Dilemmas in Sustainable Development

Page 1


DILEMMAS IN SUSTAINABLE DEVELOPMENT

PUBLIC POLICY CASE STUDIES FROM ASIA

DILEMMAS IN SUSTAINABLE DEVELOPMENT

Dilemmas in Sustainable Development: Public Policy Case Studies from Asia

© Lee Kuan Yew School of Public Policy, National University of Singapore, 2024

Copyrights to Case Studies 2, 4, 5, 7 and 8 belong to the respective authors. These five cases were winning submissions for the LKYSPP Case Writing Competition organised by the CIU. The CIU reserves the right to use, reproduce, publish, print, edit and distribute any case study submitted for the Competition.

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The case studies in this book do not reflect the views of the Lee Kuan Yew School of Public Policy, nor are they intended to suggest correct or incorrect handling of the situations depicted. The case studies are not intended to serve as a primary source of data and are meant solely for class discussion.

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National Library Board, Singapore Cataloguing in Publication Data

Name(s): Chia, Jean, editor. | Villanueva, John Emmanuel, editor. | Wong, Gabriel, 1977editor. | Lee Kuan Yew School of Public Policy, publisher. Title: Dilemmas in sustainable development : public policy case studies from Asia / edited by Jean Chia, John Emmanuel Villanueva, Gabriel Wong.

Description: Singapore : Lee Kuan Yew School of Public Policy, National University of Singapore, [2024] | Produced by Pagesetters Services for the Lee Kuan Yew School of Public Policy.

Identifier(s): ISBN 978-981-17539-2-3 (paperback)

Subject(s): LCSH: Sustainable development--Asia. | Sustainable development-Government policy--Asia.

Classification: DDC 338.9507--dc23

DILEMMAS IN SUSTAINABLE DEVELOPMENT

PUBLIC POLICY CASE STUDIES FROM ASIA

Preface 9

Case Study 1

Singapore’s Renewable Future 13

Case Study 2

Putting a Price on Carbon: Hard Targets to Keep Singapore Going 35

Case Study 3

Challenges for Vietnam’s 2050 Net-Zero Target 55

Case Study 4

Eco-Compensation in China: Mediating Water Demands on the Xin’an River 69

Case Study 5 What is the Dam Worth? How Cambodia Came to Build an Internationally Unpopular Dam 99

Case Study 6

Climate Crisis for Agriculture in India 115

Case Study 7

Can Indonesia Promote Sustainable Growth Through Green Special Economic Zones? 125

About the Lee Kuan Yew School of Public Policy and the Case Insights Unit

FOREWORD

Asia has developed rapidly since the second half of the 20th century. In the 1950s, Asia accounted for less than 20% of the global economy in purchasing power parity terms. Today, the figure is close to 50%. The Asian Development Bank has called this “the Asian Century”.

With growth, many Asian countries have undergone industrialisation and urbanisation; the share of industrial production and the number and sizes of cities in Asian countries have increased significantly. The majority of the Asian population now lives in urban areas and many of the world’s largest cities are in Asia.

There are downsides to rapid industrialisation and development, especially in terms of environmental impact. Examples include deforestation, pollution and an increase in greenhouse gas emissions. Many cities in Asia are experiencing extreme weather conditions as the global temperature and sea level are rising.

Asian governments too must pay greater attention to environmental protection and actively address climate change. This is critical given the greater environmental consciousness, a more vocal citizenry, diverse stakeholder interests and difficult policy tradeoffs. Policymakers increasingly have to critically assess the costs and benefits of different policy options, before careful communication and implementation of environmentally sustainable policies.

The Lee Kuan Yew School of Public Policy in Singapore is committed to improving governance and lives in the region through education and research on the most pressing issues facing Asian countries and how public policies can effectively address them. We recognise that sustainable development and climate change are existential challenges for the people and governments in Asia and the world, and hope that we can contribute knowledge and skills towards practical policy solutions to these challenges.

The School promotes the use of case studies in classroom teaching in our degree and executive programmes. This book, titled Dilemmas in Sustainable Development: Public Policy Case Studies from Asia, brings together case studies on the challenges faced by several

Asian countries – Cambodia, China, India, Indonesia, Singapore, and Vietnam – when formulating public policies to deal with climate change and achieve environmentally sustainable development. The cases cover a range of issues: encouraging use of renewable energy, reducing carbon emissions, adapting to climate change, minimising environmental damage resulting from development, and assessing the costs and benefits of development. Through discussion of different policy options and their impact on various stakeholders, we hope the case studies offer useful insights on policy development to policymakers and students.

