Opening Remarks by Singapore's Ambassador for Climate Action at COP29 Singapore Pavilion

12 NOV 2024

Opening Remarks by Singapore's Ambassador for Climate Action for Climate Action & Senior Adviser (National Climate Change Secretariat) Ravi Menon at the Launch of COP29 Singapore Pavilion, Baku Olympic Stadium, Azerbaijan, 12 November 2024, 10.30A.M.

Singapore – Doing Our Part for Global Climate Action

Ladies and gentlemen, good morning. Welcome to the launch of the Singapore Pavilion at COP29 in Baku, Azerbaijan.

Let me start with an inconvenient question: is it too late?

The question is pertinent because we have been saying at COP meetings for the last 20 years that time is running out and that we need to act fast before it is too late. So, is it too late?

In one sense, yes.

Climate change is already happening.

And it will get worse in the coming decades, simply on account of the greenhouse gas emissions that have already occurred.
And let’s not forget global greenhouse gas emissions are about 40% higher than they were 20 years ago – and they are still rising.
It is inevitable that we must prepare for a climate-impaired world.

But in another sense, it is not too late.

A low-carbon world and a sustainable planet are still within reach.

If the world can achieve net-zero emissions by 2050, we can avert catastrophic and irreversible climate change and the planet can begin to heal gradually.

Singapore will do its part to mitigate climate change.

We are committed to achieve net-zero emissions by 2050 and have been putting in place targets and plans towards that goal – sector by sector.
But Singapore accounts for only 0.1% of global emissions. The more substantive way in which we aim to do our part is to work with partners to facilitate Asia’s decarbonisation.
As a global trade, transportation, and financial hub, Singapore is well-placed to be a catalyst for global climate action, especially in Asia.
Asia accounts for half of global emissions – it will be in Asia that the battle against climate change will be won or lost.

The COP29 Singapore Pavilion will feature how Singapore is contributing to global climate action in two ways:

striving towards a low-carbon world; and
preparing for a climate-impaired world.

STRIVING TOWARDS A LOW-CARBON WORLD

First, a low-carbon world. Our focus will be on Asia. Let me highlight three areas where Singapore is leaning in:

blended finance;
carbon credits; and
grid infrastructure.

Blended Finance

Let me start with blended finance.

Asia faces significant challenges in attracting private capital for decarbonisation.

Insufficient project development expertise;
High upfront capital costs;
Long payback periods; and
Regulatory, technological, and foreign exchange risks.

We need blended finance – a combination of concessional capital, technical assistance, and de-risking mechanisms which can help to catalyse private commercial capital.

Concessional capital could be in the form of grants or financing at below-market rates.
By helping to absorb first-loss risk, it improves project bankability, thereby attracting private commercial capital.

Last year, the Monetary Authority of Singapore (MAS) launched a blended finance initiative which aims to mobilise up to 5 billion US dollars to facilitate Asia’s transition.

It is called the Financing Asia’s Transition Partnership or FAST-P.

The Singapore Government has pledged to contribute up to 500 million US dollars in concessional capital to FAST-P on a matching basis.

This means that if FAST-P can attract an equal amount of concessional capital from other sources, we can build up a pool of concessional capital of up to 1 billion US dollars.
The other sources of concessional capital could be sovereign governments, development finance institutions, multilateral development banks, and philanthropic foundations.
The combined pool of concessional capital will be used to crowd in up to 4 billion US dollars of commercial capital, to support transition projects in Asia.

FAST-P comprises three programmes aimed at three priority areas for Asia’s transition.

The Energy Transition Acceleration Finance, or ETAF, partnership, will focus on the early phase-out of coal plants, grid infrastructure, and battery storage.

Coal plants in Asia account for a third of the continent’s emissions and most of them have about 30 years or more to run.
ETAF will use financing to bring forward the retirement of these coal plants and substitute them with renewable energy.
It will also invest in the upgrading of grid infrastructure to transmit the renewable energy to where the demand is and battery storage systems to cope with the intermittence of renewable energy.
The Asian Development Bank (ADB) and the Global Energy Alliance for People and Planet (GEAPP) have joined us as strategic partners.
We are in discussions with Clifford Capital, which has extensive experience with infrastructure financing in Asia, to be the manager for ETAF.

