SINGAPORE - Singapore has made it clear that it is serious about decarbonising its economy but will proceed only at a measured pace to avoid any major business disruption or jobs displacement.
Ministers took turns during the parliamentary debate on the Singapore Green Plan 2030 on Thursday (March 4) to remind legislators of the challenges and risks the transformation entails.
Senior Minister Teo Chee Hean said the country's unique constraints - the top being paucity of space - mean the trade-offs it faces are much starker than what most other nations face.
While expressing the desire to turn the Republic into a "bright green spark" by embracing sustainability, Trade and Industry Minister Chan Chun Sing also stressed that the economic reboot must be paced to ensure industries are not displaced, competitiveness is maintained and the impact on jobs livelihoods is minimised.
While the topic of climate change and sustainability in general puts the spotlight on the most carbon and energy intensive industries like petrochemicals and transport, the required changes to fuel consumption patterns, greenhouse gas emissions and energy efficiency will be all-pervasive. No sector or industry, big or small, will be immune.
Companies as far apart in sectoral terms as General Electric, Microsoft and ExxonMobil have announced that they are planning their growth and financial forecasting based on the higher environmental standards their investors, customers and governments will demand.
Singapore companies, especially those that have a business relationship with multinational corporations, need to ensure they have clearly defined Environmental, Social and Governance (ESG) compliance targets even if such ESG metrics are not part of mandatory financial reporting.
Even policy-makers have found some disruptions from the global energy reset beyond their control.
For example, oil giant Royal Dutch Shell said last November that it would cut 500 jobs here as it moves to focus on production of a low-carbon slate of fuels which would require halving the crude refining capacity on Pulau Bukom in the next three years.
But the case in point can be argued the other way round as well.
It was back in 2017 when Shell had announced plans to become a net-zero emissions energy business by 2050.
The declaration was not surprising as most oil majors have been gradually increasing their renewables portfolio for some years.
In theory, policy-makers are supposed to anticipate such disruption when market leaders start talking about major structural changes in their business models.
Singapore did pre-empt the surge in e-commerce transactions amid the coronavirus pandemic by building up its online payments infrastructure years in advance.
However, the e-payments infrastructure exists in cyberspace supported by data centres that can be anywhere in the world.
But power generation facilities need to be build on solid grounds.
Sun Cable's solar farm - the world's largest - in Australia's Northern Territory is proposed to be spread over some 46 square miles. That's twice as much as Singapore's land reclamation plan that envisages a 23 square-mile increase in size of the island by 2030.
Sun Cable plans to export power from that solar farm to Singapore via an undersea cable. The giant farm will still meet only 20 per cent of Singapore's electricity needs.
Still, responding to climate change is an economic imperative for Singapore. There is increasing evidence that climate change can reduce the productivity of agriculture, aquaculture and fisheries across the Asia-Pacific region.
As a country that imports more than 90 per cent of its food, Singapore is highly vulnerable to climate-related impacts on regional food production and supply, especially if climate change prompts producer countries to cut exports and ensure their own food security.
Rising sea levels are an existential threat as well.
Though Singapore is not a major polluter on a global scale, its carbon emission stands at around 8.5 tons per person, ranking it above Malaysia and China.
While the risk of disruption and job losses is real, there is also growing evidence that moving to a low-carbon economy can produce jobs.
The World Bank estimated that a transition to low-carbon, resilient economies could create 65 million new jobs worldwide by 2030.
For instance, in the midst of the pandemic in July last year, South Korea announced one of the largest green stimulus packages seen to date. The US$135 billion ($180 billion) Korean New Deal commits to US$62 billion of green funding before 2025.
Overall, the New Deal - with a significant push to decarbonisation and investments in advanced technology and skills - is likely to create 319,000 jobs by 2022 and 659,000 by 2025.
A recent research report by ING Bank noted that while Singapore's Green Plan takes some important steps in the direction of a more sustainable economy, the country has a long way to go with a number of other countries globally, as well as in Asia, further advanced in pursuit of this goal.
ING Bank's Asia-Pacific head of research, Mr Robert Carnell, and its senior economist, Mr Prakash Sakpal, wrote in the report that Singapore's plan to expand its electric vehicle (EV) charging infrastructure is the first concrete pledge of the Green plan.
Deploying 60,000 charging points at public car parks, airports and other sites by 2030 is a very competitive goal by current international standards, they said.
For example, Singapore's targeted charging points will come to a ratio of one for every 8.6 cars.
However, by the time Singapore gets there in 2030 the Netherlands will have 1.8 million charging points, or one for every four cars.
Some experts and analysts have also noted the absence of a target date for Singapore to become net carbon zero.
Without committing to a date, some businesses here may continue to drag their feet in moving on sustainable targets, and in turn increase the risk of disruption and displacement, they said.
Ms Cherine Fok, director, sustainability services at KPMG in Singapore, said it is critical for the energy sector, and every downstream industry, to modernise ESG practices to support financial performance and resilience.
"Trusted reporting capabilities to help organisations more accurately measure, mitigate, report, and offset their greenhouse gas emissions will be critical to meet stakeholder expectations and to comply with emerging regulations," she said.
Mr Benjamin Chiang, EY Asean government and public sector leader, said the Government alone won't be able to meet climate commitments without an engaged private sector.
"Small and medium-sized enterprises form the backbone of our economy, and many are already struggling to adapt their business models under the current pandemic climate," he said.
Still, initiatives such as the Enterprise Sustainability Programme will be critical in providing the right support and incentives to invest in sustainable practices and pivot to capture opportunities in the green economy, he said.
Most experts agreed that demonstration of a higher level of preparedness for a low-carbon economy by local businesses may encourage the Government to take bolder steps and speed up decarbonisation initiatives in subsequent budgets.