissions by at least 81% by 20353;

➢ Switzerland by at least 65% by 20354; and

➢ Brazil has committed to reduce emissions by 59-67% below 2005 levels by 2035.5

  • And Singapore has committed to a 2035 emissions target of between 45 to 50 million tons of carbon dioxide equivalent. The 45 million tons target puts us on a linear trajectory to net zero in 2050.

Overall, global political developments on the climate front have been mixed, but I would say more negative than positive.

But politics is only one factor. Economics matters too.

ECONOMICS

By economics, I mean the balance between the cost and benefits of decarbonisation.

Let me start with the good news.

There has been a sustained and significant decline in the cost of renewable energy across the world.

  • Between 2022 and 2023, the average levelised cost of electricity for newly commissioned utility-scale solar photovoltaic projects fell by 12%. The cost of solar panels has plunged by 30% over the last two years.6

  • Renewable energy generation from wind and hydropower have also become cheaper.

  • Perhaps more significantly, battery storage project costs have fallen by nearly 90% between 2010 and 2023.7 Storage is critical for overcoming the intermittency of renewable energy and promoting its adoption.

  • Nuclear energy is getting a boost with Big Tech investments driving the revival of mothballed nuclear reactors and the development of Small Modular Reactors to meet the rising energy demands of data centres.

Renewable energy generation is now cheaper compared to fossil fuels.

  • In 2010, the average levelised cost of electricity of solar photovoltaic was 400% more expensive than fossil fuel-fired alternatives. Today, it is 50% cheaper.8

  • More renewable energy sources are reaching this tipping point of being cheaper than fossil fuels.

  • Notwithstanding political exhortations to “drill, baby, drill”, it is the falling relative price of renewables that will drive investment decisions in power generation.

  • Two-thirds of global energy investment in 2024 went to clean energy technologies and infrastructure9.

Cheaper renewables are making the electrification of the economy more viable.

  • Sales of electric vehicles (EVs) are continuing to surge, on the back of more affordable batteries. EVs already make up 35% of automobile sales in China and 20% in Europe.10

  • Electrification of heating activities in light industries is expected to gather pace.

The green economy is becoming an increasingly important driver of growth.

  • China’s clean energy sectors contributed 10% of GDP in 2024.

  • Renewable energy, led by electric vehicles, batteries, and solar, accounted for one-quarter of China’s GDP growth last year.11

But not all cost trends have been climate positive. Several important decarbonisation pathways have not seen the same rapid decrease in costs.

  • The production of low-carbon hydrogen, for instance, is facing challenges. Equipment and financial costs have increased, threatening the bankability of projects12.

  • Carbon capture and storage costs have remained fairly high, in part due to the high customisation required for each project.

  • As for sustainable aviation and marine fuels, they remain much more expensive than traditional fuels, and there continues to be global supply shortages.

  • These technologies are key to countries and companies being able to achieve their decarbonisation goals. It is of concern that costs are not coming down significantly.

In sum, economic developments have been mixed for climate action, positive for more mature technologies and somewhat neutral for emerging technologies.

NATURE

Beyond politics and economics, I think the most important developments that will drive climate action are the ones taking place in nature.

The most direct indicator of the growing risk facing our planet is temperature.

  • The ten hottest years on record have all occurred in the last decade13.

  • The persistent rise in temperatures over the last few decades has already begun to unleash more frequent and more intense storms, floods, heatwaves, and droughts.

  • These are happening across the world, and there is growing awareness of these natural disasters.

But the far more worrying developments in nature are seldom in media headlines: they are happening in our glaciers, the Arctic region, and the oceans.

Our glaciers are melting at an accelerated pace, unleashing both floods and water shortages.

  • Globally, the loss in glacial mass over the past decade is almost 40% more than in the decade before it.14

  • Glacial floods threaten millions of people, predominantly in Asia and the Americas.

  • The accelerated retreat of glaciers in the Himalayas and Tibetan Plateau has already begun to reduce flows for major rivers like the Indus, the Ganges and the Mekong, undermining water security for hundreds of millions of people across South and Southeast Asia.

The Arctic is heating up almost four times faster than the global average, creating vicious feedback loops with climate change.

  • Melting of Arctic sea ice means less of the incoming sunlight is being reflected back out to space, thereby adding substantially to temperatures in the Arctic.

  • This has in turn accelerated the melting of land-based ice in the Artic. Greenland is losing 30 million tonnes of ice every hour.

  • The Arctic is the largest source of the ongoing rise in global sea levels, threatening coastal regions and small island nations around the world.15,16

  • At the same time, the thawing of the Arctic permafrost is releasing massive amounts of deadly methane into the atmosphere, accelerating global warming.

Our ocean currents are weakening rapidly; if they collapse, the consequences will be disastrous.17

  • Take for instance the Gulf Stream, which carries warm water away from the tropics to the North Atlantic, thereby keeping Western Europe and the east coast of the Americas warm.