I hope this book will raise awareness of and provide lessons on the public policy dilemmas of sustainable development faced by Asian and other countries.

for Governance and Leadership)

Lee Kuan Yew School of Public Policy

PREFACE

Case studies are a powerful tool for teaching and learning in public policy schools. As concise narratives of policy events, they throw light on the key moments and most salient dimensions of policymaking, while providing rich context and fine detail to help students grapple with the complexities of real-world situations. Through facilitated discussions of case studies, students learn how to diagnose problems, analyse solutions and exercise judgment as if they are in the policymaker’s shoes.

As a postgraduate institute of a professional discipline, the Lee Kuan Yew School of Public Policy makes it a mission to help our students put into practice what they learn. From its inception, the Case Insights Unit has been producing case studies to serve our fulltime and executive education programmes. In this time, the online and publicly accessible LKYSPP Case Study Library has grown into a repository of more than 200 titles on Singapore, Asia and beyond. Between them, they cover a vast range of policy domains – economic development; social welfare; urban planning; international relations; governance and leadership; and science and technology.

In 2021, year two of the pandemic, there was much talk about resetting policy thinking in Singapore. While the disruptions brought by Covid-19 were on a scale unprecedented in recent memory, it was not the first time that longstanding policy principles were challenged. Change or no change: that is one of the most persistent questions in public policy. It seemed timely for us to assemble a collection of stories on how Singapore’s policymakers decide to defend or depart from the status quo. And so our first book, Rethinking the Status Quo: Public Policy Case Studies on Singapore, was borne.

2024 looks set to be another defining year for public policy scholars and students around the world. Above all the political unrest, economic turmoil and social disruptions, it is the climate crisis that rightly dominates our collective attention. We have therefore chosen to focus on environmental policy in this second edited collection of case studies. Individually, these accounts show how governments in China, India and Southeast Asia are confronting issues like

environmental protection, renewable energy and carbon emissions. When put together in a single volume, they reveal the recurring factors that will determine the prospects for climate interventions: resources, trade-offs, politics, public sentiment, leadership and ideology.

These case studies are all drawn from our online case study library. We did a fresh round of editing and added editors’ notes to bring them up to date. Apart from our own writing, we intentionally included several case studies authored by students. These were winning entries in our annual case writing competition that has been running since 2017 and was extended to all public universities in Singapore for the first time last year. As public concern over the climate crisis grows, so an increasing number of students have chosen to write about environmental policy. We felt it was important to capture their voices.

Good public policy case studies teach us how to recognise policy problems, how to take up different points of view, how to analyse an issue across multiple dimensions and how to make decisions that have the best chance of doing the most good. I hope that this collection of case studies will spur all readers – no matter where we locate in the policymaking ecosystem – to apply these skills towards the most critical policy challenge of this generation.

Singapore’s 60 MWp Sembcorp Tengeh Floating Solar Farm generates clean energy equivalent to powering about 16,000 four-room public housing flats in Singapore or taking 7,000 cars off the roads.

Image credit: Sembcorp Industries

CASE STUDY 1

SINGAPORE’S

In October 2022, Deputy Prime Minister and Minister for Finance Lawrence Wong announced at the Singapore International Energy Week that Singapore would increase its emissions reduction contributions from what the country had previously promised.

Several years prior, Singapore had committed to an emissions peak of 65 million tonnes of carbon dioxide (CO2) equivalent in 2030. The city-state would now reduce that peak to 60 million tonnes, Minister Wong said. “This five million tonnes improvement is significant,” he told the audience at Singapore International Energy Week, an event that drew over 10,000 participants from around the world. “It is equivalent to reducing our current transport emissions by two thirds. These enhanced 2030 targets will put us in good stead to achieve our longer-term goal of getting to net zero by 2050.”

Minister Wong acknowledged that the 2050 target of netzero carbon emissions was a “stretch” goal for Singapore, given that the country was “an alternative-energy-disadvantaged nation”. Nevertheless, the Singapore government had long been committed to adapting and innovating in response to changing global dynamics, and was emerging as a potential model for pragmatic energy transition that balanced economic growth with environmental stewardship.

BOX 1: CARBON NEUTRALITY

Carbon neutrality refers to the state in which an entity –for example, a country, company or individual – balances the amount of CO2 emissions it releases into the atmosphere with an equivalent emissions removal or offset, with the goal of achieving a “net-zero” carbon footprint.

CO2 is a greenhouse gas that traps heat in the Earth’s atmosphere. Activities such as burning fossil fuels for energy, deforestation and industrial processes release CO2 into the atmosphere, leading to an overall increase in greenhouse gas concentrations and ultimately to climate change.

An entity might take several steps to achieve carbon neutrality, including:

Reducing emissions: Transitioning to renewable energy sources, implementing energy-efficient technologies, improving industrial processes and adopting sustainable practices to minimise the release of carbon emissions.

