Atlantic Council Virtual Climate Dialogue - Ms Grace Fu

Speech by Ms Grace Fu, Minister for Sustainability and the Environment, at the Atlantic Council Virtual Climate Dialogue on 8 September 2021

1 Greetings and a warm welcome to the Singapore-Norway climate dialogue organised by the Atlantic Council.

2 Article 6 is the only outstanding item yet to be agreed, in the Paris Agreement. It has been almost six years since we adopted the Paris Agreement. But we have not reached a resolution on Article 6 rules.

3 In that time, the severity of the climate emergency has deepened around us; and the need for climate mitigation and adaptation actions grows ever greater. The IPCC Working Group I Report has warned us that unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to 1.5°C or even 2°C would be beyond reach.

4 To succeed in our efforts, we need every tool in the toolbox.

5 If we get it right, Article 6 can facilitate higher ambition in mitigation and adaptation. Well-functioning carbon markets can unlock financing for green projects, spur innovation, bring down technology costs and enable us to harness green growth opportunities. The International Emissions Trading Association has estimated that an effective carbon market could save up to US$250 billion a year in costs for climate action by 2030. Market opportunities for global emissions trading could also reach more than US$800 billion by 2050.

6 There are down sides if we fail to reach an agreement. While countries can start to cooperate on carbon market instruments today, we risk having different accounting systems apply to different mechanisms, which could result in the erosion of environmental integrity. Without the rules in place this year, we will also have further delays on the revenue for the Adaptation Fund, which is vital for supporting developing countries in their adaptation challenges.

7 This is why we must succeed in Glasgow. The multilateral rules-based system of global climate action that we the world collectively established in Paris in 2015 rests on us completing this outstanding work.

8 My Co-facilitator, Minister Sveinung Rotevatn from Norway and I have been given the difficult task of co-facilitating ministerial consultations on this key issue. It is a heavy responsibility placed on Singapore and Norway, but we will do our best to advance progress, with the support of all Parties.

9 I am pleased to share that the consultations so far have been constructive. There is clearly a common will to make progress and work for a deal that is credible and balanced in Glasgow. But we are not there yet. There are still divergent interests and concerns at play on several issues, which distinguished panellists will elaborate later. We heard clearly from Parties that a balanced package is necessary to land Article 6, considering the sub-sections as a whole, and other issues outside Article 6. We need to address all concerns in an inclusive way, consider the needs of the Parties fully. We need to find creative solutions that accommodate the needs of the Parties, with all Parties prepared to adjust their positions, while maintaining confidence on the integrity and quality of the entire architecture.

10 Clearly, there is still a lot of work ahead of us with very little time before COP-26 to resolve these issues.

11 I therefore welcome this timely dialogue. It provides us an opportunity to listen and exchange ideas on how we can all work together to arrive at a strong outcome on Article 6. The teams from Norway and Singapore will be listening carefully and taking copious notes on all suggestions and views. We look forward to your continued engagement and support.

12 I wish you all a fruitful and meaningful discussion.