Is ASEAN Critical to its Regional Climate Actions?

Despite many sceptics who thought the wide divergence of views among its members would pose difficulties, the Association of Southeast Asian Nations (ASEAN) has now been celebrated as an economic powerhouse, known as the major global hub of manufacturing and trade apart from being one of the world’s fastest-growing consumer markets. However, ASEAN now faces an unprecedented threat, as the region is considered as one of the most vulnerable to climate change. As ASEAN turns 53 this year, one may wonder how the regional organization is responding to this challenge. For this issue, this article intends to discuss ASEAN’s involvement in formulating climate policy initiatives, its challenges, and the way forward to strengthen policy enforcement and climate change commitments of its member states.

According to the Global Climate Risk Index 2020, four of the world’s ten countries most affected by climate change are located in Southeast Asia: Myanmar, the Philippines, Thailand and Vietnam. While all ASEAN Member States (AMS) are susceptible to climate impacts such as sea-level rise, extreme weather events like extreme drought and flood, the effects are more pronounced in countries with significant low-elevation coastal areas where increased frequency and intensity of typhoons, tropical storms, floods and droughts have regularly gripped news headlines. In addition to physical damage and impact on fishing resources, climate change threatens food security in the ASEAN region through loss of agriculturally productive territory and reduced nutritional value of crops.

Member states need to step up their efforts in tackling climate change. ASEAN plays an important role to incorporate climate change adaptation and mitigation in its regional frameworks to push the AMS. Below is a brief account of ASEAN’s initiatives on climate action since 2007. 

  • 13th ASEAN Summit where the ASEAN Declaration on Environmental Sustainability was announced in 2007
  • It was then followed by the ASEAN Declaration on the 13th Conference of Parties (COP) and 3rd CMP to the Kyoto Protocol. The declarations had a clear goal to address climate change issues and achieve sustainable development
  • This was also followed by the ASEAN Socio-Culturally Community (ASCC) Blueprint 2009-2015 where it aims to address impacts of climate change through the implementation of adaptation and mitigation measures with a few principles at core like the common but differentiated responsibilities
  • ASEAN Working Group on Climate Change (AWGCC) was also established in 2009 to oversee the blueprint accompanied by other relevant working groups like energy and transport
  • ASEAN Multi-Sectoral Framework for Climate Change: Agriculture and Forestry Towards Food and Nutrition Security and Achievement of SDGs was integrated into the ASEAN Framework for Climate Change (AFCC)
  • ASEAN has also worked on several regional policies related to climate change such as ASEAN Plan of Action for Energy Cooperation, ASEAN Environmental Education Action Plan and also ASEAN Disaster Management and Monitoring Response System

While the regional efforts mentioned above deserved to be recognised, the conversation on climate change has yet to get a centre stage in its regional meetings, as issues of economic development are still the main priorities for AMS. The increasing coal consumption, in addition to relatively modest and unambitious nationally determined contributions to the Paris Agreement are hurting ASEAN’s fight against climate change. Further, limitations like inadequate capacity, monitoring mechanism and consensus-based decision making had caused difficulties in implementing resolute solutions. Weak enforcement of existing AMS agreements has also been the subject of criticism. For example, although the ASEAN Agreement on Transboundary Haze Pollution (THPA) was agreed in 2002 but considering it is a consensus-based decision making, thus it was fully ratified in 2014. Even years after its ratification, the haze still becomes a recurring problem in the region as the THPA prescribes no specific sanctions against a country that fails to comply with its obligations. 

As climate change issues become more critical and complex, ASEAN has to rethink how best it can coordinate climate change actions across the different sectoral working groups. It also needs climate change concerns to be mainstreamed in all of its institutions, and not only limited to the socio-cultural, but also economics and political security frameworks. For example, the climate change agenda should be embedded in foreign trade agreements facilitated by ASEAN, due to increasing investor’s interest in environmental sustainability. Regional cooperation amongst the AMS in addressing climate change is imperative not only for their economic interests, but also to safeguard their credibility in shaping the discourse on climate justice and sustainability issues at the international stage. ASEAN also needs to strengthen the enforcement mechanism of its existing agreement, and hold members accountable over their commitments. It can start to: 

