After COP26 Glasgow, what next for Malaysia's climate policy?

 

Global climate talks in Glasgow ended last weekend in disappointment, recrimination, and incremental progress. The rich-poor nation divide that has riven climate talks for decades could not be bridged despite the ticking down of the global climate clock.

An equitable deal failed to materialise in Glasgow, but various countries have announced national commitments to reduce their greenhouse gas emissions by a target date. 

Malaysia has echoed the language of developed countries with our goal to be “carbon neutral” or achieve “net zero” emissions by 2050. Both have been announced in the 12th Malaysia Plan, though the two are not necessarily the same. Climate ambition is welcome and Malaysia clearly wants to be perceived as proactive in this area.

What does this 2050 goal mean for Malaysia and what is our pathway towards getting there? Will we pursue rapid decarbonisation to reduce our climate footprint or will we continue to rest our economy on fossil fuels followed by rapid, possibly controversial, measures to “net” our emissions to zero with offsets? 

The latter pathway, closer to a carbon neutral approach, could emit as much as three times the emissions of the former, which is more consistent with net zero. Policymakers must clarify this for government, business, and society because it has big implications for investment, industry, jobs, and nature itself.

As a species, we must stabilise the global climate to 1.5°C above pre-industrial levels by drastically cutting the greenhouse gases responsible for global warming by around 7 percent per year. 

Some 23 rich nations including the US and EU, are responsible for half of all historical emissions; accumulated emissions drive global warming. Whereas over 150 countries – including China and India, with Malaysia distantly behind – are responsible for the other half. 

Rich nations are supposed to make the biggest emission cuts and contribute finance and technology towards the sustainable development of poor nations, many of whom are already experiencing permanent loss and damage from climate change.

'Pay to pollute' programmes

A carbon trading market will allow the rich to buy their way out of making emissions cuts via purchases of carbon-absorbing nature in poorer nations. Unfortunately, such ‘pay to pollute’ programmes divert resources that could be invested in reducing emissions while taking land away from poor states. 

The recently announced deal ceding two million hectares of Sabah’s forest – an area 2.5 times the size of Selangor – for 100 years to a Singaporean-Australian partnership appears to be an example of this.

Malaysia is neither terribly rich nor terribly poor. We are not amongst the biggest historical contributors to climate change, neither have we settled on a fiscal policy bold enough to finance a rapid transition towards a clean economy. But we have the second largest emissions within Asean, the third largest automotive industry in the region, and a national oil company Petronas that contributes to national development in a way distinct from private companies such as Shell and Exxon.

This means that there will be resistance towards a radical shift away from fossil fuels and private vehicles from some powerful interest groups. It also means that if the US and EU moot carbon tariffs at the World Trade Organisation it could affect our exports if our economy is deemed below their climate standards. 

Such countries have outsourced carbon-intensive production activities in their global value chains to countries like Malaysia. It is hypocritical, but supporting their own fossil fuel interests has never stopped them from putting old protectionism in green bottles.

Two options 

Malaysia needs strategies to address these challenges. New climate policies are due in 2022, including a Climate Change Act and a National Adaptation Plan. Their content and direction remain unclear, and much work remains to be done. We have two broad options before us.

We can follow the lead of developed countries by using 2050 net zero goals as a deflection to delay action. The year 2050 is far enough away that today’s elderly leaders will either be dead or beyond the reach of accountability. But our children will inhabit that reality and they will be more or less vulnerable, better or worse prepared, depending on decisions made today. 

We could continue emitting greenhouse gases but just do so more efficiently, reducing the greenhouse gas emissions intensity of our economy – as is currently the target for 2030. 

Then we would have relied upon our forest stocks to count as absorbed carbon, or engage in controversial high-risk, high-cost approaches such as carbon capture and storage (CCS) that attempt to lock carbon dioxide back in the ground, as Petronas has signalled. 

The major risks of this pathway would be feeding climate change, potential environment, social, and governance (ESG) sanctions, and having to manage perceptions of greenwash.

Alternately, we can use a policy commitment to deep decarbonisation to direct investment and drive innovation. 

This would involve an aggressive increase in renewable energies beyond 31 percent of total supply, phasing out coal entirely, pursuing ambitious gains in energy efficiency to economise energy demand, adoption of circular economies, reversing the ratio of public to private transport to something like 60:40, stopping deforestation and restoring critical habitats such as mangroves and marine ecosystems to improve resilience. 

This will involve substantial expenditure, but it also presents a major business opportunity to become a regional green industrial hub and ensure long-term sustainability. This would dispel doubts in the private sector over ESG tokenism by showing it’s the only game in town.

We could also choose a pathway that is neither climate laggard nor climate champion. Like our current trajectory, we would minimise disruption to the status quo but expose ourselves to similar risks as the laggard path without the gains of being a champion. 

Taking climate change seriously means undertaking deep structural transformation, but the technologies and measures are now within reach compared to a decade ago. Malaysia’s climate policies must ultimately spell out our level of ambition and give a clear focus for national efforts. - Mkini

---

YIN SHAO LOONG is a senior research associate at Khazanah Research Institute focused on climate change and industrial policy. 

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.