BEI 2014 Speech by Dr Vivian Balakrishnan


Speech by Dr Vivian Balakrishnan
Minister for the Environment and Water Resources

at the BEI (Built Environment Industry) Asia Awards 2014,
on 12 September 2014, Ritz Carlton Hotel

Date Published: 12 Sep 2014

Distinguished Guests
Ladies and Gentlemen

We are at the Ritz Carlton today. Ritz Carlton is certainly more than a decade old. If you were to have stayed in the Ritz Carlton ten years ago, and if you looked out at Marina Bay, what would you have seen? The truth is you did not see very much, because if you walk around Marina Bay today, you would notice that we have completely transformed it in a decade.

If I asked you to go back 30 years ago, how would you know you are close to the Singapore River, without seeing it? You would smell it first. If you go back 50 years ago, when Singapore just became independent, I think you would agree with me that it was a completely different world.

Strategic Principles for Sustainable Development
The first point I want to make is that, if you think about the built environment and what has been achieved in Singapore over 50 years; our Singapore River over the past few decades and Marina Bay in the past decade, we live in a completely transformed world. It is the result of the work of many people in this room. In fact, you have got the full spectrum of building professionals here, from developers, designers, contractors, engineers, consultants to property managers. So, whether you realise it or not, you are actually part of an enormous force of change that has left a physical, psychological and social imprint on our lives today.

One key advantage that Singapore had was that at the point of independence, Mr Lee Kuan Yew, our founding Prime Minister, instinctively understood that it was never a zero sum game between the environment and economic development. That is why even 50 years ago, when Singapore was much less developed, much of what you see today was not around, and yet he instinctively understood the need for us to be green. That is why grass was planted at every village; that is why millions of trees were planted; that is why we got vertical greenery, and that is why we did not burn coal 50 years ago when we were much poorer because he understood the need for blue skies. We embarked on decades’ search for water security. We were obsessed with food and safety standards and because we were so small, we never had the option of polluting our backyards because my backyard is your front yard. Because he understood that and because Singapore was green, way before it became glamorous and fashionable to be green, we arrived at this happy situation that we have today.

We are at this happy situation today because of some key organisational principles that underpinned our development strategies. A few of these principles include, for instance (i) right pricing – this is why we do not have subsidies which distort resource allocation and consumption; (ii) accounting for externalities – for instance, you do not have the right to pollute the environment in order to save a few dollars for your company and expect everybody else to suffer for that. That is also the reason you do not have the right to burn forests and trees in Singapore, and pollute the air and the air for your neighbours to breathe. Another example – fair competition. Whether you are a local or foreign company, whether you are big or small, you are subject to the same rule of law, the same regime to ensure fair competition. We have always strived to have world class infrastructure because that is what attracts companies to Singapore, to know that you will have “best in class” infrastructure, a disciplined and hardworking workforce, and a forward, long-term thinking government which is stable, and good for its word and value.

Built Environment Industry
We have also embarked on investing in research and development over the years, not just research for its own sake but to ensure that it can be translated into the way we build and organise our society. So let me now come more specifically to the built environment industry. The construction sector has grown more than tenfold since our independence. Between 2006 and 2013, the construction sector actually averaged 12% growth rate per year. From 2006 to 2013 which included the global financial crisis, economic restructuring and shortage of manpower, I think you have to accept that 12% growth per year is a phenomenal figure by any reckoning. BCA has told me that the building industry contributes about 3 to 5% of our GDP per year on a consistent basis. That is not a small number. Despite the pressure that all of you are on, you know that the Government is fully committed, and we have got a foot on the accelerator for further expanding our public transport system and also to ensure that there is sufficient housing for our population. BCA has told me that this year we expect between $31 to $38 billion worth of contracts in the industry, and we think this will be sustained over the next two years at this pace.

