Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on April 18, 2022 - April 24, 2022

THE United Nation’s newest science-backed report on climate change warns that countries have to take drastic action in the next few years to move away from fossil fuels in order to have any hope of limiting global warming to 1.5°C above pre-industrial temperatures.

The “now or never” warning by the UN’s Intergovernmental Panel on Climate Change (IPCC) raises the question of what further actions Malaysia and the rest of Asia plan to take.

So far, what is already known is that Malaysia plans to increase the share of renewable energy (RE) in its energy mix to 31% by 2025, and 40% by 2035. Based on press reports last year, RE accounted for just 18% of the country’s energy mix, with the rest coming from fossil fuels.

Last year, Malaysia announced a target to reach net zero by 2050, although details are yet to come. It has also committed to reducing emissions intensity per GDP by 45% by 2030 against the 2005 level.

Clearly, more needs to be done, experts say.

“From a climate perspective, more has to be done to decarbonise the economy and limit the temperature rise to 1.5°C. Beyond the climate pledges, a comprehensive strategy and implementation of the same will be fundamental to enable the transition and will also be the most challenging aspect,” Wai-Shin Chan, HSBC’s global head of environmental, social and governance (ESG) research, tells The Edge.

Consulting firm PwC’s Asia Pacific climate change lead, Low Lit Ping, says Malaysia needs to accelerate efforts to decarbonise, or reduce carbon emissions.

“We’re not moving fast enough, but it’s not just Malaysia — almost every country in the world is not moving fast enough,” Low tells The Edge in an interview.

“At PwC, we’ve got this Net Zero Economy Index that shows the speed of decarbonisation for the major economies of the world. Globally, on average, we need to decarbonise more than five times greater than we are [doing] now in order to limit global warming to 1.5°C by the end of the century. The IPCC report reinforces that we need to accelerate decarbonisation,” she says.

The IPCC report, released on April 4, highlights that in order to limit global warming to around 1.5°C — as agreed upon by global leaders under the Paris Agreement in 2015 — global greenhouse gas emissions would have to peak before 2025 at the latest, and be reduced by at least 43% by 2030 from 2019.

1.5°C is the threshold beyond which scientists say the dangers of extreme weather events — including floods, droughts and wildfires — will grow significantly.

The IPCC warned that if nations do not strengthen their current policies, global warming will reach 3.2°C by the end of the century.

Chan, who is also the head of HSBC’s Climate Change Centre, notes that Malaysia is “one of the most vulnerable countries” to physical climate risks.

“This is due to a myriad of factors including temperatures and changes in labour productivity due to heat, food security and the share of agriculture in the economy, as well as biodiversity and the threat to species and range,” he states.

Asked for his views on what more Malaysia needs to do, he says: “We think adaptation policies and funding need to be enhanced in order to build resilience to issues such as water scarcity and extreme weather events to avoid the worst impacts of climate change.”

Chan points out that delayed action on Malaysia’s part will make the climate mitigation and adaption much more costly and harder, as the effects of climate change like extreme weather events increase with warmer temperature. “Subsequently, the climate damage and economic loss would be higher,” he says.

The IPCC report suggests that decarbonisation should involve all sectors, with a particular focus on energy systems, urban areas and cities, transport and agriculture, forestry and other land use.

At higher risk of delayed transition

PwC’s Low notes that the IPCC discusses “delayed transition”, a risk she feels is higher for Malaysia and other countries in Southeast Asia (SEA).

“A delayed transition (DT) refers to a situation in which we are late in moving towards a low-carbon economy, such that we will need a Covid-19-style emergency response year after year to deal with the physical effects of climate change. So basically, you get the worst of both worlds — you get the physical climate impact and you incur the massive transitional costs,” she says.

“In contrast, if we moved to act now, yes, it would be painful, but we’d at least be taking a systematic and orderly approach and we would get to the point where policies gradually ramp up. The risk of a DT is, I think, more prominent for a country like Malaysia, for countries in SEA — because we are not yet at that stage of having a very deliberate approach to start now,” she opines.

She goes on to say: “Yes, there is some action [as] most of the SEA countries are trying to do something [to decarbonise] … but the signal is not as strong as what you might see in Europe. So, the risk of a DT is extremely prominent for SEA.”

One area in which Malaysia can do better than most is in the area of forest preservation.

“Given the growing [topic] of decarbonisation, a lot of attention has gone into how we should work on the carbon sinks and protect our forests and biodiversity. That’s an area, I think, countries like Malaysia and Indonesia will think about how they can take a leadership [position],” Low says.

“I won’t say we’re doing great, but that’s where the attention is and where we can do more on, apart from focusing on growing RE [capacity]. When we talk of increasing our electricity supply, we need to be thinking of renewables, not coal. That’s where we need to move towards,” she adds.

Last month, Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said the government may be releasing the details of its 2050 net-zero emissions plan this year.

He said the government is currently developing the framework, which includes exploring the introduction of a voluntary carbon market, carbon pricing mechanism such as carbon tax, and the expansion of green technology tax incentives.

He said the Ministry of Environment and Water was also in talks with Bursa Malaysia Bhd on carbon trading.

 

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