Offsetting emissions: Investing in projects or activities that remove or reduce an equivalent amount of CO2 from the atmosphere such as reforestation projects or carbon capture and storage technologies.

Carbon credits: Participating in carbon trading markets, where entities can buy and sell carbon credits. A company that exceeds its emission reduction targets can sell its surplus credits to another entity that might be struggling to meet its targets.

SINGAPORE’S ENERGY TRAJECTORY

In its early years, Singapore met its energy needs largely via conventional sources, including carbon-intensive fossil fuels. The country experienced rapid industrialisation and economic growth in the mid-20th century that heightened its dependence on imported oil and natural gas to power its burgeoning industries and meet the demands of a growing population.

BOX 2: NATURAL GAS

Though natural gas is a relatively clean-burning fossil fuel compared to coal and oil, its finite nature and environmental impact make it a non-renewable energy source. Natural gas forms over millions of years. Heat and pressure decompose organic molecules, causing the remains of ancient marine microorganisms and organic matter such as plants and algae on the ocean floor to transform into natural gas reserves. Extracting natural gas and using it for energy depletes natural gas reserves, and the process of replenishing these reserves occurs on geological timescales, that is, over millions of years. The use of natural gas contributes to environmental concerns, as it releases CO2 and other greenhouse gases during combustion.

Singapore began to embrace natural gas as a significant energy source in the 1990s. Natural gas is a versatile and relatively low-carbon fuel source compared to other hydrocarbons such as coal and fuel oil, and was thus an attractive choice for meeting the rapidly developing nation’s increasing energy demands. Senoko Power Station, which was Southeast Asia’s largest and most technologically sophisticated power station at the time of its construction in the 1970s, switched from crude oil to natural gas in 1992,1 a move that underscored the government’s commitment to natural gas as a core component of its energy mix. At the time, Singapore relied on natural gas imports from Malaysia. The country added imports from Indonesia in the 2000s.

The years that followed saw a significant expansion of natural gas infrastructure that included the construction of the Jurong Island Liquified Natural Gas (LNG) Terminal to enhance Singapore’s capacity to import and store LNG, thus bolstering the country’s energy security. The Jurong Island LNG Terminal began operations in May 2013. Natural gas assumed a crucial function as a reliable energy source in Singapore and played a balancing role that supported the integration of intermittent renewable energy sources into the energy grid. The strategic importance of LNG continued to grow, with Singapore evolving into a key trading hub for LNG in the Asia-Pacific region.

Environmental blueprints had been part of Singapore’s green efforts since 1992, when the Ministry of the Environment (now the Ministry of Sustainability and the Environment) then launched the Singapore Green Plan to ensure that economic prosperity and sound environmental management could coexist. Over the late 20th century, Singapore experienced rapid industrialisation and urbanisation that created a clear need for proactive measures to manage the accompanying environmental impacts sustainably. The launch came on the heels of growing concerns over pollution, deforestation and climate change, and the government updated the Plan as the years went by in response to emerging ideas and trends in the environmental sphere. In the early 2020s, climate change became an increasingly urgent global issue to tackle, and a growing awareness of environmental issues among the public led to increased calls for action from both individuals and communities.

The Singaporean government launched the Singapore Green Plan 2030 in 2021 to “galvanise a whole-of-nation movement and advance Singapore’s national agenda on sustainable development”.2 Five ministries – the Ministries of Sustainability and the Environment; Trade and Industry; Transport; National Development; and Education – came together to lead an ambitious sustainable development agenda consisting of five pillars: City in Nature, Energy Reset, Sustainable Living, Green Economy, and Resilient Future. The Plan formalised concrete targets for creating a more sustainable and liveable Singapore.

SINGAPORE’S NET-ZERO INITIATIVES

To move towards a low-carbon future, Singapore took action to clean up both the supply and demand sides of its energy mix.

Supply Side

In 2019, the Minister for Trade and Industry Chan Chun Sing described a “4 Switches” strategy to tackle the energy frontier. The four switches comprised (1) natural gas, (2) solar, (3) regional power grids and (4) emerging low-carbon alternatives. It aimed to diversify Singapore’s energy sources and ensure greater energy security.

Switch 1: Natural Gas

As of early 2024, Singapore’s energy supply relied heavily on imported natural gas. Due to its cleanliness relative to other fossil fuels as well as Singapore’s limited access and ability to deploy alternative energy options, natural gas would persist as a leading fuel in the foreseeable future, and would bridge the gap as Singapore intensifies its shift towards other energy sources.

