Land reclamation costs for coastal protection can be met from Past Reserves: Lawrence Wong

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Climate adaptation is a long-term endeavour by the PAP Government to ensure that Singapore remains resilient to rising sea levels and climate change. We need to keep our shores and people safe. 

Mean sea level around Singapore is projected to rise by up to 1m by 2100 (source).

Singapore is especially vulnerable to sea level rise for 3 reasons:

The first and most obvious reason is that we are a small island surrounded by the sea. The second reason is that 30% of our land is less than 5m above mean sea level. This is equivalent to 30,000 football fields. And the third reason is that unlike other countries, we do not have abundant high grounds to retreat to. 

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According to DPM Lawrence Wong, the Government does not yet have good estimates of the cost of the major infrastructural investments needed.

A high-level estimate is that these will cost more than $100 billion over 100 years.

The Government plans to employ a combination of funding methods to finance various climate adaptation measures, in a way that is fiscally sustainable and equitable across generations, DPM Wong said. 

Past Reserves

“Where the measures include land reclamation, the land reclamation costs can be met from Past Reserves,” said DPM Wong.

This underscores the importance of our Past Reserves. They are not an everyday fund that we dip into it because we are unwilling to make a little sacrifice.

Our Past Reserves are our strategic resource to defend our economy, a rainy day fund for rainy days and storms, a fund that comes in useful when we face an existential crisis

The Singapore economy is worth around $500 billion a year. Having enough firepower in our reserves to protect an economy of this size is of utmost importance if we are to protect people’s livelihoods and future.

Though the size of our reserves may be big to some, the growth of our reserves is, in fact, not keeping pace with the growth of our economy. For this reason, it would be a mistake to delude ourselves into thinking that we have more than enough firepower to defend the size of our economy in a crisis

Coastal and Flood Protection Fund and surpluses

In 2020, the Government set up the Coastal and Flood Protection Fund (CFPF) with an initial injection of $5 billion.

With fiscal conditions are good, the Government will be able to set aside monies in this fund for future spending. Surpluses accumulated by the Government are not squandered away in populism. They are carefully stewarded to ensure that the money spent benefits Singaporeans.

In addition to the annual Budget and CFPF, and using Past Reserves for land reclamation costs, the Government will look at the option of borrowing, for example through green bonds, to spread the cost across the generations that will benefit from these measures.

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