It's only the start of the year and big things are already happening in the climate change space - from massive changes like the refocus on climate change for the new US administration, the very real prospect of carbon border adjustments (tariffs for goods heading to the EU) and the setting of net-zero emissions targets for countries down to actions being taken by companies and the investment community to support the transition to zero emissions. It's clear that there has been a growing realisation that just behind the Covid disruption, there's the potential of a much bigger disruption!
(Cartoon taken from Statistically Insignificant - Raf Schoenmaekers - @statisticallycartoon)
In Singapore, there has been a notable increase in discussion at a Government level around transition, climate change risk and green recovery. This has built on budget announcements last year that have specifically targeted climate change and sustainability - and of course on the enhanced first Nationally Determined Contribution under the Paris Agreement and subsequent Low-Emissions Development Strategy that sets out the country's long-term goals with regard to decarbonisation.
Clearly, alongside these announcements and discussion points, a lot of work has been going on behind the scenes. This has now resulted in the release of the Green Plan for Singapore (https://www.greenplan.gov.sg). A little bit more detailed than announcements to date, this plan is a multi-agency effort that sets clear targets to 2030 that will assist in achieving goals set out under the Sustainable Development Goals and Singapore's goals under the Paris Agreement - setting up the trajectory to achieve net-zero emissions for the country in line with the Low-Emissions Development Strategy (currently targeted at "as soon as viable in the second half of the century").
The Green Plan itself is largely a collection of policy announcements and targets that have already been announced - though it is good to have them all in one place. Some of the key targets included within the plan - all for achievement by 2030 - are:
Plant 1 million more trees
2 GWp solar PV deployment (1.5 GW by 2025)
Expand the cycling network to 1,320 km
Increase the rail network to 360 km (early 2030s target)
All new car registrations to be cleaner energy models
Reduce the waste going to landfill by 30%
Phase out high global warming potential refrigerants from 2022
Reduce energy consumption in HDB towns by 15%
Produce 30% of nutritional needs locally
Be a leading centre for Green Finance in Asia and globally
And others - the full list of targets is here.
This is a good vision for Singapore and further highlights the Singapore Government's commitment to achieving sustainability goals. The important thing that will be required both from a policy point of view and for Singaporean businesses is consideration of what happens after 2030. Although the targets detailed in the plan will start the country on a path towards decarbonisation, more will still need to be done to achieve the targets in the Low-Emissions Development Strategy - to halve absolute emissions by 2050 and achieve net-zero as soon as viable after that.
For businesses, two things stand out as actions in the short to medium term. Firstly, an examination of what opportunities are available from the announcement of this plan. The Government is committed to action on sustainability and the budget (the 2020 budget at least...) makes available funds and support for transformation - unlocking potential opportunities for businesses.
Secondly, businesses must consider what decarbonisation means for them and how they will be able to achieve it. Understanding what their emissions are now and how they might be able to achieve net-zero emissions in a Paris Agreement aligned scenario. It will also be important to develop an understanding of what Paris Agreement aligned means. In simple terms, it will mean achievement of net-zero emissions towards the middle of the century (even earlier to achieve the 1.5 degree target!). This does mean that the decarbonisation efforts of all countries will need to be accelerated - which will present potential risks (and opportunities) for companies. Particularly as accelerated decarbonisation trajectories may mean increase in carbon pricing instruments (both coverage and price point) and erosion of market share for carbon intensive products. To achieve this, companies should conduct scenario analysis and use Paris aligned scenarios and decarbonisation trajectories to analyse financial exposure and develop transition strategies.
As part of the overall Paris Agreement, we expect to see an increase in ambition by all countries - particularly in time for the third round of Nationally Determined Contributions in 2025. This will be after the first scheduled global stocktake (in 2023) and we see an acceleration in national policy at this point - as way of playing catch-up in some ways (2020's huge reduction in GHG emissions notwithstanding).
As mentioned, there is a lot of good to take out of the Green Plan and this represents not only a firm commitment by the Government but a good stepping off point to further increase ambition in the future. At engeco, we look forward to seeing how this unfolds and the subsequent roadmap to achieve our goals after 2030.
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