Malayasia's sustainable development plan for 2025 might involve carbon taxes or reductions in fuel subsidies, according to recent speculation.
In a bold stride towards a greener future, Malaysia is embarking on a comprehensive transformation, focusing on structural reforms and sustainable development.
One of the key initiatives is the ongoing reforms, which include the fuel subsidy cut that commenced last May and the introduction of locally-assembled electric vehicles. The government is also focusing on substantial investments in grid infrastructure and comprehensive electricity planning, with the aim of increasing renewable energy capacity to 31% of the energy mix this year.
Malaysia's commitment to combating climate change is further evident in its draft climate change bill. This legislation, if passed, could establish a legal framework for climate action, with long-term climate targets. However, the draft has faced criticism for its lack of provisions for climate adaptation, loss and damage, and the rights of Indigenous peoples.
Recognising the importance of waste management in the quest for sustainability, Malaysia plans to launch waste-to-energy (WTE) plants to manage municipal solid waste. However, non-governmental organizations have raised concerns about WTE, citing that it generates GHG emissions and discourages recycling efforts.
To address this, measurable waste reduction targets and timelines with economic incentives and penalties for non-compliance are crucial for transitioning towards Extended Producer Responsibility (EPR). Policies are also needed that prioritise waste segregation and retrieval to ensure recyclables are sent back to producers or manufacturers for re-processing.
Data reporting mechanisms are essential to monitor progress in waste management. In line with this, Malaysia is engaging companies in the iron, steel, and energy sectors to prepare for the carbon tax announced in the 2025 budget.
In the realm of carbon trading, Malaysia signed a Memorandum of Cooperation (MoC) in Baku, Azerbaijan, providing a two-year roadmap for collaboration on cross-border carbon trading. Furthermore, Malaysia proposed an Asean standard for carbon projects in July 2024 and launched the Malaysia Carbon Market Association (MCMA) to accelerate the development of its carbon market.
Malaysia's leadership in the Asean region is evident as it spearheads the operationalisation of the Asean Common Carbon Framework (ACCF) with representatives from Singapore, Thailand, and Indonesia. The country is also expected to leverage its leadership as Asean chair to drive the adoption of the ACCF and foster regional collaboration on carbon markets.
However, challenges remain in transitioning to cleaner energy sources. Malaysia has yet to launch an emissions trading system to tax polluting industries, which is a crucial step in the transition. The development of an emissions trading scheme could pave the way for the co-existence of both voluntary and compliance carbon markets.
In over 1,000 kilotonnes of manufacturing waste currently classified as 'others', there lies a gap in how Malaysia identifies and processes used materials. This underscores the need for a more comprehensive approach to waste management and recycling.
As Malaysia moves towards its 2050 net-zero emissions target, it is undertaking sector reforms to enhance efficiency and promote renewable energy integration. The foundation of the Malaysian Carbon Market Agency (MCMA) in 2023 marks a significant step in this direction, accelerating the development of Malaysia's carbon market.
In conclusion, Malaysia's green transformation is a multi-faceted approach that encompasses structural reforms, waste management, carbon trading, and renewable energy integration. While challenges remain, the country's commitment to sustainability and its regional leadership in carbon markets bode well for its future.
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