Growing awareness that Asean needs to collectively tackle food and water security, flood risks: Ravi Menon
Singapore can mobilise the necessary financing and bringing together technological solutions and policy frameworks
[SINGAPORE] Food security, water scarcity and flooding are some of the biggest transboundary climate risks that Asean will face with the worsening climate crisis, and the region needs to collaborate to tackle these challenges, said Ravi Menon, Singapore’s ambassador for climate action.
“The more I reflect on this and the more I speak to experts and all manner of people, it’s quite clear that we need to double down on adaptation efforts, both as a country, and also in collaboration with other countries around us for collective action,” said Menon, who was addressing a question during a wide-ranging interview with the media on his priorities in his new role as climate ambassador.
This was his first interview with the media since retiring as managing director of the Monetary Authority of Singapore and taking up his new role in April 2024.
Climate adaptation
The good news, he said, is that there is a growing consciousness among Asean leaders that climate adaptation needs to be a regional effort.
“And we’re looking forward to successive years in the Asean chairmanship – Malaysia, the Philippines and Singapore – where we can focus more on this,” he said.
Adaptation measures are often seen as the poorer cousin of climate mitigation; they are under-invested, as the focus has been to contain climate impacts through the reduction of greenhouse-gas emissions.
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However, with the latest science indicating that climate change is happening at a faster pace than initially projected, climate adaptation has grown in importance over the last year.
Singapore has identified extreme heat, floods and rising sea levels as the main territorial risks facing the city-state.
However, Menon said there is an increasing need to look at climate-related risks from a regional, and sometimes global, context, for effective risk management and adaptation.
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“We really need to work with partner countries to address these spillover effects that affect all of us, and so I’ve become a lot more keen to understand transboundary climate risks. It’s not very well understood, but efforts are really under way,” he said.
Based on some early conversations on this issue, food supply, water scarcity, flooding and public health have been identified as some of the biggest spillover effects that Asean will have to face as a region.
As a region heavily dependent on rice, and specifically on the Mekong River system as a breadbasket for rice supply, food security might increasingly be a challenge with rice yields falling.
Water levels are receding; there is also the issue of salination from seawater intrusion up the Mekong Delta.
“So these areas need much further study to see how can we work together to change some agricultural practices, what other reforms might be needed,” said Menon.
Rising temperatures, sea levels
The fishery sector has also been impacted by rising temperatures, as fishing grounds have shifted northwards with waters in the tropics getting warmer.
There is also a need to identify populations in the region that are at greatest risk from sea level rise, as many live on the coast in many countries in the region.
More studies also need to be done to understand the effects of the risk of dengue fever and malaria cases rising due to climate change.
“It’s a whole gamut of issues that we need to come to better grips on, prioritise them because you can’t do everything at the same time,” said Menon. “But most important is collaboration and cooperation. No single country can manage this on its own, so Asean countries need to work closer together on this.”
He added that Singapore can be a valuable partner by mobilising the necessary financing – from the public and private sectors, as well as multilateral development banks – as well as bringing together technological solutions and policy frameworks.
However, adaptation projects, such as the building of sea walls, are often seen as public goods and financed only with public funds. The private sector has been hesitant to deploy capital in adaptation projects as they typically do not generate a revenue stream.
Yet, Menon said this assumption should be challenged.
“The private assets that are being protected actually are gaining from this, and should they not bear part of the cost, even if there is no direct revenue being generated,” he added.
Then there are adaptation projects that do generate cashflow, such as those addressing declining yields in the agricultural sector.
Financing that could help change irrigation methods, or help farmers buy seeds more resilient to climate change could improve productivity, thereby generating higher revenue.
“The challenge is always to try to design adaptation projects which generate some revenue. It may not be enough to provide the full returns that private capital wants, but at least part of it,” said Menon.
Blended finance
This is why blended finance is also an important mechanism to shore up more funds for climate adaptation.
Blended finance is a capital-raising approach that leans on investors with higher risk appetites, such as multilateral development banks, development finance institutions, philanthropists and governments, to provide concessional or catalytic capital to pull in more commercial investors.
However, the share of public and philanthropic capital as compared to commercial funds may have to be higher than the ratio seen in mitigation projects that also utilise a blended finance structure.
Singapore’s blended finance programme, known as Financing Asia’s Transition Partnership, has a target of raising a total of US$5 billion across three funds, with a base of US$1 billion of concessional capital.
Menon said that this ratio of raising four times of private capital from each dollar of concessional funds would not likely be achieved in adaption financing.
“I don’t know what the number is. So that’s something we’ve been reflecting on. We know that some philanthropies are interested. We know that governments see this as part of their public responsibilities to provide protection. But (putting) that together is still not enough. We need to bring private capital in,” he said.
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