Tackling climate change: Start with people’s wallets

The panel on Globalisation and De-Globalisation featured (from left) LKY School Associate Professor in Practice James Crabtree, who was the moderator; Mr Friedman; Ms Karadsheh-Haddad; and Prof Quah.

The impending catastrophe of global climate change should be tackled not only by appealing to people’s goodwill but to their wallets, a panel heard on 20 November.

“There’s only one thing bigger than Mother Nature and that’s Father Greed, the marketplace,” said Mr Thomas Friedman, Foreign Affairs Columnist at The New York Times. “The only way you’re going to get scale on climate is if you reshape the market with the right rules, incentives and laws to produce clean, green and efficient technologies at scale.”

Mr Friedman was responding to an audience member’s question at a panel on Globalisation and De-Globalisation, held as part of the inaugural Festival of Ideas. The event, held from 20 to 23 November, was organised by the Lee Kuan Yew School of Public Policy at NUS (LKY School) and brought together youth, policymakers and thought leaders to discuss important public policy issues, and the need for a new trajectory of improved governance and sustained economic progress.

It’s not that we are at risk of extinction, but we cannot live life the way we do now. We need to find different ways to adapt.

Many current efforts to tackle the global climate problem involve pleading for people to undertake more environmentally-friendly actions – in a sense, appealing to their better nature.

Amid this, Mr Friedman believes that society – including businesses – should be persuaded using dollars and cents. “(You have to) incentivise the market, the greatest engine for innovation and scale that we have,” he said.

Market-based solutions to the climate crisis

Mr Friedman cited the example of California that has set a target of clean energy that produces zero emissions by 2045. Companies can reach this goal via any technology they want, but they need to get there.

The International Finance Corporation (IFC), a part of the World Bank Group, is also undertaking some market-based solutions. “We have a mandate that we have to focus our investments on climate as well,” said fellow panel member Ms Rana Karadsheh-Haddad, Regional Industry Director for the Asia-Pacific at IFC.

“We are seeing (the impacts of climate change) play out particularly in the poorer countries and we are trying to find ways where we can help address that by bringing in private sector solutions.”

Need for radical change

LKY School Dean Professor Danny Quah, who was also on the panel, said that “humanity needs to change its way of life” in the wake of the climate crisis.

“It’s not that we are at risk of extinction, but we cannot live life the way we do now. We need to find different ways to adapt. That is as much a local response, as it is a global one,” he explained.

Sri Mulyani Indrawati - re-sized.jpg

Ms Indrawati shared her insights based on her vast experience in public finance

The sessions at the Festival of Ideas also touched on the ongoing trade war between the United States and China.

Ms Sri Mulyani Indrawati, Indonesia’s Minister of Finance who previously guided her country out of the disastrous 2008 Global Financial Crisis, noted that the trade war “has been one of the most significant factors creating global economic uncertainty”.

“But we should never lose sight that for Asia, particularly Southeast Asia, the potential is enormous. Asia is home to around 4.6 billion people or 60 per cent of the global population with abundant natural resources. To optimise these advantages, Asia has to step up its game through structural reform, building competitiveness and driving productivity,” she extolled.

See media reports on the Festival of Ideas. Also see a recent commentary on building the business case to fight climate change, written by Associate Professor Lawrence Loh, Director of the Centre for Governance, Institutions and Organisations at NUS Business.