Switch 2: Solar

The Singapore Green Plan called solar energy Singapore’s “most promising renewable energy source”.3 Singapore had set a target of producing 2 gigawatt-peak of solar energy by 2030, sufficient to power 350,000 households annually – around 4% of Singapore’s total electricity demand – and an over sevenfold increase from previous solar capacity levels.4 One prediction suggested that Singapore might achieve 2.5 gigawatt-peak of solar energy by 2032.5 By 2050, solar power would account for around one tenth of Singapore’s electricity demand.6

Singapore had embarked on a concerted effort to incentivise the adoption of solar energy as early as the 2000s, with the government launching various initiatives to promote solar energy adoption. The introduction of the Solar Capability Building Programme marked a significant milestone for Singapore’s solar energy journey. With the aim of gaining knowledge and expertise that would later help

enhance the solar capabilities of government agencies and statutory boards, the scheme test-bedded solar photovoltaic systems in Housing & Development Board (HDB) residential blocks and served as a catalyst for solar adoption across the public sector. Subsequent initiatives like the 2014 SolarNova programme sought to deploy solar panels on government buildings and spaces: a 2022 tender under this initiative pledged to bring the total number of HDB blocks installed with solar panels to 8,400 (there are around 10,000 HDB blocks in Singapore).7 Private sector adoption gained momentum as well, with businesses receiving incentives to integrate solar technology into their operations. The SolarRoof programme provides financial incentives and support to encourage commercial entities to power their buildings with solar energy.

Over the years that followed, advancements in solar technology coupled with government support led to a considerable increase in Singapore’s solar capacity. Solar panels became ubiquitous, covering commercial buildings, public housing flats, ATM kiosks and 7 out of 18 Supertrees at the horticultural tourist attraction Gardens by the Bay. The Tengeh Reservoir houses one of the world’s largest floating solar photovoltaic systems, generating enough energy to power local water treatment plants. The installed capacity of solar photovoltaic systems increased over tenfold, and the number of solar installations expanded nearly sixfold, from 2015 to 2021.8 As of early 2024, Singapore was still maximising the deployment of solar panels on available spaces.

“We are already one of the most solar-dense cities in the world and we are looking to do more, wherever possible,” Minister Wong said at Singapore International Energy Week 2022.

Figure 1: How the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project worked

Source: Energy Market Authority, “Regional Power Grids”, https://www.ema.gov.sg/our-energy-story/energysupply/regional-power-grids# accordion-fdc429675a-item-91c088a632.

Switch 3: Regional Power Grids

Due to the relative absence of domestic natural resources, low-carbon electricity imports are part of Singapore’s strategy to access costcompetitive clean energy sources. To prepare for large-scale imports, the government has commenced small-scale trial projects: the

Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, which imports hydroelectric power from Lao PDR to Singapore via Thailand and Malaysia (Figure 1); and the appointment of YTL PowerSeraya to import electricity from peninsular Malaysia via the existing interconnector. The Energy Market Authority launched a call for proposals in July 2022 to award licences for electricity importers to bring non-coal-derived electricity from other countries to Singapore, and had provided Conditional Approvals for imports from Cambodia, Indonesia, and Vietnam by end 2023.9

Switch 4: Emerging Low-Carbon Alternatives

The Singapore government earmarked $55 million for 12 research and development projects to explore low-carbon energy options under the Low-Carbon Energy Research Funding Initiative. These projects were in two areas:

Hydrogen: In 2023, Singapore announced the launch of its National Hydrogen Strategy to develop the infrastructure and technology necessary to make low-carbon hydrogen a major alternative to fossil fuel in the country’s power supply. Unlike traditional fossil fuels, the combustion of hydrogen produces water vapour as its only byproduct, making it a zero- or low-emissions fuel when generated through environmentally friendly methods. According to the strategy, hydrogen would possibly supply up to half of Singapore’s electricity by 2050 and Singaporeans might be able to access hydrogen-generated electricity from as early as 2027.10 Efforts to capitalise on the potential of hydrogen include experimenting with hydrogen technologies that are near commercial readiness, fostering international collaborations for imports, research and development, conducting land and infrastructure planning, and training the workforce.11 As of early 2024, hydrogen was a prohibitively expensive energy source due to an underdeveloped value chain.12

Carbon capture, utilisation and storage: This strategy, which involves capturing carbon emissions at their source, utilising the captured carbon for various purposes, and safely storing the remaining emissions underground to prevent their release into the atmosphere, was also still in its infancy in Singapore. Funded research and development projects aimed to convert CO2 into

sand, capture carbon using ashes, increase the energy efficiency of producing alcohols and fuels from CO2, and more.

