Introduction

From 31 Oct to 12 Nov 2021, world leaders gathered in Glasgow, United Kingdom, for the United Nations 26^th Climate Change Conference (i.e. COP26).

The COP26 also represented the third meeting of parties to the Paris Agreement, which was first signed in 2015 at COP21. In 2018, at COP24, the signatories met again and agreed to adopt the Paris Rulebook, a document guiding nations on how the Agreement can be implemented. This year’s conference was therefore paramount, as it served to finalise details on the action and implementation plan of the Agreement.

While there were innumerable issues discussed at the conference, in this article we will focus on five key takeaways from COP26 that Singapore, in particular, needs to pay attention to.

Five Key Takeaways for Singapore from COP26

1. “Many hands on deck” required to mitigate effects of climate change

This year’s COP26 has proven once again, that international collaboration and partnerships are key principles underpinning Singapore’s climate strategy. As a small island-state highly vulnerable to global warming and sea level rise, its actions alone will be too insignificant to stop the unprecedented global challenge.

Singapore has to strategically rely on multilateral cooperation and international alliances, to collectively come up with solutions that can contribute more meaningfully to the climate agenda.

During the summit, Singapore signed up to several partnership coalitions – the following of which will be vital to the nation’s continued progress in national climate efforts:

• Powering Past Coal Alliance & Global Coal to Clean Power Transition Statement: Singapore is the first Asian nation to sign up to this alliance, pledging to phase out unabated coal power by 2050.
• Global Methane Pledge: Singapore, along with other ASEAN nations, have pledged to cut their methane emissions by at least 30% by 2030.
• Greening Government Initiative: Led by the American and Canadian governments, this initiative provides a platform for participating countries such as Singapore to share best practices and cases of successful green government operations. In doing so, countries are encouraged to partner and collaborate with one another to accelerate national efforts in greening their respective governments.
• Agriculture Innovation Mission for Climate: Singapore supports this jointly launched initiative by the United States and United Arab Emirates governments, that aims to boost investments in climate-smart agriculture and global food systems innovation.
• Glasgow Leaders’ Declaration on Forests and Land Use: Singapore, along with 130 other nations – that, together, cover around 85% of the world’s forests – have pledged to end deforestation by 2030.

2. Size Isn’t Everything

Singapore’s small size should not constrain it from being more aggressive and ambitious with its climate goals. A coalition of Singaporeans published an open letter to the government, during the course of the conference, detailing 18 recommendations to tackle the environmental crisis.

One key sticking point highlighted was Singapore’s ambiguous statement towards net zero, stating that it aims to achieve net-zero emissions “as soon as viable in the second half of the century”. The government had also announced last year its enhanced Nationally Determined Contribution (NDC), to peak emissions at 65MtCO2e, “around 2030”.

Activists argue that bolder targets can be set, in line with the Intergovernmental Panel on Climate Change (IPCC)’s recommendations. Overall, a tighter timeline (aiming to reach peak emissions earlier) and more committed targets (aiming to reach net zero by 2050) would not only reflect Singapore’s recognition of the urgency of the climate crisis, but serve to accelerate efforts in decreasing the amount to greenhouse gases produced.

3. Sustainable and green financing will become mainstream

Beyond cutting emissions, Singapore considers green financing as another key part of its overall climate strategy and aims to become a green finance hub for ASEAN and Asia.

During COP26, a coalition made up of some of the world’s largest and most influential banks, insurers and investors had pledged $130 trillion into supporting green investments, climate disclosures and reporting. Such a move is likely to be welcomed by Singapore, as it bolsters existing domestic efforts in growing the sustainable finance market.

To get a head start in green finance in the region, the Monetary Authority of Singapore announced on 9 November a pilot of four new platforms that will seek to solve current gaps in ESG data and reporting:

• Greenprint Common Disclosure Portal: simplifies the ESG disclosure process by converting data and inputs such that they can be mapped into different reporting frameworks
• Greenprint Data Orchestrator: aggregates sustainability data from multiple data sources
• Greenprint ESG Registry (in partnership with Hashtacs Pte Ltd): provides a one-stop access to all businesses’ ESG certifications, for financial institutions and regulatory authorities
• Greenprint Marketplace (in partnership with API Exchange): promotes partnership between local green technology providers and a network of venture capitals, investors and corporates

These initiatives will enhance the green finance ecosystem in Singapore and ease decision-making by making data more transparent and efficient.

