True or False: Singapore to Reduce Carbon Emissions Growth by 16% from 2020 BAU Levels

You must have already heard of the announcement yesterday that Singapore will reduce carbon emissions growth by 16% from 2020 business-as-usual levels, provided that:

Singapore will only commit to this if there is a legally binding global deal that obliges all countries to cut emissions, and if other countries offer significant pledges, said Professor Jayakumar. – Straits Times

Read more from the Ministry of Foreign Affairs news release and from the local media.

We were wondering yesterday whether the 16% cut refers to absolute carbon emissions or carbon intensity, and whether the cut is from 1990 or 2005 levels. But having read the news over again, we realised that:

Singapore’s target means it will cut roughly 12 million tonnes of CO2 by 2020, said Dr Yaacob.

This is based on a projection that the country’s emissions would reach 75 million tonnes of CO2 by 2020 if no measures were taken. – Straits Times

Singapore’s absolute carbon emissions in 2007 is about 40 million tonnes and from the statement above, it seems that the government projected that carbon emissions will reach 75 million tonnes in 2020 on a business-as-usual scenario. If Singapore takes action to reduce its emissions by 16%, the cut is equivalent to 12 million tonnes, meaning that emissions would reach 63 million tonnes in 2020. This cut is not based on 1990 or 2005 levels, it is just based on 2020 levels, which implies that there is no peak in emissions and a drop thereafter. What we would expect is a continuous increase in absolute carbon emissions till 2020.

The graph above shows the absolute carbon emissions from 1990 (22 Mt) to 2007 (40 Mt) based on available published data by the government. If we do a projection of the emissions from 2008 to 2020 based on an estimated 5% annual growth (BAU), we would reach 75 Mt, which is the business-as-usual scenario projected by the government.

If we do a projection of the emissions from 2008 to 2020 based on an estimated 3.6% annual growth (pledge), we would reach 63 Mt, which is the 16% cut committed or the we-will-take-action scenario projected by the government.

From 1990 to 2007, the average annual emissions growth is about 3.6%. We would expect a projection for business-as-usual scenarios for the future to use this number but the government uses a higher business-as-usual growth of 5%.

What we find funny is that when the government commits to the 16% cut by 2020, it is reducing the average annual growth in emissions from 2008 to 2020 from 5% to 3.6%, which is the same annual growth as what we have been doing over the past 17 years. In other words, if we continue business-as-usual from 2008 to 2020 without the 16% cut, we would still reach the projected 63 million tonnes in 2020 or the we-will-take-action scenario.

So, are we really reducing carbon emissions by 16% from 2020 BAU levels or are we just assuming a higher BAU level in 2020 and then committing to 16% cuts, which results in a level we would reached anyway if we don’t take any measures to reduce emissions?

Or are we just plainly wrong, make wrong assumptions and mistakes? Or did we get the maths wrong? Or maybe we are just talking rubbish and don’t know what we are talking about? Let us know what you think.

Red dot goes black?

China Huaneng Group, a Chinese state-owned enterprise has recently bought over Singapore’s Tuas Power, a power plant that produces about 26% of Singapore’s electricity. According to the Business Times, Tuas Power is planning to convert its standby capacity of 1,200 MW that is currently generated by steam plants to be generated by either natural gas-fired plants or coal-fired plants.

Tuas Power’s CEO Lim Kong Puay explained that the capital costs of coal-fired plants (about $2 billion) would be higher than natural gas-fired plants (about $700 to $800 million), but coal-fired plants have lower operating costs. Tuas Power could also tap on its new owner, Huaneng’s vast experience in coal-fired plants in China.

We think it is highly possible that Tuas Power would take the coal route as it wants to tap on the expertise of Huaneng on coal and cut its costs before its competitors (such as Power Seraya and Senoko Power) also acquire new owners and become more competitive. Once there is a coal-fired plant in Singapore, the worry is that other power plants will follow suit and build more coal-fired plants as coal is still more cost competitive than oil and natural gas.

We are against the use of coal for generating electricity because coal is still a dirtier fuel source that emits more carbon dioxide, thus contributing to global warming. A cleaner coal-fired plant such as a modern Integrated Gasification Combined Cycle (IGCC) plant still emit about twice the carbon dioxide amount as compared to a natural gas-fired plant. The future zero emissions coal plant using carbon capture and sequestration technologies are still in research and not commercially available yet.

In Tuas Power’s Health, Safety and Environmental Policy, they commit to:

Conducting operations in an environmentally responsible manner through maximizing our plant efficiency, resource conservation, reducing waste and controlling emissions

We hope that Tuas Power would remember its own environmental commitment to control emissions and reject the idea of building coal-fired plants in Singapore. If there is a go-ahead by the government to allow Tuas Power to start using coal to generate our energy, does it mean that we are contradicting our stand on sustainable development and climate change?

Source: Business Times via Wildsingapore; Tuas Power. Image attribution: Wolfiewolf.

