I am a Singaporean. And one aspect about Singapore highlighted by many stories of its growth and early leaders is the notion of pragmatism. Yet I feel that this notion probably has been overplayed.
Pragmatism is used to suggest that the ends justify the means. Now within the context of school, it could mean that you can get your grades by rote memorisation as opposed to genuine learning. Or that you could simply find the right answer to copy than to solve a problem yourself on an assignment.
Same goes for the worker at work – just find the answer, don’t bother solving the problem. This may mean finding out how it was done before; or to figure out what others who had the same problem was doing. One could argue those are problem-solving heuristics. Maybe. But I call those “answer-finding”.
As a consultant, I cannot help but recall clients who are asking, “but have you done this same thing before with another client or somewhere else?” This is answer-finding, not problem-solving.
The Singapore today needs trail-blazers and problem-solvers; as it always had. But decades of overemphasizing pragmatism means we prefer to pay for answers than purchase problem-solving capacity. We desperately need to shift this culture and move towards real problem-solving than answer-finding.
Some interesting announcements and updates were coming out of Ecosperity last week. Most of them oriented around financing of the transition. This is an important topic considering that a lot of our existing economic system is locked into high carbon intensity systems because of financial incentives. Being able to change the incentives can help adoption of more emission-reduction measures.
Transition credits
Launched in 2023, a coalition of players were studying the use and deployment of transition credits. Verra also started working on a proper methodology to account for the carbon emission reductions from transition; and they launched it last week. Since the initial MAS announcement, the Acen Coal-fired power plant in the Philippines have become a candidate for a project that will issue transition credits in exchange for shortening the project’s tenure. And Mitsubishi also announced joining the team of firms taking a stake in the consortium that will generate the transition credits. The idea is that the consortium could then sell off the transition credits to players in Singapore who can then offset the carbon taxes; and there is hope to do the same for Japan.
I believe there is interest for these players to also participate in developing more renewable energy projects in the Philippines to help make up for the shortfall of power generation. After all, the article linked above quoted Rockerfeller Foundation that the shortfall will require “1,000MW of solar, 250MW of wind, and 1,000MW of battery energy storage”. Not sure if it comes as a surprise to all, but because of resource availability, solar and wind farms are not ‘always-on’. They only generate a fraction of their nameplate capacities most of the time, which means a lot more capacities must be built to produce the same amount of gross energy. Energy storage is needed to help time-shift the energy to when required.
WEF-GenZero aviation initiative
Launched as ‘Green Fuel Forward’ – it is a capacity-building initiative that is aimed at drawing in airlines, refiners, logistics companies, banks and others. I think the idea of building up capacity to deal with the entire SAF ecosystem is useful. Aviation decarbonisation over the next few decades disproportionately depends on SAF. It is good that the global aviation industry have more or less settled on this particular decarbonisation pathway and is developing various tools to be able to adopt it.
More than just using a different fuel, it involves getting customers to share in the higher cost of the fuel. How to do so is the issue; and all the airlines are afraid of the ticket pricing affecting their competitive position. Different approaches to distributing the emission reduction costs have been mooted: (1) some like the idea of a corporate decarbonisation programme where partners are gathered together and somehow agree to some formula to share the cost of the low-carbon fuel premium; (2) others think we could convert the emission reductions into some kind of credits to be sold to freighters or passengers who are on board those flights. Those methods involve using airlines as the market-maker for emissions reduction.
The customers of airlines especially the corporate players will need to determine their strategy when it comes to flight carbon emission abatement, as well as the budget they can allot to it. For now, corporate probably have some kind of trip budget – they might have to scale it down based on the SAF prices they are expecting. The airlines themselves will have to develop their own strategy of allocating the cost of SAF to passengers or corporate customers. And of course they can then issue or bundle the SAF-credits (SAF-C) accordingly.
As stated in the ST article on this initiative, each SAF-C means a reduction of 2.5-2.8 tonnes of carbon emissions. Assuming that each SAF-C is priced exactly equals to the premium that airlines pay for SAF above their conventional jet fuel, you’re looking at about US$1000-1,600 for each SAF-C. Now in comparison, a typical carbon credit (representing 1 tonne of carbon dioxide abatement) out in the market is selling at around US$3-4; or if it’s CORSIA-eligible, maybe US$20? So corporates are going to have quite some difficulty working out what is worth paying for SAF-C if you were supposing there was going to be some kind of market and price-discovery for those credits. Does it mean the airlines will have to pass on the rest of the cost shortfall to other customers? Then why do only the SAF-C buyers get to claim the reductions?
A lot of capacity-building will be needed and a proper vision for the workings of the ecosystem worked out.
Singapore government’s clean energy fund
There was yet another announcement about US$500m fund that Singapore government is going to deploy for green projects in the region, as part of the new ‘office’ that MAS is going to set up (named FAST-P). That’s actually going to be really interesting though the news was very scarce on details. I suppose they just wanted to announce some parameters they have decided during Ecosperity week while many other things are still being worked on.
