Singapore’s declaration of 2018 as the “Year of Climate Action“, backed by plans to soon implement a carbon price, has served to demonstrate the country’s determination to lead by example. Furthermore, as ASEAN chair in 2018, Singapore has a key opportunity to forge a path towards universal access to affordable and sustainable energy across the region.
As countries across South-east Asia are wrestling with the challenge of powering their growing economies, coal still looms large in the region’s energy supply.
In the past, policymakers have understandably turned to coal as the cheapest option for powering their economies. But changing economics and a new understanding of the sustainable future we need to accelerate mean that coal’s attraction is quickly fading.
The stakes of the low-carbon transition could not be higher. A recent study by the Asian Development Bank estimated that the economic impact of climate change could reduce the region’s GDP by a massive 11% by 2100.
World Bank president Jim Yong Kim put it in starker terms, explaining that “if the entire region implements the coal-based plans right now, I think we are finished”.
Fortunately, Singapore is attuned to this urgent turning point. Its “Year of Climate Action”, backed by concrete steps in the domestic policy sphere, is the kind of leadership the region needs.
But there is also a hard business logic behind the country’s climate drive. In addition to the billions saved if we avoid the worst impact of climate change, the shift to renewable energy is also a major business opportunity from which Singapore, with its innovative clean energy players, is well positioned to benefit.
Singapore’s finance sector has a major role in this effort. But, unlike the government, major banks based in Singapore are heavily invested in a coal-driven future. Singapore’s “Year of Climate Action” is a step in the right direction, but its world-leading financiers and asset managers need to follow suit. There is no time to waste.
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Source: Business Times Singapore, 2 March 2018