Towards a Low-carbon Society

Sir, it is too hot and too wet! If you recall, this was what I said one year ago, when this House came together to declare climate change a global emergency. Yet, somehow, the world has become even hotter and even wetter. July 2021 was the world’s hottest month. Regions, from sunny California to snowy Siberia, faced their largest wildfires in history. The Arctic hit a record high of 38 degree Celsius. Catastrophic floods struck India, Europe, Malaysia, Australia and China. In China’s Henan province, a year’s worth of rain fell in a single day.

And it is not just heat and rain either. Extreme winter weather left nearly 10 million people in the US without power and water. It killed 318 people and caused nearly US$200 billion of damage, making it the deadliest and costliest natural disaster in US history.

The science is clear: climate change will increasingly usher in extreme weather and throw lives and livelihoods into disarray. As an open country, Singapore will undoubtedly be hit hard. This is a grim picture, and we are running out of time.

This is why my fellow GPC Members and I have returned to this House just one year later to call again for the Government to take further steps to tackle climate change, to sharply reduce Singapore’s carbon emissions and urgently move towards an inclusive low-carbon society. We are not alone in this fight.

As the climate crisis worsens, the people of Singapore have taken up the fight in their personal and professional lives. I shared the stories of some of these inspiring individuals in this House last year, including Esther, Lastrina, Xiang Tian and Wei Shan. I am happy today to share more about what they have done to further the fight against climate change, and I am happy they are up in the gallery, joining us in Parliament for this important debate.

Let me start with an update on Esther, the Chief Sustainability Officer of City Developments Limited. Last year, I shared how it really is not common to see a business leader advocate about climate change like she does and how despite all her time working with titans of the industry, her inspiration comes from youths. She continues to walk the talk. This past year, she attended COP26 in Glasgow as a private sector representative with our activists. At COP26, Esther proudly flew Singapore’s flag and spoke at the Built Environment Leaders Panel, a main stage event.

But it is not just at COP26 where Singapore’s activists and businesspeople stand together. Back home, Esther led CDL’s partnership with young activists from the Singapore Youth for Climate Action, or SYCA. Together, CDL and SYCA launched a campaign called "Keep Calm and Love Our Planet". Climate change can feel too big, too difficult a problem for the youths of the world. The campaign aims to dispel the sense of paralysis and instead motivate youths to take action against climate change. If you have not spoken to Esther before, I strongly encourage you to do so. She is a breath of fresh air, overloaded with enthusiasm and passionate about working together with our youths to save this planet we call home.

And this brings me to the young leaders at SYCA – Lastrina, Cheryl, and Swati, who Esther works closely with. Last year, I shared how Lastrina co-founded SYCA in 2015 to shine a light on what young people can do for the environment. Her message is one of empowerment. I am happy to share that SYCA celebrated their sixth birthday in November last year. With this milestone, other leaders have stepped up. Lastrina has empowered and inspired many others and this movement has grown.

Two of the leaders at SYCA are Cheryl and Swati. Passionate about fighting climate change, they attended COP26 as youth representatives. But their journey to COP26 was full of challenges, involving complicated logistics and fund-raising. Yet, their go-getter attitude exemplifies exactly what we want to see from our youths today. They shared with me that, to quote: "We are cautiously hopeful because we are see changing mindsets and positive actions all around us. We have seen our peers push for change and encourage positive impact through conscious food choices, recycling and sustainable energy use. There are students, entrepreneurs, teachers, artists and individuals in various professions among us who work tirelessly to achieve this. They inspire us to keep going and empower other individuals who have this shared vision of this world."

Last year, I also shared the story of Xiang Tian, a young man who leads LepakInSG, a youth initiative that circulates environmental events to motivate others to get involved. One year on, Xiang Tian remains optimistic about what we can achieve through collective action. He told me: "One thing that makes me hopeful is the increasing number of people who are learning more about the climate crisis and other environmental issues and taking actions to push for change."

In the past year, LepakInSG has been active on social media, explaining the important environmental impact studies and baseline studies we have done. Importantly, Xiang Tian is still doing this infamously in his slippers, although I am aware he is finally not wearing his slippers today. He sacrificed them to be able to enter Parliament.

Sir, Xiang Tian's work makes these complex but important topics more accessible to the public and makes it easier for the public to get involved, such as in consultations on land use and development plans. Xiang Tian tells me that LepakInSG has exciting plans coming up to facilitate discussions between green groups in Singapore. I cannot wait.

We are also very fortunate that at the PAP Youth Wing, we also have young activists working tirelessly on climate change issues. Wei-Shan is one such activist, leading a team of volunteers who are passionate about making a serious difference. We have been on many late-night calls with the YP team led by Wei-Shan. Last year I talked about the familiar sight of her two young children on our many Zoom calls. Like my daughters, they remain a regular and welcomed presence on our calls over the past year. Welcomed in most cases, except when my daughter Katie appeared completely naked when I was on a Zoom call listening to the Prime Minister’s National Day Rally live. I was horrified and I sure hope that no one, including the Prime Minister, saw.

Sir, Esther, Lastrina, Cheryl, Swati, Xiang Tian and Wei-Shan inspired us. Along them are countless other activists and citizens who have fought so hard against climate change in their own ways. Their call for action is loud and clear. I hope we can heed their call. In this spirit, I come to this House with three proposals: first, we should commit to achieving net zero emissions by 2050; second, we should increase the carbon tax to a price necessary to achieve net zero emissions by 2050; and third, we should expand coverage of the carbon tax to include all reportable facilities.

Let me start with my first ask. The Government should commit to achieving net zero emissions by 2050. I have pushed for this many times in this House now. Sir, 2050 is not just a random year. It is based on science; global emissions must be net zero by 2050 if we want to have any hope of limiting global warming to 1.5 degrees Celsius. Singapore’s current commitment is to reach net zero as soon as possible after 2050. This runs not just against what science say is needed, it runs against what many other countries are doing. Already, 136 countries have set concrete target years for carbon neutrality. This is 70% of all the countries. It includes nearly every developed nation in the world. Last year, the US, Australia and Israel also committed to reach net zero by 2050. What is stopping us?

I understand that the Government may want to focus on actions, not targets. And I do thank the Government for taking the right actions: releasing the Green Plan and for sharing how it will transform Jurong Island into a sustainable chemical and energy hub. But actions are motivated by targets. It will be harder to get to net zero by 2050 if we are not actually intending for that to happen.

In addition, setting a target in line with scientific and international standards set a strong message to Singaporeans. This would help the Government achieve what it says is needed: a whole-of-nation approach to climate change.

Last October, Minister Grace Fu said, “We will continually review and enhance our climate targets.” I thank the Government for its openness to revising its targets. Given the increasing severity of the climate crisis and the potential for sparking a whole-of-nation response, will the Government commit to reaching net zero emissions by 2050?

My second proposal today is that we increase the carbon tax significantly. There is no question that the carbon tax is the most powerful tool we have to slash emissions. Everything else – from green jobs to green financing that we are debating is important, very important. But the carbon tax has the highest potential to reshape incentives and motivate action. But our current rate is $5 per tonne. Finance Minister Lawrence Wong said last October that this is too low. I agree with him.

How high should it be to sufficiently slash emissions? One range from the High Commission on Carbon Prices, which is supported by the World Bank, proposed that US$50 to US$100 is needed by 2030. The IMF similarly recommends a rate of U$100 by 2030. Even higher prices have been suggested by LSE’s Grantham Institute, which proposes US$145 and the OECD, which provides a central estimate of U$147

My ask is that we look at the studies that have been done by these institutions and the principles for how they arrived at these prices. I hope we can adopt the principles and approaches to derive a price that Singapore needs to reach net zero emissions by 2050. An increase in the carbon tax will also mean an increase in tax revenue. I hope the Government will use this to help subsidise decarbonisation projects in the private sectors as well as limit the impact on lower-income Singaporeans by issuing more U-Save rebates or vouchers under the Climate Friendly Households Programme. Let us make this transition an inclusive one.

My third and final ask is that we expand the coverage of the carbon tax. Currently, carbon tax applies only to facilities emitting at least 25 kilotonnes of CO2-equivalent in a year. This covers around 50 facilities that contribute about 80% of our total carbon emissions.

We should be aiming for a higher coverage. I understand that the Government set a high threshold to limit compliance costs by smaller emitters. But smaller emitters, those emitting at least two kilotonnes of CO2equivalent, are already “reportable facilities” and have to pay the costs of monitoring and measuring their emissions.

Given that any additional compliance costs would likely be minimal, it would make sense for the carbon tax to cover all reportable facilities. This would, after all, be in the spirit of a whole-of-nation fight against climate change. Emitters, small and large, have a role to play.

In conclusion, let me summarise my proposals: first, the Government should pledge to achieve net zero emissions by 2050; second, it should increase the carbon tax rate significantly; and third, it should expand coverage of the carbon tax to include all reportable facilities.

The fight against climate change must involve decisive action. On the matters of net zero targets and carbon taxes, we need to move much faster. I thank the Ministries and agencies for their hard work so far in helping Singapore play its part in the global fight against an existential crisis.

Sir, during last year's climate change Motion, I spoke extensively about how Captain Planet, that children's cartoon, motivated me to care more for the environment. Through that sharing, I learnt that many people did not know who on earth Captain Planet is and that I really am getting old. But I am glad many went to find out about Captain Planet and the important message of protecting our planet.

Sir, let me end with a quote from Gaia, the spirit of Earth in Captain Planet, and I quote, "The feeling that one person can't make a difference is the greatest obstacle of all." Small as Singapore may be, I hope we can all believe in her ability to make a difference in the global fight against climate change.

Mr Speaker, Sir, I would like to declare that I am working with a Singapore bank, but I am not involved in the issuance of green bonds nor green equities. I am also a council member of the Institute of Singapore Chartered Accountants (ISCA) on a pro bono basis.

Every region of the world has been hit by extreme weather events that are growing more frequent and more powerful. Our neighbouring countries have been impacted as well. These occurrences are the result of climate change from cumulative human-induced factors. And some of these changes – like the continuing rise in sea levels – are irreversible. Left unchecked, the interconnected crises of climate, pollution and biodiversity loss will rapidly erode the very foundations of our existence.

Since human activities have resulted in these changes, human activities can also slow down, halt or even, if we may dare hope, recede them. By reducing activities with heavy carbon emissions and through investments in green projects, we can strive to make changes for the better.

Green financing is an important enabler to catalyse the evolvement of our region's green economy. As one of the key financial centres in the world, Singapore has a strong responsibility to communities most vulnerable and existentially threatened by climate change.

Singapore can catalyse the flow of capital towards sustainable development in the region. We should continue to take the lead in mobilising climate finance from a wide variety of sources, instruments and channels, including instruments to unlock the huge potential of private finance through the targeted use of public climate finance.

Our financial services industry, which includes banks, insurers and asset management firms, can play a useful role in promoting sustainable and green finance in Asia, if not the world. Green finance, as one of the key programmes of the Singapore Green Plan 2030, can boost sustainability efforts in Singapore companies and compel companies to consider green projects more seriously.

MAS adopts an active approach in promoting sustainable financing in our financial services sector, including engaging financial institutions to consider environmental, social and corporate governance (ESG) criteria in decision making processes, supporting the adoption of industry standards and guidelines, encouraging industry-led capacity-building efforts and developing the green bond market in Singapore.

