A Sustainable Recovery from Covid-19July 13, 2020
“A crisis is a terrible thing to waste”
Paul Romer, Nobel laureate and Stanford economist (2004)
If there was a silver lining about the Covid-19 tragedy and its innumerable human, economic, and social costs, it could be that the global lockdowns on road and air travel, as well as the reduction in consumption and hence energy production, have led the International Energy Agency to estimate an eight percent decline in annual global carbon emissions from 2019, to 30.6 Gt in 2020. This was the largest reduction in carbon emissions in history, and has led to a visible increase in bluer skies, clearer waters, and a return of wildlife.
The coronavirus pandemic has reminded us about the repercussions of our individual actions, shown how tightly we are all connected, and strengthened our empathy through this collective experience. While the pandemic has led to an upswell of Covid-19-related waste, masked illegal logging and poaching, and delayed Cop26 climate talks, it has also shown the world that what may have been perceived as remote consequences of a global catastrophe can in fact be very real, and that widespread behavioral change such as to travel less by accepting telecommuting and videoconferencing as a way of life, though painful, can be possible.
Building Momentum for the Low-Carbon Economy
Emission levels rebounded rapidly following the 2008-09 global financial crisis, and that opportunity to transition to a low carbon economy was lost without deliberate action. The changing social contract of employees, consumers, and investors once again offers a window for business leaders to secure a mandate for sustainable transformation, as they re-configure their business models and supply chains. Globally, governments and central banks have already committed an unprecedented $15 trillion stimulus injection to preserve their economies. Policymakers now have another chance to preserve companies, create jobs, refresh national infrastructure, and avoid potential damage to the environment by carefully aligning stimulus packages with the UN Sustainable Development Goals, rather than purely relying on the blunt tool of cash injections.
The European Commission has been leading this charge, by linking its economic stimulus and recovery plans to sustainability in the European Green Deal. In Asia, just as countries such as China, Indonesia, Korea, and New Zealand have introduced green recovery plans, there have been calls for other countries like Australia and Singapore to pursue ‘quality growth‘ as their economies recover.
A Sustainable Recovery for Singapore
What might a sustainable, inclusive recovery look like for a country like Singapore? Singapore contributes to just 0.11 percent of global emissions, but is ranked 27th out of 142 countries in terms of emissions per capita. Industries contributed to 60 percent of Singapore’s emissions, and about 75 percent of industrial emissions are from the refining and petrochemicals sector. The country has already been encouraging energy and carbon efficiency, making significant investments in renewable energy sources such as solar, and building a cleaner transportation system.
Singapore is an established an Asian LNG trading hub. Just as global oil prices collapsed, LNG prices too are at record lows. As with many other countries, Singapore has been receiving critique that its carbon emission targets and carbon taxes are too low. As much as the country should be concerned about stranded assets and job losses from higher taxes, the oil majors are already investing in diversifying their energy mix and could welcome such fiscal instruments to accelerate their energy transition alongside Singapore’s economic transformation. Driven by regulatory changes in Europe, renewables are the only source of energy that has been growing in 2020, and this could similarly drive demand for new, highly-skilled jobs in Singapore and the region.
Untapped Opportunities for Growth
Many renewable energy sources such as biofuels, geothermal, hydroelectric, nuclear, and wind power have previously been characterised as being unfeasible for Singapore, based on the country’s geographical constraints and existing technological readiness. Yet, there remain many green growth opportunities that can be further explored. Any excess power capacity from the slowdown in energy demand might be used to power electrolysis in the short term, to jumpstart the development of a new hydrogen economy. Singapore’s extensive LNG infrastructure, its establishment as a trading hub, as well as its status as a regional financial centre place the country at an advantage in pioneering a hydrogen sector. Nuclear energy has received much negative press, yet advances in Small Modular Reactors make this an option that generates less nuclear waste and needs less space, while being much safer and more affordable. As an island-state, floating nuclear power plants could represent export opportunities that can tap into our strengths in offshore and shipbuilding and revitalise jobs in these industries. Singapore can examine the benefits of modernising its energy grid to interoperate with microgrids, given the foreseeable rollout of solar here. The country can find new ways to reduce the energy footprint of its thriving data centre market, such as reusing cold energy from LNG re-gasification process to cool data centres, enhancing networks, using solid-state drives,and refreshing hardware regularly. Singapore can accelerate its R&D efforts to enhance fuel cell and battery technologies, such as using its supercomputing and AI capabilities to explore alternative battery chemistries. We can intensify research on advanced or second-generation biofuels, while exploring new carbon capture, utilisation, sequestration systems, such as emerging methods based on gas hydrates, membrane separation, or cryogenic technologies, as well as carbon-to-value business models.
Green stimulus packages have shown to be effective at reshaping the economy, mobilising capital, and creating jobs. A crisis such as the global pandemic forces us to challenge business-as-usual assumptions beyond our comfort zone, and emboldens leaders to make hard decisions that in normal times might seem impossible. Singapore has been able to directly address its water scarcity challenge and turn it into a strength. What we’re looking at now could be a once-in-a-lifetime opportunity to inspire other countries how they can work towards carbon neutrality, while developing another export industry to fuel our economy and create new jobs.