Pragmatism at Work: Singapore's Approach to Addressing Climate Change (Part 1)

This two-part post will focus on how one country's endeavors to tackle its contributions to climate change can serve as a model for other countries to emulate in their progress towards climate change mitigation within their own boundaries.  Hopefully, smart policy solutions from one country will catch on and help the planet speed its progress towards carbon-neutral status.

Singapore is one of the world’s greatest national success stories of the 20^th century.  As one of the four Asian Tiger economies (the others being Taiwan, South Korea, and Hong Kong), Singapore has achieved a remarkable level of industrialization and growth over a very short timeframe.  The country now ranks among the world’s leaders in a host of categories, including per capita income, life expectancy, and quality of life.  However, because of its vulnerabilities as a small island nation with limited resources, Singapore is also a country that is acutely aware of its needs for sustainability and efficiency in all walks of life.  These needs have propelled it to the forefront of efforts to adapt to the growing challenges posed by global climate change.  To meet these challenges, Singapore has developed a strategy that combines mitigation efforts in its infrastructure with competency building amongst its business communities and populace to create a synergistic approach towards insulating itself against the possible future effects of global climate change.

In drawing up their blueprint for attacking global warming’s consequences, the Singaporean government first assessed its vulnerabilities to climate change, as well as the strengths and weaknesses of its programs already in place.  As denizens of a low-lying island city-state, Singaporeans are keenly aware of the possible effects of rising sea levels towards their homes and businesses, in addition to the changes in wind and precipitation patterns caused by changing atmospheric conditions.  Because the country is so small, it cannot produce much of its energy needs domestically, and must import fuel from abroad to meet its consumption habits.  The size of the country also limits the availability of renewable forms of energy, such as hydroelectric or geothermal sources.  Hence, the country is reliant on fossil fuels to meet its energy demands, and thus susceptible to fluctuations in oil and coal prices.  Additionally, as Singapore’s economy is highly export-based, it is an energy-intensive economy for its size.  These factors place additional pressure on the government to make sure that every watt of energy is used to its maximum ability. 

To its credit, even before the study was commissioned, the Singaporean government had already taken steps to begin to maximize its energy efficiency.  By 2007, 79% of the country’s power was from natural gas, with plans for further conversions towards gas sources in the near future.  The country is connected by a highly efficient mass transit system, and has policies in place that encourage its use and discourage automobile ownership.  By not subsidizing its energy industry, the government encourages competition amongst energy providers to minimize costs to consumers; this competition also ensures that energy can be purchased at a reasonable price by industries that need increased amounts to function effectively. 

While the country has a solid foundation to build upon to increase its energy efficiency, the Singaporean government recognizes that there is ample room to improve on the state’s “green” standing in multiple sectors.  The main push that the government is currently undertaking is to improve the energy usage of buildings throughout the country.  The first method being implemented is the mitigation of heat stress, or, the urban heat-island effect.  The heat island is a bubble of higher temperatures in urban areas created by the absorption of light rays by building faces and concrete.  This temperature bubble results in increased air conditioner usage by building occupants, creating a need for large amounts of energy.  Easing this effect would help to lower energy usage, and subsequently, energy prices, resulting in economic and environmental benefits alike.  To do this, Singapore’s Urban Redevelopment Authority (URA) has developed a program to increase the number of parks within the country limits, and the National Parks Board (NParks) has started a program known as Community in Bloom to encourage private gardening groups amongst Singaporeans.  The Community in Bloom program will provide advice on urban gardening, and the groups started will help to foster a greater sense of community, in addition to providing more plant cover to absorb light and heat energy.  NParks also has been undertaking a program to plant over sixty thousand trees within city limits to help combat the urban heat island effect.  While Singapore is already known as the “Garden City” because of its abundant greenery, these additional measures will help to ensure that the heat island effect will continue to be minimized within Singapore’s urbanized areas.

Another step that the government is taking to help maximize energy efficiency and minimize environmental impact from Singapore’s commercial and residential building infrastructure is to provide grants and incentives to upgrade existing buildings, as well as those under construction, and make them more energy-efficient.  For example, to support efforts by industry to refit machinery with energy-efficient models, the government has approved both a deduction on income from purchasing green equipment, as well as a one-year accelerated depreciation credit on qualifying equipment to ease tax burdens.  The government has also worked to provide additional incentives toward upgrading building structures by providing a $9 million grant towards subsidizing businesses that choose to renovate with green technologies.  Additionally, the Singaporean government has created a system, the Green Mark system, (which is similar to the United States’ LEED program) where energy-efficient buildings are rated and scored.  The highest rated buildings, Platinum and Gold, will be given a cash incentive of $6/m² or $3/m², respectively, as an award for meeting the higher standards.  The government is providing these incentives because it understands that, while green buildings are more profitable over the long-term, they are up to 20% more expensive to construct, and that extra start-up cost needs to be reduced so that businesses can stay competitive, and the country remains an attractive base for interested multinational companies. 