The Government can lead the way to promote sustainable financing by mandating its statutory boards, like MAS, LTA, HDB and NEA, to issue green bonds and laying the framework and rules for green financing. This is on top of the S$19 billion worth of selected public infrastructure projects identified to be financed by green bonds.

I hope our government can commit to a minimum number of green bond issuances every year, including a standalone retail green bond product which can be tied to the country's sovereign rating, so as to broaden the pool of Singaporean green investors. We should also tap into the growing investor demand across the globe for green financing products and projects with clearly defined environmental benefits.

The Government may consider reporting on the social benefits of expenditures financed by green bonds financing, such as job creation, access to affordable infrastructure and socio-economic advancement.

We can build on MAS’ Greenprint initiative and formulate a Singapore Green Financing framework which sets out the Government’s environmental agenda and its vision for enhancing Singapore’s leadership as the Asia’s green financial centre. The framework should detail how the proceeds from the green bonds will finance expenditures to help tackle climate change, biodiversity loss and other environmental challenges, while creating green jobs in Singapore. The sectors where we can make a difference include clean transportation, renewable energy, energy efficiency, pollution prevention and control, living and natural resources and climate change adaptation.

The Government should also perform annual allocation reporting and periodic reporting of metrics on environmental impacts and social benefits and ensure transparency for retail and institutional investors and other interested stakeholders.

Singapore is elevating the standards of emissions monitoring and reporting in Southeast Asia so as to help the large emitters in the region to curb their carbon footprint and increase their access to green financing schemes.

Singapore can take the lead to devise ASEAN’s version of the Action Plan on Financing Sustainable Growth and follow-up with a Strategy for Financing the Transition to a Sustainable Economy. Other areas we should look into include an ASEAN taxonomy for environmentally sustainable economic activities, sustainability-related disclosures for issuers and for financial market participants, the ASIAN green bond standard and corporate sustainability reporting which may also include carbon tax accounting especially when carbon tax is likely to rise in the near future.

To create a sustainable future for Singapore, we need all hands on deck. Every sector, business and individual need to play their part. In promoting the adoption of sustainable business practices and reporting, the trade associations and chambers, or TACs in short, can play a key role as enablers and strategic partners of the Government. TACs or professional bodies can partner the Government to support the sustainability agenda by providing resources to drive adoption of sustainability reporting and green finance.

Sustainability reporting is an emerging area, and companies will need references to guide them in their disclosures. With the introduction of the Singapore Exchange Regulation’s roadmap for mandatory climate-related disclosures, ISCA is also developing a series of guides to share best practices and guidance publications on green and sustainable finance. These publications include a roadmap to guide professional accountants on obtaining green and sustainable finance for their organisations if they assess that such financing fits into their corporate business strategy, and a best practice guidance on how businesses can disclose their green finance policies and initiatives. With such assessment, this will allow companies to better approach banks for the financing of their sustainability projects. It leads to a virtuous cycle of sustainability.

This is just one example of how a TAC can contribute to the sustainability agenda. Sustainability issues are inter-connected and multifaceted. I urge the TACs to collaborate and work together to impact all sectors of society as we progress in the Singapore Green Plan 2030.

To support Singapore's move towards a green economy, there is a need to equip the workforce with the skills and knowledge to participate in the sustainability sector. Citing the accountancy profession as an example, being stewards of capital and corporate reporting, accountants play a crucial role in accelerating business practices in sustainability. Therefore, increased participation by the accounting and business fraternities is key in Singapore’s bid to become a leading centre for green and sustainable finance in Asia and globally. Climate-related risk management is also an important skill to possess.

Accountants must be equipped to prepare sustainability reporting as more stakeholders and investors adopt environmental, social and financial performance metrics. Likewise, auditors need to get themselves ready to verify such information. Both accountants and auditors must step up to meet the market demands for sustainability reporting and the assurance of sustainability reporting. Beyond collecting, analysing and reporting sustainability-related information, accountants and auditors can be strategic advisors to help embed sustainability into a company’s strategy, decision making and reporting processes.

There is therefore a need for accountancy professionals to upskill so that they can fully inhabit their role in driving sustainability and meeting the rising expectations of businesses, economies and societies in this area. To engage the accountancy professionals, this is where we can involve professional bodies like ISCA. ISCA is the national accountancy body which has more than 33,000 professional accountants as its members. I understand ISCA has developed a sustainability reporting strategy which aims to raise the capabilities of the accountancy profession in driving sustainability. As part of its sustainability reporting strategy, ISCA will focus its efforts on capabilities development and career opportunities for the accountancy profession in Singapore. Given that sustainability is a new growth area and to equip Singapore Chartered Accountants with the necessary skill sets to flourish in this area, ISCA will be rolling out courses and certification programmes. This will include sustainability reporting and external assurance on sustainability reporting.

In development of such upskilling programmes, there will be significant content development involved. And to encourage more professional accountants to upskill and perform higher value roles, training grants can be made available to encourage employers to send their staff for training.

In this area, Government agencies such as Accounting and Corporate Regulatory Authority, Singapore Accountancy Commission and SkillsFuture can provide funding and grants to ease development costs and offset training expenses. This will greatly enhance the career prospects of accountants and contribute to Singapore becoming a sustainability accounting hub in Asia.

The Singapore Green Plan 2030 is expected to bring new career opportunities and economic growth. This has created vast job opportunities and new roles for Singaporeans, especially the accountancy and finance professionals.

To encourage accountants and aspiring accountants to take up sustainability-related roles, there can be greater efforts to raise awareness of the diverse roles in this aspect and to brand sustainability jobs as attractive career choices. For instance, ISCA also shared with me that they plan to profile their members who have taken on sustainability-related roles to showcase the emerging demand for such talents. They will also connect employers in need of sustainability-related talent with their members who wish to embark on this track.

Sir, the steps we need to take to transition to a green, low-carbon society may seem overwhelming as there are so many problems we need to solve along the way, but these challenges also present enormous opportunities and chances to make breakthroughs. I call upon all Singaporeans to work with us as we progress towards a greener, more sustainable future.

Mr Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] We do not want Singaporeans to be left behind as the world progresses towards a sustainable future and economy. We also realised that the Government needs to provide some help to local our businesses because this is a relatively new area, and the size of the start-up fund is not small. We hope to create fulfilling opportunities for Singaporean of all backgrounds in this new sector. Singaporeans should be brave and stand at the forefront, seizing these opportunities presented to them.

(In English): I support the Motion. Thank you.

Mr Speaker, Sir, I thank Member Ms Poh Li San and the Members for tabling this Motion to debate on our actions towards a low-carbon society. I would also like to thank the activists from the Young PAP for their detailed and passionate proposal to mitigate climate change.

Sir, the Motion statement has thoughtfully captured the key thrust of efforts to transit towards a low-carbon society, focusing on creating green jobs, corporate accountability, partnership with the stakeholders and importantly, that this transition must be an inclusive one.

We are all aligned in recognising the severity of the climate change threat that is upon us and are mindful of the urgency of actions. Doing nothing or status quo is not an option.

As a responsible global citizen, we take our climate change commitments very seriously. But we also know that transiting to a low-carbon society is a mammoth undertaking, especially for a small, alternative energy-disadvantaged country with resource constraints like Singapore.

While we hope to get to the promised land in double-quick time, we have to also ensure that the stakeholders are all able to keep up with the pace, achieve the outcomes we set out to do and importantly, sustain high level of public support throughout this sustainability journey.

There will be pain-points and trade-offs that we will need to be addressed and for us as a nation to make, as a society as well and as individuals.

The obvious immediate concern of many businesses is the transition cost towards more sustainable and low-carbon business practices. This takes place against the backdrop of other worrying global trends, such as supply chain disruptions, protectionism and slower global growth.

As businesses look to lower their carbon footprint to meet the demands of their customers, or business partners or even their bankers, they may also experience higher capital outlay and operating costs, such as the need for mandated sustainability reporting, the requirements to adopt of low-carbon technology, or the use of greener but potentially more expensive raw materials.

Domestically, the source of higher cost pressures could also come from Government regulations, such as energy efficiency requirements and the carbon tax as Singapore strives towards more sustainable growth. Externally, as the world decarbonises, it can also lead to rising energy costs.

In the case of carbon tax, it is estimated that every $5 per tonne of carbon tax could lead to approximately 1% increase in electricity prices for households and businesses in Singapore. Businesses now need to ready for the next round of carbon tax increases, with the likely announcement at next month's Budget Statement by the Finance Minister.

Sir, while increased costs would be a concern, we cannot allow that to be the reason to slow our decarbonisation efforts. The higher near-term business costs may well be the necessary nudge needed for businesses to pivot, and when overcome, can enable these sustainable businesses to reap good returns and capture new and greater market share in the longer-term. Hence, it is pivotal that we closely support our businesses as they overcome the initial steep challenges in their transition journey to low-carbon practices.

Singapore has no domestic hinterland and we compete with the rest of the world to sustain our livelihoods.

In some markets and industries, we may also face competitive comparisons as a place to invest and conduct business, with competing economies who have fewer sustainability requirements or are less strict in their implementation.

The carbon tax is a case in point. We recognise that having carbon tax sends a clear signal that we are serious about decarbonising our industries and to become more energy efficient, and therefore spur the necessary industry transformation.

But on the other hand, the impact to our businesses would be that companies may be disadvantaged when competing with jurisdictions that do not impose such taxes, or provide exemptions for some carbon-intensive export-oriented sectors.

For example, some of these sectors in the EU, China and South Korea do receive free allowances under their emissions trading systems. And closer to home, in South East Asia, there are still economies who compete with us that levy no or lower carbon tax.

The short-term impact on business competitiveness and compressed margins may be inevitable. Businesses would need to rely on or strengthen their other competitive propositions such as quality and reliability to defend or grow their market share. But, in the longer term, sustainable businesses may have a competitive advantage as consumers increasingly demand sustainable products and services.

Sir, I support the imposition of carbon tax and to progressively increase over time to disincentivise the high carbon emission business practices. But we have to pace out the incremental increases so that our industries would not be dislocated and businesses can carry out the transition while staying as a going concern. It is also important for Government to be open about the timeline to increase the carbon tax so as to give businesses time to adjust. Inevitably, there will be businesses that may not be able to break even or cope with the carbon tax increases and may exit. We have to minimise such casualties and help as many businesses as possible to transit.

While the healthy tension by way of carbon tax is necessary to nudge practices, it must be complemented by support measures from the Government.

MSE Minister Grace Fu has indicated in an answer to a recent Parliamentary Question that the Government is prepared to spend more than it collects from carbon taxes on worthwhile projects that reduce carbon emissions. In the same reply, the Minister also mentioned about increasing funding support to assist industries in improving energy and carbon efficiency by way of the Resource Efficiency Grant and the Energy Efficiency Fund (E2F).

The Government is also working with companies based on Jurong Island to transform the island into a sustainable energy and chemicals park, and to develop and export the low-carbon solutions globally. For SMEs, they can tap on the Enterprise Sustainability programme to build capabilities for the green transition. These support measures and plans are useful. I urge the Government to continue reviewing these measures, taking in feedback from businesses and consumers, and enhancing the support where necessary.

Sir, the accelerating global momentum and traction on climate action creates new opportunities. A 2020 report by Bain and Company has estimated that ASEAN's green economy could be worth up to US$1 trillion in annual economic benefits by 2030.

There is an emergence of green growth areas, such as in electric vehicles, green financing and research and development (R&D) of the low-carbon technologies and solutions. Some of these areas are more developed, while others are more nascent. But these are all exciting areas.

