Our world is changing profoundly at an unprecedented rate. We need a coalition of the government, private companies and NGOs to protect human welfare, the fragile ecosystem and biodiversity. We have to get the economics right too.
Transcript of my speech at the launch of the “The Economics of Ecosystems and Biodiversity for Business Coalition” at the Singapore Botanic Gardens on 6 November 2012
We live in a world, which perhaps unwittingly, has gone through a series of inflexion points at a rate which is unprecedented. Let me cite a few of these.
First, our world population has now exceeded seven billion. Clearly, that is unprecedented. Not only that, but for the first time ever in human history, more than half of all human beings live in a city, and not in the rural countryside. This is another world first.
The third point, and something which I think many of you here can identify with, is that the way fortunes have been made in the last 50 years or 100 years was to a large extent because it was relatively easy and cheap to scrape natural energy and resources, as well as oil and gas, off the superficial crust of this Earth. And I believe that age of cheap natural resources is coming to a close.
The fourth point is that we are running out of fresh water. It may seem counter-intuitive but if anyone does an inventory of fresh water that is available to human beings, we are going to reach the crunch point in the next couple of decades.
The fifth point is that if you add up all the preceding trends, you know that there will be a global crisis involving food, water and energy. And increasingly, these are simply “three faces of the same coin”. For instance, in Singapore, 40 per cent of our water comes through reverse osmosis. We can desalinate it and recycle it, but the key variable in reverse osmosis is energy.
The key variable for the cost of water is therefore the cost of energy; and without energy and the ability to alter the nitrogen cycle, the yields from agriculture are going to suffer. Even though we may have substantially solved the issue of water in Singapore, we have not been able to make water so cheap that it is cheap enough for agricultural use. So, my bet is that the confluence of food, energy and water will present us a crisis in our lifetimes.
The sixth point is that in the past, we could simply dump waste, pollutants, toxins and carbon dioxide into the atmosphere or into the sea. We could do that because the amounts that we were putting out were in a sense negligible compared to the vastness of the atmosphere and the sea. But we have reached another inflexion point and the amounts of pollutants and carbon dioxide we are putting out is no longer negligible. We now have to account for externalities. The world has been through far higher variations in temperature, in ice and carbon dioxide, but that in itself is not new. What is new is the rate of change, human beings’ complicity in this rate of change and the complications that derive from that.
The seventh inflexion point is that we are still figuring out the implications of globalisation and information technology. It has created enormous economic opportunities, and many of us, including Singaporeans, are rich because of the opportunities of globalisation. Those same opportunities have however also created disparities, because the ability of people to harvest opportunities from globalisation and information technology is quite asymmetrical. It depends on your education, where you were born, and the infrastructure that is available to you. The nature and value of human ingenuity; as well as effort, labour, jobs and employment are all changing. If you add up all these seven inflexion points, we are indeed living in revolutionary times, and never before have human beings faced both the excitement, the thrills and the dangers that we live in right now.
I will tell you quite humbly that none of us has the solutions to the problems and the existentialist challenges that are we are faced with. Some people still believe that there is a trade-off or a dilemma between economic development on one hand, and environmental protection on the other. I submit that this is a false dichotomy and that there has to be increasing appreciation of the fact that there is a virtuous cycle behind environmental protection and economic development.
And Singapore, perhaps unwittingly, represents that. Because we are so small, we had no space to pollute our environment because our backyard is also our front yard. The luxury of polluting our air, of poisoning our water and of dumping our waste on our land was not afforded to us. Perhaps, this has been a blessing, or the converse blessing of the resource curse. When a country is endowed with too many resources, it can forget the necessities for ingenuity, hard work and discipline. In a sense, we have been blessed by our constraints.
But not only that, but for instance, in the case of water, we are the only country whose independence documents have, stapled at the back of it, two water agreements with our northern neighbour. Even today, half the water that we drink comes from Malaysia. And the catchment area for that half of our water supply is twice the size of Singapore. It has been an existential threat, but today we have solved it – not because we invented reverse osmosis – but because we have been able to create a system that is able to generate enough water for our needs and right price it; and our companies today seek opportunities in many parts of the world, using our success in Singapore as the track record and as their calling card to open doors and gain credibility.
