Large benefits from tackling climate, water and biodiversity crises together: Transcript Of Speech By President Tharman Shanmugaratnam At The Ecosperity Week Welcome Dinner On 15 April 2024

Ms Maria Antonia Yulo-Loyzaga, Secretary of the Department of Environment and Natural Resources of the Philippines,

Distinguished guests at the Ecosperity Week, as well as the Philanthropy Asia Summit,

Our hosts from Temasek,

Ladies and Gentlemen,

Thank you very much for inviting me to join you at this opening dinner. You've already had a full day of productive discussions and I know you're looking forward to the next two days. So, I think I can be most useful by making a few remarks of a broader nature.

First, we have a glass that's half full. But it is only half full.

We're making progress. It's not often recognised that we've made very significant progress from where we were before Paris in 2015 to COP28 last year. Very significant progress in thinking as well as actions. And companies have moved too, not just governments. Even companies in states within countries which deny climate change are making significant progress. So, there is progress.

But we have to be frank. There is still, around the world, a prevailing culture of inaction - or wanting to postpone action in the hope that things get better, or in the hope that public support for government actions will get stronger in the future. The temptation to postpone action is still deep-set in societies and politics around the world.

There's equally a tendency for the opposite. And we do see the opposite, which is to talk only about the worst that could happen, to talk about the catastrophe that's coming, and hope to shock or scare people into action.

Most studies show that simply scaring people by talking about catastrophe, or driving people to despair, does not lead to action. It leads to lying flat. It doesn’t lead to action.

We face both these tendencies - either hoping that things will turn out to be better, or expecting the worst. Both these tendencies breed inaction.

So, we’ve got to avoid either the complacent optimism of the first culture, which is a social and political culture, or the fatalistic pessimism of the second.

We have to be unsettled enough to want to engage with some boldness and some urgency in purposeful action. But not so unsettled as to lie flat. That should be our orientation.

My second point is that transition paths are the key, not just the setting of distant goals for when we achieve net zero. The goals are important, an important marker. But transition paths are critical.

You would have heard this morning from Minister Grace Fu talking about Singapore's transition path. How we are setting targets, and how we intend to meet our targets. And we know that there was a shift in COP28. The inaugural Global Stocktake that took place, focused on the implementation of transition paths.

But we are very far from where we have to be, in closing the gap between commitments and action globally. Even between commitments for 2030 and actions to get there. On current projections, current policies and actions by the corporate sector, we're going to achieve just 5 per cent of the reduction in carbon emissions that countries need to achieve by 2030 to reach net zero in 2050.

It's not a question of whether or not we achieve transition. The only choice we face is between an orderly transition and a disorderly transition. And we are currently on the path to an extremely disorderly transition globally beyond 2030. That's the choice: either an orderly transition or a disorderly and painful transition, which would likely too be most unjust. That's a choice.

There's another reason why we have to take transition paths very seriously. And that is that we do know that we are very likely underestimating the scale of global warming that is going to take place. The reason for that is that the best models that we have, even the models of the IPCC, don't have enough data from the last 50 years on extremities - and hence are unable to model accurately what really happens as things get more extreme. We also don't have the data or even the models today to estimate what happens when we cross tipping points - be they in the Antarctic or the boreal forests or in the chemistry of the oceans. We don't have the models or the data, but we know that the risk is in one direction. It's not about either upside and downside, it's only a question of how serious the downside risk is.

And that's another reason why we have to take the transition path so seriously - not risk crossing the tipping points. Every tenth of a percentage point, every 0.1 degrees centigrade, counts and we should take that very seriously. So that's my second point - that transition paths are key, not just the setting of distant goals.

My third point is that this is a massive opportunity. The trillions of dollars we talk about as being necessary for us to achieve net zero - first to get to 2030 targets and then to achieve net zero - those trillions of dollars are not a cost. They are an investment for growth, jobs and an inclusive future.