Singapore needs to ride on this green wave to seize the economic opportunities and not be left out. As a country with limited resources, we need to identify the key strategic growth areas for Singapore that builds on existing strengths such as our position as a business and a financial hub.

There are also newer sectors that we can go into by leveraging our strengths in R&D. For example, R&D presents a pathway for Singapore companies to develop new capabilities, technologies, and innovative products and services in the green economy. Such solutions are particularly sought after in carbon-intensive sectors such as power generation, industrial processes, transportation and construction.

To seize green growth opportunities, it is important for the Government to support and partner the industries and businesses. We have done it before to grow globally competitive industries. We should and can do it again to grow a thriving Green Economy in Singapore.

Sir, as our economy shifts towards a greener one, new employment opportunities in the green economy will arise. We need to develop the talent pool for Singapore to remain as an attractive destination for businesses, especially for those who place a premium on sustainability.

The green economy was identified as a key growth area in the recent SkillsFuture inaugural report. It highlighted that today, there are more than 450 job roles in 17 sectors that require green skills, including manufacturing, financial services, trade and connectivity, hospitality, and the built environment. We can expect more jobs to be greener.

It is therefore important for the Government and businesses to help workers to equip themselves to take on these green jobs, whether within existing sectors or in new sectors. Time and opportunity cost on the part of the workers must be factored in to allow them to acquire the new skills and adapt to a greener business environment.

Mr Speaker, Sir, we need to press on with our efforts to transition into a greener Singapore that contributes meaningfully to the global efforts to combat climate change. There are pain-points we will need to address to ensure a smooth transition for businesses and people.

To do so, we need to pace out our green transformation and support businesses in their journey, seize the green economy opportunities, and equip our workforce with the skills to take on the jobs in the green economy.

Sir, with that, I support the Motion.

Mr Speaker, the process of moving from a carbon-based "brown" economy to a renewables-based "green" economy is one of the major challenges of our time, not just for us, but for our children and their children.

I agree that corporations have a crucial role to play in this transition and that the state and civil society, must be partners in the process. I believe, however, that the state must play a substantive leadership role and my remarks will address the various manner by which I believe it can do so as it guides the private sector.

Before I proceed, I declared that I am both a professor at a business school as well as the Chief Economist (Emeritus) of a wealth management advisory outfit, and occasionally speak on the topic of sustainable financing to audiences comprised of industry professionals and potential investors.

Sir, the celebrated management theorist, Peter Drucker, once famously quipped: "what gets measured, gets managed", or perhaps more pointedly in this case, "what gets measured, gets treasured". Now, even if one disagrees with the sweeping premises of either claims, it is probably fair to acknowledge that objectives that are subject to measurement, are more amenable to being targeted, whether in a practical or aspirational manner.

It makes inherent sense therefore for us to take more seriously the need to incorporate the core and the concept of natural capital into our national income accounts. Lest I be accused of introducing yet another annoying definition of capital to this House, I will start by emphasising that this concept is neither particularly novel – the term was introduced by German British statistician, E.F. Schumacher, in 1973 – nor especially controversial.

Simply put, natural capital refers to the stock of ecological assets such as fertile soil, forested land and coastal mangroves from which we receive essential services such as good harvests, clean air and water, and healthy fisheries. The term is now widely used across a number of disciplines, including anthropology, architecture, biology, geography, environmental science, economics, psychology and sociology; and the Prime Minister's Office – under the auspices of the National Research Foundation – has even supported an international collaborative project, entitled "Natural Capital Singapore".

While the measurement of a concept that encompasses typically non-market ecosystem services, such as the richness of subsoil from which crops may be grown, the natural resources from which so much of modern communications technology is reliant on or the potential pharmaceutical innovations that could be discovered in a biodiverse forest, or even the cultural heritage that we receive from our understanding of our embeddedness in our terrestrial, coastal and marine ecosystems. While this is challenging, such quantification is, in fact, not impossible, and the past decades have seen enormous advances in our ability to value natural capital.

In 2006, the World Bank launched the first of its reports aimed at measuring this natural wealth of nations. And just last year, the institution released its latest report.

Unsurprisingly, Singapore reports extremely low levels of natural capital. Of the $817,846 in per capita wealth, a miserly $62 was attributable to natural sources, both renewable and non-renewable.

While this should, perhaps, be unsurprising, given our surfeit of natural endowments, importantly, all of this accrues to renewable sources, which suggests that such capital can be protected, and perhaps even expanded, should we choose to do so. The vital need for us to preserve the little that remains of our forests, offshore fisheries, coastal mangroves, and protected land, rather than raze it all on the altar of urban development, is underscored by the recognition that we receive enormous benefits from natural capital, because properly accounting for natural capital alongside reproducible capital makes it clear that the former is a non-trivial contributor to the observed differences in the economic performance of rich relative to poor countries.

All nascent financial markets, and especially those in fixed income, benefit from the presence of a clear and trustworthy benchmark. This benchmark, more often than not, comes in the form of a government issuance. Here, it is worth thinking more carefully, therefore, about developing green financing. Of course, the Government has been proactive in its efforts to encourage the development of green bonds. The MOF established a Green Bonds Programme Office in September last year. A month prior, NEA became the first statutory board to issue medium-term notes under its Green Bond Framework.

These initiatives are important, and I hope that the Government will continue to look for opportunities to further catalyse sustainable investment efforts. In particular, I am hopeful that all Government agencies will look for opportunities to weave in green financing elements into their capital expenditure projects and to fund these green components proportionately. This will ensure that administrators have strong incentives to conceptualise projects with sustainability considerations in mind – the stated goal of the 2030 Green Plan – since additional financing pools may, in fact, avail themselves when they do so.

Moreover, I hope that the public-private partnerships (PPP) in green bond issuance goes beyond the current co-investment in debt financing platforms to entail actual green development projects, especially in infrastructure, as well as equity contributions and loan guarantees issued by Government developmental financing vehicles. This is truly where, in my view, the strength of PPPs comes into play.

To this end, I wonder if existing SINGA bonds will enfold green elements as well, and if so, whether this may mean a further expansion of the SINGA-related debt ceiling, and if there are plans for MAS’ Green Investments Programme to also include credit guarantees. Perhaps, more fundamentally, we must not expect sustainable financing to be a silver bullet that will, in and of itself, be sufficient for our efforts to resolve climate change. The estimated $500 billion in green bonds issued worldwide in 2021 is only a miniscule 0.4% of the $119 trillion global fixed income market. Our focus must remain on resolving environmental and climate change issues by dedicating real Government resources toward the emergency, rather than expecting financial markets to ride to the rescue.

Through all this, we should avoid the temptation to satisfy ourselves with feel-good actions that amount to little, insofar as their genuine environmental impact is concerned. The current affinity, and some would call obsession, for environmental, social and governance – commonly referred to as ESG – investments is a case in point.

The most common refrain seen in marketing materials for ESG is that by investing according to such criteria, one could "do well while doing good". This siren call is especially attractive to younger generations of investors, who both understand the critical import of long-term environmental sustainability, while simultaneously holding a deeply-felt desire to grow their money in a manner consistent with their conscience.

Yet the promise of many ESG funds may well be a Chimera. Not only do most ESG funds currently underperform a more mainstream index, many are expected to do so in future. Scepticism about the asset class is building, with at least one former ESG evangelist calling it a "dangerous placebo", while other observers fear that climate finance is now a financial bubble. Perhaps more critically, the underperformance of ESG relative to non-ESG investments is precisely the point. The converse of lower expected returns to green corporations is that brown corporations face higher costs of capital. And when capital is more expensive, these firms are likely to grow slower and, by extension, pollute less.

On the corporate front, we should likewise guard against claims by firms that proclaim environmental objectives but are only doing so for the veneer of sustainability. While it is impossible to perfectly police these so-called "greenwashing" attempts, Government should not be complicit in lending a stamp of approval to firms that are simply pronouncing adherence to such standards for the purposes of going through the motions or, worse, marketing reasons.

As an example, consider one of the more egregious examples of greenwashing, involving carbon offsets. In 2019, a ProPublica report examined the market for carbon offset credit – the idea this House will recall – that firms would purchase carbon sinks such as trees to counter the pollution they would be creating – and concluded that most programmes, while not always blatantly fraudulent in that they would actually set aside forest land, nevertheless contravened the ultimate purpose of the scheme, since a large majority of projects involved forests that were either already protected or would never have been cleared anyhow. The report concludes that, and I quote, our "hunger for these offsets is blinding us to the mounting pile of evidence that they haven't – and won't – deliver the climate benefit they promise" and that "carbon credits for forest preservation may be worse than nothing."

As an example, consider our current, single-stream recycling programme. While this approach surely encourages many to adopt a recycling habit, reports suggest that awareness of our recycling best practices remain low. The routine disposal of non-recyclable materials in our blue bins – such as styrofoam or plastic bags – is, I am certain, commonly observed by Members of this House during their estate walks. At best, this creates additional work for the conservancy contractors and at the sorting center; at worst, the contamination by food and liquid waste renders an estimated 40% of recyclables unusable. Further downstream, the practice of exporting recyclable waste runs the risk – as demonstrated by the Chinese treatment of most imported recyclables – of simply being redirected to foreign landfills. As of 2019, we continue to export a third of our recyclables, to an uncertain consummation.

As a third example, consider the booming market for sustainability bonds worldwide. Even as we enter into this market in earnest with our proposed exchanges, we need to guard against whether the ESG criteria are overly flexible, and, in particular, whether the ultimate rating ends up privileging the "social" or "governance" – the "S" and "G", respectively – rather than the environmental – the "E". This has resulted in dubious players issuing bonds under the rubric of sustainability, including a number of clean coal projects in China that were sold by Spanish oil company Repsol. The result is a loss of credibility and efficacy that could undermine the entire purpose of the exercise.

Mr Speaker, the purpose of these examples, which are just a few of many, is not so much to point to the possibility that green projects, operated in conjunction with the private sector, may turn out to be a marketing tool, without delivering on the intended environmental objectives. After all, corporations are primarily in the business of making profit, and market their goods and services in a way that enhances said profit as much as possible.

But just as Government plays a role in regulating false claims of efficacy in pharmaceutical products or imposes conditions to ensure product safety in food and children’s toys, it should also play a role in ensuring that claims on green practices are broadly justifiable, rather than claiming caveat emptor and placing the entire burden of verification on the shoulders of the busy and often underinformed consumer.

Alternatively, Government can operate in closer collaboration with non-profit efforts – such as the Green Label scheme under the National Environmental Council – to ensure that such labels do not become an unwitting tool of unscrupulous greenwashing attempts.

Regulation over misleading environmental claims is currently practised in Australia, Canada, the European Union, Norway and United States, to varying degrees. It is worth exploring if such regulatory moves are warranted here.

To this end, I wonder if the Minister will be willing to elaborate on regulation specifically targeted at greenwashing and whether there are such existing collaborative efforts with NGOs to account for greenwashing risks in environmental labeling.

Simultaneously, we could promote and develop a private sector that undertakes environmental audits, perhaps by requiring that listed firms, or firms that are among the major emitters, regardless of size, routinely report such audits, much like how we require routine financial statement reporting, albeit in this case, perhaps, with lower frequency. This would have the added benefit of creating green jobs for our next-generation economy. Having said my piece, I support the Motion.

Mr Speaker, Sir, let me declare my interest. I work in a financial institution.

We have all heard this phrase about the importance of finance – money makes the world go round. The Chinese has an even more imaginative phrase: 钱能使鬼推磨. Meaning that with the right amount of money, one can even get ghosts to work for you.

