Fireside chat with SM Teo Chee Hean at the "Shell Powering Progress Together" Forum

SM Teo Chee Hean | 4 July 2019

Dialogue with Senior Minister and Coordinating Minister for National Security Teo Chee Hean at the “Shell Powering Progress Together” Forum on 4 July 2019, moderated by Strategic Moves Chief Executive Officer Viswa Sadasivan.


Viswa Sadasivan: Singapore has been quite big on scenario planning. What sort of technological instruments do you think can be deployed for us to have greater accuracy and granularity in scenario planning? 

SM Teo Chee Hean:   Scenario planning is not about predicting the future, but about describing possible scenarios. The possible scenarios have to be based on proper evidence and data. Scenarios are not a prediction of where we will be in the future, but where we might end up. That is the approach that Shell has been taking. By examining the scenarios, you are able to identify the possible threats. You need to be resilient against not just one scenario, but to a range of scenarios, so that if any of them occurs, you are ready for them. But it is not just about threats. From the range of possible futures, you can look at the opportunities and where you can deploy the resources to take advantage of those opportunities, in a way which is robust and resilient across a range of scenarios. So we are not looking for precision but at the ability to think about the future in a more coherent and complete way.

Viswa: And the use of big data, how is Singapore going into that space?

SM Teo: We are investing in data sciences in a number of different fields. One, in the government, to provide better services to citizens, and for better policy making. The other is for businesses to make use of the data they have to power their businesses, to identify future opportunities, and to serve their customers better. But that requires a base of people who are knowledgeable about data sciences. So we are putting more emphasis on the mathematical sciences in our universities, where we already have quite a strong base. Even in our secondary schools, we have a very, very strong base in mathematics already.

Viswa:  One more question before I throw it open to the floor: collaboration, discussions. It cannot just be the government deciding this is the right thing to do. You need to engage the ground, carry them with you and also influence and share experiences with other countries. The ASEAN Smart City network, introduced when Singapore was chairing ASEAN, was perhaps Singapore's way of finding ways to share some of our own experiences. How successful have these initiatives been in encouraging greater dialogue and sharing of experiences?

SM Teo: Engaging communities to work together is a very important aspect of environmental action. I am glad to see that in Singapore and many countries, young people in particular, are very taken by environmentalism. That is very positive because this is the world that young people are going to grow up in. For us with a little bit more grey hair, this is the world that we want to leave to you. 

This is the legacy of the older generations for the future of our younger generations. It is important to bring them together so that we safeguard and protect the future together. There are many opportunities to make a better life for all of us.

And climate action is not something which you can do in isolation. It is an interconnected system – weather patterns, wind, sea, waste, where it flows, where it comes from; these are all interconnected. 

One needs to have a regional and global perspective and work together. You cannot just stay in isolation, and try and build a dome around yourself and say, “I will protect myself, I do not care what happens to anyone else.” It is not possible. We live in a global ecosystem and we have to take responsibility for it collectively. That is why Singapore is very active in the UNFCCC (United Nations Framework Convention on Climate Change). 

Although we are a small country, we are part of many different groups. We understand the concerns of each of these groups – the small island states, the developing countries, the more developed countries – and try in our own small way to play a bridging role to come to a good solution which we can all agree to, accept and adopt. We have also been working at the IMO (International Marine Organisation), International Civil Aviation Organisation (ICAO) and other organisations which we are members of.

Q: Hi, I am Zee from Shell. You mentioned this dome and that we cannot insulate ourselves from the world. I believe that there needs to be some form of currency to deal with climate change and CO2 and account for the fact that environmental impact has a cost to it. At Shell, we have been pushing for some form of CO2 price and the world has been slow in adopting it. Do you see an intermediate stage where the surrounding countries can adopt some form of CO2 currency, such that we are responsible for the slightly larger dome that is our immediate environment?

SM Teo: I think you are referring to the discussions on carbon pricing and carbon trading. Singapore is playing a role in this. We currently chair the work group in the UNFCCC follow-on negotiations that is dealing with carbon trading. It is a very complex issue because different countries have different perspectives on what should be counted and what should be given full credit. It is important to get carbon pricing correct. There is market failure if I can do something and enjoy the benefits, but somebody else suffers from the negative effects. That does not cause me to be responsible in my behaviour. Carbon pricing is meant to internalise those negative externalities.