4. US-China surprise climate pact spurs hope for the region

As trade tensions have been rife over the past few months between the United States and China, many were pleasantly surprised to find out that that a climate agreement had been reached between the two superpowers.

Both sides recognise that in order for the world to keep within the 1.5-degree Celsius threshold, there is a need to critically limit carbon emissions in the next nine years. As such, they laid out specific areas in which they plan to cooperate, including: green design, resource reuse and direct air capture of carbon dioxide.

Some may perceive this pact to be a largely symbolic gesture – indeed, it is difficult to see such cooperation play out in more contentious arenas such as the ongoing trade war, or the allegations of human rights abuses in Xinjiang and the Taiwan issue – but the deal will contribute significantly to constructive cross-border exchanges. More importantly, with the involvement of the world’s two largest superpowers, they will be pivotal to “closing the gap” between ambition and action.

For the Asian region that has been caught in the middle of US-China strategic competition, this surprise climate pact is good news. Both parties explicitly stating their intention to set up a working group that will meet regularly to address the climate problem represents a much welcome turn in relations from rivalry to cooperation.

There is reason to hope that the joint declaration will potentially have positive spill over effects for the APAC region, spurring greater investments and knowledge transfer in decarbonisation solutions and initiatives.

5. Global carbon market rules finally established

The COP26 ended on an uplifting note, with rules around carbon offsets and carbon markets firmly established. Carbon offsetting refers to when a company “compensates” for its emissions by investing in a green project elsewhere that aims to reduce emissions. Carbon markets were seen as crucial to supporting carbon offsets, as well as other mechanisms such as emissions trading schemes and cap and trade.

For years, countries had been trying to come to a consensus and negotiated over the regulations for international carbon trading. Last weekend’s summit finally saw nearly 200 nations settle on a landmark deal to implement a new framework for emissions trading.

Also known as Article 6, this agreement is likely to catalyse large investments into renewable energy projects, as well as boost environmental protection, technology transfer and capacity-building. More importantly, they will advance global goals to limit global warming to “well below 2 degrees Celsius above pre-industrial levels”.

In Singapore’s case, the establishment of rules and frameworks for carbon markets will critically support the nation’s grand ambitions to become a key carbon services hub and synchronises neatly with plans already in place.

In September, at the 37th edition of the Asia-Pacific Petroleum Conference, the republic announced that a carbon credit trading marketplace was in the works. This digital carbon exchange platform – expected to launch by end-2021, will cater mainly to institutional investors and multinational companies, and aims to provide greater transparency, environmental integrity and quality in carbon credit transactions. Singapore hopes that by founding the carbon market on a clear set of international guidelines, it will ensure high standards in carbon trading.

Conclusion: What’s Next?

As the conference wrapped up on 12 November, many observers around the world were looking forward to the enhanced and concrete steps that will be taken to push forward the global climate agenda. While some may feel that current commitments still fall short, others are satisfied with the progress made since the first World Climate Conference in 1979.

Only time will tell if the programmes and initiatives conceived at this year’s conference prove to be a critical turning point in ensuring that the world is able to keep the 1.5-degree Celsius goal in sight. However, COP26 has definitively shown the power of collaboration and collective action. Such global conferences encourage country leaders to put aside differences and actively work together with a common goal in mind. Only through cooperation can we shift the world towards a greener trajectory and avoid a global climate disaster.

Lim Yun Hui is an Associate Consultant at Future-Moves Group. A graduate of the National University of Singapore with a degree in Political Science, Yun Hui contributes towards FMG’s thought leadership content on current and public affairs, as well as environmental and sociopolitical issues.

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Disclaimer: The views expressed in this article are those of the writer and do not necessarily represent those of Future-Moves Group.