For the climate change crisis, we need to use all the tools at our disposal and, perhaps, the most powerful tool is the financial tool.

Appropriately structured financing can direct resources and efforts towards green projects and endeavours to mitigate climate change. As an international financial hub, Singapore will play a crucial role in ensuring financial flows from the public, private and not-for-profit sectors to our sustainable development priorities.

MAS launched the Green Finance Action Plan in 2019. The actions for six identified areas include setting Environmental Risk Management Guidelines for banking, insurance and asset management, grants for green loans through grants, committing US$2 billion to a Green Investments Programme, promoting fintech innovation, and supporting climate research and training.

MAS followed up with Project Greenprint in December 2020 to promote a green finance ecosystem by using technology to mobilise capital, monitor sustainability commitments and measure impact. Five months later, the Green Finance Industry Taskforce (GFIT) was set up to accelerate green finance by improving disclosures and fostering green solutions.

So, what more can be done?

Transparency in green finance reporting is vital. Corporates listed on the Singapore Exchange (SGX) are already required to disclose their environmental information through sustainability reporting, although as Singapore Exchange Regulation (SGX RegCo) and the Centre for Governance and Sustainability (CGS) noted, there is "ample room for improvement in the quality and depth of disclosures on quantifiable sustainability targets".

Indeed, such disclosures should not be marketing-style narratives of their green philosophy and policy statements. Outcomes and evidence of Environment, Social and Governance (ESG) impact, in addition to financial performance, consistency between policies and practices and supported analyses of asset-specific ESG risks should be quantifiable, verifiable and clearly presented in plain English.

All companies, not all listed ones, should have ownership of environmental management in their businesses and integrate sustainability into their business models. Would the Government consider standardised green certification for all companies?

The public will be able to view which product or service providers are awarded Green Certificates. This will be helpful information for consumers and motivate other companies to reach their desired green labels or targets.

Eventually, more and more enterprises will make sustainability an integral part of their businesses. Can the Government more organisational guidance and other forms of support to transition to green businesses, with courses for their staff to enrol in and linking them to relevant course enrolment websites, funding schemes and programmes?

It would be good to have a standardised nationwide ESG Rating Index and methodology for companies' green evaluation.

Financial institutions (FIs) can integrate sustainability into their business by making financing dependent on the implementation of social and environmental sustainability guidelines. This means that the banks will take economic, social and environmental issues equally into account. They should avoid financing projects that are harmful for the climate on the one hand and invest in climate change mitigation and adaptation on the other hand.

The Government can consider providing green finance participants with more incentives, such as tax exemption for qualified green deposits, bonds and funds. As green finance becomes increasingly mainstream, there will be a growing demand for retail products, such as green mortgages. Improved consumer awareness will give individuals greater agency in choosing these financial products. This will help stimulate demand for sustainable products.

The Ministry can also establish national or industry awards for corporate sustainability evaluations to provide awareness and recognition for green companies.

Lastly, regarding carbon tax. MOF had announced that they will be reviewing the carbon tax rate for 2024 which is expected to be higher than the $10-$15 range previously announced for 2030.

I hope more investment be made into technology with the use of the carbon tax to reduce, eliminate, capture and convert the carbon emission to improve the environment for us and the world and such technology shall be shared with all businesses, big and small, that produces carbon and operating in Singapore. The businesses shall be encouraged to continually look into sustainable and substantive solutions to the carbon elimination or conversion from bad to good and be rewarded for their effort and positive outcome.

The Government is still studying the use of high-quality international carbon offsets but to me, it is more important to reduce the emissions in the first place. I hope the Ministry can look into a system limiting the amount of offsets and providing incentives for the affected companies to adopt green transition processes and technology where available.

Sir, I will suggest that the Government could consider allowing the businesses to use carbon credit earned to offset the carbon tax imposed. With that, I support the Motion.

Mr Speaker, nearly a year ago, this House acknowledged that climate change is a global emergency and a threat to mankind and called the Government, in partnership with the private sector, civil society and the people of Singapore, to deepen and accelerate efforts to mitigate and adapt to climate change and to embrace sustainability in the development of Singapore.

It could not have been timelier was we have seen more effects of climate change materialised over the last year. At home, intense rainfall events in 2021 led to heavy flash floods. In the region, the floods in Malaysia and Typhoon Rai have led to hardship and suffering to the affected communities. The events remind us that climate change is at our doorstep.

This year, in this Motion "Towards a Low-carbon Society", Members of Parliament on the other side of the aisle is calling on the Government to advance Singapore's inclusive transition towards a low-carbon society. This builds upon last year's Motion as there were measures discussed, such as enhancing green financing, creating green jobs and strengthening corporate accountability. We, the Workers' Party, do not object to these measures. However, I would like to push further.

Our inclusive transition also need to be just to address the unequal impact of climate change. I will ask that this Government throws its support behind a just transition, not just in words, but also in deeds.

What is a just transition? This idea is advanced by the International Labour Organization (ILO) as a process towards an environmentally sustainable economy which needs to be well-managed and contribute to the goals of decent work for all, social inclusion and eradication of poverty. To put this simply, it aims to address inequalities, such that no Singaporeans will be left behind and all can aim for a better future in the transition towards the green economy.

Lest some in this House think a just transition is mere window dressing and holds no direct relevance to us, this very term can be found in the preamble of the 2015 Paris Agreement, of which we are a party to. The relevant paragraph notes, and I quote, "Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities."

If nothing else, our manpower and development policy should adhere to the spirit of the Paris Agreement by trying to stay in line with its goal of keeping global warming or limiting temperature rises to 1.5 degrees Celsius as we reaffirm by COP26 in Glasgow, last November. This means that we need to ensure that green financing is not just catered towards greening the sources of energy. It needs to create value for our labour force. We need to ensure that we can prepare those working in our high carbon intensive industries, particularly those in the the fossil fuel related sectors for new green jobs. We need to ensure that corporate accountability is not just about reporting their greening efforts, but how they are ensuring their own green transition includes bringing the many workers within and not lead to mass retrenchments.

A just transition also means that green finance should not solely be about capturing profitable opportunities in the green economy. It should also be offering those that are left behind by a green transition, the funding opportunities to adapt. They should concern those whose existing jobs and livelihoods are affected by transition, away from polluting industries, as well as those at risk of the direct impacts of climate change.

How do we achieve a just transition for all Singaporeans? This must be done in both words and deeds.

Here, I have a few suggestions for the Government to consider.

On words, I ask that the Government review the COP26 just transition declaration and consider supporting the said pledge and efforts, putting social dialogue as well as rights at work at the centre of policies for strong sustainable and inclusive growth and development for our workforce. And a commitment to this will give impetus to focus societal efforts on combating the global emergency, that is, climate change.

This pledge also looks at supply chain development. Singapore, as a shipping and logistics hub and a commercial centre, can and should play an important part in the global supply chain screen. transition.

Second, on deeds. The average Singaporean worker must not only hear that we are doing the right thing but also sees the concrete benefits from this move towards a low-carbon sustainable economy.

Clause 29(b) of the ILO's just transition guidelines also ask that governments, in consultation with social partners, and I quote, "Give particular attention to unemployed workers and workers at risk of unemployment in communities and industries affected by climate change, resource degradation or structural change, including those in the informal economy."

We need to help Singaporean workers in sectors who are being affected or will soon be affected by developments in the green economy. We need to look at how to prepare Singaporean workers to go into jobs, which will be created in the green economy.

Therefore, I ask that the relevant Ministries and Statutory Boards work on a just transition roadmap for Singaporean workers which can be at risk of displacement as the green economy develops. We should prioritise a roadmap for carbon intensive industries, such as petrochemicals and power generation. We can also look at ensuring a just transition for the labour force. For secondary industry, they are carbon intensive but are already taking active and laudable steps to adopt less polluting technologies, such as transport, shipping, logistics in the supply chain. Mr Speaker, I declare my interest as a shipping lawyer.

We should also consider a just transition roadmap to get our financial professionals to take on nascent green financing roles where there are growing opportunities. Such a just transition roadmap must be a key complement to the Singapore Green Plan 2030 on the green economy and be executed upon. This will ensure that value is not just accrued within businesses only but an equitable share of the value created will directly benefit Singaporean workers.

We can also kickstart stronger efforts on green upskilling. My Parliamentary colleague, Mr Gerald Giam, has previously called for extending the Special Employment Credit scheme to provide time-limited wage support to all Singaporeans workers while taking up their first job in the green economy. I wish to reiterate this call. In the vein of ensuring our talent pipeline remains robust, I also ask that all our agencies ensure their future upskilling programmes and career conversion programmes are created for and geared towards the green economy we aspire to, so that the value of the green economy can be directly captured by Singaporeans, both present and future.

All these may require funding of course and the Workers' Party has welcomed carbon taxes. However, we will need to consider funding mechanism to properly channel carbon taxes towards a just transition measures. Here, the Government can take reference from the EU's just transition mechanism, which includes a just transition fund offering financial supporting and technical assistance for most affected communities, such as low-income communities.

Mr Speaker, let me conclude. We, in this House, have seen robust exchanges on Motions surrounding climate change and jobs. We have the opportunity here to hit two birds with one stone. Let us not waste it and seek a just transition for all Singaporeans workers in the greater future we seek to achieve. Mr Speaker, I support the Motion.

Mr Speaker, before I start, I would like to declare my interest as council member of the Singapore Business Federation.

Sir, businesses have both a responsibility and an opportunity to proactively commit to decarbonise. The impact of climate change and the opportunities presented for a green and sustainable economy have never been more urgent. Whilst sustainability efforts amongst companies in Singapore have gathered pace, the lack of understanding of sustainability and related concepts has been a barrier to galvanising strong action.

During the recent Ecosperity Week held in September last year, it was revealed that some 250 chief executives of firms who have made net-zero commitments are unsure of how to reach their goals. From inconclusive measurement, reporting and verification (MRV) standards to a lack of agreement in defining sustainability performance, business leaders urgently need a framework to navigate their firms through these challenges.

There remain many companies, especially our SMEs, who have yet to come on the green economy bandwagon. Many consider "sustainable" practices as "regulatory" requirements. They lack the understanding of its impact on their business and how to make the green transition; yet this is one of the most significant business opportunities that they can tap for business growth.

Certain industries may need additional support to spur decarbonisation ahead of others, in anticipation of carbon border taxes such as the European Union’s Carbon Border Adjustment Mechanism which puts carbon prices on imports into EU.

Given SMEs’ critical role in supply chains, we can boost their transition on three fronts: first, we can promote sector-based sustainability road maps with industry-aligned principles, frameworks and uniform standards; second, we need to support SMEs with pre-identified sector-based green solutions to fast-track adoption; third, we can leverage the ecosystem to build scalable green capabilities and collaborations.

Sir, to catalyse transition, SMEs should be supported by Government grants designed specifically for a range of industries, taking into consideration the limited scale and resources firms have in making the transition viable.

Speaker, a carbon tax assigns costs to planet-warming emissions and forces companies to consider the cost of pollution and environmental harm. Finance Minister Lawrence Wong has indicated that Singapore’s carbon price is too low and will be up for review. I wholeheartedly agree. Our current carbon pricing at the rate of S$5 per tonne of emissions pales in comparison to other jurisdictions, falling far short of the recent IMF’s guidance of US$75 or S$100 per tonne of emissions for advanced economies. This is about 20 times our current rate.