    • Advocate for an improved disclosure and reporting of climate change related risk and commitment, as well as monitoring and publicly commenting on the implementation of nationally determined contributions by its member states 
    • Formulate a Regionally Determined Contribution (RDC) for ASEAN to encourage more ambitious commitments between member states
    • Expedite the formulation of ASEAN Climate Change Initiatives (ACCI)
    • Accelerate and expand the implementation of ASEAN Power Grid (APG) to facilitate speedy roll-out of renewable energy sources which would also allow regional renewable electricity trade between its members 
    • Emphasize the importance of strengthening partnerships, best practices between member states, and 
    • Continuously engage private sectors and civil society groups in addressing climate change

ASEAN’s motto “one vision, one identity, one community” distinctly portrays the serious commitment of the association to unify its 10 member states into a shared goal of achieving “cooperative peace and shared prosperity”. Now, it is more important than ever to turn that spirit into collective action in responding to the threat of climate change. 

References

Anbumozhi, V. (2017). Ensuring ASEAN’s Sustainable and Resilient Future. ASEAN@50 – Building ASEAN Community: Political–Security and Socio-Cultural Reflections, 4, 309–323. 

ASEAN Climate Change and Energy Project. (2019). Multiple game plan for ASEAN in tackling climate change. ASEAN Climate and Energy Insight. https://accept.aseanenergy.org/wp-content/uploads/2019/12/Energy-Insight_Multiole-Game.pdf  

Eckstein, D., Künzel, V., Schäfer, L., & Winges, M. (2020). Global climate risk index 2020. Germanwatch. https://germanwatch.org/sites/germanwatch.org/files/20-2-01e%20Global%20Climate%20Risk%20Index%202020_10.pdf 

Letchumanan, R. (2010). Is there an ASEAN policy on climate change? Climate Change: Is Southeast Asia Up to the Challenge, 50–62. Retrieved from https://www.snrd-asia.org/wp-content/uploads/SNRD-Newsletter/issue-2/Documents/Adaptation%20to%20Climate%20Change/Is%20there%20an%20ASEAN%20policy%20on%20Climate%20Resillience.pdf 

Sagbakken, H., Overland, I., Merdekawati, M., Chan, H. Y., & Suryadi, B. (2020). Climate change, security and regional cooperation in ASEAN. ASEAN Focus. https://www.iseas.edu.sg/wp-content/uploads/2020/02/ASEANFocus-March-2020.pdf

The ASEAN Post. (2019, November 26). Is ASEAN losing its battle with climate change? https://theaseanpost.com/article/asean-losing-its-battle-climate-change

Wijaya, A., & Idris, S. (2018, September 26). ASEAN countries must act together to confront climate change. World Resources Institute. https://www.wri.org/blog/2017/11/asean-countries-must-act-together-confront-climate-change

Written by: Chew Ai Hui, Fathi Rayyan, Liyana Yamin, Rahim Ismail

Of COVID-19, Oil Price Crash, and Climate Change

The arrival of the new decade has presented itself in a daunting way and 2020 has been nothing but tragedies. The coronavirus pandemic has swept across the globe and infected millions with hundreds of thousands of mortalities. Oil price crashed and WTI crude has reached a negative price for the first time in forever. Climate change agenda is still on the table and struggling as countries around the world roll back climate-friendly policies amidst the public health concern. Even the Conference of the Parties (COP) has been postponed for a year due to the concerning pandemic.

Let us look at what has happened thus far. The outbreak of COVID-19 started late 2019 and spreading violently early this year. One by one, the countries closed their border and lockdown orders were issued. People were advised to stay at home and were enforced to social distancing in an attempt to flatten the curve. The economic activities started to slow down as people are no longer travelling and working from home. Factories are shut, international air travel declined, and non-essential businesses are closed, which reduced the global demand for oil, the energy source that mostly powers the economy. 

Now, comes the OPEC+ coalition led by Saudi Arabia, entering in a discussion with Russia to cut the oil production. The negotiation essentially fall apart when Russia refused to slow down their production, further driving the oil price down as both Saudi Arabia and Russia ramping up their production in a bid to gain the market share. The price war and the low global demand for oil has caused a worldwide oversupply and deficit in storage. The oil price kept dropping and anybody with oil futures contracts are scrambling to get the contracts off their hands. They are paying to release the contracts as there is no more storage available to reserve the supply. Then, it happened, the free fall of oil price. The WTI crude dipped to a negative price and traded as such. It has since rebounded but still hovering at a low price of around $30.