  • The Gulf Stream is now at its weakest in more than a thousand years and continues to slow down, as the influx of fresh water from the melting of Greenland’s ice cap lowers the salinity of the ocean.

  • If the Gulf Stream collapsed, temperatures would plunge across Europe and the east coast of the United States would be subject to flooding from the sea.

  • But the effects go much further: if warm water in the tropics no longer flowed northwards, it could cause major changes in rainfall patterns in South America, West Africa, and India, leading to declines in crop yields and food insecurity for hundreds of millions of people.

In short, climate change is going to get much worse, with increasingly catastrophic consequences.

  • According to the World Bank, by 2050, the estimated damage due to climate change could be 38 trillion US dollars, about 28% of projected global GDP.18

  • Hundreds of millions of people across the world are likely to face:

➢ severe health risks from heatwaves; or

➢ food shortages due to declining crop yields; or

➢ be displaced from their homes and livelihoods due to rising sea levels.

CONCLUSION

Nature will eventually force the world to do what it has been delaying for too long – decisive actions to reduce greenhouse gas emissions.

  • It is highly unlikely that the world will have an orderly transition that limits temperature rise to 1.5 degrees Celsius.

  • It is perhaps also unlikely that the world will do nothing and head into a 4 degrees Celsius scenario of irreversible and catastrophic climate change.

  • A more likely scenario is a disorderly transition with accelerated climate action in the outer years when developments in nature become too serious to ignore, we suffer from some climate change but manage to avoid its worst effects.

  • The result could well be a low-carbon yet climate-impaired world.

If that is a likely future, where does it leave us today?

Obviously, in the short term, we cannot completely disregard the political headwinds. Countries and companies alike have to carefully assess the global political backdrop, understand the nuances, and decide where the opportunities and risks lie in climate action.

The economics must shape medium-term investment decisions. This means looking at the cost curves for various technologies, shifts in consumer patterns, and movements in relative prices. These, I believe, are generally in the direction of progressively becoming more green.

Ultimately it is nature that will call the shots. The timeline is not set by electoral cycles or cost curves; it is set by nature. Whether we are a country or a company, the longer we delay action, the more disorderly the transition will become for us.

With its 2035 targets, Singapore has made its position clear: we remain fully committed to effective climate action. Where we need to be in the long-term is very clear: net-zero by 2050; a competitive green economy; and a climate-resilient society. Singapore is not blind to short-term political and economic realities but we will invest what is necessary for our long-term future in a low-carbon and climate-impaired world.

Achieving net-zero is not just an international obligation but also an unprecedented economic opportunity and a moral imperative to safeguard future generations.

The companies in this room will have to think hard about these issues and decide for themselves where they stand.

Thank you, and I wish you a fruitful day.

1 America Is All In. https://www.americaisallin.com/about

2 LSE. Why Green parties remain key players after the 2024 European Parliament elections. https://blogs.lse.ac.uk/europpblog/2024/07/22/why-green-parties-remain-key-players-after-the-2024-european-parliament-elections/

3 The UK’s 2035 NDC ICTU. https://unfccc.int/sites/default/files/2025-01/UK%27s%202035%20NDC%20ICTU.pdf

4 Switzerland’s second nationally determined contribution under the Paris Agreement 2031–2035. https://unfccc.int/NDCREG

5 Brazil’s NDC. https://unfccc.int/NDCREG

6 IEA. World Energy Investment 2024. https://www.iea.org/reports/world-energy-investment-2024

7 IRENA. Renewable Power Generation Costs in 2023. https://www.irena.org/Publications/2024/Sep/Renewable-Power-Generation-Costs-in-2023

8 IRENA. Renewable Power Generation Costs in 2023. https://www.irena.org/Publications/2024/Sep/Renewable-Power-Generation-Costs-in-2023

9 IEA. World Energy Investment 2024. https://www.iea.org/reports/world-energy-investment-2024

10 IEA. Global EV Outlook 2024. https://www.iea.org/reports/global-ev-outlook-2024/trends-in-electric-cars

11 Centre for Research on Energy and Clean Air.

12 IEA. Global Hydrogen Review 2023. https://www.iea.org/reports/global-hydrogen-review-2023

13 Global Centre on Adaptation. A Year of Heat and Havoc: Why 2024 Must Be a Wake-Up Call. https://gca.org/a-year-of-heat-and-havoc-why-2024-must-be-a-wake-up-call/

14 EPA. Climate Change Indicators: Glaciers. https://www.epa.gov/climate-indicators/climate-change-indicators-glaciers

15 EPA. Climate Change Indicators: Arctic Glaciers. https://www.epa.gov/climate-indicators/climate-change-indicators-arctic-glaciers

16 Arctic Monitoring and Assessment Programme. AMAP Arctic Climate Change Update 2021: Key Trends and Impacts. https://www.amap.no/documents/download/6890/inline

17 Geographical (25 October 2024). What Would Happen if the Gulf Stream Collapsed?

18 The World Bank (2006). The Road to 2050: Sustainable Development for the 21st Century.