We are exploring geothermal and biomethane technologies as well as small modular reactors using nuclear fission. GREEN ECONOMY The third imperative for the net zero transition is to green the economy. Greening the existing economy is more important than growing new green sectors. Investing in green technologies and renewable energy is important. But such pure green activities are estimated to make up less than 8% of the global economy. Non-green activities – in manufacturing, building and construction, aviation, maritime, agriculture and fisheries - make up the bulk of any economy. To move the needle on emissions reduction, we need transition strategies that progressively reduce the carbon footprint across all sectors. Let me highlight six challenges associated with greening the global economy. First, a green economy will rely much more on electricity. The cheapest and easiest way to decarbonise several sectors of the economy, such as cars that run on petrol or heat generated by burning natural gas, is to electrify them and ensure that the electricity is generated from zero 5/9  BIS central bankers' speeches  or low carbon sources. According to the Princeton researchers, total electricity usage in the United States will likely be two to four times as great in a fully decarbonised economy compared with today. In the IEA’s net zero world, electric vehicle sales would vault from 5% of the car market today to 60% in 2030. This would require building the equivalent of 20 of Tesla’s massive “gigafactories” every year this decade.
Singapore will do well to prepare for a future where CBAMs cover a significant part of world trade. CBAMs are likely to be a reality, especially if several major economies agree on a global minimum carbon price. The EU has already proposed a CBAM. A well-designed CBAM that does not raise barriers to trade, is compliant with W TO rules, and gives some relief to the poorest countries who are also small emitters, is not a bad outcome. CLEANER ENERGY The second imperative for the net zero transition is a decisive shift towards cleaner energy. According to the IPCC, to have a good chance of limiting global warming to 1.5 degrees Celsius, global consumption of coal, oil, and gas must start declining immediately and steeply. This is unlikely to happen. The growth in renewable energy has been spectacular but not sufficient to meet growing energy demand. Despite a 50-fold increase in the supply of new renewable energy in the last two decades, fossil fuels continue to account for more than 80% of global primary energy consumption. One of the reasons is that about 750 million people in the world still lack access to electricity. For them, the priority is having the lights on at an affordable price, not how much carbon dioxide is emitted in its production. Most of the people living in sub-Saharan Africa in 2020 consume no more energy per capita than the people of France and Germany did in 1860.