The world has not seen for a long time seen the opportunity to boost growth and jobs on this scale, and to spur development for more than half of humanity. We now have this opportunity.

We are well past the old thinking - that acting to mitigate and adapt to climate change is a cost you pay today to avoid some painful cost in the future. It's not just that. Acting on mitigation and adaptation to climate change is an opportunity for benefits today, not just avoiding a cost in the future. Benefits with regard to growth, with regard to jobs, which must include creating jobs for displaced workers in power sectors and other areas. Benefits in terms of improved crop yields and farmers’ incomes. Benefits for clean air today - and you have to remember that all over the world, and particularly in the developing world, millions die from air pollution each year. And benefits in providing people with some protection from the extreme events that already exist, already come today. The massive floods, the droughts, the heat waves, all the extremities, they are already with us. These are benefits today.

So, the politics of climate change has to shift from talking about the costs we pay today to avoid costs in some distant future, to the benefits we get today. Growth, jobs, cleaner air, wherever we live, better incomes for those who have been at the bottom. And our ability to protect ourselves from the extreme events that are now part and parcel of the world we live in.

My fourth point is that this is also an opportunity for us to remodel our economies. To develop collaborative economies focused on sustainability and equity. It's an opportunity to remodel our economies so that you do not have the public sector and the private sector in silos and the philanthropic sector, doing good by way of charity. Instead, you have co-investment, and you have all three parties taking risks and expecting rewards together. It's a huge opportunity to remodel what we think of as a market economy and to combine forces through the sharing of risk and rewards to achieve a common mission of sustainability and equity - which are our largest common missions, within countries and globally.

And in that regard, I think we are now at a pivotal point in philanthropy. In Asia, as you are discussing, and in a very useful direction, in my view, as well as philanthropy globally.

We have to shift from thinking of philanthropy as just doing good towards thinking of philanthropy as risk capital. We cannot solve this global challenge without a class of investors that have the ability to take risk on early-stage innovations, the ability to take a long view of returns, and the ability to think not only of financial returns, but social returns - to think of impact and social returns.

And this new philanthropic capital needs to be mobilised, needs to work in concert with the private sector and the public sector. Think of philanthropy first and foremost as risk capital. And there are many good examples from amongst you here and from your discussions. If you think of what Breakthrough Energy, for instance, is doing to fund large-scale demonstration projects or investing in first-in-kind commercial scale projects in emerging technologies.

And if you think of what's necessary, it’s not just early-stage innovation, but mature technologies needing to be scaled up globally across the developing world especially, where there's still very little application of the technologies required for us to have low carbon growth. That too, requires a mix of capital. Commercial capital has been slow to invest in these areas, but a mix of capital, a blend of capital - philanthropic, public, multilateral, and private sector - should surely be able to scale up mature technologies in energy, and in more efficient use of energy, as well as critically in the revolution in agriculture that we need.

And we also need in this whole process to develop our own capacities, capacities within the philanthropic sector, and the ability to constantly compare and spread best practices amongst each other. I think you're now off on that path in a very encouraging way. What you're doing through the Asia Centre for Changemakers at Temasek Trust, as well as the Centre for Impact Investing and Practices, is aimed precisely at that development of capabilities, spreading best practices. And there's a whole set of Singapore-based convenors now that have this broad aim. Asian Venture Philanthropy Network, the Asia Philanthropy Circle, Asia Community Foundation. It's very encouraging. It's a collaborative mindset now. And globally, you've got GAEA, which the World Economic Forum has been leading many partners around the world.

It's not a competition. It's about collaborating, spreading best practices. And it's all about thinking about philanthropy as risk capital.

My fifth point and I suppose I've now come to the dessert in my speech, which should be a little sweeter, is that in the same way that we think about this as risk capital, we have to realise that the central challenge we face has to do with innovation. And it’s a very exciting challenge.