Because the main source of Singapore’s energy use comes from its industries, the government has taken extra steps to promote structural energy efficiency within this sector.  In 2002, the government introduced an audit program designed to provide industries with a comprehensive examination of their capital and recommendations for energy efficiency improvements.  While the companies are expected to bear the cost for the audits, the government has set aside money to subsidize 50 percent of the cost; as of January 2008, 87 companies had signed up for the audits.  Furthermore, the government is heavily promoting the use of the cogeneration and trigeneration energy production processes, whereby heat produced from fuel combustion, whether it is within industries, power plants or commercial buildings, can be captured and used to produce more energy.  The process of cogeneration “can increase the efficiency of power generation from 50% to more than 75% (22),” with trigeneration producing even more efficient results.  Improving these industries’ energy efficiency is not only good for the environment, but will also improve their balance sheets and competitiveness, a “win-win” situation for both parties.

Next week, I'll take a look at some of the competency-building strategies Singapore employs in its efforts to reposition itself as a greener state and a leader in the carbon-mitigation community, and take a stab at what this will all mean for the larger human community as well.  Stay tuned!  You'll find that this tiny country has a lot more to teach us than we think.

After Oil: The Coming Crisis? (And What To Do About It)

Oil.  It runs our cars, it puts food on our tables, and it creates many of the machines that our society today takes for granted.  But oil is a finite resource, and eventually we must face the inevitable question:  What happens to us, and the rest of humanity, when oil runs out?

The concept of Peak Oil is based on the premise that at some point in the near future, oil production will reach a climax, after which dwindling resources and increased demand will raise the oil price to the point where it will be too expensive for the majority of individuals and business entities to afford to buy it.  We've already seen what effects spikes in the price of oil have had on the daily lives of Americans and others; many of the Baby Boomer generation can still remember waiting in line to get gas for their cars.  While lately we've been spoiled by reasonably cheap gasoline and diesel prices, it is foolish of us to expect those prices to remain stagnant for much longer.  Increasing demand in China, India, Indonesia, and elsewhere will begin to raise oil and gas prices for all of us in the next decade or sooner.

If this trend continues, cars will eventually be too expensive to drive around.  Law enforcement, fire, ambulance, and supply trucks will all cease to function, which will cripple the effectiveness of such services.  Without the supply trucks to bring food, medicines, and consumer items to stores, Americans will not have any readily available means of feeding themselves, clothing themselves, or keeping themselves healthy.  The fact that many Americans are living in car-driven suburbs only exacerbates the problem:  because they have to drive everywhere to obtain essential services, Americans in the suburbs will be effectively stranded once their cars cease to run.  Even our technology will become ineffective extremely quickly:  computers and microchips require oil to produce.  I'll leave you to your imagination as to what would happen next.  This breakdown will, of course, not come peacefully, and it will not be limited to the United States.  Other developing nations will be affected just as much,  if not more so, due to more limited resources.  I imagine that if a crisis like this were to unfold, the death toll would be astronomical before things began to stabilize. 

So, what are we to do about this coming crisis?  Believe it or not, we already have a blueprint for success (and for failure) in the event that oil becomes cost prohibitive, and it comes from a place that most people would not ordinarily think to look to for inspiration.  In the late 1980s, the Soviet Union suffered from massive budget imbalances and subsequently collapsed, and two countries that had become almost completely dependent on Soviet oil suddenly were nearly completely without that resource.  Those countries were North Korea and Cuba.  

(I'm going to turn the next two paragraphs over to mental_floss' blogger Ransom Riggs, who can explain what happened far more succinctly than I can)

"North Korea froze. Their political structure was far too rigid and they didn’t move quickly enough to address the crisis. They had this top-down food distribution system where most people got their groceries from the government — and when the oil stopped, and their economy collapsed, the food distributions stopped, too. People starved to death at an amazing rate. Something like three million people died. Kim Jong Il stationed army units in every town in the country just to collect and dispose of the bodies, but even they were overwhelmed. And even while this was going on, the North Korean government ordered many of its farmers to grow non-food crops, like opium poppies, for export.

Cuba, on the other hand, responded quickly. Food production went local. It was mandated that every bit of arable land in Havana be used to grow crops. As a result, they made it through the collapse, and now the Cubans are eating better than ever — they have plentiful, organic, locally-farmed food, which is more than even many Americans have."

To be fair, however, the story of Cuba's success does come with one major caveat: that Cuba is a relatively small island nation. While it is restricted from trade with the US, Cuba was able to receive aid from other nations to help smooth its transition after it lost its source of oil. But in a worldwide crisis, who is there to provide aid to other countries when every country on the planet has to deal with its own set of problems?

Regardless, it seems to me that a reasonable solution in the event of an oil crisis is to downsize: make communities more walkable and accessible, rely on local produce and livestock to provide for community needs, and become more self-sufficient. The communities that manage to convert to a more sustainable lifestyle sound like the ones who will best be able to weather this crisis and prosper afterwards.