Let me also now make another point on biodiversity. This venue is called Burkill Hall. It celebrates, in the sense, part of the British legacy in Singapore and it is perhaps fitting that we had the wonderful message from His Royal Highness Prince Charles. Because we are one degree north of the equator and a tropical island, the biodiversity in this area and in the central catchment areas where our reservoirs are – exceeds the biodiversity in the entire continental North America? It is not something which we can take pride in because we did not create it – we inherited it. But in terms of biodiversity and sensitive development – even in these Botanic Gardens, there are still trees and areas which are virgin jungles which have not been touched. You see the wonderful orchids, the rolling manicured lawns, but we have also been careful to preserve sufficient stocks of nature, because this is a heritage worth protecting.
If you were to fly over Singapore and look down, one of the things that we are very proud of is that about 48 percent of everything that you see on this island is covered in greenery, by tree canopy or by grass. And yet, this is one of the most densely populated islands in the world. What I am trying to show you is the paradox, that there is in fact a virtuous cycle behind sustainable development and protection of the environment.
In 2009, Singapore hosted a series of expert workshops in biodiversity and one of the outcomes of the series of workshops was that we formulated a City Biodiversity Index. This index provides a means to measure how well cities are protecting their biodiversity and their natural heritage, and we are quite proud of the fact that now this is now known as the “Singapore Index”. Without being excessively immodest, I believe it does reflect our approach to economic development and the protection of our natural biodiversity.
Let me now move to these two words – “economics” and “coalition”. I think one key question in economics is in getting the true cost of any activity and the price right, because these determine the way you allocate and utilise resources. And it is only right and fitting that if we are going to take an economic approach to life, we need to value life and natural heritage. It is not just for putting a price on things which are easily measured, but we need to understand the true value and then figure out a good approximation of the cost and the price, so that it will guide our decision- making. Ultimately, it is about decisions that we have to make.
I want to end with perhaps a less positive example, but a real, current and chronic problem which we are facing in Southeast Asia. Shift cultivation and the use of fires to clear small patches of forest so that you can plant crops have been around in Asia for thousands of years. But something changed 20 years ago, and we started having fires on a plantation scale – fires large enough to generate haze which would blanket Singapore and the surrounding areas. In fact, even today’s skies are not as blue as they should be, because there are still fires smouldering. Not only just fires on forests, but these are fires in forests growing on peatlands, and you do not need to be a biologist to know that enormous stores of carbon are trapped in peatlands. Once you burn and drain it, you are sending all that into the atmosphere.
The question must be why this has happened only in the last 20 years and not in the last 2000 years and why we cannot fix it. I would put to you – that we cannot fix it because there is an economic issue at the heart of this. So long as plantation companies can get away with the cheapest way of clearing and burning forests in order to plant oil palm, they will do so. So long as governments do not have the political will to take investigations and enforcements seriously at a local level, all the huffing and puffing that we do down here will not make a difference.
The point I want to leave with you is that we need a coalition. In dealing with economics and the environment, governments have a role. Governments have to pass laws, have the right policies and incentives, and invest in research and development – all these are right and proper. But there is also a role for private companies. Private companies have to see that it is in their own enlightened self-interest to pursue business in a way that protects not only their fiscal bottom-line but also their natural bottom-line – the impact that it has on the societies in which they operate in, and because we are dealing with the atmosphere, there is also the international implications of such activities.
Finally, there is a role for the non-governmental sector. Because if you come back to the example of plantation companies – if governments will not do what needs to be done and if commercial companies continue to exploit short-term advantages, we need consumers and enlightened non-government organisations to put the spotlight on them so that people know what is going on, where it is going on, who is responsible and to hold companies accountable for it. Only when you join the dots between money, behaviour and incentives, will you get the correct solutions.
So let me end by saying that I am very glad you have launched The Economics of Ecosystems and Biodiversity for Business Coalition here in Singapore. It is absolutely essential that we get the economics right, and the economics have to extend to biodiversity and to the environment. I am also equally glad that you have established a coalition, because for all the seven fundamental inflexion points and challenges that I have outlined earlier, the only way we are going to solve them is through a coalition – a coalition of the world and a coalition of all the different stakeholders you represent.
It was no accident that in the case of Singapore, it is the Economic Development Board that has brought you all here and I am here as the Minister for the Environment to just bless this. It has come about because in the case of Singapore, we understand that you need to create a coalition of diverse stakeholders in order to create anything worthwhile, which will make a long-term impact and ultimately make a difference to human welfare.
My friends, we are not saving the Earth. The Earth will survive and will outlive us. The question is the quality of life and the welfare of humanity – that is what this is really about. So on that note, let me wish all of you a wonderful time in Singapore and a wonderful evening ahead.