Carbon markets, climate adaptation among green focus areas for S’pore as 2027 ASEAN chair: Ravi Menon

SINGAPORE – The agency coordinating Singapore’s climate policies will focus on carbon markets, nature-based solutions and climate adaptation as Singapore takes on the ASEAN chairmanship in 2027, said the nation’s Ambassador for Climate Action, Mr Ravi Menon, on May 21.

South-east Asia faces specific challenges, such as the need to decarbonise and adapt to the impacts of climate change while also ensuring economic growth, he said.

“Resolving this trilemma requires governments, industry and finance to work in concert,” he said.

Mr Menon was speaking at Southeast Asia Climate Conversations, an event co-organised by Ecosperity – Temasek’s flagship sustainability summit – and the National Climate Change Secretariat (NCCS).

NCCS is the body responsible for coordinating Singapore’s climate policies.

South-east Asia is highly vulnerable to climate change as it faces a medley of risks and hazards, such as rising sea levels, unbearable heat and extreme weather events intensified by climate change.

It is also the only major region in the world where economic growth is still linked with a rise in emissions, said Mr Menon.

“If you can’t decouple growth in GDP (gross domestic product) and growth in emissions, then you’ll be forced to choose one over the other, and that’s not a choice that we want to make in South-east Asia.”

Strategies to tackle the region’s climate challenges include the use of carbon credits and nature-based solutions, which are largely untapped in South-east Asia, he said.

On carbon markets, he said South-east Asia has huge potential for decarbonisation projects that can generate high-quality carbon credits, like mangrove restoration.

But obstacles in the way are the integrity of such credits as well as the lack of financing for projects.

Singapore is working with stakeholders such as the Integrity Council for the Voluntary Carbon Market to remove some of these barriers, for instance, by improving supply-side integrity in carbon markets.

“The answer is not to abandon carbon markets, but to rebuild integrity so that financing can follow,” Mr Menon said.

While nature offers the greatest potential in removing emissions in South-east Asia, nature-based solutions remain under-invested, due to the difficulties in quantifying and monetising these projects.

Nature-based solutions could include planting carbon-sequestering mangroves and seagrass, and preventing the deforestation of peatland.

Innovative financing mechanisms like blended finance – which is being used to de-risk renewable energy projects – could also potentially work for nature-based solutions, he added.

Blended finance refers to using public and philanthropic funding support for projects to make them more attractive for private funding to come on board.

Mr Menon said the region also remains underserved by financing for climate adaptation, which reduces the impact of climate change on communities. This is partly because climate adaptation projects, like building sea walls, seek to reduce harm and largely do not generate revenue, unlike climate mitigation projects such as renewable energy generation.

As a result, climate adaptation proceeds more slowly than it should.

Singapore is working on its first national adaptation plan – a blueprint to guard the country from climate impacts – which will take stock of current measures and identify climate risks, providing a foundational framework on which to build solutions, said Minister for Sustainability and the Environment Grace Fu on May 19.

At a separate event on May 21, leaders and representatives of international organisations said the crisis has strengthened the case for an ASEAN power grid to share the region’s renewable sources of energy, as the war in Iran drives the worst energy crunch.

Transitioning to clean energy can help South-east Asia, which is heavily reliant on fossil fuels, decarbonise while boosting energy security.

The grid is an interconnected system that will allow countries in the region to trade electricity generated from renewable sources with one another, cut their reliance on fossil fuels, and strengthen regional energy resilience.

Britain’s special representative for climate Rachel Kyte said at the Climate Group Asia Action Summit 2026 that the need for an interconnected grid for the region has “never been so clearly visible”, with ASEAN sitting at the epicentre of the impact of the crisis.

Should the war continue, Britain, which helms the Group of 20 in 2027, will probably be in the middle of the energy crisis and its economic impacts, she noted. She added that representatives from Britain had met the 2027 ASEAN chair, Singapore, on many occasions this week to discuss a shared view of the energy transition.

Professor Kyte said: “So then I think the question is, to ASEAN countries off the back of this crisis, what are the specific issues of support each country needs (to build the power grid)?

“How can ASEAN together provide that and how can the international community support ASEAN to deliver on that?”

She said many countries she has spoken to or visited since the war began are trying to pivot more profoundly or quickly to renewable energy.

This comes as the war has laid bare the hidden cost of fossil fuels, said international non-profit and summit organiser Climate Group’s director of energy, Mr Sam Kimmins.

He added: “So, if we can wean ourselves off fossil fuels, the payback is incredibly rapid.”

Similarly, Ms Tan Sue-Ern, head of the International Energy Agency Regional Cooperation Centre, stressed the importance of the ASEAN power grid as a solution to connect the region’s diverse and abundant renewable energy sources across the 11 member countries, such that areas in the region with high energy demand can tap them.

“Overall, this will enhance the region’s energy security, particularly given its import dependency on fossil fuels,” she said.

Commenting on the hurdles standing in the way of the project, which has been decades in the making, University of Tokyo’s director for the Center for Global Commons Naoko Ishii said the biggest barrier lies in the lack of political will, noting the potential that the region has in terms of critical minerals, manufacturing, power capacity and financial capacity.

“It needs to be owned by every country so that it’s in their own interest to move towards that; it’s not a sacrifice they have to make, it’s a longer term self-interest,” she added.