Whilst the plan to increase carbon tax is imminent, we need to carefully calibrate the increase and consider the trade-offs. Too low, we fall short of our commitments in making a viable impact to nudge firms in the right direction. Too high, we risk firms passing on cost increases to consumers and end users, or worse still, moving business activities to countries with lower sustainability requirements and carbon pricing.

Speaker, Sir, the carbon tax in Singapore applies to approximately 30 to 40 companies. These high emission firms such as power generation and petrochemicals directly employ over 27,000 workers and constitute 3% of Singapore’s GDP while providing business activities for a host of other sectors.

While these firms need to pay their fair share, there are some who are already pivoting their business activities towards low-carbon solutions in Singapore. For example, in 2020, Shell Singapore announced a 10-year plan to cut down local emissions by a third by the next decade. Similarly, ExxonMobil collaborated with local Universities in launching the Singapore Energy Centre, forming centres of excellence in research and innovation to solve technological gaps amongst industry players. There is opportunity to work closely with such firms to co-create a sustainable future, helping transition high emitters of yesterday into green industry leaders of tomorrow, here in Singapore.

Whilst Singapore’s headline amount of S$5 per tonne of emissions is low – it is low – but it covers 80% of local emissions with no offset provision. In Southeast Asia, Indonesia is the only country other than Singapore which has announced concrete plans to introduce a carbon tax, at a minimum rate of US$2 per tonne of emissions only from 2022. Trade-exposed sectors in the EU, China and South Korea receive free allowances under their emissions trading systems.

Speaker, Sir, whilst reviewing Singapore's model, we should note that there are more than 60 different carbon pricing initiatives worldwide. Each regime adapts to different strategies based on its own goals and constraints. Whilst Singapore can learn valuable lessons from other jurisdictions, we need to develop our own unique playbook for carbon pricing and ensure any change is set and paced carefully to avoid dislocating our industries or losing our attractiveness as an investment location.

Sir, we must recognise that any increase in carbon tax will result in an increase in operating cost, directly impacting the largest upstream emitters as well as indirectly impacting downstream users such as increases in electricity production costs, that will likely be passed on. For instance, the Singapore Business Federation expects that carbon tax increases will impact the manufacturing sector hard, as utilities can comprise up to 9% to 10% of operating cost. Given the rising cost of labour, freight and raw materials, any further increase in operating cost in the near term will adversely impact many companies already struggling in the current economic conditions.

Currently, Singapore’s carbon tax does not apply to imports. This puts local SMEs in a disadvantaged position as Singapore embraces more advanced integration of sustainable practices at increased costs, affecting these companies' cost competitiveness relative to peers in the region. To cushion the impact, the Government should consider channelling part of the carbon tax revenue to subsidise the increase in cost for a specific transition period, as well as provide subsidies to adopt green technologies to spur companies towards green practices and reduce use of energy.

Finally, I call on the Government to ensure that the businesses are provided ample lead time on the implementation of any new carbon tax rates, giving them time to adjust, whilst sending a strong but positive signal for companies to adapt and pivot. One good example is Sweden, which oversaw three decades of phased implementations before reaching its current pricings, without hemorrhaging economic developments. So, Sir, a clear long-term trajectory of the expected changes to carbon tax will be key to Singapore, to help companies make the business case to adopt new green technologies and make the necessary investment. With that, I support the Motion.

Mr Speaker, Sir, please allow me to declare my professional interest as Director of the Centre for Nature-based Climate Solutions at the National University of Singapore, and a member of the International Advisory Council of Climate Impact X.

Many businesses have shown increasing interest in improving their environmental, social and governance performance. In particular, they want to reduce greenhouse gas emissions in their value chain, to meet carbon neutral or net-zero emission goals.

However, many businesses are also finding it difficult and challenging to completely transition away from fossil fuels by mid-century. Mr Sunny Verghese, the CEO of Olam, made a telling remark during Temasek’s Ecosperity Week in October last year. After speaking to over 200 fellow chief executives who have made net-zero commitments, Mr Verghese realised that most of them may not know how to get there.

So, while it is important to set ambitious targets for a low-carbon society, it may be even more important to develop and execute the strategies, policies and actions for us to achieve these goals. That is what this Motion is calling for and why I fully support it.

Sir, we need to take concrete steps to decarbonise. This will include putting an appropriate price on carbon to internalise the social, economic, environmental and climate costs of carbon emissions, as my fellow Members have highlighted. At the same time, there is growing recognition that carbon offsetting may need to be part of our immediate strategy as we transition to a low-carbon society.

What is carbon offsetting? In a nutshell, it is a way for companies or individuals to invest in value-adding environmental projects to balance out their own carbon footprint.

Carbon offsetting as a concept may present various technological, political and ethical conundrums. But insofar as decarbonisation remains the top priority and effective guardrails for carbon offsetting are in place, certain types of carbon offsets are not only viable, but may be indispensable, for us to meet our climate goals.

A carbon offset credit is a tradable certificate or permit that represents the allowance to emit one tonne of carbon dioxide, or equivalent greenhouse gas. These carbon credits can be produced from different types of clean technology projects, emissions reduction projects or carbon capture projects, including both technology-based and nature-based solutions.

Nature-based carbon projects are important because they represent low-hanging fruits for us to immediately turn off one tap of our carbon emissions by ending deforestation and start to remove carbon dioxide from the atmosphere through reforestation.

And that is not all. Nature-based carbon projects, such as mangrove conservation and restoration, can also deliver many other benefits for local communities and biodiversity that are well-aligned with the United Nation’s Sustainable Development Goals.

Sir, as a city-state, Singapore faces the geographical constraint of limited land and coastlines for implementing nature-based projects at scale. But by the same token, we have the good fortune of being geographically situated in a region with bountiful opportunities to work with nature in our fight against climate change.

In fact, there are at least 160 million hectares of investible, carbon-rich forests across Southeast Asia that could provide an annual supply of some 400 million tonnes of nature-based carbon credits, if they came under protection as carbon projects.

I believe we have the ability and responsibility to work across sectors, nations and generations, to realise these opportunities and to help us transition to a low-carbon society.

Perhaps a more pertinent issue is to ensure that carbon offsetting will actually deliver the benefits it promises.

Indeed, there are concerns about the lack of transparency in the global carbon marketplace today, in terms of the quality and pricing of carbon credits. This has posed a deterrent to both buyers and producers, and created a bottleneck to both the demand and supply of nature-based carbon credits.

More importantly, we need to ensure that carbon offsets are not being used for greenwashing to create a veneer of sustainability, as fellow Member Assoc Prof Jamus Lim pointed out. There is always the risk that some companies or individuals might buy up carbon credits for environmental claims, without actually making any effort to reduce their carbon footprint. Therefore, we need to hold to high standards of accountability, both the buyers and producers of carbon credits.

On the supply side, we need to ensure that carbon projects deliver real, additional and permanent benefits, not just for climate change mitigation, but also for communities and biodiversity on the ground. On the demand side, we need to ensure that users of carbon credits have in place, concrete policies, plans and actions to transition to a lower carbon economy, and are not relying solely on offsetting to reduce their net carbon emissions.

In May 2020, Deputy Prime Minister Heng Swee Keat set up the Emerging Stronger Taskforce (EST), led by Minister Desmond Lee and Mr Tan Chong Meng. The EST convened several Alliances for Action (AfA), which represent a new form of private-public partnership with a strong bias towards action in capturing new opportunities. And capture new opportunities the EST did indeed. The AfA on Sustainability was prescient, in anticipating the need for a trusted platform, that would provide transparency in carbon trading for businesses to support nature-based carbon projects. This led to the establishment of Climate Impact X, a global exchange and marketplace for high-quality carbon credits, through a partnership between DBS, SGX, Standard Chartered and Temasek.

Who would have thought that one day, Singapore’s most important financial institutions – the engines of our economy – will play such an important role in the conservation and restoration of our natural environment? So, we are capable of thinking beyond the dichotomy of economic development versus environmental protection. The tension between these and other societal priorities will likely remain. But this constant tension can be helpful in reminding us, that in our transition towards a low-carbon society, no one succeeds until everyone succeeds. Sir, I stand in support of this Motion.

Mr Speaker, Sir, experts noted that the recent COP26 Climate Conference to secure a net-zero carbon footprint fell short of actions but help move the world forward. In Singapore, a Clean and Green Global City has always been a national focus since our founding as a nation. We have been doing our part such as setting up a Climate Action Package in 2018 and more recently, putting forward the Singapore Green Plan 2030 which we discussed in this House.

In joining the debate on this Motion, there are two key areas I would like to touch on: one, factors to consider in our Green transition plans; and two, seizing opportunities in the Green economy. These are areas that will pave a clear glide path in our journey towards achieving our net-zero ambitions and eventually set a time-bound commitment, along with strengthening our position on climate leadership.

Key to an effective green transition is about having a good implementation plan. This requires a clear-headed recognition that a greener world and Singapore will come at a cost. Therefore, we need to navigate this well. It was apparent at COP26 that such trade-offs are not easy to make and Singapore will face similar challenges in our transition journey.

A good implementation is about our Government leading these efforts which are effective in reducing real carbon footprint and done smoothly, so that the unintended effects on our society are mitigated. A holistic plan would entail: one, a balanced approach in carbon pricing; two, eliminating the regressive effects; and three, accelerating efforts on identifying enablers, which is about stepping up awareness and education on carbon emissions and greener alternatives.

As we transition towards a green economy, the immediate concern of many households and businesses is about having to bear higher costs to adopt more sustainable and low-carbon practices. This will be taking place against the backdrop of other forms of global trends that is driving cost increases, such as supply chain disruptions, a topic we debated passionately about.

As businesses look to lower their carbon footprint to meet expectations of stakeholders, they will experience higher operating costs and capital outlay. Domestically, higher costs can also arise from changes in regulations, such as energy efficiency requirements and the Carbon tax. Externally, as the world decarbonises, energy costs will rise.

Given this, the implication is not to stop or slow down our decarbonisation efforts but to ensure that we provide support to households and businesses in their journey to become more sustainable. As such, with the impending revision of Singapore’s carbon tax regime, the Government should adopt a balanced approach to carbon pricing with subsequent increases paced.

While a higher carbon tax can drive reductions in carbon emitting activities, it is important that Carbon pricing be tiered to match against the greener alternatives available or abatement efforts. This is to allow households and businesses in particular SMEs, to make rational transitions. Higher businesses costs could be temporary during transition and eventually make our businesses fitter in the longer term. But transitions do take time, and our Government could consider adding "carrots" as part of a total package over and above the tax regime, such as Green rewards or financing incentives for households and businesses to accelerate behavioural changes.

As carbon taxes can have regressive effects on the vulnerable segments of our society who spend a higher proportion of their income on basic services such as electricity bills, such negative effects need to be addressed. I hope that as a higher carbon tax is being contemplated, the Government can provide some assurance that relief will be granted in the same way we cushion for GST increases.

Singapore’s transition plan towards a low-carbon society should be an inclusive one. If we are to achieve a greener way of life, it is important to scale up awareness and educational programmes for households and businesses. This enabler is key to move from rhetoric of mere targets to real actions.

Many initiatives we do today, such as our Smart Nation or Zero-Waste Nation programmes, fits nicely into our green movement. Such programs reinforce our green efforts, such as accelerating digitalisation, will lead to a paperless society and reduced waste will help go towards reducing carbon footprint.

