Governments need to catalyse private capital for world to be net zero by 2050: PM Lee at G20 summit

NEW DELHI: Trillions of dollars worth of annual investments are needed for the world to reach its net-zero target by 2050 and governments must do more to attract private sector funds, Singapore’s Prime Minister Lee Hsien Loong said on Saturday (Sep 9) at the Group of Twenty (G20) summit in New Delhi.

“Governments alone cannot do all of this. We need to catalyse more private funds at scale to crowd-in and complement public capital,” he said.

Mr Lee noted that Singapore is exploring a blended finance platform that will “pull together and scale” green and transition finance among the public, private and philanthropic sectors.

Blended finance refers to the strategic use of public capital – via various methods such as low-interest loans and debt, or equity investments – to attract private investments.

Singapore is keen to partner others for its blended finance initiative, said Mr Lee.

The Prime Minister was speaking during the first session for global leaders at the annual G20 summit, which officially kicked off on Saturday in India’s capital. The first session is focused on green and sustainable development, the environment and climate, among others.

Apart from new financing models, Mr Lee also spoke on how new technologies and new markets offer “hope” for countries like Singapore that face inherent challenges in climate transitions.

For example, Singapore has developed a national strategy on using hydrogen – one of the emerging technologies that can help with the transition to a low-carbon world – to green its power sector. It was announced last October that low-carbon hydrogen could supply up to half of Singapore’s power needs by 2050.

“The viability of deploying hydrogen at scale will depend on establishing reliable and resilient global supply chains with international partners. And this, no country can do alone,” said Mr Lee, adding that Singapore is keen to work with “like-minded partners” to diversify its power mix.

On the point of new markets, Mr Lee noted that governments will need to work together to create a conducive environment for decarbonisation investments, such as by providing clear definitions of green and transition activities.

The promotion of various mitigation policies is the first step in identifying effective approaches to tackle climate change, create new markets and direct financing to where it is needed most, he said.

This is why Singapore supports multilateral approaches towards mitigation goals, such as the Organisation for Economic Co-operation and Development’s (OECD) inclusive forum on carbon mitigation approaches.

All three ways – new technologies, new financing models and new markets – will require international collaboration which the G20 “can and should provide” leadership for, he added.

The two-day G20 leaders’ summit officially kicked off on Saturday morning with a welcome ceremony for the world’s leaders gathered in New Delhi.

India holds the G20 rotating presidency for this year. It is seeking to promote inclusive growth and accelerate the achievement of the United Nations’ sustainable development goals under the theme of “One Earth, One Family, One Future”.

The G20 consists of 19 countries and the European Union, representing around 85 per cent of the global gross domestic product and two-thirds of the world’s population. The bloc admitted a new permanent member on Saturday – the African Union, a continental body of 55 member states.

Singapore is not a G20 member but has been regularly invited to take part in past summits and related meetings, usually as the convenor of the Global Governance Group – an informal grouping of 30 small- and medium-sized members of the United Nations.

Mr Lee is set to participate in further discussions about the rules-based multilateralism and digital public infrastructure, among others. He will also have bilateral meetings with other leaders on the sidelines of the summit.