We know there will be 3 pillars: (1) accelerating the energy transition away from fossil fuels to clean energy, (2) ramping up green investments, and (3) decarbonising emissions-intensive sectors like cement and steel production. I suppose the first pillar might relate to the transition credits mentioned earlier. The FAST-P office will probably be spending more efforts for (2) because that will be a lot more complex and require someone to drive or coordinate across different parties. It is not clear how (3) can be done when those sectors are likely the beneficiaries themselves either through energy efficiency investments or fuel/electricity substitution.
Having been involved in the set-up of Infrastructure Asia some 7 years ago, I am fully aware of how much effort behind the scenes just to get the resources together, not to mention the actual work of setting up the office. The work to be done by the office is really to identify the activities where it is worthwhile helping to reduce the riskiness of other financiers or funder. The metric would probably be more impact driven though for the sake of Singapore’s economy, it would be necessary to require anchoring some activities out of Singapore.
I think it’s really great to see how the various entities within the Singapore government or related organs (and I’m almost definitely stretching that by implying platforms like Genzero, which is part of Temasek, and some of those Singapore firms dealing in transition credits) are trying to tackle the issue of the transition, not just for Singapore but for the region.
So it’s general elections season. It’s really interesting how this general election gives a great sense of a maturing democracy where more capable candidates are stepping forward, and emphasising the need to provide diversity of voices in the parliament. Peers of mine are stepping forward as candidates. I’m seeing even young independent candidates like Darryl Lo stepping forward.
The features of the Westminster Parliamentary system that Singapore inherited create a strong government because of the ‘first-past-the-post’ approach to voting. While the governing party can somehow gerrymander to optimise their support across constituencies, there is a natural limit to that as their vote share decreases.
The other feature is that the system calls non-ruling parties the ‘opposition’. It is perhaps a result of the typical debate terminology where they talk about proposition and opposition. As our democracy matures, we begin to see what it means more and more to be a loyal opposition, and not be misled by this somewhat ‘confrontational’ sense of the term.
Even as the country faces uncertainty from the global situation, this general election thus far fills me with a sense that Singapore is really ‘coming to age’ as a country that is learning to deal with challenges. Looking at the MPs coming from different walks of life and at a broader range of socio-economic backgrounds (at least from my perception), there is more a sense of ordinary people trying to make a difference in the society they live in, recognising it is no longer enough to slog for their own personal lives and expect the society to develop desirably.
Tom Bilyeu posted something insightful on Linkedin a few days ago that’s worth mulling over. He said, “There are no solutions, only trade-offs.”
And that the belief in a perfect solution can cap your growth as it paralysed you from making decisions as you wait for the perfect solution to come by. It may also be just because you are endlessly searching thinking that the ideal solution will emerge.
Yet when we do chance upon some things, we do recognise them as solutions. I realised that this is because we have priorities in most settings and it is the priorities that determine what we value more and what we value less. The trade-offs then allows us to exchange things that are less valued for things that are more valued. The ability to do so increases the overall value and hence becomes a ‘solution’.
There may be times when the things being traded off against are both valued – and then it takes that strategic mind, one that is able to look into different versions of the future to try and determine which elements in the trade-off is more important and would have lasting impacts.
Ultimately, there is no way one can navigate life and decision-making without the ability to prioritise things. If we see everything as equally important, we suffer from the plight of Buridan’s Donkey and never get anything done.
There seems to be some conventional or prevailing wisdom about people having to keep to their lanes in different ways. So there are so-called norms for being a worker, being a father, a brother, a son and so on. Overlay that with the dimension of culture, including heritage and religion, you get a different set of different norms that as an individual, you are expected to display.
And so all my life I’ve somehow been defying classifications. One of the big divisions in school I had was between a ‘science’ student and an ‘art’ student. In high school, I defied that classification by doing arts (not just humanities but even fine arts, digital arts, and film) alongside all of the sciences (biology, physics, chemistry). When I entered junior college, I took two science subjects and two arts subjects as my main subjects.
And when it came to college, I just had to go to a school that offered a Bachelor of Science (BSc) in Economics when in most places, Economics was considered a Bachelor of Arts (BA). And then in my masters of economics, despite joining the advanced mathematics course, I also did a module in Economic & Business history.
I often recognise the value and importance of arts despite being an economist and finding it difficult to quantify the value that arts generate. Life in Singapore has become so draining and taxing on the human spirit often because we don’t know how arts play a role in helping us recover and restoring dimensions of our lives that we fail to see or identify. In recent times, as I caught plays from Checkpoint theatre and various films or shorts produced by Singaporeans about life in Singapore, even poetry that is written about life (eg. Government Haikus), I begin to see more and more that we all need arts more than we know. It could well be what will keep us alive.
