COP27: Singapore can unlock finances to accelerate net-zero push, says MAS chief
People walk at the green zone of the Sharm el-Sheikh International Convention Centre, during the COP27 climate conference in Egypt's Red Sea resort city of the same name, on Nov 9, 2022. (Photo: AFP/Mohammed Abed)
SHARM EL-SHEIK, Egypt: The managing director of the Monetary Authority of Singapore (MAS) said climate change is “a race of our lives”, as he addressed delegates at the UN climate summit in Egypt on Wednesday (Nov 9).
Mr Ravi Menon delivered a keynote speech at the COP27 Singapore Pavilion, highlighting how Singapore could help unlock some of the financial capital needed to address the existential threat that climate change poses.
Finance took centrestage as the main theme of the fourth day of talks in the coastal town of Sharm el-Sheikh, with trillions of dollars of investment needing to be committed and mobilised to help counter the impacts of a still fast warming planet.
“Climate change is no longer a prediction, it is becoming a reality,” he said. “We need to act now to start reducing emissions. The world is currently far from a net-zero emissions trajectory.
“Global greenhouse gas emissions are still rising, not falling. If we do not act now to start decarbonising, we risk breaching tipping points that will lead to catastrophic and irreversible climate change, with unimaginable risks to lives and livelihoods,” he said.
Mr Menon highlighted the massive gulf that exists between finance needed for the world to transition to net zero carbon emissions and what was currently available for investment.
He said Singapore could help, with three clear strategies; blended finance, meaning mobilising private capital to combine with funds provided by governments for climate investment projects, developing and facilitating carbon markets, as well as “good-quality data to support credible disclosure and track progress”.
Blended finance can help make green projects in emerging markets, such as throughout Southeast Asia, that seem like risky projects far more bankable, with the injection of capacity building, technology transfer, and institutional support.
“Blended finance is not new but scaling it requires a fresh approach, he said, while giving examples of several initiatives that Singapore is involved with to help with the net-zero transition.
Those include partnering with the The Network of Central Banks and Supervisors for Greening the Financial System (NGFS) and the The Glasgow Financial Alliance for Net Zero Asia-Pacific Network.
On carbon markets, he said that the country is well positioned to be a leader in an emerging and critical space for both carbon services and as a trading hub. But these markets need to become bigger and more efficient.
“We have sound infrastructure, good governance, and a premium on trust - critical ingredients for a marketplace,” he said.
“We are located at the heart of Southeast Asia which is fertile ground to harness the potential of nature-based solutions for carbon sequestration,” he added, referencing the vast potential of the region's mangroves and degraded forest that could be restored.