The Green Investment partnership, or GIP, will focus on renewable energy and storage, electric vehicle, transport, and water and waste management projects.

GIP will identify such green infrastructure projects that are not readily supported by commercial lenders due to factors such as lack of investor familiarity.
GIP will use blended finance to help de-risk these projects to the point where they can access mainstream financing.
In addition to the International Finance Corporation (IFC) and Allied Climate Partners (ACP), others are considering their participation in GIP as capital providers.
Pentagreen Capital, backed by Temasek Holdings and HSBC, is the manager for GIP.

The Industrial Transformation programme, or ITP, will focus on hard-to-abate sectors (like cement and steel) and technology solutions for decarbonisation (like carbon removals).

These are areas where Asia’s ongoing urbanisation and development have been a growing source of emissions.
ITP aims to identify and finance technology solutions that will help to decouple Asia’s growth from its emissions.
MAS is pleased to partner IFC and BlackRock to develop ITP.

Since its launch, FAST-P has achieved good momentum, attracting reputable partners.

A number of other partners are close to finalising their investment due diligence to commit concessional capital, which will be matched by the Singapore Government.
With this strong support, FAST-P aims to commence commercial fundraising early next year, and make its first investments by the next COP.
MAS will share more details on Finance Day on 14 November.

Carbon Credits

Let me move on to carbon credits.

Carbon credits help to channel financing to decarbonisation outcomes that would not otherwise have taken place.

Carbon credits offer a way for companies and countries to meet their emissions targets after they have exhausted their abatement potential.
At the same time, the credits help to finance mitigation activities that can reduce or remove emissions, no matter where they are in the world.

But there are significant hurdles to overcome before global carbon markets can scale.

Demand signals from buyers are not clear.
On the supply side, many project developers do not have the expertise to generate high-quality carbon credits; and most seriously.
There is a lack of confidence in carbon markets, due to gaps in accounting for the generation, transfer and use of carbon credits.

The Singapore Pavilion will bring together ecosystem players from across the world to develop strategies to promote carbon markets.

We will highlight four initiatives that Singapore has been pursuing in partnership with others.

First, Singapore has been supporting the demand side for carbon credits.

As of this year, carbon tax-liable companies in Singapore can offset up to 5% of their taxable emissions with high-quality carbon credits compliant with Article 6 of the Paris Agreement.
Singapore has signed Implementation Agreements with Papua New Guinea and Ghana to open up the supply of such credits. We are also working with Bhutan to sign an Implementation Agreement in the early part of 2025.
Singapore companies are already looking to purchase credits under these Agreements.
We look forward to furthering cooperation with partner countries to catalyse high-quality carbon credits.

Second, Singapore is addressing the financing gap for carbon credit projects.

The Singapore Economic Development Board will be launching later today a new initiative to enable and catalyse project origination and development of Article 6 carbon credit projects.

Third, Singapore is supporting the development of a harmonised carbon data platform to address transparency concerns.

To ensure that credits are not double-counted, we worked with the World Bank and the International Emissions Trading Association to launch Climate Action Data Trust, or CAD Trust.
CAD Trust uses blockchain to link, aggregate and harmonise data across carbon crediting registries to improve transparency, giving buyers and sellers confidence that their credits are of high quality.
To-date CAD Trust has grown to cover 85% of all credits issued globally. We are working to expand its coverage even further.

Fourth, Singapore is supporting the development of high-quality carbon credits to accelerate Asia’s coal transition.

MAS is piloting the concept of transition credits, generated from the emissions reduced through retiring a coal plant earlier than planned, and replacing with cleaner energy sources.
Given that many coal plants in Asia are young and have secured long term revenues with power purchase agreements, the early phaseout from coal plants is inherently uneconomical.
Transition credits offer a source of financing to cover the revenue foregone from retiring a coal-fired power plant early.
To develop transition credits as a viable solution, Singapore has brought together more than 30 ecosystem players to form the Transition Credits Coalition, or TRACTION.

TRACTION will release its interim report, outlining the next steps for transition credits in three areas – integrity, scalability, and confidence in demand.