In the end, whether you believe in the Peak Oil crisis or not, we can all agree that downsizing certain aspects of our lives would probably be beneficial to us in more ways than not. If nothing else, more exercise from walking more places and less time spent on phones, computers, ipods, and televisions would be beneficial to our mental and physical well-being. Interaction with others on a personal level, rather than through video screens and audio devices, may also help to foster communication and more cooperation between community members. These changes are well within our means to achieve, if only we put our minds to them.

Hmm.  Looks like Karl Marx might've gotten something right after all.

Surge Protector: The Role of Governments in Promotion of Alternative Technologies

The inclusion of green technologies into the world’s energy production sectors presents a number of opportunities for both developing and developed countries alike to pursue a pro-jobs agenda while improving mankind’s environmental stance.  However, because these new technologies are in their relative infancies, support from governmental institutions are critical to provide entrepreneurs with the necessary incentives to overcome start-up costs and keep these technologies cost-efficient until technological advances can bring operating costs down.  In providing these incentives, it is imperative for governments to provide a stable policy foundation to give businesses the time to make plans for growth in the intermediate-to-long term.  Yet, both domestic and international governments continue to equivocate and push policy decisions off towards the future, instead of creating this foundation for the present.  This piece aims to show why sound and well-reasoned green energy policy should be a critical facet of any government’s vision for the future of the country it represents.

The last few years have seen remarkable investments by developed and developing nations alike towards alternative energy initiatives in both the public and private sectors.  A combination of tax credits, combined with billions in current and proposed expenditures in 2011 alone, has helped to subsidize both technological advancements and utility construction towards wind, solar, geothermal, and tidal energy sources.  Rising oil prices and public pressure provided the impetus for these investments, but recently the trend towards alternative energy sources has begun to stall.  Total investment in green technologies (public and private sector) has dropped 28% from 2011 fourth-quarter earnings (Q4) to a current 27 billion in funds between the United States and Europe.  This represents a decrease of 22% from the previous year’s Q4 levels, and that pattern appears likely to continue in the future.  The primary tax credit for wind power in the United States, the Production Tax Credit, will expire at the end of 2012 unless renewed by Congress, and European governments are simultaneously looking to cull alternative energy investment as part of a general Union shift towards austerity and elimination of nonessential government services.  These policy changes have not gone unnoticed by the private sector; by the end of Q4 in 2011, private sector investment was down 87% from Q1 of the same year due to the slowing performance of alternative energy stocks.  A lack of coherent governmental policy vision for this sector will continue to hamper stock performances, and consequently act as a drag on private market investment into this field.  Providing a more stable policy foundation will help to ensure that nascent green technology companies can compete with established energy sources and carve out their own markets in the near future.

Additionally, in today’s job-starved economies, investment in green energy can provide a new, and environmentally responsible, source of employment opportunities.  Recently, leaders in the European Union met to discuss a new, pro-growth agenda to stave off an impending recession for the continent.  In their proposals, they discussed the impact of a green energy focus in providing millions of jobs over the next decade, commenting that “Job growth in the green economy has been positive throughout the recession and is [forecast] to remain quite strong.  Only the energy efficiency and renewable energy sectors could create 5 million jobs by 2020”.  To this effect, they propose a combination of environmental tax increases to encourage carbon-neutral industry formation, and a shift of taxation policies away from labor activities and towards energy and emissions outputs as a deterrent to traditional energy usage.  The commission’s representatives state that this pairing of tax strategies could lead to the creation of as many as 1.5 million new jobs, in addition to the two million jobs that can be created from enacting “energy-efficiency measures”, and the 500 thousand jobs created from the “increased recycling of key materials”.  Overall, the plan argues that over 20 million jobs could be created by 2020 if the reforms are adopted by EU member states.

While the Brussels plan offers promise as a starting point for a general transition towards an alternative energy economy, it is too early to tell at this point whether the plan will be ratified by the Union’s members.  It is important to keep in mind that the climate in Europe is currently not conducive to additional spending and taxation, as Europe’s leaders are taking a page out of the Austrian school of economic thought and pursuing a general program of austerity in the hope that fiscal discipline will stimulate economic growth.  Across the pond, the US is in an election year, and partisan gridlock in Congress will keep many policy initiatives from being enacted.  Nevertheless, it is imperative that green energy incentives and investment be continued, even in the face of prevailing attitudes towards budgetary constraints.  We have already seen that, without government support, private sector investment can drop off markedly because of the inherent risks associated with emerging energy markets.  It will take a solid, stable, long-term policy base to provide markets with the reassurance to invest in alternative energy utilities.  If the proper incentives are put into place today, green energy will continue to be a growth industry throughout the coming decade, and provide developed and emerging economies alike with a source of desirable employment.  

Welcome!

Hello!


Welcome to the Green Giant green energy blog!  With occasional clarity of insight and (hopefully) spot-on humor, I'll be commenting on different facets of alternative energy politics and policies, and all those other topics you wouldn't want to discuss at the dinner table with your in-laws.


That said, the Green Giant is also going to touch on some of the really clever and creative technological advances taking place within the green energy community these days.  It will hopefully shed some light on all the possibilities a greener planet can provide for mankind today as well as tomorrow.


Ready?  Let's begin!