There is scope to create more awareness on enablers as well as actionable steps to galvanise actions. Shopkeepers and residents in our neighbourhood want to be green and want to know how much carbon they produce. This is where Government can help facilitate through sharper awareness programmes, through providing carbon footprint calculators and alternatives to facilitate individual action.

Given the global urgency to act quickly for a net zero carbon future, Singapore can and should seize the exciting opportunities that exist before us. We can improve the lives of our citizens and contribute to the global good along with creating new business opportunities.

As an international services hub for finance, consulting, accounting, trading and legal amongst others, we are well-positioned to help the region and the world. This will also create many exciting green business opportunities.

It is often said in business, what you want to manage, you first need to measure. While this is a critical step, the task of any company to determine its baseline carbon footprint or emission is not easy, even for a sophisticated corporate. The Greenhouse Gas Protocol requires the measurement of not just this but also the indirect emissions from a company’s activities known as Scope 2 and from the value chain known as Scope 3, which is even more complex to measure. What I am saying is that measurement is not easy and companies here and the region will need expertise to get this done.

Financial services is also an area where Singapore can make an impact. Investors globally have demonstrated willingness to offer loans at favourable rates while demand is also set to increase as organisations look to also finance decarbonisation efforts and projects. This demand will spur the supply and diversity of products in the international financial marketplace, such as sustainability linked loans, green bonds, green investment funds, as well as transition financing to support decarbonisation plans.

Another key opportunity will be for Singapore to position itself as a carbon services hub. Even though carbon credits are recognised as part of the climate solution in the Kyoto Protocol since 1997, in reality, the Voluntary Carbon Market (VCM) is still at a nascent stage. Today the carbon markets globally remain illiquid and fragmented as they face challenges such as the lack of strong governance, differing standards and grey areas such as the verifiability of projects. These impact market confidence. Market participants wonder if the carbon credits purchased really deliver carbon reductions.

As such, the opportunities before us are real given the pent-up demand. I believe this is where Singapore can play a distinctive leadership role as a trusted global financial and services hub with strong regulatory regime, market infrastructure and services sector expertise. Our brand name for excellence will provide us the platform to create a carbon services hub where participants can buy and sell carbon credits that are of integrity. This would mean the need for an ecosystem such as carbon accounting and Monitoring, Reporting and Verification Services (MRV) here and in the region.

In Singapore, there will be a need for more professionals in a carbon services hub ecosystem. This will spur our services sector to leverage existing skillsets in areas such as trading, product structuring, measurement and certification to apply in the carbon space to support clients in their decarbonisation efforts. All these will lead to the creation of new jobs in Singapore and in the region.

As such, I am glad that the Government is exploring the use of carbon schemes such as the enablement of large carbon emitters in Singapore to purchase high quality international carbon credits to offset their liabilities. With innovative solutions, Singapore-based international carbon exchanges can also participate in this transition which has other spin-off benefits like spurring greener projects such as R&D in clean hydrogen, developing carbon sinks and clean energy farms in the region.

Mr Speaker, Sir, in summary, Singapore is well-positioned to contribute towards a greener future to help achieve our net zero ambitions on carbon. We can achieve this by implementing measures in a balanced approach. Transitions will require sacrifices and trade-offs by individuals and businesses, but the positive impacts created and the opportunities that can be seized will be bountiful. In addition, the future is an exciting one as there are many green growth opportunities for Singapore to scale while at the same time riding this wave to drive economic growth.

Mr Speaker, combating climate change is the challenge of our generation and quite possibly, the next two generations. If our generation does not set in motion sufficient changes to mitigate climate change, our grandchildren will pay a painful price for our lack of resolve and action. It will be infinitely harder for successive generations to reverse the impact of global warming, even if they try their best to. It is therefore incumbent upon our nation and the world to rise to meet this challenge.

Singapore has in the past approached climate action as a small nation which is unable to make much impact on the vast world. This approach has thankfully evolved in recent years. Nevertheless, a greater resolve in our outlook towards this challenge is needed. We are still constantly reminding ourselves that we are a small country with inherent limitations as to what we can do to reduce emissions. We wave the flag that our alternative energy disadvantage status is officially recognised by the United Nations' Framework Convention on Climate Change.

Certainly, these are realities that we cannot run away from. However, we must not, in our attempts to temper expectations, allow these mantras to limit our imagination and innovation.

Decarbonisation within Singapore's boundaries is important. However, carbon dioxide does not respect national boundaries. Arguably, the biggest impact that Singapore can have on averting climate change, and hence saving ourselves from the harm that global warming will do to us, will come from test bedding and developing new green technologies and sharing these discoveries with the rest of the world.

Making low-carbon technology widely available at a reasonable cost will be critical to spurring industry adoption and helping the world to achieve net zero carbon emissions. We may be small, but that does not prevent us from working around our constraints of a small land area, high urban density, hot tropical weather to innovate solutions that could mitigate climate change in an increasingly urbanised world. Our constraints can actually be our comparative advantage over other nations.

Our green inventions could spread far and wide beyond our shores to benefit the rest of the world. Climate change is global. We should therefore aim to make a global impact in our climate change efforts. We should be prepared to make big investments in emerging green technologies and in doing so, take decisive steps towards wielding the mantle of climate leadership.

In my speech today, I wish to focus on a few of these green technologies and how the Government can play a bigger part to drive their adoption.

First, the transport sector, which is one of the biggest emitters of greenhouse gases in Singapore. Singapore plans to phase out internal combustion engine (ICE) vehicles by 2040 and replace them with electric vehicles. Almost all the current plans for the rollout of EVs focus on battery electric vehicles (BEVs). However, it may be risky to place all our bets on BEVs.

For starters, it is still unclear whether we will have the infrastructure to handle an all-BEV fleet of vehicles once ICE vehicles are fully phased out. A study by KBR, commissioned by the National Climate Change Secretariat, estimated that approximately 164,000 publicly available BEV chargers will be required for a 100% BEV scenario. Singapore plans to roll out just 60,000 BEV charging points by 2030. This will equip only about 6% of public carpark lots and 3% of private carpark lots with charging stations. Given that it takes anywhere from 30 minutes to six hours to recharge a car, and assuming people charge their cars only once every five days, my calculations indicate that the infrastructure will support only about 30% of cars in HDB estates and 15% of cars in private estates each night.

I am, in fact, making optimistic assumptions about driver behaviour. In reality, range anxiety will dictate that drivers will avoid waiting for their batteries to run flat before recharging them, just like we do not wait for our mobile phones to go flat before plugging them in. To avoid hogging the charging stations, one driver will have to hurry down to the carpark at 12.00 midnight to unplug her car and find another parking spot, while another will need to come down at the same time and plug his car into that same charging station. Imagine the disruption to everyone's sleep rest cycle and the number of neighbour disputes that this would spark.

One possible solution to this problem would be for charging stations to serve multiple car lots at once, with an automated system that recharges the cars on a rotational basis. This will spare drivers the need to unplug and re-park at night. The technology for this already exists, but it is unclear if these types of chargers will be deployed in Singapore car parks.

The batteries in BEVs are heavily dependent on two metals: lithium and cobalt. According to a study by Deloitte, BEVs account for about 27% of global lithium demand, while lithium-ion batteries account for about 59% of cobalt demand. More than half of the world's cobalt comes from mines in the Democratic Republic of Congo and there are ongoing concerns about the health, human rights and geopolitical risks of mining this mineral. Any disruption in supply of materials for BEVs might affect their production and raise their prices in future. The price of cobalt rose by 90% between January and December 2021. Economists have warned against the possibility of "green-flation" caused by supply chain shortages, leading to higher prices for metals and minerals that are essential to EVs and other renewable technologies.

We have to keep this in mind that the mining of lithium and cobalt and the manufacture of lithium-ion batteries also produce large amounts of greenhouse gas emissions. This could negate some of the green benefits across the full cycle of BEVs.

A large number of BEVs will also place a heavy load on the electricity grid. Will the grid be strong enough to support so many vehicles being charged at the same time, including many using fast chargers, which will drastically increase peak power demand? The cost and carbon output of grid upgrades will need to be considered if you want to fully electrify our transport using BEVs.

Fuel cell electric vehicles (FCEVs) are another major type of EVs which are much less discussed than BEVs. They run on hydrogen, the most abundant gas in the universe. They are more energy efficient than ICE vehicles and produce no harmful tailpipe emissions, only water vapour and warm air. They are powered by electricity generated by fuel cells through an electrochemical reaction between the hydrogen fuel and the oxygen in the air, facilitated by a fuel cell catalyst.

Some might have safety concerns about the FCEVs becoming Hindenbergs on wheels. In terms of vehicle fires, leaks and explosions, FCEVs are measurably safer than ICE vehicles. Hydrogen is much lighter than petrol vapours and dissipates much faster if there is a leak, reducing the potential for explosions. In any case, safety regulations will dictate that hydrogen fuel stations must store gas above the ground in well-ventilated areas.

FCEVs bring with them some advantages over BEVs.

First, they can be refuelled much faster that BEVs are recharged. Each BEV will require at least 90 minutes to fully charged using a fast charger and up to six hours using other types of chargers. In contrast, FCEV buses can refuel their hydrogen tanks in as fast as 10 minutes.

Second, with improvements in technology for the production and distribution of hydrogen, FCEVs could eventually have a lower carbon footprint than ICE vehicles and possibly even BEVs.

Third, a study by Deloitte forecasted that the total cost of ownership of FCEVs will be less than BEVs by 2026. Currently, the cost of production and distribution of hydrogen is much higher than diesel or petrol. However, many countries are devoting significant efforts to developing sustainable hydrogen production technologies. With improvements in technology, hydrogen prices are expected to decline over 40% in the next 10 years.

With the benefits that FCEVs bring and some of the risks and disadvantages of BEVs, it would be prudent for Singapore to include FCEVs in our local mix of EVs. The KBR hydrogen study commissioned by the National Climate Change Secretariat (NCCS) found that taxis, buses and heavy goods vehicles are well-suited for hydrogen fuel, given the high daily distances they travel. What are the steps that the Government is taking to transition our public transport and goods transport systems to use green hydrogen?

Hydrogen is not just useful as a source of clean energy for vehicles. It also has multiple other industrial applications, including in clean power generation. About 30 other countries, including New Zealand, the Netherlands, Belgium and South Korea, have already rolled out hydrogen roadmaps. Singapore should do the same.

This national renewable hydrogen strategy will spur the creation of a hydrogen economy in Singapore. It should map out our plans to invest in the development of hydrogen technologies, propose new legislation, set national targets for low-carbon hydrogen and develop a pipeline of local talent to take advantage of careers in this emerging sector. This will set Singapore on a path towards being a global player in the hydrogen industry and benefit Singaporean workers.

The Government is targeting a two gigawatt peak of solar energy by 2030. Yet, even if this target is met, solar energy will still supply only about 4% of our total electricity demand. Given that solar energy is one of Singapore's most promising renewable energy sources, we have to make a much bigger push to develop it and set bolder targets for solar energy in our electricity mix.

Rooftops present one of the most promising platforms to deploy solar photovoltaic (PV) systems, given are highly urbanised landscape. The Government's SolarNova programme is looking to install solar PV systems on the rooftops of public sector buildings, including HDB flats.

I asked the Minister for National Development on 10 January whether HDB intends to install solar PV panels on all HDB block rooftops where feasible. I am glad to note the Minister has replied in the affirmative.