But let me now speak as the Minister for the Environment and Water Resources. Your industry is extremely energy and carbon intensive. According to the UN, buildings in the world contribute to a third of all global greenhouse gas emissions, 40 % of global energy consumption and resources and 25% of water consumption. In Singapore, because we are so densely organised and so built up, these figures matter. Therefore, continuing to manage this balance between environment, economic development and building sophistication will remain a crucial task in the years ahead. And how you manage and build our buildings will make the difference. That is why in 2009, we set out in the Sustainable Singapore Blueprint the target of 80% of our building stock having to meet BCA’s Green Mark standard by 2030. How are we doing today? Today, 25% of all our buildings; both built and existing buildings have obtained the standard. 25% is actually a very good figure if you compare us with other cities in the world, but it is still a long way to go for our target of 80%.

I mentioned just now that being green for us is not just a matter of being fashionable or being generous. We also do this because we believe that there is synergy between environmental sustainability and the economy. Let me give you an example. Many of you here in this room are not Singaporeans. You are expatriates, or working for MNCs. You are here in this room because your wife and your children demand that they will see blue skies, breathe clean air, drink clean water and have safe food. The point I am making now is that having a sustainable and safe environment is a competitive advantage, because this is the reason your families and you are here. Companies are attracted not just because that there is land, security, or first world infrastructure. Companies go to where talents congregate; hence our focus on environmental sustainability, and making sure that we create something that is beautiful and good enough for your children and your families.

Environmental Sustainability through Greening Buildings
Our own green building journey has come a long way, and I mentioned just now the increase in percentage of our buildings which are Green Mark certified. Since 2006, the BCA has also launched a series of Green Building Masterplans, and just last week the third Masterplan was announced, with a greater emphasis to engage occupants and tenants of buildings to change their practices, because we increasingly realised that it is not just the hardware that matters; it is the concept, design and software. Therefore, we have also instituted other initiatives and provided support. BCA introduced a $52 million fund for the Green Buildings Innovation Cluster (GBIC) which will incentivise and encourage companies to develop, test, monitor and showcase new green building solutions. There is another separate $50 million Green Mark Incentive Scheme for Existing Buildings and Premises targeted especially at SMEs, so that companies will be encouraged to take advantage of new technologies to retrofit existing buildings.

On top of that, we have other incentives and training programmes. For instance, the NEA and EDB offer the Grant for Energy Efficient Technologies (or GREET) to encourage companies to get over the initial cost of investing in energy-efficient technologies, to help them save money and to improve their bottom-line. We will continue to consult people in this room as well as the larger industry for other ideas on how we can support as we take this journey towards a more sustainable future.

Finally, let me make one more point. Many people assume that being green is good for CSR, marketing and branding, but being green is expensive. Indeed, today, I think there is still an upfront green cost premium of between 1 to 3%. The challenge in the next decade is to make being green pay for itself, not as the cost centre but as the resource centre or profit centre. The reason we are on the verge of this tipping point is because technology has changed. Let me give you an example. Solar panels used to be a fashion statement and you have to pay more on an ongoing basis for solar panels than buying electricity from the grid. Today, we are on the verge, where there is no need for subsidies for you to invest in solar panels, because the payback period is so short. In fact, we do not want to do that as companies would offer to lease the solar panels, so you do not even have to come up with the upfront capital cost to enjoy the savings from day one. So, increasingly, we need to understand how technology and the demands in the world have changed, and the business opportunities that you have by taking in the latest and best technologies, applying it in your designs and buildings and deriving both short term and long term value in your projects.

So, I want to congratulate all the winners for being role models and for being on the leading edge of the wave which is going to transform the world. If we in Singapore succeed in generating urban solutions and buildings which work, which are safe, sustainable and value creating, then you will have many opportunities all over the world and your calling card will be: “I come from Singapore. I build a future. Come here and see a working model for the future.” So, I wish you all great success in the years to come and wonderful opportunities for all of us. Thank you very much for your attention.