A third potential low-carbon power source was geothermal energy, which involves exploiting the natural heat emanating from the Earth’s interior for power generation. While there were currently no concrete plans for geothermal energy production in Singapore, a study had suggested a site close to the Sembawang hot spring had geothermal potential. In September 2023, the Energy Market Authority issued a Request for Proposal for a non-invasive, islandwide investigation of Singapore’s geothermal potential and the scalability of geothermal power at underground depths of up to 10km.13

Beyond the four switches, research and development efforts towards carbon neutrality in Singapore’s energy supply involves the exploration of new technologies and solutions for generating and storing energy sustainably. In 2023, the Energy Market Authority launched two calls to academic and industry researchers for energy storage solutions that were safe as well as cost and space efficient, including methods to repurpose electric vehicle batteries. Such solutions would help to store excess solar energy during times of low demand and provide an additional energy source during times of high demand. The statutory board also partnered with Shell Singapore to commercialise promising clean energy solutions from small- and medium-sized enterprises. Participating companies would go through a six-month incubator programme that would help them build capacity, learn about the energy sector and pitch to investors.14 Projects under these partnerships aimed to improve solar photovoltaic deployment efficiency, engineer new systems for lowcost hydrogen production, create universal battery packs for personal mobility devices, and more.

Demand Side

Carbon Pricing

Singapore implemented Southeast Asia’s first carbon pricing scheme in 2019. Carbon pricing, a market-based approach that puts a price on carbon emissions to provide economic incentives for businesses to

adopt cleaner technologies and practices, covered 80% of Singapore’s emissions in the manufacturing, power, waste and water sectors as of 2023. The coverage increased to 90% after including fuel excise duties that encourage reduction of transport emissions.15

The 2019 carbon tax was $5 per tonne of greenhouse gas emissions for the period from 2019 to 2023, and would become $25 and $45 per tonne of greenhouse gas emissions from 2024 to 2025 and 2026 to 2027 respectively, eventually reaching $50–$80 per tonne of greenhouse gas in 2030 (Figure 2). This phased implementation aimed to ensure a smooth transition for companies. Starting in 2024, businesses could utilise reputable international carbon credits that adhered to a set of eligibility criteria to neutralise up to 5% of their taxable emissions.

Figure 2: Singapore’s carbon price trajectory, 2022–2030

Some had criticised the initial $25 price hike as being too low. The National University of Singapore’s Energy Studies Institute Executive Director Associate Professor Lee Poh Seng noted that a gradual approach to carbon pricing was prudent.16 “It’s sending a signal to industry that there will be an increase in carbon prices, and that companies will have to put in place necessary measures to remain competitive in the coming years,” he said.

Singapore had also introduced vehicle emissions schemes since the early 2010s (such as the Carbon Emissions-based Vehicle Scheme and the Vehicular Emissions Scheme) that encouraged the adoption of environmentally friendly vehicles by giving citizens rebates or imposing surcharges according to vehicle emissions.

Incentive and Support Schemes for Citizens and Businesses

Households might feel the effects of carbon taxes through an increase in their electricity bills (though some argued that the bill increase would be too low to make a difference). The increase to $25 per tonne of greenhouse gas in 2024, for example, would require residents of a four-room HDB flat to pay about $4 per month more in utility bills that year. In 2020, the Singapore government introduced the Climate Friendly Households Programme to provide lower- and middle-income households with Climate Vouchers to buy energyand water-efficient appliances.

Meanwhile, the Energy Market Authority initiated a regulatory sandbox – the “Demand Side Management” initiative – to optimise and reduce the energy demand of businesses. This initiative consists of the Demand Response Programme, which involves incentive payments to companies that reduce their electricity use during periods of spiking electricity prices; and the Interruptible Load Programme, where companies receive financial incentives to be on standby to reduce their energy demand during times of inconsistent power supply. Businesses would pay penalties if they fail to meet the agreed-upon reduction in electrical load. The sandbox will run until early 2025, after which the Authority may decide to instate it as a permanent initiative depending on its success.

Other initiatives to encourage business and larger users to reduce energy consumption include the Energy Efficiency Fund, which provides financial support for things such as energy audits and the installation of energy consumption monitors; the Green Mark certification scheme, which provides a certification for buildings based on their energy efficiency and environmental performance that could help make properties more attractive to buyers and improve brand reputation; and the Energy Efficiency Grant, which provides funding support for businesses to use energy-efficient equipment.

Rethinking Car Ownership and Usage

Owning a car in Singapore comes with a hefty price tag. Singapore began implementing measures to regulate the number of private vehicles on its roads from the later half of the 20th century, adopting a market-driven approach to vehicle ownership in order to manage traffic congestion, reduce environmental impact and address challenges posed by Singapore’s limited land space. A 2018 Deutsche Bank report named Singapore the most expensive city to buy a car, with costs coming up to nearly double those of the next most expensive city, Copenhagen.17 Factors contributing to the high costs include the following:

1. The Certificate of Entitlement system. This is a quota system that requires individuals to bid for the right to own a vehicle for a predetermined period. This bidding process often results in elevated prices, with demand surpassing the limited number of available certificates.