Innovation not just in what we talk about so often, which is about the shift towards renewable energies and the gradual phasing out of fossil fuels. But innovation in each and every sector of the economy, so as to improve energy efficiency and to develop reuse and circularity. That's an enormous game across each of our economies and globally. And that too, is where the combination of philanthropic, private, and public capital is required.

We are already seeing some early gains. I spoke about agriculture. That transformation is probably the most neglected, but it's critical. Critical for reducing methane and greenhouse gas emissions. Critical for ending water overconsumption. Critical for avoiding the endless encroaching into natural ecosystems -deforestation. We need a new green revolution in agriculture. And it involves specific projects with new technologies being scaled up. One of them, by the way, is to revolutionise rice farming, to decarbonise or demethanise rice planting, but also go for strains and cultivation methods that involve far less water use. It can be achieved.

Other major innovations needed include low carbon cement, green steel, and more efficient running of buildings to use far less energy. Taking off, still early stage, at least for cement and steel, but they're no longer what we should regard as permanently hard to abate sectors. The technologies are emerging; not yet commercially viable, but it’s where risk capital has to move into.

Closer to consumers - we don't focus on enough on the textile industry, the fast fashion industry. I don't think I as an individual in my late 60s, should be lecturing people about how often they should change what they're wearing. But at the very least we could go for circularity. The textile industry contributes up to 10% of global emissions -it's not small. And polyester is big in the textile industry, and polyester is made from oil. At the very least, we can go for circularity and there are some very impressive innovations now. Again, not yet commercial scale, but they're very promising.

And I took a quick glance at the menu before I walked up, and I'm glad they are not serving beef because that too will count.  - Simple changes in diet without reducing our standard of living - in fact, it shouldl increase our standard of living because we probably get healthier as well.  They make a big difference.

So, innovations in each and every area of life, quite apart from the dramatic change in the power sector that will have to take place over the next 30 years. Changes within each and every activity of life need a lot more focus. And it's about innovation.

Finally, I suppose this is a second dessert. You know, I really like your focus this year on natural ecosystems because we have to understand that's not just nice to have. We're not going to solve for climate if we don't solve for water and biodiversity at the same time. They're intimately connected with each other. But it's actually an opportunity because when we solve for water, we're solving for food security, we're solving for biodiversity because you can stop this endless removal of forests and natural ecosystems, and you also improve soil health and the ability to store carbon. Solving for water helps biodiversity and carbon and global warming. We all know how biodiversity is critical for carbon. That's obvious. But it's not just because of carbon. Biodiversity provides many other benefits to the human species, and we should respect that and find ways of valuing it, valuing nature, valuing natural capital, and eventually having it on our books and accounting for it. And of course, if we can mitigate climate change and global warming, we'll also be making it that much easier to get the global water cycle back into equilibrium and preserve our forests. So, we now have a negative feedback loop between the three of them, but the opportunity is to create a positive feedback loop by addressing all three together. Because the sum of benefits that we get from addressing climate change, water and biodiversity together is much larger than the individual benefits we get from addressing one or the other. That's what it boils down to. We've got to address all three together, and it's a real opportunity because we then create a positive feedback loop.

So let me conclude: We have to avoid complacent optimism as well as catastrophic thinking, both of which breed inaction. We have to recognise this as an opportunity for a new era of growth, new jobs and inclusivity. We have to also treat it as an opportunity to remodel our economies, for partnerships between the public and private sector and philanthropies playing a critical catalytic role through the risk capital they provide. And we've got to think holistically about ecological change. That is not just global warming. It's not just the floods and droughts or the fact that 2 billion people don't have clean water every year. And it's not just the loss of forests and biodiversity.  It's all three together. But that's an opportunity because we can address the three together in ways that create benefits much larger than addressing each by themselves. So, it is a glass half full, and we actually know how to fill it up. It does require collaboration across every sector and collaboration globally. And I believe we can achieve it.

And I want to thank you for your efforts, small and large, in creating this momentum towards that new way of thinking about our role in the world.

Thank you very much.