Reflections on Singapore’s efforts in energy and climate change

Sometimes, we are hurt by comments that tell us the truth. We find them unpleasant even if they are spoken for our own good. We often ignore them or try to dispel them. Recently, there are some comments about Singapore’s efforts in energy and climate change:

Today reported the following comments by National University of Singapore Associate Professor Natasha Hamilton-Hart in response to whether Singapore could lead on climate change in Southeast Asia:

Prof Hamilton-Hart said while Singapore has “great potential”, the country lacked credibility.

“The target here is to reduce energy intensity, but that’s not the same as reducing emissions,” she said. “To get other countries involved, Singapore needs to show a willingness to commit to bringing down its emissions.”

Today reported comments by Mr Erik Thorsen, president and chief executive officer of Renewable Energy Corporation:

“The (solar) industry will have to take responsibility by lowering prices, with governments supporting with incentives.”

He added: “Singapore has a philosophy of not subsidising or subsidising very little. So, it’s very hard to make use of technologies and programmes that need more incentives to happen.”

Were all countries to share Singapore’s attitude of waiting for technology to become cost-competitive before adopting it, such technology could not have been accomplished, he argued.

The government has reasons for not doing the things mentioned in the comments – It’s the economy, stupid! The government cannot afford to bring down emissions significantly or give subsidies because it will distort the market and increase the business costs for companies and living costs for the people. It’s the typical ‘environment is important but economy comes first’ mindset and reasoning.

We understand the government’s worries for our business and living costs, and appreciate their good efforts to maintain a sustainable environment as described in the National Climate Change Strategy and National Energy Policy Report. But if we were to give the government a report card, it would say, “Has shown improvement but can do better”.

For Singapore to become a global clean energy hub or take the lead in the region on climate change, we have to do better. The comments have some truth in them and it’s time to relook the two issues below:

Using reduction in absolute carbon dioxide emissions as a target instead of carbon intensity

The national target in the National Climate Change Strategy is to reduce carbon intensity to 25% below 1990 levels by 2012. A reduction in carbon intensity (carbon dioxide emissions per dollar of GDP) does not necessary mean a reduction in the amount of carbon emissions. The problem of climate change is one of absolute concentrations of carbon dioxide and each country must reduce its absolute carbon emissions.

Singapore’s per capita emission is one of the highest in Asia and is similar to some developed countries. Most developed countries under the Kyoto Protocol are required to reduce absolute emissions by about 5% below 1990 levels. Likewise, we should set a target of reducing our absolute carbon dioxide emissions.

Work towards a Four National Switches energy portfolio

We diversified our water supplies and have our four national taps: local catchment water, imported water, NEWater and desalinated water. Similarly, we should diversify our energy sources and work towards an energy portfolio of four national switches: fuel oil, natural gas and two other renewable energy sources (solar, wind, biomass, tidal, etc). The intention is not to completely replace fossil fuel but to reduce our dependence on their import.

The cost of alternative renewable energy might be higher now but we should also take into account the future price of oil given the security and climate change concerns. Besides considering the cost of doing something, we should also consider the cost of not doing it.

Source: National Climate Change Strategy; National Energy Policy Report; Today. Image attribution: nic221.

Asia and the Clean Development Mechanism

(Just for fun, rest assure that the carbon credits from CDM projects are not earned in the above manner.)

The Clean Development Mechanism (CDM) was discussed in our previous article. We are encouraged by the interest and participation of China and India in the CDM projects. However, the other Asian countries are still not making full use of the CDM to get funding and technology to reduce their emissions. Some information that we obtained from the Carbon Forum Asia 2007 is shown below.

The UNFCCC CDM website reported that there are 844 registered projects and 53 requesting registration, and more than 2600 projects in the pipeline. Of the registered projects, 61% is implemented in Asia and the Pacific (34% is implemented in India, 16% in China, 2% each in Malaysia and Korea). The expected average annual CERs from the registered projects amount to about 174,268,851 and 45% is generated by China while India generates 16%. Together, India and China takes up 50% of the CDM registered projects and generates 61% of the annual CERs.

The UNEP Risoe Centre reported that for the other 2600 projects in the pipeline, 73% is in Asia and the Pacific. The number of CDM projects in Asia by country are as follows: China (44%); India (40%); Malaysia (4%); Indonesia (3%); Philippines (2%); South Korea (2%); Thailand (2%); Vietnam (1%); Sri Lanka (1%) and Others (1%). The expected volume of CERs until 2012 in Asia is generated mostly from China (66%) and India (19%).

The above figures show that China and India host most of the CDM projects in Asia and the world, and most of the CERs is expected to be from China. The other countries in Asia are still lacking behind in the CDM market and some speakers attribute it to the lack of knowledge and awareness of CDM among the governments and private companies, and also the lack of financial support. Those countries can learn from China, especially on China’s role in CDM and carbon trading, and on how China use the profits generated for tackling climate change.

Source: UNFCCC CDM website; UNEP Risoe Centre; China.org.cn; Xinhua News Agency. Image attribution: WillyFeng.

