Mr Dennis Tan Lip Fong (Hougang): Mr Chairman, with climate change, countries around the globe have been bracing themselves for changes in the nature of global supply chains and economic policy. One of the changes we have been following is the opening of the Northern Sea Route and how this may affect the economy of Singapore. The question at hand is not merely a transport or maritime issue which Minister Vivian Balakrishnan and Minister Chee Hong Tat addressed in 2020 and 2021 respectively, but is respectfully at heart an economic one.
Today, Singapore is the second busiest port in the world and with the maritime industry contributing to 7% of local GDP, employing more than 170,000 people, the investment of $20 billion into the Tuas Mega Port can be seen as a vote of confidence in the development of Singapore’s port capabilities as an economic strategy.
However, with climate change, should the Arctic sea ice continue with its current decline at a rate of 13% per year, an uninterrupted sea highway between Asia and Europe and the US that is navigable by large container ships will be created, allowing for a shorter route between Europe and the Pacific.
What this means is that cargo shipments may bypass the Suez Canal and the Malacca Strait, and hence Singapore. This raises concern of whether Singapore will remain the top transhipment port in the world and a major port of call, which may in turn have trickle-down effects to the economy that should not be underestimated.
Cargo passage along the Northern Sea Route has increased from 41,000 tonnes of cargo in 2010 to 285,000 tonnes in 2019 and is expected to only increase in the future, given that the warming in the Arctic has been four times faster than the rest of the world.
I would thus like to ask: one, whether the Government has an update on the climate developments of the Northern Sea Route since 2021; two, whether the Government has studied the possible economic impact of the Northern Sea Route to jobs and businesses in Singapore; three, has the Government studied the projected impact to the capacity of Tuas Mega Port in 2050 and beyond, should the Northern Sea Route become the predominant shipping route, and if so, whether it has taken any measures into account in the planning of the Tuas Terminals?
How will our economic policy adapt to the changes brought about by the development of the route in the coming years? And what are the Government’s plans to ensure that the country remains economically competitive if the route should affect our status as a premier global hub, port and international maritime centre?
The Senior Minister and Coordinating Minister for National Security (Mr Teo Chee Hean): The physical effects of climate change also have wider implications for our economy, as Mr Dennis Tan has pointed out about the Northern Sea Route. If rising temperatures in the Arctic make this short-cut passable year-round, it could alter the flow of shipping between Asia and Europe. Our port will therefore have to be more efficient and better-connected to compete. This is why Singapore has been closely monitoring developments in the Arctic. Although Singapore is on the equator, we have been an Arctic Council Observer State since 2013 – for the last 11 years – and we contribute and participate actively in its discussions. Currently, the commercial viability of the Arctic routes remains low. It is a very difficult and treacherous route. In 2022, only 43 transit voyages were made through the Northern Sea Route, fewer than the 85 transit voyages in 2021.
Still, we cannot ignore how profoundly climate change can disrupt our lives and livelihoods. For Singapore, this means not just acting now to achieve our own climate goals, but also catalysing regional and global action, so that other countries do the same. Only then can we collectively achieve our global climate action goals. As Ms Poh Li San pointed out, we emit about 0.1% of the carbon dioxide each year, but we are affected by the other 99.9%.
Domestically, we have set ambitious targets. In 2022, we announced our enhanced climate targets, committing to reduce emissions by 2030 to 60 million tonnes of carbon dioxide equivalent, after peaking emissions earlier; and to achieve net zero emissions by 2050. We have essentially decided to target for the future, look at what the future will bring for us, shape our economy and our society and plan on that basis rather than doing incremental changes as we go along.
Prime Minister’s Office
28 February 2024
https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=budget-2344
Office of the Leader of the Opposition 