Singapore reaffirms its position as a developing country ahead of COP29 amid climate finance focus

Ahead of the 29th Conference of the Parties to the UN Framework Convention on Climate Change (COP29), which begins on 11 November 2024 in Azerbaijan, Singapore’s Minister for Sustainability and the Environment, Grace Fu, reaffirmed the nation’s commitment to climate action while maintaining its classification as a developing country.

This status exempts Singapore from being obliged under the Paris Agreement to contribute financial resources to less-developed countries.

However, Ms Fu highlighted in an interview with the Straits Times that Singapore will continue to contribute voluntarily to global climate finance.

Singapore’s classification as a developing country, she explained, aligns with the provisions of the Paris Agreement, which imposes obligations on developed nations to provide climate finance.

This distinction was previously scrutinised during a parliamentary exchange in April 2023 between Ms Fu and Mr Leon Perera, then Workers’ Party Member of Parliament for Aljunied GRC.

Mr Perera questioned the rationale behind Singapore potentially being a claimant of the Loss and Damage Fund established during COP27, suggesting Singapore could instead contribute, given its high GDP per capita compared to other developing countries.

In response, Ms Fu reiterated that while Singapore’s economy is advanced, the Paris Agreement remains the framework that guides such classifications.

The government had not finalised its position on claiming or contributing to the Loss and Damage Fund at that time, stressing ongoing deliberations within the United Nations Framework Convention on Climate Change (UNFCCC).

Ms Fu’s insistence that Singapore adheres to international agreements underlines its nuanced positioning on climate finance commitments.

As COP29 is being viewed as a “finance COP”, discussions will likely centre on the establishment of the New Collective Quantified Goal (NCQG) on Climate Finance.

The NCQG is the successor to the 2009 target where developed nations pledged US$100 billion annually to developing countries, a goal only met in 2022, two years past its deadline.

The NCQG is expected to set a new minimum threshold of US$100 billion annually, addressing the rising financing needs estimated by the UN to be as high as US$500 billion annually, with other institutions projecting even higher figures.

According to Ms Fu, the burden cannot solely rest on public finance from governments or multilateral development banks. Singapore has taken proactive steps by fostering private sector involvement.

In 2023, the Republic launched the Financing Asia’s Transition Partnership, a blended finance initiative aimed at generating up to US$5 billion (S$6.6 billion).

This platform involves contributions from the Monetary Authority of Singapore, development banks, and philanthropic bodies to finance projects such as the early retirement of coal plants and improvements in electricity grid infrastructure.

Blended finance, as explained by Ms Fu, is designed to combine public and philanthropic funding to make investments in green projects more attractive to private investors.

One example is the partnership between GenZero, a Temasek-owned platform, Keppel, and the energy arm of Ayala Corporation, focusing on retiring a coal plant in South Luzon by 2030—10 years ahead of schedule.

Another key area of interest at COP29 will be carbon markets. Ms Fu highlighted Singapore’s introduction of transition credits aimed at incentivising the early retirement of coal plants, particularly in Southeast Asia, where 2,000 such plants remain active. Carbon markets are expected to complement direct financial contributions in achieving significant climate goals.

In addition, pre-COP discussions in Baku, attended by Ms Fu in early October 2024, sought to advance talks on Article 6 of the Paris Agreement, which governs international carbon trading.

This aspect had stalled during COP28 in 2023 due to disagreements over transparency and credit management. For COP29, Ms Fu, alongside New Zealand’s climate minister Simon Watts, will co-facilitate these negotiations, aiming to resolve outstanding issues.

Ms Fu also underscored the importance of Singapore’s role beyond negotiations, noting that the Singapore Pavilion at COP29 will convene a diverse mix of stakeholders, including businesses, academics, youth, and government agencies, to showcase climate solutions and foster collaboration.

Observers have noted the potential impact of the US presidential election, set for 5 November 2024, on COP29 outcomes.