Needless to say, the oil price has always been volatile and this is one of the many cycles that we have observed. However, the COVID-19 situation did trigger the major collapse of oil prices. The supply and demand shock that the oil and gas industry experienced today may be the first in history. The oil price is expected to be low for a significant period as countries reopen and the global economy recovers. The major enigma now, what does this mean for climate change? Does it help the climate change agenda and accelerate climate action or will it delay the supposed transition from fossil fuels?

Historically, low oil price is a major issue with significant impacts for climate advocates. The low price tag of oil supply reduces the incentives to change to a more sustainable energy and raw materials. People will be driving more often, logistics costs will be more economical, and it will be more affordable to use natural gas as a source of energy. This will drive consumption and ultimately increase carbon emission. It will be difficult to convince some policymakers and business leaders to switch to renewable sources of energy. In short, the low oil price affects the economic decision and that decision is not necessarily in favour of the climate change agenda.

In the transportation sector, the low oil price delays the transformation to electric vehicles as there will be a sustained demand for internal combustion engine vehicles. The fuels are cheap enough for people to ignore the fuel economy of the car and have more mileage at the same cost. The sales of conventional vehicles will be booming and electric vehicles will be only appealing to those who are less cost-conscious in making economic decisions. Even in the logistics sector, the affordable fuels for the trucks, ships, and airplanes accelerate business growth as more goods transported around the world.

The low oil price creates a business case for the energy sector to use natural gas as an available option for the source of energy. It diminishes the immediate needs to deploy renewable energy and entice the policymakers to continue to rely on fossil fuels rather than sourcing to alternative energy. Even in the manufacturing sector, petroleum remains the major raw material for many products, from crayons to lubricants. Low oil price abates any effort to substitute this material with a more sustainable source. Plastics will remain as the go-to material for packaging with lesser incentive to find alternatives. Yet, there is still a glimmer of hope for the climate change agenda. The low oil price only delays the energy transition but did not change the trend.

The recent cycle of oil price crash is another proof that the market is volatile and demonstrates that it is an unreliable investment. The latest market crash should be the catharsis for the oil and gas industry to change their investment strategy. In a world with a low oil price, small producer companies will be forced out of business and they will need government intervention to recover or else bankruptcy is imminent. However, big producer companies are resilient and chose to wait it out as they have enough cash reserve to persevere of yet another cycle. Nowadays, they are pressured to diversify their portfolio in an extravagant attempt to future-proof their company. The golden preferred investment? Renewable energy.

In a bigger scheme of things, this approach makes sense. Renewable energy is dubbed as the cheapest source of electricity. The cost of developing and building the infrastructure for renewable energy is lower than the fixed cost of fossil fuel and it is decreasing as the innovation progressed. The renewable energy sector is less volatile than the fossil fuel market hence it should be an attractive investment. Reading the room, the oil and gas companies should invest strategically in the renewable energy sector and start the energy transition. An unconventional move has to be made to stop investing in new fossil fuel infrastructure. The oil and gas industry has the capacity to change the tide and the industry is never short of great engineering talents so expanding to the renewable energy sector is not a far-fetched idea. It is just a matter of will. The industry can take this opportunity as an advantage, right here right now, to reduce the dependency of fossil fuels and build more infrastructure to accommodate the new energy. It is a long-term exit strategy for a sustainable prospect and future-proofing of the company.

PETRONAS recently recorded a 68% fall of profit after tax in the first quarter of 2020. To brace the impacts of the coronavirus pandemic and oil price crash, PETRONAS has decided to cut capital expenditure and operating expenses of the year. Still upholding the three-pronged strategy; maximize cash generators, expand core business, and stepping out, PETRONAS plan to future-proof the organization and ensure the company’s long-term sustainability. With the establishment of the new business unit, Gas & New Energy, PETRONAS should react to the current situation by investing heavily in wind and solar energy infrastructure and accelerating technological innovation as outlined in the strategy of stepping out. The acquisition of Amplus Solar and a joint collaboration with Universiti Teknologi MARA are good starts but PETRONAS is capable to do more than that. Building solar farms and conducting feasibility studies of offshore wind farms are among many proactive measures that PETRONAS can undertake in this situation. It is imperative for PETRONAS to grow renewable energy as one of the core businesses and cash generators since it is an incentive to dampen the effect of oil price volatility. The shift, sooner or later, will help to sustain the company. Hopefully, the cost-cutting exercise soon to be conducted by PETRONAS would not involve the little amount of 5% of capital expenditure, announced earlier this year, reserved for the renewable energy. After all, PETRONAS aspires to be a significant contributor to the Malaysian government’s renewable energy target of 6GW by 2025.

