Hit and Miss: Singapore 2020 Budget for our Environment

 

May 8, 2020

Amidst more time at home and dosing off to video lectures due to the COVID19, our intern (Esther) has decided to spend some time to read up on the SG budget 2020 and share her thoughts about it. She has a special interest in Electric Vehicles so brace yourselves.

SGBudget 2020 may have become a distant memory amidst the chaos of COVID19 so here is a recap on the Budget 2020 that was released in February. Let’s take a look at its significance to Singapore’s progress to be a more climate resilient country.

Money is definitely going in to tackle climate change and here’s where some of the money are going to!

 

1. More (electric) cars!

Anyone remembered this tweet?

Elon Musk, the CEO of Tesla (A luxury electric car brand), tweeted in 2018 about Singapore’s unsupportive stance towards Electric Vehicles (EVs). Guess this statement no longer stands in 2020 because our Deputy Prime Minister and Finance Minister Mr Heng (Not Green Nudge’s Mr Heng) just announced that Singapore aims to phase out fuel engines and transit to hybrids and electrics by 2040. First thought that came into my mind was:

“Finally! What took Singapore so long? London had an approximate 20,000 EVs in 2019 while Singapore only had 823 EVs in 2018.”

However, are EVs truly environmentally friendly? It’s complicated but in short, yes. Here’s why it is complicated:

Upstream Carbon Emissions of EVs

The first issue is that in the production of any products, carbon emissions will be emitted. The life cycle analysis of EVs versus Fuel Engines has shown that EVs generates significantly lesser carbon emissions but it is not negligible. In the case of EVs, it clocks carbon emissions mainly at the production of the battery and the car. It takes few years of driving an EV to offset the carbon emissions generated upstream, despite having zero emissions while driving.

Also, 95.3% of Singapore’s electricity is powered by natural gas.

This means that the electricity that charges your EVs is still releasing emissions. Sian. However, Messagie’s study shows that even for countries that predominantly rely on coal and fossil fuel for electricity – the switch to electric vehicles will still ultimately result at least 25% reduction of carbon dioxide emissions. This means that the switch to EVs is possibly more environmentally friendly regardless of fuel mix. That being said, until Singapore’s electricity generation fuel mix is pre-dominantly powered by renewable energy, the reduction of carbon emissions from private vehicle is largely limited by the fuel mix.

If you are really interested to check out how electricity mix affects the overall carbon emission of EVs: check out this detailed analysis from The Guardian. However, do remember the sources originate from a European context and it differs from different brands of vehicle.

MORE (battery) waste

Growing adoption of electric vehicle could spell trouble for waste management. Sigh, more waste problems..! These batteries are produced using precious resources such as rare earth, cobalt and lithium. They were all extracted and refined with certain environmental costs. At the end of its life-cycle, how will these hazardous materials be disposed of? Will it be recycled? The disposal of batteries needs to be treated with utmost urgency as it will ultimately worsen Singapore’s mounting waste problem. I am curious if the ministries have carried out preparations to deal with the potential battery waste that will arise from this trend.

Moving on, let’s look if the policy approaches are sufficient to encourage uptakes!

Increase in charging infrastructure and financial incentives

It is clear that the Mr Heng has taken the approach to reduce the price barrier and increase public charging infrastructure to encourage uptakes of EVs.

Prices of battery cell is expected to decline steadily over the next few years which has a significant impact on the prices of EVs. Source: (BCG,2018)

With lower maintenance cost, projected continual decline of battery cost and rebates provided by the government, prices of EVs will find it as competitive as traditional fuel engines. Generous rebates for registration fee are given and road tax is revised to be less punishing for EV users. However, in order to make up for loss in fuel taxes, electricity taxes will have to be phased in and some experts see that the ownership of electric cars will ultimately still be more expensive.

Public charging infrastructures will be expanded to 28,000 by 2030 to reduce range anxiety, aka what if I can’t find a charger for my dying battery while driving? This is definitely a key enabler and encouragement for people to opt for EVs, as it is often the reason people cited for their hesitancy to switch over to EVs.

I am wondering if these measures will be coupled with education programs for the public and car retailers? EVs have yet to reach equivalent profitability as ICE, there may be limited incentives for car retailers to bring in a range of electric vehicles and even to promote such vehicles to customers. Furthermore, it is important that Singaporeans are aware of the financial and environmental reasons of why they should or should not be switching to EVs.

It should also be cautioned that all of the above should be balanced with strong message of “a carlite vision” which signals that ultimately taking public transportation, cycling or walking are still the most efficient and environmentally friendly option. Will you opt for an EV the next time with these measures in place? Share with us!

 

2. Banking on Geo-engineering

Ka-ching
A new coastal and flood protection fund is being set up.

Ka-ching, Ka-ching.
5 billion dollars goes into it.

Ka-ching, Ka-ching, Ka-ching.
It is projected that the state will inject 100 billion over 100 years for coastal engineering. This means more dykes and polders (it’s the same as dykes except this is able to pump water out as well) will be built.

This is what Singapore does best, leaning into technology to solve our biggest problems. It is not necessarily bad. Granted, NEWater helped us to secure 40% of our water needs. Surely, it will do the same for climate change? Geo-engineering is important as the threat of rising sea level is real and projected to increase by 0.25m to 0.76m. However, it is still fundamentally a mitigation method that does not address the drivers of climate change. Geo-engineering is not a long-term solution and it should not be our main solution.

 

3. Misplaced Emphasis: Reducing Energy Efficiency of Households

Mr Heng also encourage homes to be eco-friendly, introduce incentives to help lower income households with the cost of greener appliances. Energy Market Authority showed that households only contribute to 14.3% while industrial, commercial and service-related rakes a total of 85.7% of energy consumption – this is why I am skeptical of this approach. Though it is better than nothing being done, the measures are clearly misplaced and could be better targeted at the players that are responsible for the bulk of energy consumption.

 

4. SG Eco Fund: Roping in the Community

Last but not least, 50 million will be used to support sustainability initiatives that encourages collective action to build a sustainable future. In the Ministry of Environment and Water Resource’s own words, “The fund will focus on supporting sustainability projects that nudge people and communities towards environmentally-friendly behaviour.”

 

Well, Green Nudge is really excited for that. Right up our alley of nudging people in action! However, more than people and communities, it would be great if these projects are able to translate to scalable actions at government and corporate levels? Here are some projects Esther is looking forward to see from the SG Eco Fund.

  1.  Projects that empowers each individual/community to go on to educate and lead sustainability beyond themselves.
  2. Projects that empowers corporation to take charge of their environmental footprint in the long term.
  3. Projects that gains clarity on the realities of waste/climate change issues on the ground which should be communicated to guide policy formulation.

In closing, I am heartened that the Singapore’s budget has taken climate change more seriously than they ever had in history. There are clearly laudable efforts taken to reduce our carbon emissions and we have to take any small victories that comes our way. For the meantime, let’s march on towards greater victories for our environment and its inhabitants.

Psst, we are very lucky to have an MP Louis Ng who is tremendously vocal in the parliament about taking political action for the environment. Do drop by his Facebook and Instagram, like and comment on the topics or measures that resonate with your heart! Show some support!

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