2. High taxes and duties on vehicle purchases. The overall cost of a car includes its Open Market Value, which covers the purchase price, freight, insurance, as well as considerable taxes and duties.

3. High fuel prices in Singapore. The government does not provide fuel or electricity subsidies.

The Singapore government heavily promotes the use of public transport as a primary means of commuting, steering residents away from reliance on private vehicles. In addition to creating a highly efficient and well-integrated public transport system, the Singapore government conducts messaging campaigns that highlight the reduced traffic congestion, cost effectiveness and environmental benefits of choosing public transit over private vehicles.

As electric vehicles (EVs) surged in popularity in the 2010s, the government introduced various measures to encourage their use. These include the “Power EVery Move” campaign, which includes a 2022 Land Transport Authority advertisement reminding viewers that “with electric vehicles, we are changing the way we move, driving

a more sustainable Singapore, by keeping our city and air cleaner, and our rides quieter”.18 The Authority also set a target of providing 60,000 electric vehicle charging points in public carparks and private premises by 2030. Half of Singapore’s bus fleet would be electric by 2030, and all of it would run on cleaner energy by 2040. Meanwhile, the Electric Vehicle Early Adoption Incentive provides rebates on purchases of fully electric cars and taxis, and all government cars were to have zero exhaust emissions and to run on cleaner energy by 2023 and 2035 respectively.

Green Finance

Sustainable investment practices are an important pillar of Singapore’s green finance strategy. The Monetary Authority of Singapore actively supports financial institutions in integrating environmental, social and governance (ESG) considerations into their decision-making processes through initiatives such as the ESG FinTech Grant, which provides Singaporean financial institutions with funding for developing use cases and technology applications in the ESG space. In 2019, the Authority convened the Green Finance Industry Taskforce, a group of representatives from financial institutions, corporates and government agencies focused on developing strategies and recommendations to drive innovation in green financial solutions and products. Singapore also positions itself as a hub for green bonds. The Authority introduced the Sustainable Bond Grant Scheme to support issuers in obtaining green bond certifications, contributing “up to $125,000 of expenses incurred for external reviews of eligible green, social, sustainability, sustainability-linked as well as transition bonds, and promotes the adoption of internationally recognised standards and taxonomies”.19

CLEARING A PATH TO A CLEAN ENERGY TRANSITION

Because Singapore is an alternative-energy-disadvantaged nation, the country will have to rely on a mix of domestic efforts and international cooperation to create a balanced energy portfolio.

“It’s never going to be a silver bullet,” Professor Lee said.

While larger countries have expansive landscapes for renewable energy installations, Singapore’s limited land area of 734 km2 leaves it with few scalable options for generating clean energy. For example, while Singapore receives a lot of sunlight due to its proximity to the equator, the small available land area constrains largescale solar panel deployment. Space is important for solar power generation: a solar farm needs 300 times more land to produce the same amount of electricity than a combined cycle gas turbine power plant.20

“Even if we were to maximise all available space in Singapore for solar deployment, we will still not be able to generate enough electricity to keep the lights on,” Minister Wong said at the Singapore International Energy Week.

Singapore’s small land area also limits its capacity to move towards nuclear power. Garnering public support for using nuclear energy to meet Singapore’s power needs is a challenge due to concerns about creating sufficiently large buffer zones around nuclear power plants to keep the public safe. The country’s high population density adds to the apprehension.

“The Fukushima nuclear accident happened in 2011 – not that long ago,” Nanyang Technological University Energy Research Institute Executive Director and Materials Science and Engineering Professor Subodh Mhaisalkar said.21 “People still remember the number from Fukushima: you need an 85-km buffer zone [around a nuclear power plant]. That is outside of Singapore’s available land area.”

Meanwhile, Singapore’s climate and geography pose unique challenges for renewable energy generation.22 The country’s equatorial climate lacks strong, consistent winds: the country’s average wind speed of about 2 m/s is well below the typical commercial wind turbine speed of above 4.5 m/s. “Wind? We’ve got no wind,” former Prime Minister Lee Kuan Yew said at the 2008 Singapore International Energy Week. Singapore also lacks fastflowing rivers suitable for hydroelectric power generation, as well as shallow-depth underground geothermal energy resources for use in conventional geothermal systems. Tidal power is not a very promising option thanks to a limited tidal range and tranquil seas.