We have done this in Singapore in a number of sectors. For example, we have road pricing which internalises to the road user the congestion and other costs that are imposed on the city. In this way we are able to manage traffic much better in Singapore. In the same way, we have implemented carbon pricing in Singapore to internalise the effects of carbon emissions to encourage responsible use. 

Carbon trading is a more complex issue. I have not studied it carefully enough to analyse whether it can be done on a regional basis, say, within ASEAN. But I think that you will need a larger market than that, in order to make it work. The major owners of carbon credits today are probably not within ASEAN, and the major buyers of carbon credits may also not be within ASEAN. If you create a system within ASEAN, and then connect it eventually to the outside world, and the price gradient is wrong, there will be a big disruption to the ASEAN market. So it is better to have a clearer picture of what is going to happen internationally first.

Q: I am Ahmad from Egypt, Cairo. I have two questions. The first question is - how can a developing country like Egypt join this global movement of reducing the carbon footprint in collaboration with Singapore? How can we join the international efforts?

SM Teo: Each country needs to take the appropriate policy measures to prepare itself for the future. Many countries, for example, subsidise the use of water or transport fuel for good social reasons, and also for good political reasons. But one has to look at the longer term effects – not just on the world, but also a more localised view of what happens to the city. 

Cairo is a very congested city and, I am sure, faces all kinds of environmental issues, including the quality of air. It is possible, for example, to take measures in Cairo to improve the fuel mix used for transportation in Cairo. This will improve the living environment in Cairo, and at the same time contribute to the larger global green objectives. Egypt, or a city like Cairo, can do some of these things, in your own enlightened self-interest, and in the process contribute to the greater global good. 

A number of cities and countries have switched to natural gas for heavy vehicles in the city. That has reduced both particulate pollution in the city, as well as greenhouse gas emissions. There is a lot of sunshine in Cairo and a lot of open spaces on the outskirts which can be harnessed for solar energy. There are many things that Egypt can do which are in the enlightened self-interest for Egyptian citizens, which will also be good for the global climate situation as well.

Q: My second question is, I see Singapore as the future of a city like Cairo. But what is the future of Singapore? What are the technologies that the government is investing in, for example, artificial intelligence in the decision making and other technologies?

SM Teo: Singapore takes a multi-path approach to have a diversified economy. We are not placing our future on any particular aspect of the economy. We intend to continue to be a good place for high end manufacturing; a well-regulated and efficient financial centre; a hub for air travel and maritime trade; and a good place for people to meet. We are investing in the future – in research and development, infrastructure and facilities. We have built convention centres which can host large meetings; we invest in the future by building a new airport, and a new port. 

We are also investing a great deal in research and development because the future lies in being able to develop and harness new knowledge for new economic benefit. I talked about Keppel Offshore & Marine planning to do things in the polar regions. We recently invested in and opened a very large marine wave tank. It is probably one of the biggest in the world – over 60 metres across, and 50 metres deep in the deepest part of the pool. It is the deepest marine experimental tank. It is connected to our petaFLOP class supercomputer so that researchers can work on a physical model and its digital twin, and use both the digital and physical models to improve the design of structures. We have also invested in biotechnology. We are also investing in new technologies which may be further out on the economic realisation chain. We have a very strong quantum lab in Singapore, and also a very strong lab in graphenes and other two dimensional materials. These are some of the things which we are doing to position ourselves for the future. But we have a different economic structure from Egypt. We are not able to grow very much food and we do not have great rivers like The Nile. Therefore, each country has to develop its own strategies for the future.

Viswa: Senior Minister, you were in charge of the National Research Foundation. Is there anything specifically related to climate change and climate action that you could highlight that we have invested in?

SM Teo: Yes, smart grids for example, something which Shell is interested in. In Pulau Semakau we have an experimental grid that connects different electricity generating modes - solar, wind, wave - to develop a grid which is resilient, given the intermittency of some of these power sources. We are also looking at whether solid state transformers are ready for wider employment to provide greater flexibility in the grid. We have also been investing in solar technology. 

We have very good water technology especially in membranes. Water is going to be a scarce resource in many places. A number of cities have run out of water in South Asia and South Africa. We are developing biomimetic membranes, which will require about half the energy than current membranes for water purification. Water is very crucial for us.

Q: Good morning, Senior Minister Teo. My name is Jason and I am from Nanyang Technological University.

SM Teo: What are you studying, Jason?

