Time to exploit the green economy

 

Malaysia can benefit from the green economy but not in the way it is often presented.

Most green economy policies will not benefit Malaysians that much and if they are pushed too far they will even impose a huge burden on ordinary people, especially those on low incomes.

Introducing “green policies” is easy in principle but often undesirable in practice. The challenge is that the social and economic loss is often very high for very little environmental benefit.

For example, Malaysia makes very little impact on global warming, accounting for only 0.7% of global emissions.

Malaysians could turn off all the electricity, switch off the air conditioning and stop all the cars but it would not stop or even slow down global warming. It would just make people feel hotter and poorer.

Malaysia will not achieve net-zero by following policies of other countries. Carbon taxes, electric vehicles (EVs), green products or any of these agendas are mostly irrelevant in the Malaysian context.

The effect of green policies like these and the net zero target for 2050 may harm economic growth and development which will hold back social development.

Instead Malaysia can take advantage of the opportunities of the demand for green products overseas by using its natural resources to meet that demand just as it did with oil and gas and palm oil in the past.

The National Energy Transition Roadmap will raise the production of green energy beyond the energy requirements of Malaysia. This excess can be sold in other markets such as Singapore.

The strategy for Malaysia should be to over-produce electricity from renewable and clean energy sources and then to sell it to countries that want clean energy at low costs so Malaysia makes money from the green demand overseas.

This allows Malaysia to achieve net-zero by reducing the emissions of buyers as well as reducing its own carbon footprint.

Of course it will compete with other countries on this.

Malaysia can also contribute by providing rare earth resources used in green growth products, which are estimated to be worth RM800 billion or even RM1 trillion.

In other words Malaysia benefits from the demand for green growth in other countries as a supplier of green growth solutions.

The green growth agenda will not significantly reduce carbon emissions in Malaysia directly.

The push for EVs and solar panels for example makes very little difference in Malaysia but the demand overseas benefits Malaysia because of the rare earth resources here used in these technologies, for batteries for example.

Malaysia benefits from the natural resources it has which can be extracted and sold generating huge potential income.

The extra money generated from green technology sales in rare earth metals and renewable energy offers a similar money source as oil and gas and palm oil.

This can be used for investment and development to boost economic growth. It could even add to a Malaysian Superfund to tackle the pension crisis.

Adoption of green economy products and services is largely irrelevant to Malaysia, especially to low-income groups. This is why adoption rates are low.

Conventional products, services and technologies are better, cheaper and economically more viable.

This is mostly similar to other countries. The economic case for green technologies, products and services has not been made, which is why adoption rates are low everywhere. Malaysia is not so different in this respect.

There is room to exploit natural resources and the possibility of green energy and the government and private sector are already pursuing that sufficiently.

Perhaps they could help the market by reducing regulations to make extraction of natural resources cheaper and quicker. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.