No doubt that the coronavirus pandemic has triggered the oil price crash and in a way, it has helped reduce the carbon emission as people stay at home and non-essential long-haul journeys are banned. It is nothing short of tragic. What matters the most is the next steps. We must take advantage of the low oil price and volatility of the market as a sign to invest in clean energy, hence recognizing the long-term economic trends and urgent threat of climate change. The business case of fossil fuel investment has weakened leading to accelerated energy transition. However, it must be acknowledged that low oil prices could reduce the economic incentives to reduce emissions. Nevertheless, we should come out of this pandemic and market crash with a new outlook and fresh perspectives. The oil and gas industry may not recover to its former glory but we can make the energy industry to be future-proof. Business, as usual, should not persist and the challenge of climate change should no longer be ignored.

Bibliographies

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Written by: Meor MH

Migration Issue: Why the Global Community Needs to Care About Climate Change?

1.0   What is Climate Migration?

Climate migration is the result of climate change effects causing population movements away from increasingly unviable or uninhabitable places. The International Panel on Climate Change (IPCC) noted it as one of the greatest climate change impacts. Millions will be displaced due to coastal inundation, water stress, frequent flooding, reduced crop yields, disease outbreaks, among other climate change effects. Climate change will cause population movements by making certain parts of the world much less viable places to live in. 

Definitions and labels conferred to people displaced by climate change have very real implications for the obligations of the international community under the law. There are a lot of discussions surrounding it worth exploring and it is a highly contested debate amongst international rights lawyers. For the purpose of this article, we shall adopt the definition proposed by the International Organisation for Migration (IOM) which states “Environmental migrants are persons or groups of persons, who, for compelling reasons of sudden or progressive changes in the environment that adversely affect their lives or living conditions, are obliged to leave their habitual homes, or chose to do so, either temporarily or permanently, and who move either within their country or abroad”. IOM in their study on Migration and Climate Change uses the term “forced climate migrant” acknowledging that it is not a universally accepted term but hopes that it conveys a reasonable and accurate impression of the increasing phenomenon of non-voluntary population displacement likely as the impacts of climate change grow and accumulate.

 

 

2.0 How Climate Migration Materialises in Asia

Asia is projected to be hard hit by climate change, more than most regions in the world. The Global Climate Risk Index 2019 forecasted that intense cyclones, excessive rainfall, and severe floods will make South and Southeast Asia among the worst affected by climate change. When adaptation measures fail to perform in one country, victims resort to migrating away from the disaster region. In some cases towards less affected parts within the country, and in the cases of international interest, across country borders. In 2019 we have recorded India and Pakistan baked in a heatwave, Chennai was hit by a water crisis, rising seas engulfed Indonesia’s coastline, powerful storms slammed into the Philippines, Indonesia’s forests were  ablaze, and torrential rains lashed Bangladesh, Nepal, India, and Pakistan. All of these contexts are important to illustrate how other neighbouring countries of affected states will be roped into this scenario.

As much as migration is seen as an important mechanism to deal with climate stress, people usually only resort to it when other means of adaptation are insufficient to meet their immediate needs, i.e when governments have proven incapable of giving assistance. In slower-acting climate processes or even in the most extreme of natural disasters, climate migrants would require money and networks like family, friends, or historical ties in a destination country they would settle in. These people displaced by environmental causes will mostly find new homes within the boundaries of their own regions. The 2004 Asian Tsunami for example killed more than 200,000 people and displaced twice as many. However, they were not displaced to OECD countries but rather were overwhelmingly borne by the local region. Those who are not able to find new homes within their own country usually seek refuge in places where there are existing cultural or ethnic ties to them. Therefore, Bangladeshis are likely to seek refuge in India or Pakistan, Indonesians from Sumatra would consider Malaysia and so on. As a country that is already struggling to  address humanitarian issues due to the influx of  hundreds of migrants/refugees, Malaysia must adapt itself for this larger  scale humanitarian issue involving tens if not hundreds of thousands of migrants/refugees driven by climate change.  

