$100B cost to fight climate change to come from borrowing, reserves and ministry budgets
SINGAPORE — To finance the projected $100 billion cost arising from the fight against climate change, the government could rely on a combination of funds from the ministries’ budgets, borrowing and past reserves.
For instance, smaller-scale infrastructure, such as localised flood barriers, can be funded from the budgets of ministries, while funds for “long-lived major infrastructure” like sea walls can be borrowed “to spread the cost across the generations which will benefit”, said Second Finance Minister Lawrence Wong in Parliament on Tuesday (3 September).
Where measures include land reclamation, the costs can come from past reserves and when such land is subsequently sold, the proceeds accrue fully to these reserves, added Wong, who is also the national development minister.
“The reclamation of land is in essence a conversion of past reserves from financial assets to State land. The use is not a draw on past reserves,” he explained, noting that such use is in accordance with the Reserves Protection framework, which is agreed between the president and government.
Under the Supply Bill, which is debated and approved annually, Wong said that the government seeks approval for development expenditure, which includes land reclamation costs, and also provides the president with a statement on land-related expenditure annually.
He was responding to a parliamentary question filed by Nominated Member of Parliament (NMP) Associate Professor Walter Theseira on the extent to which past reserves will be applied to the climate change costs announced by Prime Minister Lee Hsien Loong at this year’s National Day Rally.
Lee had said that the long-term costs of protecting Singapore from the effects of rising sea levels could cost more than $100 billion over the next 50 to 100 years.
In a supplementary question, Prof Theseira asked if it was the commitment that in all cases of land reclamation, the cost will come from past reserves “without the draw down on the requirement to raise taxes”, or “whether it is flexible based on the finance minister at the time”.
In response, Wong reiterated that the framework already allows the government to use past reserves for all reclamation projects.
“That is already the case today and that is the basis for which we operate currently,” he added.
“The Ministry of Finance will continue to study equitable and sustainable ways to finance the full suite of climate adaptation measures we need to protect our island,” Wong said.
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NDR 2019: Protecting Singapore from rising sea levels in the long-term could cost at least $100B
