Govt study on climate and output

Singapore's manufacturing industry.

SINGAPORE - How will the earth's changing climate - and the policies that countries take up to address it - affect the competitiveness of Singapore's manufacturing industry?

That's what the National Climate Change Secretariat and the Ministry of Trade and Industry want to know.

The secretariat is looking for consultants to study the direct or indirect implications of climate change on manufacturing costs and market share, and how companies might respond to the challenges and opportunities that the phenomenon presents, it said in a government tender that opened last month.

Once a contract is awarded, the study is to be completed by early January next year. Singapore's manufacturing industry contributes about a fifth of the country's gross domestic product.

Major sectors here include electronics, precision engineering, chemicals, biomedical manufacturing, transport engineering, food manufacturing, and printing.

As a developing country by United Nations standards, the Republic is not yet subject to cuts on its absolute carbon dioxide emissions, which contribute to man-made climate change. But this may change after UN climate negotiations in coming years.

If Singapore chooses ambitious carbon-emissions targets, it is likely to achieve them largely through energy efficiency, as it does not have much in the way of renewable energy like geothermal or wind, according to Ms Cecilia Springer of US-based climate and energy consultants Climate Advisers.

The Government is considering different ways to lower the nation's carbon emissions, such as carbon pricing, which would have implications for competitiveness.

Dr Tilak Doshi, chief economist of the National University of Singapore's Energy Studies Institute, noted that oil refining and petrochemicals account for a large part of GDP and compete globally.

If Singapore were to tax carbon dioxide emissions, which cause climate change, or put a price on carbon via a cap-and-trade scheme, this sub-sector could lose out to other countries that do not do likewise.

But if there was a regional cap-and-trade programme, he said, Singapore could meet targets by buying credits from other countries.

Climate change will also affect the availability of water and how effectively heat from industrial processes can be dispersed, said Professor Michael Quah, director of the NUS Energy Office.

On the other hand, policies here and elsewhere to cut energy use could also lead to an increased demand for energy-efficient building or cooling technologies, from which the electronics sector here could benefit, Ms Springer said.

The costs and benefits of climate change will not be evenly distributed. For instance, sea level rise could reshape or drown coastlines, while melting sea ice could open up new shipping routes that bypass existing ones.

Singapore is not the only country or state to study the economic impacts of climate change, Ms Springer pointed out.

The US state of Massachusetts looked at what a carbon tax would do to its industries, concluding that it would affect chemicals and utilities most but spare many other sectors.

 

caiwj@sph.com.sg


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