Ravi Menon on Singapore's Adaptation Efforts

Yes. Thanks, David. I think in many ways, the global economy, global financial markets are deeply entangled. It's a term I borrowed from quantum mechanics. And we've seen the effects of entanglement most dramatically with the Covid-19 pandemic, how supply chains were so connected. And we didn't expect disruptions on the scale that happened because of a pandemic. We've seen it more recently in the energy infrastructure, the Russia-Ukraine war and 2022 disruptions in energy and food supplies. And exactly the same thing happening now in the Straits of Hormuz being closed. We didn't expect so many multiple effects coming out of that single closure. And how interdependent various supply chains are. I think the mother of all supply chain disruptions will be the climate, because that is the deepest form of entanglement in that the global economy has set up. Supply chains are so intertwined. You take an El Niño effect. It has got multiple repercussions. If it hits the Mekong River system, you have food supply disruptions because of agricultural use coming down, excessive floods. It will affect hydroelectric power generation that has knock-on effects on energy. So again, the same story is being repeated. Energy disruption, food supply disruptions. And I think in the case of climate, the impact on livelihoods and labor productivity and a whole range of economic activities will all have knock-on effects down supply chains. And that's a way I think climate is the ultimate entanglement because we share one planetary system.

Yes and no. I wouldn't even argue that this is the biggest challenge. I mean, it really depends on the business you're running or the country that you're in. Priorities are manifold and with lots of things going on. Everything has to compete for attention. But this is going to be with us for a long while. I think that is what I would say of the climate crisis. We've got a lot of other things to worry about today. But five years from now, ten years from now, 15 years from now, I think this will be our central preoccupation. We'll all be talking about the weather in ways that are not so pleasant. And I think the sense of perspective is sometimes lost with the daily bombardment of news. I don't blame Bloomberg for it, of course, if you keep us informed. But I think there is just so much distraction. And if all our worldviews are formed by having to check on Truth Social every morning, that doesn't quite give us a picture of what is in the future. The big piece of news is the fact that 2024 global temperatures exceeded 1.5°C above pre-industrial levels. Last year was 1.4. It takes a few—the scientists would need a longer time period to assess whether it has crossed the Paris thresholds. But we are getting there. Every piece of news that's coming up on the climate front is worse than the climate scientists had predicted five, ten, or 15 years ago. Sea levels are rising faster than expected. Scientists were figuring out why they measured the melting of the soil and the ice caps. That is happening. They measured all kinds of things. It turns out the oceans—the oceans, by the way, absorb more than 90% of the heat that's generated. And the oceans are expanding. Volumes are expanding because it's hotter, and the carbon sinks in the world are declining. If you ask me, what is the single most important piece of news last year? That is it. Carbon sinks. Wildfires decimating carbon sinks and forests. Oceans less able to absorb heat. The global energy system is now in imbalance, not reflecting back as much of the heat as it is absorbing. So very many breaking points are being breached. I think the number of people who pay attention to this are still in the minority, but what is very encouraging is that the determination of these people to do something about it is undimmed. And I see this disparity here. I see this in London Climate Week, and I see this in many conferences like these. Businesses who are thinking about their business ten, 15 years from now, a country of policymakers who are thinking about the resilience of their economies of ten, 15 years from now are thinking hard about this. And so what we are seeing a lot more now of public-private partnerships. Coalition of the willing. Those who know this, those who understand these risks and those who want to do something about it but can't wait for the rest of the world to come together in a multilateral setting, are finding their own ways, and that is most encouraging. Plural coalitions, public-private partnerships, getting things done, and many small things being done together adds up to something. And I think that is the most encouraging. And I see a lot more of that happening as the climate crisis gets worse.

Yes. So I think the current energy crisis or energy crunch the world is facing, for all its downside effects from a climate perspective, is a net positive because I think increasingly now, the energy security agenda and the climate agenda are converging. And you see this in Asia. The sun that shines on your land and the rivers that flow in your country, the wind that blows on your seashore—those are yours. It can’t be disrupted by war elsewhere. It can be disrupted by closures of chokepoints and bottlenecks. And I think that understanding that real energy security comes from homegrown renewable energy is dawning much stronger now. This is a conversation I hear in many parts of Southeast Asia and countries like India, which have realized their huge reliance on imported fossil fuel. China realized this about ten years ago. And while the focus is on China still building coal-fired power plants, what people miss is that it has built more renewable capacity than the rest of the world put together times two. It is basically moving away from imported liquid fossil fuels, either LNG or oil, into renewables, solar and wind, and as energy security backup coal. And what's interesting is that they're relying less and less on coal. The capacity is that the consumption of electricity—the generation of electricity from that coal fleet has been declining steadily. Almost all the new demand is being met by new renewable capacity. India is trying to do the same thing on a massive scale. So I think this is a real positive. Of course, there are huge problems. Our grids, even in the advanced economies, are not built for renewables quite so. There will be major infrastructure investments that are necessary. And let's face it, renewables have intermittency problems. And to have the baseload electricity supplied on the same scale, you will need battery storage and massive amounts of investment. But these are investment opportunities because this is where the future is. And I don't even have to talk about electric vehicles. I think the queues outside petrol stations across Asia have driven home the point. This is just not tenable to have to pay so much more for private transportation. And so I think that pickup in EVs is also going to—it's already happened on a double-digit scale in countries like Vietnam and so on. And it's likely to escalate. Quite. And of course, we were just hearing from VinFast earlier this morning on the outlook for EVs in Vietnam.