 

 

3.0 Impacts of Climate Migration

If climate migration follows the pattern of the existing civil and humanitarian crises migration pattern, the probable case would be that low to middle-income countries  will be the largest hosts of climate migrants. This is especially the case for Malaysia as our neighbouring countries are hotspots for climate disasters; from threats of inundation of thousands of Indonesian islands and more than 20 separate incidences of typhoons in the Philippines just last year. Climate migrants tend to stay within their borders or their cultural lines, or are flushed to the city, causing a phenomenon known as the urban flood. This could negatively impact urban welfare and service provision, with studies predicting a massive increase of people living in the slums, possibly up to  1.7 billion, if the phenomenon is unplanned and rapid. This is exacerbated by food and water scarcity caused by climate change itself, and increases the spread of disease with overpopulation.

In Malaysia, rapid urbanisation had resulted in  sprawling car-dependent low density areas with little public open space, often characterised by an exploding rate of land clearing with significant growth in population, like the Klang Valley. Urban sprawl is also the cause of several environmental adversities, like loss of green space, species habitat, and agricultural land in the wake of low-density sprawling development. The development of infrastructure such as  pavements increased the total surface area of  impervious surfaces, which leads to flash flooding that overwhelms the drainage system. 

Even though the number of people displaced through climate migration are in the millions, the normative frameworks and policy response remains scattered and inadequate. Addressing the issue today would minimise forced displacement and minimise the fluctuation in patterns of climate-induced migration, which is already incredibly difficult to keep track of due to lack of capacity. This results in the  inability to be spatially and temporally specific about the location, severity, timing, and nature of climate change and its likely impacts on different population groups, leaving us unable to predict and prepare for the impact.

 

 

4.0 Recommendation to Actors

Currently, Malaysia has no existing policy response to climate migration. It would be humane of us to start opening diplomatic doors for international climate migrants as done by countries like Australia and New Zealand, to save vulnerable people who would otherwise be at-risk of extinction. The lack of legislative or administrative provisions for refugees and asylum seekers in Malaysia means that the burden of protection of the refugees, from reception, registration, documentation, and also refugee status determination would lie upon the 173 staff of UNHCR who are currently monitoring a total of 178,600 refugees from their 2 offices. In their report, they cited that the lack of funding hampered their effort to support the government. If the population of people of concern continues to grow with climate migration and the policy response remains dormant and inadequate, this support from UNHCR may shatter under the pressure.

To enable an easier transition for  climate migrants, pre-existing frameworks can and may be utilised. In assisting them, governments should be pressured to pursue efforts broadening the definition of refugee, constituted within the refugee law and to revise the principle of non-refoulement within the International Covenant on Civil and Political Rights as  suggested by the United Nations Human Rights Committee following the case of the Teitiota family from Kiribati who sought asylum in New Zealand. 

Preservation of life should always be the priority of any government, regardless of its method as upheld in the European Court of Human Rights, in Budayeva & ors. v. Russia, that even inaction upon positive obligation is a breach of human rights. Such a precedent should be applied to climate change due to the repeated nature of failure of risk mitigation, warning issuance, as well as evacuation aid and negligence investigation when necessary. Whilst it may not be binding in Malaysia, this precedent could be persuasive in convincing the state and public to create a framework for adaptation should we wish to pursue and advocate for it.

In essence, climate migration is an inevitable effect of climate change. Legal frameworks and other means of adaptation are crucial in ensuring the preservation and protection of human rights. Therefore, the state must look into addressing this issue urgently. As individuals, we could contribute by volunteering via manpower, expertise, or even pecuniary means. Here are some UN-accredited organisations within Asia and the Pacific that you could contribute to: https://www.unenvironment.org/civil-society-engagement/accreditation/list-accredited-organizations.

Written byMahirah Marzuki, Azierah Ansar

Study Session #3 – How Climate-Sensitive are Malaysia’s Laws and Regulations?

Study Session #3 – How Climate-Sensitive are Malaysia’s Laws and Regulations?

The Malaysian Youth Delegation (MYD) organised its third study session this year on 11 July 2020, discussing climate mitigation and adaptation in Malaysia. The session was guided by Evelyn Teh, a Senior Researcher on Climate Change at the Third World Network (TWN). She assists the TWN team in producing climate talk reports for negotiators, think tanks and civil societies at the UNFCCC. She is a core team member in Malaysia’s 2020 NDC update task force, and a working group member on ‘Environment, Climate Change and Disaster Risk’ for the 12th Malaysian Plan (12MP). Evelyn has been trained in environmental policy and impact assessment, urbanisation and social studies.