Q: I am studying computer science. I am representing the Singapore team for the “Imagine the Future Scenarios” competition. One thing that has been highlighted today many, many times, and also something that I have learnt over the course of the past few months, is how costly environmentalism can be, and how that entails a lot of internalisation of negative externalities and doing other things to ensure that we have a sustainable future. So my question is that, given the cost of being green, at the highest level of Singapore's government, how exactly do you balance the economic side and the environmental side? How do you decide exactly where to draw the line in terms of like, I am willing to go this far for the environment, but I cannot go beyond this point, if not, I will suffer?

SM Teo: There are a number of things you can do, which are environmentally friendly, but which do not cost money and in fact save money. Switch off your lights or TV set so that they are not consuming electricity when you are not using them. This does not cost you anything, but actually saves you money. If you switch from using filament lamps to LED lights, it may cost you something initially; but in the long term, it actually saves you money, and it is also environmentally friendly, because you consume less electricity. 

There is a range of things which we can sensibly do as individuals, households, and businesses, which make sense and do not cost money but save money. You may have to invest initially, but the initial expenditure still makes sense as you can reap the benefits later on. There are other cases where you derive the benefit, but the negative effects fall on somebody else. We must find a way of balancing it out in such instances so that the person who benefits also bears the cost of the negative effects as well. He will then be less inclined to do them unnecessarily. So where do we draw the line? 

I chair the Inter-Ministerial Committee on Climate Change in Singapore that brings together the different ministries and agencies. We line up all the things that we could do and make an estimate of what effect each would have on our greenhouse gas emissions. Which are the things which we should be doing anyway because they reduce emissions and save cost; which are the things which we may need some encouragement in order to break the investment-versus-longer-term return cycle; and also those things which have negative externalities, where we need to shift policy to get the balance correct. 

We line up all the measures and can see which ones we should implement. The carbon tax is one of these measures. It is applied evenly across the economy to encourage users to reduce their carbon emissions. It allows us to avoid having to implement other measures which impose a greater economic cost. That is how we evaluate what to do. We have quite a robust discussion and we review the measures continually.

Q: I am Mark Patterson from Rosen Power. Thank you for speaking so eloquently about the role of future scenarios. Just wanted to ask for any reflections on the challenges that you face about how those scenarios inform your plausible future states, and particularly that transformational or transitional journey, which is often where the messiness occurs. And thinking about the energy ecosystem with many different elements, not just technological, I just wondered if you had any particular reflections on the nature of the challenges and the ways in which Singapore might navigate that transition over the next decade.

SM Teo: You have pointed out a very interesting dilemma. A country which is further up in the development chain already has a very large installed base of infrastructure – such as telecommunications, power and roads. In a developing country where you do not yet have that kind of infrastructure, you can leapfrog by putting in new infrastructure. With an installed base there are existing users who are used to doing things in a certain way. You may have stranded assets which are made obsolete by new infrastructure. The scenarios help us to develop a clear vision of where we want to be. And if that is where I want to be, then how do I get there?

You have to take practical and sensible steps including how to deal with assets which might potentially be stranded, how to incentivise people, how to clear bottlenecks, and to develop the right policy. Sometimes it is the policy that gets in the way. It is not the technology, and it is not the people. It may be that you are organised so that different aspects are managed by different agencies. They each have sensible reasons for what they are doing because the domains might have been distinct and separate. How do you bring the two together because the technology has changed and we now have to prepare for the new situation 10 or 15 years down the road? 

Mark was talking earlier about electrification of transportation. But what are the impediments? The infrastructure for charging needs to be developed. What policies are needed to start laying the infrastructure which can sustain the demands for charging electric vehicles?

At the same time, if you are making internal combustion engines, you have to start thinking about what business to be in. Do you want to be making components and devices for electric vehicles? Or to be in internal combustion engines, which may still be around for several more years? Companies also have to make decisions on how to make the transition.

Viswa: That is a very interesting point to end the discussion. The whole point you raised about energy – new energy transition – how do you manage the transition?

SM Teo: Can I make just a small plug for Singapore? We used to assemble cars. Those of you who are of a certain age will remember the former Ford Motor plant along Upper Bukit Timah Road, which is now a very important historical site. We decided many decades ago that we are not in the business of making or assembling cars. Then a company which makes electric cars decides that it wants to locate in Singapore – Dyson. Our efficient economic infrastructure, our skilled workforce, and the encouragement we give to future-oriented high tech investments, helped them decide to locate here. It is an exciting and different new business. We hope they succeed, and we will help them to succeed.


(This transcript has been edited for brevity and clarity)