I was watching Carl Sagan’s explanation of how the Greeks knew that the earth was spherical and how Eratosthenes (then head librarian of Alexandria) calculated the circumference of the Earth without even leaving his home country. It’s a brilliant one worth watching:
Brilliant men in the past would have mastered astronomy, geometry, and mathematics and played the role of military strategists. The ability to make observations in nature and draw interpretations were essential to determine the approach on the battlefield.
Yet, today, with technologies supporting the interpretation of observations and supplying multitude of information to leaders, there’s less of a need for the ‘strategist’. Rather, the tasks of looking and interpreting the various information is decentralised and the information comes together already processed for decision-making.
In such a world, we use resources to displace thinking. Eratosthenes will have to pit his wits against the rocket ships, satellites and scientists with funds for expedition who will say that his calculation yields a figure which is ~2.5% off the mark.
The role of strategic thinking has diminished in importance in the societies which are highly developed and well-resourced. Every now and then, someone comes from seemingly nowhere and overcome an incumbent with all the position, and the resources. A David and Goliath story. In many ways, DeepSeek is an example of that; especially when put in contrast with Sam Altman’s response to a question from an audience at a talk where he said that any worthy competitor to OpenAI will have to invest massive resources and datasets to train another LLM to achieve the prowess of ChatGPT.
I think we need to go back to a culture that appreciates strategic thinking and this sort of brilliance. And believe once again that it isn’t just about resources and overwhelming others with abundance. For those who feels limited by their resources, let the ability to think strategically provide a channel and means to defeat the giants.
Things hasn’t been the most positive for hydrogen the past 2 years or so. Hyzon Motor is on the verge of ‘giving up’, while When one look back, it is a wonder why we felt comfortable ignoring some of the bigger problems associated with hydrogen. It is definitely less ‘trendy’ to tout hydrogen as the solution for the energy transition these days.
One of the challenge about the climate and energy transition is that it is a transition. And that means there is going to be change happening over time; and the challenge is that we don’t really know what the end point is in terms of the technology and pathways even when we know that we’re trying to have a go at net zero.
In the meantime, as we struggle to determine what we’ll use to fuel our aircrafts or vessels, we are making decisions on replacing these equipment, and trying to project cashflows over an asset lifespan or 20-30 years. These all without the certainty of the fuel being available is extremely challenging. So instead, we are more likely to bet on things not changing rather than things changing.
Hydrogen continues to face an uphill battle when it comes to the science, the technology and economics. But there is still good reasons for us to continue refining the technology we have. In the mean time, while we are still trying to decarbonise what we can, we try to leverage the resources that are available more immediately. We can optimise our biofuel supply chains more to achieve lower carbon intensity. Along that journey, we can improve our traceability of feedstocks and biofuel supply chains.
Now, biofuels or any of the new fuels will never be as ‘cheap’ as fossil fuel. And just because they are chemically almost equivalent to the hydrocarbons we dig from the ground doesn’t mean they are the same. This means we will have to continue working at pricing carbon and allowing the real price of carbon to hit all of us. Governments can protect the economically vulnerable not by blocking the transition but ensuring that more and more of that carbon revenues gets directed to support the vulnerable who may not be able to deal with the cost from the transition.
Biofuels could even be a commercialisation pathway for green hydrogen as the hydrogen can contribute to boosting the biofuel yields of organic feedstocks in the FT-Gasification pathway and improve the overall economics of the project when there is access to cheap renewable electricity. It’s almost like blending e-fuels into the mix already. This is a plausible intermediate step for us to encourage more green hydrogen production to sufficiently create more scale to bring down the costs.
The technology surrounding logistics for hydrogen then needs to improve before the end-use equipment would transform. Changing end-use equipment is still the hardest to do. Even if it’s just the heavy industrial users who have to change.
So the good news is that we may still eventually land on hydrogen in some shape or form. It may not be what we are envisioning now, but it’s vital to recognise that the time horizon is probably a lot more stretched out than we think.
As we learnt from Thomas Edison, one could invent many things and accomplish a lot of innovation (or anything else for that matter) by leveraging others and taking credit from them in exchange for paying them a salary.
Industrialism accomplishes a lot. Often by using artists, craftsmen and individuals, then taking credit.
Charlie Munger once said of the legal profession that it was very much like a pie-eating contest where the winner gets to eat more pie.
I laughed at that.
Because many other professions are the same. The capable staff gets more work to do; and having proven himself, gets promoted into handling more responsibilities.
But for most part, workaholics love their pie.
And to a large extent, for some, they don’t care about winning or losing at pie-eating. What matters to them is they get to eat pie.
Maybe that appreciation for work is what we need. Not to obsess so much over the winning or losing but instead, focus on the pie. And when the pie is no longer tasty, you quit. Because there wasn’t so much at stake to begin with.
I’m not sure if it’s just me, but these days, when I’m walking in public spaces, I get really tense and stressed when people approach me to try and get me to do something. Something inside me feels like they are stealing my attention and time without my permission. Yet, at the same time, I do want to be kind and empathise with the person working hard on the street.