  

Evelyn Teh Senior Researcher on Climate Change at the Third World Network (TWN), presenting her slides to the Malaysian Youth Delegation audience over Zoom

“We must either prepare for the best case scenario from a more sustainable future, or be prepared to live with the worst case scenario from a business as usual future.”

 

The session was kicked off by stating the importance of drastic measures to reduce GHG emissions which must be achieved within the next 12 years to keep temperatures within 1.5℃ above pre-industrial levels. Evelyn noted that legislative measures become integral in restricting, regulating, and facilitating a holistic and climate-centric approach for economic and social development.

 

Evelyn goes on to highlight that It is important to understand how law works to help us connect the dots on why some laws are stuck, why are some laws so old, why are some laws existing but not implemented on the ground. This understanding can help us better tackle and call for implementation of climate change into Malaysian law. To name some important basics mentioned by Evelyn, Policy is not legally binding but can lead to new laws, an Act is a piece of legislation that is a basis for forming a Law and a Law is an implemented Act. Implementation of climate change policies depend on how mainstreamed climate change planning is across various ministries, including state departments and agencies. During the session, various acts and policies were analyzed and critiqued to identify potential areas of improvement. 

 

The Renewable Energy Act 2011 provides the establishment and implementation of a special tariff system to catalyze the generation of renewable energy and to provide for related matters. It was noted that it only identifies electricity as energy. Attention is not focused on recovery of usable heat as an important sustainable energy source for industrial, commercial and residential applications. This causes a missed opportunity to harness other forms of energy which can potentially decrease our GHG emissions.

 

The National Land Public Transport Master Plan was formulated to drive regulatory and industry reform for the transport sector with an aim to increase the public transport modal share for urban areas from 16% in 2011 to 40% in 2030. Currently taking into account every urban area, the public transport model share is not too good, for example in Penang it is only 3% .Despite these plans, Malaysia is still expanding the industry based on non-sustainable models. Last year alone the government spnet RM1.89 billion in fuel subsidies and private cars are affordable (average of 1.1 Million new registrations per year between 2010 – 2019). So imagine 1.1 Million new vehicles on the road every year – to manage this surge, the Malaysian solution was to build more roads, but it only paves way for exacerbating GHG emissions. 

 

Legislation for the agricultural sector in Malaysia is guided by the National Agro Food Policy (2011 – 2020) and the National Commodity Policy (2011 – 2020). Their sole purpose is to increase food production and export of industrial commodities. The concept of a self-sustaining index is non-existent in these policies. There is a dangerous imbalanced focus and investment on cash crops: Palm oil, cocoa, pepper, coffee, tea, various fruits including durian, and coconuts have caused extensive deforestation, monoculture and increased emissions from unsustainable farming practices driven by the need for high production. The policies’ heavy dependence on imported foods and lack of a holistic environmental view when it comes to expanding the sector is a worrying sign for Malaysia’s food security. 

 

The session also mentioned potential flaws in the industrial sector, highlighting the cement industry, construction and urban planning, waste management and the environmental quality assessments. In general, environmental accountability, emission standards and control is poorly regulated. Evelyn shared that the  Environmental Impact Assessment, managed by the Department of Environment or Environmental Quality Act, does not consider the carbon footprint and emissions impact of any assessed project. There are no provisions in the EQA or the EIA Guidelines where it makes a distinctive requirement for projects to mitigate its carbon footprint or place any emphasis on projects to have climate adaptive features. Furthermore, Methane is not considered as an air pollutant alongside nitrous oxides and sulphur oxides.

 

Evelyn ended the session by noting that addressing climate change is a highly complex, multifaceted, challenging attempt to undo business as usual but it is necessary. We must either prepare for the best case scenario from a more sustainable future, or be prepared to live with the worst case scenario from a business as usual future.

 

Some of the members from The Malaysian Youth Delegation and Evelyn Teh during the 3rd Study Session over Zoom.

Some of the members from The Malaysian Youth Delegation and Evelyn Teh during the 3rd Study Session over Zoom.