Furthermore, ports, shipping lanes and anchorage already account for a significant portion of the country’s maritime areas, constraining the feasibility of deploying ocean energy technologies and posing further challenges to the safe implementation of nuclear power in the country.

Though Singapore has a high degree of sunshine and relative sophistication in the area of solar power, the country faces weather fluctuations and high cloud cover that impact the supply of solargenerated electricity. To combat this issue of intermittency, Singapore has created energy storage systems that the Energy Market Authority’s Sustainable Supply Division Deputy Chief Executive Ralph Foong described as “large batteries”,23 including a 285 MWh Energy Storage System on Jurong Island deployed in 2022 that was Southeast Asia’s largest energy storage system. The Authority continues to co-develop and improve energy storage solutions with other agencies and industry firms, including international companies and research institutes such as the Korea Institute of Energy Technology Evaluation and Planning.

Despite these limitations, the domestic generation of renewable energy should still be part of Singapore’s energy solution, Professor Lee said. He added that land and climate constraints had necessitated considerable creativity in developing routes to sustainable energy, and that Singapore had done a lot to optimise what the country had. The country has long relied on imports for its energy needs – natural gas, for example, comes from countries such as Malaysia, Indonesia, Australia, the United States, Qatar and Angola – and would likely switch from natural gas imports to imports of cleaner energy forms to complete its energy mix.

“Singapore takes a very pragmatic approach, as it always has,” Professor Lee said, adding that imports were necessary mitigating measures to ensure the security of Singapore’s energy supply. “There will be risks associated with clean energy imports – it’s important to set a clear government imperative to explore new technologies that will ensure reliable imports.”

Professor Mhaisalkar noted that a nascent area of interest for both domestic and international production was biofuels, which are derived from renewable organic materials such as animal manure,

agricultural residue and animal fat. The government is assessing the commercial viability of and establishing technical standards for wider biofuel adoption in Singapore in the electricity generation and transport sectors. Singapore has already made some progress in biofuel use. Singapore Airlines, for example, uses sustainable aviation fuel made partly from used cooking oil and animal fats for its flights.

“But again, it’s going to be moderated by limited land area, and the shelf life of biofuels and the need for infrastructure adaptation are important considerations,” Professor Lee said. “The reliance on biofuels and biogas is expected to complement rather than replace the main energy sources due to the scale of energy demand in Singapore.”

A viable biofuel solution for Singapore, Professor Mhaisalkar said, would likely involve conducting some of the processing overseas.

Singapore aims to keep track of and assess emerging technologies as they mature to determine whether including a given new solution made sense for Singapore. It is not clear what the energy mix would look like in 2050, and a large chunk of new technology might only kick in in the last decade of Singapore’s net-zero plan.

“If you’re an early adopter, you face the risk of using old technology,” Professor Mhaisalkar explained. “But if you’re a slightly mid- or late-term adopter, you can leverage the latest technologies, like we did with our MRT. The same can happen with renewables or alternative technologies.”

Some questioned the usefulness of Singapore’s net-zero efforts, given that the country contributes a tiny amount – 0.1% – of global carbon emissions. Others believed there was value in Singapore acting as a responsible international player and community member, contributing to global efforts to tackle climate change.

“We want to play our role as good citizens,” Professor Mhaisalkar said. “If we do this right, this model can be repeated in many jurisdictions worldwide, and companies that participate with us can export their technologies to other places.” Meanwhile, Professor Lee noted that while Singapore was unlikely to become a renewable energy hub in terms of raw capacity, the country had strengths that made it well suited to becoming a green technology

knowledge, innovation and investment hub, and to helping ASEAN and other partners scale their renewable energy deployment.

He was optimistic that Singapore would create a diversified energy mix in the coming decades, with a considerable proportion of its energy derived from domestic and international renewable energy sources.

“If we make the commitment, we will put in the necessary resources and efforts,” he said. “We aren’t making fashionable statements.”

This case study was originally written in March 2024.

DISCUSSION QUESTIONS

• In 2022, the independent scientific project Climate Action Tracker described Singapore’s climate targets as “Critically insufficient” – the worst of five possible ratings. Do you agree that Singapore is not doing enough to help mitigate climate change? Why or why not? What more, if anything, should the country do?

• Is net zero a realistic goal for a city of Singapore’s size and resource availability? Are you optimistic that Singapore will meet its net-zero targets? Why or why not?

• What are some of the risks Singapore faces in relying heavily on clean energy imports? How can Singapore manage these risks?

• How will public awareness and engagement affect the implementation and success of Singapore’s clean energy initiatives?

• What are the implications of Singapore’s energy transition for businesses and industries operating in the region?

