Singapore green pacts seek shared path to sustainable future

Way forward: Visitors at the Aviation Festival Asia 2023 in Singapore. Working with international partners, the city-state is further boosting collaboration and knowledge sharing between them on several fronts, including sustainable aviation. — Bloomberg

SINGAPORE: South-East Asia’s largest energy storage system on Jurong Island, built by Singapore’s Sembcorp Industries and launched in February, may well have a link to a little-known industrial area in the United Kingdom.

The company had earlier worked on a similar project at a manufacturing site in Teesside, in the north of England, allowing it to bring back to Singapore its learnings from there.

Another example of a Singapore company involved in green efforts in the UK is mooring solutions specialist Mooreast, which earlier in 2023 signed an agreement with the UK’s ScotWind to set up a manufacturing facility in Aberdeen, Scotland, to build subsea foundations that anchor offshore wind farms.

Such collaborations provide a glimpse of the potential that the green economy agreement signed last week between Singapore and the UK can bring.

This comes after a similar pact inked in 2022 with Australia.

Like any free trade deal, these green agreements can remove non-tariff barriers to trade in green goods and services, and help reduce regulatory burdens on businesses and increase their market access.

Together, the United Kingdom-Singapore Green Economy Framework (UKSGEF) and the Singapore-Australia Green Economy Agreement pave the way for like-minded countries to work together in accelerating the green transition.

After all, retooling the entire economy to minimise the impact of production and consumption on the environment, and at the same time foster inclusive prosperity, is a herculean task no country can successfully perform on its own.

For a small and open economy such as Singapore’s, the endeavour is even more onerous.

At the same time, the green economy presents a huge business opportunity.

According to research and consulting firms Oxford Economics and Arup, the market for new carbon-neutral goods and services that facilitate the net-zero transition will be worth US$10.3 trillion (RM46 trillion) to the global economy by 2050, up from US$1.3 trillion (RM5.8 trillion) now.

In recent years, both firms have advised the Prime Minister’s Office on how Singapore could grow its green economy and develop the country’s first green taxonomy.

Arup and Oxford Economics, in a joint study published in January, said new markets will emerge to offset the decline of higher-polluting industries.

These include renewable electricity generation, clean energy and equipment, renewable fuel production and green financial services.

“Opportunities abound along the supply chain of these emergent sectors, too, and in the business ecosystems that will develop around them,” said Adrian Cooper, chief executive of Oxford Economics.

However, Cooper said that even as governments, companies and investors become more aware of the risks of global warming, recent United Nations Conference of the Parties (UN COP) climate summits have served as a reminder of just how complex it is for these stakeholders to agree on a solution, and on their role within it.

Many policymakers and businesses approach emission reduction with a financial compliance mindset. So they focus on doing just enough to meet international commitments made at COP summits and local rules and standards on achieving net-zero targets.

Environmental activism is obsessed with the decarbonisation of polluting industries.

A recent study by non-profit organisation ShareAction found that only 10% of investment managers, representing a combined US$77 trillion (RM345 trillion) in assets, have a dedicated biodiversity policy covering all their portfolios.

Last week, GLS Bank, a German bank that specialises in ethical practices, opted to leave the Net-Zero Banking Alliance, a group for which it was a founding member.

GLS said it no longer wants to be part of the group, which represents over 40% of global banking assets, as much bigger signatories still support oil, gas and coal projects in emerging markets.

Even renewable energy projects can become controversial if they are deemed non-inclusive.

On March 1, the same day Singapore and the UK signed the UKSGEF, Swedish climate activist Greta Thunberg was briefly carried off by Norwegian police from the entrance to the Finance Ministry in Oslo that she and her fellow activists were blocking to protest against two large wind-power projects.

Protesters are concerned about the effects the construction of the largest wind farm project in Europe would have on land traditionally used by the Sami indigenous people to herd antlers.

Norway is otherwise seen as a world leader in the use of sustainable energy, with renewable sources of electricity amounting to 98.9% of the national production.

These developments show that the UN COP deliberations still need to go a long way to define rules and standards that encompass the vast ecosystem of activities that permeates all aspects of the economy, environment and the communities.

However, global negotiations on such rules and standards are dominated by large emitters, such as the United States, the European Union, China and India.

Hence, Singapore developing a network of agreements with like-minded international partners to foster rules and standards that promote cross-border green activities is probably the best course to contribute to the global discourse. — The Straits Times/ANN

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