Understanding the Clean Development Mechanism

We attended the recent Carbon Forum Asia 2007, which has given us more knowledge about the carbon market and how carbon trading works. In particular, we realised that the Clean Development Mechanism (CDM) works and is useful in helping developing countries reduce their carbon emissions through the use of cleaner and better technology.

Background

Under the Kyoto Protocol, developed countries (Annex I countries) are required to reduce their greenhouse gas emissions below specific target levels, between 2008 and 2012. To give developed countries some flexibility in meeting their targets and for developing countries (non-Annex I countries) to benefit from investment and technology in carbon-reducing projects, the Protocol developed three flexibility mechanisms. They include:

1. Clean Development Mechanism (CDM): this mechanism provides for Annex I countries to implement projects that reduce emissions in non-Annex I countries, in return for certified emission reductions (CERs) that can help meet their emissions targets.
2. Joint Implementation (JI): this mechanism provides for an Annex I country to implement an emission-reducing project or a project that enhances removals by sinks in another Annex I country, and use the resulting emission reduction units (ERUs) to meet its own target.
3. Emissions Trading: this mechanism provides for Annex I countries to purchase units from other Annex I countries and use them to meet their targets.

Developed countries are required to take domestic actions (”significant element”) to reduce their own emissions and the use of the mechanisms should be “supplemental to domestic action”. In other words, carbon trading should not be used as a shortcut way to meet emissions targets.

Clean Development Mechanism (CDM) 

Currently, the CDM is the favoured mechanism to earn CERs or commonly known as carbon credits. These CERs are traded in the global carbon market with ready buyers and sellers. The CDM works and some speakers at the Carbon Forum called it a success story. A typical CDM project undergoes the following:

• The project developer undertakes a CDM project in a developing country (host country).
• The project must satisfy two criteria – additionality and sustainable development. Additionality means that the project must have reduced emissions in addition to those that would occur in the absence of the project. The project must also help the host country move towards sustainable development and this criteria is determined by the host country.
• The project developer describes the project details in the Project Design Document (PDD) based on approved methodology by the CDM Executive Board (EB).
• The host country appoints a Designated National Authority (DNA) to approve the CDM project.
• The PDD and approval from the DNA is submitted to a Designated Operational Entity (DOE) who is approved by the EB to conduct the validation of the proposed project.
• After validation, the DOE submits the PDD to the EB for approval and registration.
• After registration, the project developer implements the CDM project according to the PDD and monitors the emissions.
• The DOE verifies the emissions from the project and requests the EB to issue the CERs.

Most of the CDM projects deal with hydropower, biomass energy, renewable energy and energy efficiency. The UNFCCC CDM website reported that there are 844 registered projects and 53 requesting registration, and more than 2,600 projects in the pipeline. The expected average annual CERs from the registered projects amount to about 174,268,851. This means that the implementation of the CDM projects have reduced emissions in developing countries by about 174 million tonnes of carbon dioxide equivalent.

Source: UNFCCC CDM website.

Choosing greener electricity suppliers

Singapore is planning to introduce the Electricity Vending System for households and small businesses. Today reported that smart meters installed will track the consumer’s electricity usage, and make it possible for consumers to “choose which supplier they want to buy their electricity from, and pay for supply upfront via the Internet, ATMs or convenience stores.” Suppliers would offer electricity packages at different prices and consumers could choose a cheaper package. This is in contrast to the current system where a flat price rate is charged by Singapore Power’s SP Services.

While we welcome the good news that consumers can choose their electricity supplier, we would prefer instead to read about consumers and companies having the ability to choose a greener electricity supplier.

In Singapore, the “power generation sector is the single largest primary source of carbon dioxide emissions” according to the National Climate Change Strategy. Consumers and companies are increasingly aware of environmental issues, especially climate change and the urgent need to reduce carbon emissions. Therefore, they may not look at price as the only factor in deciding their supplier. They would prefer a greener supplier that emits less carbon dioxide for the same unit of electricity generated (a smaller carbon footprint) as compared to other suppliers.

The electricity suppliers can give consumers and companies the ability to choose greener electricity by disclosing their carbon footprints, either voluntarily or by legislation. They would no longer compete on price alone but also on their environmental performance. This creates market incentives for suppliers to reduce carbon emissions and be seen as a greener electricity supplier. They would find ways to be more efficient and generate electricity using cleaner fuel source or renewable energy sources.

In addition, the carbon footprint disclosure by suppliers would help companies calculate their own carbon footprints as the carbon emissions from electricity supplied is required in the calculations. They can then decide to switch to a greener supplier or take actions to reduce carbon emissions in light of global climate change concerns and stricter restrictions on carbon emissions in the future. Companies that know their own carbon footprints are also in a better position to tap on carbon trading schemes.

The carbon footprint disclosure by electricity suppliers would give consumers and companies more choices, and is a step towards reducing Singapore’s carbon emissions.

Source: Energy Market Authority; Today; Ministry of the Environment and Water Resources. Image attribution: Energy Market Authority.