Govt expects to spend more on climate change fight, reserves will serve as insurance: Lawrence Wong

Singapore has accelerated its low-carbon transition to achieve net-zero emissions by 2050 and expects to significantly increase spending on infrastructure protection against global warming and rising sea levels in the medium term.

Below is an excerpt from Finance Minister Lawrence Wong’s Budget speech delivered on Feb 14, where he gave a summary of Singapore’s efforts in fighting against climate change.

The lessons from Covid-19 will help us in strengthening our resilience against the larger existential threat of global warming and climate change.

We have started to prepare for this. We have accelerated the low-carbon transition for Singapore to achieve net zero emissions by 2050.

  • We are raising the carbon tax progressively over the next few years to provide a stronger price signal and impetus to reduce our carbon footprint.
  • We are supporting our enterprises and households to become more energy efficient.
  • We are greening our buildings and going for cleaner vehicles.
  • We are harvesting solar energy, transiting to cleaner energy sources like hydrogen, and working with our neighbours to develop regional power grids.

In short, we are doing everything we can to fight climate change.

But we also know that our efforts alone will not be enough. The rest of the world must also do their part.

Unfortunately, in the short term, many countries are increasing their reliance on fossil fuels to prevent the lights from going out, and to provide for energy security. This means the world will have to redouble its efforts to get back on track with the plans to keep global temperatures from rising beyond a threshold that will result in irreversible damage.

Singapore must prepare for the worst

While we will do our best to shape and drive this international agenda, we must also prepare for the worst. And that means taking steps to adapt to global warming, and especially to rising sea levels.

We are now building a polder at Pulau Tekong – it is already more than halfway complete and is set to finish by end-2024. The experience gained from this project will give us more options to protect our coastline against rising sea levels.

We have also set up a Coastal and Flood Protection Fund with an initial injection of S$5 billion to support the construction of coastal and drainage infrastructure. And since then, the teams have been conducting site-specific studies for drainage enhancements and coastal protection, starting with the stretch from the city to East Coast.

We expect climate-related spending to go up significantly in the medium term, and we will commit more resources as we progressively implement these extensive infrastructure plans.

Ultimately, our reserves are our greatest insurance

Be it a pandemic, an economic crisis, or rising sea levels, we have been systematically planning forward, to give ourselves more options and solutions to cope with future shocks.

But we will not be able to anticipate and cater for every scenario.

Furthermore, no amount of buffers or redundancies in our system can mitigate the extreme scenarios of blockades, conflict, wars, or climate disasters.

Just look at the extent of destruction and damage that has happened in Ukraine. The cost of rebuilding the country has been estimated at several hundreds of billions of dollars, and that figure is only expected to grow as the war continues.

So, our best safeguard in any crisis remains having access to the financial reserves we have accumulated over decades of prudent government.

Ultimately, our reserves are our greatest insurance.

They allow us to respond quickly to immediate needs in an emergency, without compromising the focus on the longer term. They enable us to bounce back stronger, as has happened during the Global Financial Crisis in 2008 and most recently in this Covid-19 pandemic.

And if we were ever to be hit by a bigger calamity or disaster, our reserves will provide us the resources to rebuild Singapore.

Images via HDB