To define the high integrity attributes that transition credits should have, TRACTION will draw on the wide-ranging existing guidance, taxonomies and draft methodologies.
To make transition credits scalable across markets, TRACTION will identify the key risks across the transition credit project lifecycle, and put together potential mitigation solutions. The solutions will have to go beyond conventional instruments, and include innovative carbon credit insurance and advance market commitments.
To promote a robust pipeline of demand for transition credits, TRACTION will look into prospective buyers’ motivations and requirements, and identify how transition credits can be best positioned to meet the needs of different group of buyers.
In the next phase of its work, TRACTION will develop frameworks that can be applied across different markets, helping Asia transition away from coal plants in a credible manner.
More details will be shared here on Finance Day, on 14 November.

Grid Infrastructure

Third, grid infrastructure.

There is no transition without transmission.

The biggest obstacle to the deployment of renewable energy in Southeast Asia is not the cost of renewables but the lack of robust grids to bring the renewable energy to where it is needed.

It is not enough that we upgrade domestic grids, we must aim for interconnected grids across the region. Multilateral grids are a win-win proposition.

First, gains from trade. Multilateral grids enable energy trading across a larger network of countries, matching supply from countries with significant renewable potential with demand from other markets.
Second, commercial viability. The expanded offtake enabled by a regional energy market helps to increase the bankability of renewable energy projects and thereby attract investments into these projects.
Third, energy security. Multilateral grids provide an avenue for back-up energy sources in case there are disruptions in bilateral grids.

Singapore is strengthening partnerships to realise the vision of an ASEAN Power Grid.

First, Singapore will work with its ASEAN neighbours to develop a framework for the development of regional subsea cables.
Second, Singapore is collaborating with the US to study the legal and financing frameworks for energy connectivity in Southeast Asia. A working group comprising countries in the region and multilateral development institutions will be formed to advance this study.
Third, Singapore is working with like-minded partners to create a pilot framework to recognise renewable energy certificates associated with cross-border electricity trade. Such a framework will catalyse cross-border demand for green electrons, and thereby facilitate investments in electricity trading projects.
On Energy and Decarbonisation Days on 15 November, the relevant stakeholders and experts will gather here to discuss cross-border collaboration for an integrated grid infrastructure across ASEAN.

PREPARING FOR A CLIMATE-IMPAIRED WORLD

The second way in which Singapore is contributing to climate action is in preparing for a climate-impaired world. Let me highlight three areas of focus.

First, we have been strengthening our water resilience.

Extreme weather patterns, brought about by climate change, will place a strain on water resources in Singapore and in the region.
We have been leveraging technology and pursuing innovative solutions to ensure that our water sources remain weather- and climate-resilient.
We recycled used water using advanced membrane technologies and desalinated sea water as part of our efforts to strengthen our water security.

Second, we are building up our food resilience.

Climate change can cause fluctuations in global food supply chains, and Singapore is particularly vulnerable as we import more than 90% of our food.
We are strengthening our food resilience by building the agri-food industry’s capabilities to produce locally, in a sustainable manner.
We are also scaling up production in future foods such as alternative proteins which do not rely on the space-intensive practices of traditional animal farming.

Third, we are tapping on nature-based solutions for climate change mitigation, adaptation, and biodiversity protection.

The centrepiece of these nature-based solutions is Singapore’s ongoing transformation into a City in Nature, characterised by weaving nature into our city landscape and connecting green spaces through ecological corridors and park connectors.
Being a City in Nature has multiple benefits. For example, skyrise greenery can reduce urban stormwater runoff by about 7% to 12%, trap air pollutants in the urban environment, reduce energy consumption needed for cooling, and insulate against machinery and traffic noise.
On 20 and 21 November, we will feature programmes on how governments, businesses, research institutes, and international organisations can work together to shape the low-carbon cities of the future, strengthen resource circularity, and accelerate the adoption of nature-based solutions in urban settings.

To sum up, the Singapore Pavilion exemplifies the spirit of collaboration and collective action that are critical to addressing the climate crisis.

Be it in blended finance, carbon markets, grid connectivity, water and food resilience, or nature-based solutions, it is only by working together – across the public and private sectors, and across countries – will we stand a chance to secure a sustainable planet.

Thank you.