NOTES

1. Tin Seng Lim, “Senoko Power Station,” Singapore Infopedia, https://www.nlb.gov.sg/main/ article-detail?cmsuuid=a04a0e83-c6c3-4e03-8200-cc9926865969.

2. “Overview,” Singapore Green Plan, https://www.greenplan.gov.sg/overview/.

3. “Energy Reset,” Singapore Green Plan, https://www.greenplan.gov.sg/ key-focus-areas/energy-reset/.

4. “Singapore Announces ’4 Switches’ after ’4 Taps’,” New Fortune Times, October 29, 2019, http://www.newfortunetimes.com/ singapore-announces-4-switches-along-with-4-taps/.

5. “Singapore: Navigating the Energy Trilemma – October 2023,” New Zealand Foreign Affairs and Trade, https://www.mfat.govt.nz/en/trade/mfat-market-reports/ singapore-navigating-the-energy-trilemma-october-2023/.

6. Ralph Foong, “Forum: Singapore Harnesses Four Switches in Energy Transition,” The Straits Times, November 23, 2023, https://www.straitstimes.com/opinion/forum/ forum-singapore-harnesses-four-switches-in-energy-transition.

7. “Public Housing – A Singapore Icon,” Housing & Development Board, https://www.hdb.gov.sg/about-us/our-role/public-housing-a-singapore-icon.

8. Yaohui Lim, “Solar City: The Surprising Places You Will Find Solar Panels in Singapore,” The Straits Times, May 23, 2022, https://www.straitstimes.com/ multimedia/graphics/2022/05/singapore-solar-power-panels/index.html?shell.

9. “Regional Power Grids,” Energy Market Authority, https://www.ema.gov.sg/ our-energy-story/energy-supply/regional-power-grids.

10. Prime Minister’s Office Singapore, “Speech by Deputy Prime Minister and Minister for Finance Lawrence Wong at the Singapore International Energy Week on 25 October 2022,” https://www.pmo.gov.sg/Newsroom/ DPM-Wong-at-Singapore-International-Energy-Week.

11. “Singapore’s National Hydrogen Strategy,” Ministry of Trade and Industry Singapore, https://www.mti.gov.sg/Industries/Hydrogen.

12. “Prof Subodh Mhaisalkar on Singapore’s Energy Transition,” CNA, October 25, 2021, https://www.youtube.com/watch?v=OrPtw-kcWh4.

13. “New Study to Assess Geothermal Potential Across Whole of Singapore,” Energy Market Authority, https://www.ema.gov.sg/news-events/news/media-releases/2023/ new-study-to-assess-geothermal-potential-across-whole-of-singapore.

14. “Shell Startup Engine,” Shell Singapore, https://www.shell.com.sg/energyand-innovation/innovating-together/shell-startup-engine.html.

15. “Carbon Tax,” National Climate Change Secretariat Singapore, https://www.nccs.gov.sg/singapores-climate-action/mitigation-efforts/ carbontax/.

16. Poh Seng Lee, Interview, conducted by Tara Thean Mei Feng, January 8, 2024.

17. “Most Expensive City to Buy a Car,” Guinness World Records, https://www.guinnessworldrecords.com/ world-records/543889-most-expensive-city-to-buy-a-car.

18. Land Transport Authority Singapore, “Powering Up an EV-Ready Singapore,” April 8, 2022, https://www.youtube.com/watch?v=DlI1WWYL1e8&t=47.

19. “Sustainable Bond Grant Scheme,” Monetary Authority of Singapore, https://www.mas.gov.sg/schemes-and-initiatives/ sustainable-bond-grant-scheme.

20. New Zealand Foreign Affairs and Trade, “Singapore: Navigating the Energy Trilemma – October 2023.”

21. Subodh Mhaisalkar, Interview, conducted by Tara Thean Mei Feng, January 7, 2024.

22. “Singapore’s Approach to Alternative Energy,” National Climate Change Secretariat, https://www.nccs.gov.sg/singapores-climate-action/ singapore-approach-to-alternative-energy/.

23. Ralph Foong, “Forum: Singapore Harnesses Four Switches in Energy Transition.”

As the world, and Asia in particular, increasingly face threats from climate change and environmental degradation, the imperative for governments to pursue environmentally sustainable economic development becomes more urgent. This collection of eight case studies for teaching covers diverse policies for sustainable development such as transiting to renewable energy and achieving net-zero carbon emissions in Singapore and Vietnam, adapting agriculture to climate change in India, introducing ecological compensation in China, evaluating the impact of a hydropower dam in Cambodia, greening Special Economic Zones in Indonesia, and improving Environmental Impact Assessments in Singapore. The collection presents the dilemmas that Asian governments face when formulating policies for sustainable development, and how they must manage diverse stakeholders, competing priorities and unavoidable trade-offs.

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