Green infrastructure will strengthen continent's competitive advantage
Jessica Cheam, Straits Times 30 Dec 08;
There's still a disconnect between what is being said and what is done. In Asia, no one is clearly saying 'let's build green infrastructure' and announcing appropriate policies to drive the process.
THE year is 1933. The Great Depression began four years earlier and 'The New Deal' had just been born.
The US economy was beginning its long recovery from the worst slump in its history. Then-United States president Franklin D. Roosevelt unveiled a slew of measures to create jobs and reform businesses and financial practices.
Today, 75 years later, the world finds itself in what has been called the 'worst financial crisis since the Great Depression'. Unsurprisingly, Roosevelt has become a touchstone again and a new version of his 'New Deal' has emerged. This time, however, it's taken on a hue: green.
At the United Nations climate change talks in Poland last month, UN Secretary-General Ban Ki Moon called for a 'Green New Deal', to both curb global warming and salvage the world economy.
'This is a deal that would work for all nations, rich as well as poor,' he said, urging governments to set aside a chunk of the fiscal stimulus measures they are planning for investment in low-carbon technologies. Such investments would help fight climate change, create millions of green jobs and spur green growth, he argued.
The concept is not new. US President-elect Barack Obama had pledged during his presidential campaign to spend US$150 billion (S$215 billion) over 10 years to build a clean energy economy, one that will create five million jobs.
Some pundits say the call for a Green New Deal couldn't have come at a worse time. With economies struggling with credit crunches, falling demand and rising unemployment, the green agenda is bound to drop off the radar. Plummeting oil prices are also blurring the economic case for investing in clean energy projects.
Yet there are also some voices making a powerful case for the Green New Deal. Mr Obama, British Prime Minister Gordon Brown and French President Nicolas Sarkozy are among the world leaders who have embraced the idea.
Perhaps they recognise what Newsweek magazine said recently: 'Simply put, the world needs a new economic driver', given that the two pillars of the US economy - housing and financial services - are undergoing massive restructuring. What the Green New Deal offers is essentially a means of killing two birds with one stone - stimulating the economy by providing jobs, and laying the groundwork for a more efficient, low-carbon future.
What is striking, however, is the lack of a similar game plan in Asia. Asian governments have focused their economic stimulus on infrastructure-oriented programmes, say economists, as these tend to be good for long-term growth and generate a lot of employment.
But the same analysts also concede that Asian governments are 'not that concerned about the environment', especially since in the short-term, green infrastructure tends to be expensive.
That is a shame. The downturn would be a 'good time to think about both survival and the long-term drive towards efficiency', as Mr Simon Tay, former Nominated Member of Parliament and president of the Singapore Institute of International Affairs, puts it.
This is not to say Asian governments are not taking steps to green their economies. China has invested an estimated US$720 million in 2008 alone in clean technology.
Top politicians in Singapore and all over Asia have recognised the importance of moving towards more efficient, sustainable economies and have pledged money to that end.
But there's still a disconnect between what is being said and what is done. In Asia, no one is clearly saying 'let's build green infrastructure' and announcing appropriate policies to drive the process.
Asia has always been a laggard compared to Europe with regard to environmental economic policies. Credit Suisse Asian chief economist Joseph Tan points to two reasons: lack of regulations, and lack of leadership. There is no Al Gore of the East pushing for a Green New Deal.
We need to realise that a green infrastructure would provide us with a competitive advantage. Lower fuel costs would only be one of the many benefits, says Mr Tay.
Economists like Mr Tan agree: There is no reason why economic goals should not be aligned with environmental goals, especially when the latest crisis presents us with an opportunity to do so.
Take Singapore as an example. Layoffs in the electronics sector are expected to total 1,000 in the last quarter of the year, NTUC deputy secretary-general Halimah Yacob disclosed last month. Companies like IM Flash, Adobe, HP, Motorola and Nokia have already announced layoffs, which have affected their Singapore- based operations.
Given how skills in the electronics and semiconductor industry are similar to those required for solar technology, an investment by the Government to beef up our solar energy infrastructure could provide jobs for such retrenched workers.
As the growth potential of the solar sector is massive, these jobs are also likely to have a multiplier effect, creating spin-offs in various industries, from construction to glass-making.
According to the International Energy Agency, greening the world's energy infrastructure would require an investment of US$3.6 trillion in power plants and US$5.7 trillion in energy efficiency from 2010 to 2030. These investments correspond to 0.6 per cent of global GDP per year, but would bring fuel-cost savings of US$6 trillion.
Considering that easy oil will run out sooner or later, these are sobering statistics governments should consider - especially in Asia, as the region is an overall net energy importer.
The planet cannot afford for Asia to develop in the same way Europe and the US did, polluting its way into prosperity. The Green New Deal is the next global revolution and Asia will make history by embracing it.