We should make a stronger push to install solar panels on all rooftops, both public and private, that do not have physical encumbrances. This is similar to a call made by my hon friend, Mr Leon Perera back in 2017. This would greatly increase our solar energy capture. Currently, EMA allows consumers to be paid for channelling the excess solar electricity back to the grid and BCA has a green mark scheme for solar panel adopters.

However, from a reply by the Minister for Trade and Industry to the Member of Sengkang Assoc Prof Jamus Lim, I note that the Government does not provide grants or subsidies to further incentivise the adoption of solar energy. The Minister also stated in his reply to Assoc Prof Lim that the cost of solar energy is now generally cheaper than the retail electricity price and regulated tariff. It would therefore make economic sense to encourage widespread installation of solar PV panels among private property owners and purchase electricity from them.

This rings especially true in view of the current high electricity prices caused by supply, shortages of natural gas, which we are currently over depended on for power generation. This is a subject which I elaborate during the debate, on the Energy Resilience Bill last November.

The Government should rethink its current approach and provide more incentives for solar adoption in the private sector. Landed properties, condominiums and commercial buildings provide a significant amount of rooftop space for solar panel deployment. Incentivising all of them to install solar panels could greatly improve our solar panel coverage. It could help Singapore derive more than the projected 4% of our electricity from solar energy.

To clear, I am not suggesting that the Government should unconditionally subsidise landed property owners or companies to install solar panels, which they can later profit from by selling electricity back to the grid. They should be required to transfer excess electricity back to the grid without receiving any payments until their installation subsidy is fully covered. At the end of the day, this will still be a win-win for property owners and the nation,

In conclusion, Mr Speaker, Singapore needs to be bolder and braver in setting green goals to secure our future. Some of these may be stretched goals today but we have to trust that future generations will discover breakthrough technologies to overcome our disadvantages. Technology is improving all the time and more so when huge resources of governance are being poured into research and development into low-carbon alternatives.

We need to ride the technology wave; not fall behind it. If we take a wait-and-see approach to hydrogen and other technologies, we might start seeing even our neighbours overtake us. Let us push harder on the adoption of FCEVs, come up with a bold hydrogen roadmap and incentivise the installation of solar PV panels in Singapore. This will move the needle significantly to advance Singapore's transition towards a low-carbon society. I support the Motion.

[Deputy Speaker (Mr Christopher de Souza) in the Chair]

I see great opportunity for Singapore to create numerous green collared jobs, not just for future graduates, but also matured PMETs, which is a rare opportunity that we can and must seize now.

I see opportunities for Singapore, as the finance, governance and connectivity hub of the region, to transform and influence industries way beyond our shores, thereby cementing our regional hub status for one more generation.

I see opportunities for Singapore to strengthen climate justice by becoming the trusted carbon trading hub of Asia, by facilitating resource transfers from rich countries and consumers, to help those with less become more sustainable, thereby empowering all of us to save the world together.

Before I share the reasons for optimism, let us do a quick stock-take of where the world is, after COP26 and after two years of pandemic.

We all read the disappointing recent headlines on coal power plants that were not categorially phased out, or how there was a lack of new ambitious commitments and how a lone US senator torpedoed America’s ambitions to go even greener.

But beneath these headlines is a tsunami of real change driven by at least two forces.

One, the financial and business sector has finally woken up to their responsibility to Earth. Yes, I fully expect the governments, to fall short in make the necessary $2.4 trillion annual zero-carbon investments. But at the same time, the global financial asset management sector, with $100 trillion of assets, under the leadership of BlackRock, have starting making substantial progress towards ESG investments.

And major businesses are beginning to commit. More than 5,000 corporations have joined the Race to Zero; 1,000 have pledged to Science Based Targets, and I see major private-public partnerships formed to tackle heavy emitting industries, spur new green technologies and drive green procurement.

There is an emerging consensus that being green is not just the cost of doing business, but also the basic moral standard that consumers expect from businesses.

Two, there is at least a global consensus that climate justice is important, and the well-off must transfer resources to the less well-off. In fact, the concept of the “loss and damage fund” is now clearly in the agenda for COP27 in Egypt this year.

Driven by changing consumer expectations and guided by green finance and accounting standards, the private sector can shift towards sustainable production and compensate the affected communities. This can be a huge shift, given that private enterprises, and not governments, are responsible for most production in the world.

And when there is so much money, so much resources, being directed towards sustainability, towards climate justice, you can imagine that accountability and trust will become absolutely paramount.

But while there are some reasons for being optimistic, there are also hurdles that must be overcome.

For example, because there are many emerging sustainable finance, accounting and carbon trading standards that are western-centric, there is also an urgent need for them to factor in international, especially Asian perspectives.

Another hurdle is that, in this age of stiffening geopolitical competition, there is a risk that sustainability may get weaponised by selected countries or trading blocs to create non-tariff barriers.

Here lies the opportunity of Singapore to play a decisive role in the region, and even in the world, to shape the rules, to connect different trading blocks and competing powers. And by doing so, we can transform Singapore into the Sustainable Finance, Business and Trusted Carbon Trading Hub of Asia.

How can we do this, to capture the possibilities?

One, actively contribute to the adaption of frameworks and standards for Asia. Currently, there are many standards and frameworks by key organisations. Just to name a few organizations, they include the Sustainability Accounting Standards Board, Climate Disclosure Standards Board, Global Reporting Initiative, Task Force for Climate Related Climate Disclosure. UN, EU, UK have their own standards. Indeed, there is a lot of work to ensure that what we do here in Asia is compatible and interoperable with the rest of the world, and to ensure that standards are compatible between industries.

Specifically, this means that Singapore must anchor the Asian chapters of these key international frameworks and standard setting bodies in Singapore to encourage them to work together.

We should also actively steer Singapore professional leaders who are in our accounting, auditing and management consulting firms to get involved in these bodies, so that they can build up expertise not just for themselves, but also for younger Singapore-based professionals entering the workforce.

Doing this first task will ensure that the global sustainability framework and standards make sense for Asia and Singapore and that the global standards are of sufficiently high standards.

Two, get our sovereign wealth funds, especially Temasek, to spur Singapore companies to embrace and pilot these new green finance and accounting standards. While standards for businesses have begun to emerge in London and EU, there is insufficient in-depth corporate adoption. The adoption efforts of our Temasek-linked companies who are in Asia will go far to ensure that our standards are meaningful and relevant beyond the west.

Three, through MAS and SGX, push for financial institutes and asset management companies to adhere to these new regulations for both the debt market as well as the equity market. I also hope that in the process of the Government issuing Government bonds, we can also shape our Government’s approaches in evaluating green investments, so as to shape the Asian norms in green infrastructure financing.

Four, build a comprehensive green economy eco-system. We must actively anchor emerging ESG fintech, ESG data vendors and depository, and ESG procurement platforms such as G-17 and Matcha Initiative in Singapore. We must also encourage existing companies in Singapore in the credit-rating, asset management space to create ESG solutions. We can also get our largest accounting, auditing, management consulting and legal firms to partner with international standards bodies, as well as to establish centres of excellence in Singapore.

Five, we can encourage Singapore-based companies to use the new Climate Impact X, the new global carbon exchange launched by Singapore. Climate Impact X enables the purchases of high-quality carbon credits directly from specific projects, including re-forestation efforts in the region. When consumers see companies buy high quality carbon credits, their trust in the companies’ action are strengthened, and this sparks a virtuous cycle in spurring companies to do more for the environment.

Six, we can put together a national utility for business sustainability, like how our TradeNet serves the import and export business. By national utility, I mean that getting our sustainable ecosystem players and our Government agencies to provide cloud-based services, to enable Singapore-based companies to report emissions, purchase green products, and buy carbon credits.

Seven, create a Singapore industry association or alliance specific for sustainable finance, business and carbon trading. These areas are very regulatory-driven and are distinct from businesses focused on environment technology or clean energy. This alliance can then help the Government to develop the industry.

And finally, eight, create a solid SkillsFuture roadmap and position many Singaporeans for these green collar jobs.

At the start of my speech, I specifically mentioned creating green collar jobs for mature PMETs. This should not be a surprise to Members in this House given my involvement with the PAP Senior Group.

We all know that ageism exists in certain globally competitive industries, such as international finance. It is very hard for mature PMETs to stay in these same industries over the years. They usually then switch over to work for local companies in our domestic sectors, or work in our growing social work or healthcare sectors.

But we have a new, emergent area where opportunities are plentiful for our mature PMETs. If they receive the appropriate skills training on sustainable standards, their experience in governance, accounting, finance and cross-border business will be immensely beneficial to the green economy.

And because this is an emerging area, and one that Singapore can play a role in shaping, I am optimistic that Singapore can shape the industry norm so that ageism does not take root.

To conclude, in my previous speech on climate change, I mentioned that it is difficult for Singapore to achieve net zero emission in the coming decade or two, given the constraints of current technology, given the fact that Singapore serves the world by exporting goods and services, and given that we are resource-poor in terms of renewable energy.

But our same status as a manufacturing and services hub of Asia also gives us opportunity to shape the region beyond our shores. We do so by helping them go green. We do so by helping channel resources to the less developed parts of our region in an accountable manner, so that all of us, whether we live in a developed or developing country, can fight climate change together.

And at the same time, we must recognise that the greening of the economy is an irreversible tide. Sustainability is now enshrined into the core of what corporate governance is. If we help our economies and our companies embrace sustainability, we can strengthen our global standing for yet another generation and make Singapore the global-Asia hub of trust, knowledge and connectivity.

I will like to end by thanking PAP's youth wing, as well as the many climate change activists and passionate business professionals whom I met, for shaping my views in this rapidly changing field. With that, I stand in support of the Motion.

Thank you, Mr Deputy Speaker, Sir. I must first declare my interest as Managing Director and Partner of a management consulting firm that does work in climate and sustainability.

In previous speeches, I have spoken about how climate change, one of the biggest risks facing the world today, can be one of the biggest opportunities for Singapore to lead.

One of these big opportunities is green finance. How big? According to a Global Financial Markets Association (GFMA) report, the development of which I must say my firm was involved, some $100-150 trillion US dollars in investments is needed over the next three decades to transition to a low carbon economy. This translates to at least $3-5 trillion in investments per year – an increase of five to eight times from current levels. And $66 trillion of these investments will be needed right here in Asia.

Today, Singapore is already ASEAN’s largest green finance market, constituting nearly half of green and sustainability-linked bond and loan issuances. There are ongoing initiatives and partnerships between the Government and industry, such as the Green Finance Industry Taskforce (GFIT) to accelerate green finance in Singapore. And there is so much potential to do more.

Green bonds and green loans are now established products. They need to be scaled up and the known gaps and frictions need to be addressed, as many of my colleagues have discussed today. But to meet the needs of companies and investors in the region and globally, as well as to push for more aggressive, more ambitious targets and hence, higher risk projects, a wider range of products and instruments are needed, including equity, structured products, derivatives, project finance and securities financing in order to provide companies and investors different ways to get financing, invest and manage risk or liquidity.

A particularly interesting investment space is climate innovation. Venture capital and private equity investments in climate innovation have grown 14% a year since 2016 to reach $37 billion in 2020, with most funding going into mobility, renewables and waste. But many more times is needed.

The GFMA report estimates that today, the world is between $90 billion and $210 billion short of the yearly investments in new climate technologies needed to achieve net zero. There is a need to bring in high risk and patient capital to fund investments in early stage technologies, start-ups and emerging market firms.

The first generation of “green champion” companies – like Enel Group, NextEra Energy, Orsted – they are generating shareholder returns at Big Tech levels, think about the Facebooks and Amazons. And the second generation, including companies like Beyond Meat and Tesla, are generating returns twice this. The rewards are great. But so are the risks, and the time frames for payback long. Hence, the funding gap.

So, to unlock and catalyse private capital in transition finance and climate innovation, the government and the financial markets should promote the development of blended finance structures, combining public and private capital, in collaboration with national or multilateral development banks, foundations and philanthropic organisations, such as the Gates' Foundation. This must be coupled with Government investment in R&D, including basic research, infrastructure and standards, and smart money from venture capital and private equity.

Innovation is critical in green finance – innovation in terms of the the financial products themselves, but also innovation across the green finance ecosystem. Just to cite a few examples, leveraging geospatial data for climate risk assessment, AI and Natural Language Processing (NLP) to facilitate reporting and disclosures, sophisticated scenario analysis and risk modelling, standardisation of legal contract language, as well as tools and platforms for green finance literacy and risk awareness, for corporate boards and executives down to retail investors. These all represent opportunities for Singapore to boost economic growth and create high paying new jobs as we enhance the green finance ecosystem and build green finance capabilities. We have built a vibrant financial sector and grown new segments within the sector most recently in fintech. We can do it again.

But a key risk to the efficient scaling of the green finance globally is the absence of, or too low carbon pricing and a lack of viable transition pathways for companies to begin. In Singapore, we know that the current $5 per ton carbon tax is not enough to shift behaviour but it has served to signal intent. If we are to achieve the objective of making it less expensive for companies to invest in decarbonising and low carbon technologies than to continue emitting carbon, the carbon tax needs to go up, no question. The question is how we ratchet it up and covering what scope. Too fast and we risk disadvantaging our companies economically or passing on the cost to end customers; too slow and we risk not achieving our climate KPIs or hurting the companies' own long term resilience and missing the opportunity to create business advantage and value. Each sector has a different emissions profile, transition readiness, industry structure, willingness of the end customer to pay.

I echo the views of the Member, like Mr Liang Eng Hwa and Ms Foo Mee Har, that the increase in carbon tax must be phased, I think with the highest emitting sectors first, with explicit forward direction on price levels and ample time for companies to prepare and adjust. And they must be implemented in a way that is a "just transition", minimising social and economic costs for those least able to bear them.

At the same time, we cannot afford to lapse into naval gazing. This space is rapidly evolving, The carbon border tax has arrived and the impact will be felt through global value chains, and could redefine the competitive balance between nations in many industries. And, in the words of Larry Fink, CEO of BlackRock, there is already a tectonic shift in capital as asset managers are moving billions and billions of dollars into sustainable strategies. Companies that do not act, may well soon see capital outflows to companies that do.

So, I repeat the call I made in my Budget speech: Singapore should be bold and lead the way. The Government must move on the carbon tax, albeit with a phased implementation. The Government, the financial sector and the scientific community must help companies and industry associations to design sector specific transition pathways as part of their industry transformation maps and manage their transitions; not just give companies time to adjust but help them move faster and with higher productivity. Singapore companies must change their mindset and see climate and the green economy as a big opportunity. Businesses, investors and the Government must invest behind climate innovation and new technologies. And they must build the capabilities, people and skills needed to do this.

Finally it is not all down to companies and production, but consumers and consumption and lifestyles. We must all understand the climate risk and opportunity and make informed choices on what we are willing to pay for, if we want to leave a better world for our children. Learn from our youth, many are already making these choices. If we do not fully embrace the new green economy, we might fall behind. But if we do, then imagine this: Singapore could be, for climate and sustainability, what the Silicon Valley is, for technology. Mr Deputy Speaker, I support the Motion.

Mr Deputy Speaker, Sir, I rise in support of the Motion. We all have a responsibility to current and future generations to do our best to mitigate the negative impacts of climate change, while there is still hope.

I would like to focus on two key words in the Motion: an "inclusive transition". This means our transition to a low-carbon society must benefit not just Singapore, but Singaporeans as a whole. To me, this also means our strategy cannot be "go green" at any and all costs. This is why the Singapore Green Plan 2030, launched in February last year, is a comprehensive strategy, which includes a green economy as one of its five key pillars. I aim to speak quickly on the green economy in three areas: transitioning to a world with carbon tax, carbon trading and green financing employment opportunities.

First, moving to a carbon tax world. This year's review of the carbon tax level and its forward trajectory will be an opportune time to further elaborate on plans for our carbon taxation system. In doing so, perhaps, the Government can consider the following few points.

One, to be effective in guiding behaviour, taxes must offer a certain and transparent price pattern so that businesses can project their potential expenses and plan accordingly. Instead of reviewing our carbon tax rate every three to four years, can we establish a fixed formula for the carbon tax rate to evolve over a longer period of time?

Two, given that different countries may have different climate change standards and measures, Singapore may wish to eventually explore a carbon border adjustment mechanism to equalise the carbon prices of Singapore products and imported products from outside Singapore. Like a similar mechanism introduced in the EU, this aims to prevent carbon leakage, that is, companies transferring production to countries where climate change measures are looser than in Singapore and are "cheaper" to comply with. At the same time, this measure can help to promote greenhouse gas (GHG) reduction efforts in countries outside Singapore and to spur others to take climate change measures seriously.

Three, as we increase carbon taxes and if we do so in various ways and various levels, I ask for carbon pricing to be part of a comprehensive mitigation strategy. It should contain support measures to enhance the effectiveness and adaptability. I think the Member, Mr Dennis Tan mentioned about just transition measures. And I would like to add on that just transition measures are indeed needed to assist low-income households and vulnerable workers when it is introduced.

Four, while IMF economists have suggested that high-income economies should aim for a carbon price of US$50 to US$75 per tonne of carbon dioxide emissions (tCO2e) by 2030, we must be careful to pace any increase in our carbon tax so that businesses can adapt and not be forced to leave Singapore. One possibility is to first set the carbon tax level at least around US$8 to US$9 tCO2e, using S&P Platts CEC as a spot reference, or slightly higher to inject some urgency for emitters to accelerate their decarbonising plans. That floor is where the voluntary market is valuing and trading carbon "credits", a concept that I will turn to now.

The other main way countries use to bring down carbon emissions is to establish a cap-and-trade system which caps the total level of greenhouse gas emissions and allow companies with low emissions to sell their extra carbon "credits" or "offsets" to larger emitters. There is also the voluntary carbon markets for companies and individuals, which can co-exist with compliance markets created and driven by regulation, essentially for companies or individuals to buy carbon credits voluntarily to offset their unavoidable emissions. Carbon markets allow for companies to buy and sell these tradable carbon credits that represent reduction, avoidance or removal of a certain amount of emissions from the atmosphere.

According to estimates from McKinsey, the annual global demand for carbon credits could reach up to 1.5 to 2.0 gigatons of carbon dioxide (GtCO2) by 2030 and up to seven to 13 GtCO2 by 2050. Depending on different price scenarios and their underlying drivers, the market size in 2030 could be between $5 billion and $30 billion at the low end and more than $50 billion at the high end.

The race to decarbonise in Asia is picking up pace with China introducing its national carbon market in third quarter last year, while other ASEAN nations, including Malaysia, Vietnam, Indonesia, Thailand and Philippines, have taken steps towards establishing their own frameworks to trade carbon credits. Singapore has also pledged to reduce carbon emission intensity by 36% from 2005 levels by 2030.

It is therefore unsurprising that Singapore already plans to become a carbon services and trading hub. This is among the various recommendations of the Future Economy Council's Emerging Strong Taskforce (EST) in May 2021.  We need to do this fast as part of our green growth plans as other countries in the region are also looking into it.

Despite the opportunities, the carbon trading market has long been plagued by low liquidity, poor risk-management, limited data availability and inadequate financing. While the establishment of Climate Impact X, a new global carbon exchange established in Singapore to facilitate the sale of large-scale, high-quality carbon credits, is undoubtedly a promising development, it will be useful if the Government can share on how the carbon trading value chain is progressing.

It would also be good to know our plans to further tap on Singapore's reputation for integrity and strength in professional and financial services, such as to establish a carbon credit registry to serve Asia, much like the Verra Registry and the Gold Standard Impact Registry in the US. There is a need to build or enhance the ecosystem which needs to link up the four types of key players: the upstream project developers, NGOs that certify the projects, brokers and traders to facilitate the access to carbon credits and end users, such as companies or individuals committing to offset part or all of their GHG emissions.

Another aspect is we can also enhance the existing exchanges here as it develops standardised contracts for carbon credits and set a benchmark price.

In addition, from an infrastructure perspective, the Government can and must eventually work on the regulatory oversight of carbon markets. This would enhance the integrity and standards of carbon credits traded here, making us more attractive as a hub. In addition, there may be a need to have plans to roll our developmental courses that we can upskill Singaporeans to take advantage of these new economic trends, especially those in the banking and financial services sector. Mr Deputy Speaker, in Malay, please.

(In Malay): [Please refer to Vernacular Speech.] Finally, on the prospects for green financing employment growth. As our economy shifts towards a greener one, new employment opportunities in the green economy will emerge. The "Skills Demand for the Future Economy” Report released last year by SkillsFuture Singapore identified the green economy as a key job growth area for Singapore. The report highlighted that today, there are more than 450 job roles in 17 sectors that require green skills – including financial services, manufacturing, trade and connectivity, hospitality, and the built environment. We can expect more jobs to be greener.

Take the UK for example. There are now almost half a million jobs in low-carbon businesses and their supply chains across the UK. Of which, it was estimated that there were about 6,500 employment in the sub-sectors of low carbon financial and advisory services (as of 2018). The low-carbon and renewable-energy economy in the UK was worth £46.7 billion in 2018, up 15% on 2015 levels.

Hence, we need to find ways to develop a pool of talent to help Singapore remain as an attractive destination for businesses, especially those who place a premium on sustainability. It is important for the Government and businesses to help workers to equip themselves to take on these green jobs – whether within existing sectors or in new sectors. Time and opportunity cost on the part of the workers must also be factored in to allow them to acquire the new skills and to adapt to a greener business environment.

One sector is the financial sector which will play an important role to provide the investment for sustainability projects and in turn, help to shape a low-carbon economy. But we must build and maintain the pipeline of green workers. As the green financing sector grows, we will need to groom human capital early with the know-how to align investments with sustainability and green finance principles. The Green Finance Industry Taskforce announced plans to launch workshops for financial institutions and corporates to build capacity in green finance from May 2021 to April 2022. It is hoped, therefore, that more people will attend these workshops. I hope that the Government will do more. Will this be an ongoing educational programme?

(In English): Mr Deputy Speaker, but beyond all these domestic efforts, our greening of the financial sector allows for a more effective way for Singapore to engage regional partners to accelerate regional climate sustainability projects. Our approach has been one of not curbing directly the financing of brown activity, such as palm oil or coal-related activity, but one that is to wait for greener alternatives to replace it. But what more can be done to engage and work with regional partners to accelerate regional climate sustainability which will be more effective in the long run?

Mr Deputy Speaker, Sir, with strong support from the Government and our stellar reputation as a global financial hub, with a high level of integrity, we are in a good position to fortify this green economy pillar of our Green Plan. It is a fine balance to ensure that we achieve an "inclusive transition" to a low-carbon economy, with the participation of companies, financial institutions and other stakeholders in Singapore. In doing so, we must train to capitalise on new opportunities, strike the right balance to manage the trade-offs, and do more to raise awareness of our efforts to build a green economy. Mr Deputy Speaker, Sir, I support the Motion.