Written by: Janak Preet Kaur

 

The Need for a Green Economic Recovery

To date, the COVID-19 pandemic has spread to every continent except Antarctica. More than a global health crisis, the pandemic also represents a daunting socio-economic crisis that will leave deep, long lasting social, economic and political effects in every country worldwide. Governments around the world are taking unprecedented measures to limit the spread of the virus and support their economies which have been severely disrupted by the virus. While various economic recovery packages have been introduced, only a handful of decisions took into account measures that target post-carbon economic priorities. 

ASEAN is slow to go green

ASEAN countries adopted a regional agenda in 2015, known as the ASEAN Community Vision 2025, which sets out the path for an ASEAN community that is politically cohesive, economically integrated and socially responsible and therefore has significant parallels with the United Nations 2030 Agenda for Sustainable Development. Whilst advances have been made towards some Sustainable Development Goals (SDGs) in Asia and the Pacific, the rate of progress is insufficient to meet any of the 17 SDGs by 2030. The Asian Development Bank estimates that ASEAN nations will need between USD2.8tn and USD3.1tn in infrastructure investment from 2016 to 2030, hence implying an annual average investment need of USD185bn to USD210bn. Since the launch of the ASEAN Green Bond Standards, ASEAN Social Bond Standards and ASEAN Sustainability Bond Standards in 2017 up to June 2020, a total of only USD 5.41bn in bonds have been issued under the standards from 4 member countries, with Malaysia in second in terms of bonds issued, at a total of USD1.43bn (52% Sustainability, 48% Green). The Philippines leads the pack at USD2.37bn (66% Green, 34% Sustainability) in green bonds.

The recent mobilization of fiscal and monetary measures among ASEAN Member States (AMS) to mitigate the economic impact are all national strategies in the midst of the negative effects of global trade tensions and the very real prospect of recession due to the COVID-19 pandemic. The stimulus packages introduced by the AMS entail several overarching key measures such as health systems, income support, taxes, leases, loans, and business upgrading. Despite the promising trend in fixing the economy, green stimulus packages are nowhere to be found in the region. While Malaysia’s own PENJANA package rightfully focuses on protecting jobs, FDI and SMEs, it could do with more green commitment. Scientists and researchers have been emphasizing this chance to start rebuilding the economy after COVID-19 in a greener direction. The capacity of Malaysia to deploy holistic stimulus packages portrays our capability to be the trailblazer for green packages in ASEAN.

Economic growth and green policies go together

Before getting into the details of a green economic recovery package, we must first address the elephant in the room. What about economic growth? For decades, it has been generally accepted that there is some sort of trade-off between economic growth and environmental sustainability. However, the idea that both economic growth and environmental sustainability can go hand in hand has been growing since the mid-2000s. There has been a recent study in the UK by Oxford University regarding the impact of a traditional COVID-19 economic recovery package compared to a ‘green’ economic recovery package, with results showing that a greener package can in fact be more beneficial to economic growth in regards to creating more jobs and a long term increase in cost savings. Furthermore, the discourse caused by the COVID-19 pandemic within economies of the world is the most opportune time to transition into a greener economic growth model.

Why would a greener package be better?

 

Firstly, let us address the misconception that green investments generate less returns. There is no clear evidence that green investments come at the expense of generating returns. In the IMF’s 2019 Global Financial Stability Report, researchers found that the performance of sustainable funds is comparable to that of conventional equity funds. The report estimates that more than 1,500 equity funds now have an “explicit sustainability mandate”, controlling nearly $600 billion in assets. However, this still only represents 2% of the total investment fund universe. Norway’s Government Pension Fund Global (GPFG), also known as the Oil Fund, was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector. Owning over US$1 trillion in assets, it is the world’s largest sovereign wealth fund. In 2019, GPFG committed to divest from firms that explore for oil and gas, leading to a £130m share price drop off several UK-listed firms.

With the cost of renewables coming down, it is also becoming increasingly attractive to invest in green tech through various financial structures. In fact, the supply and prices for renewables are more stable than for oil and gas, which recently traded at negative prices. Tesla’s stock price continues to skyrocket, while 2019 saw a total of 479 green bonds issued worldwide, up by a quarter compared to the previous year. Whether through equities, bonds, ETFs, or hedge funds, the demand for ESG investing is also on the rise. 

In fact, governments now have an even stronger incentive to invest green to mitigate climate change. While private investors only seek maximum returns, governments have the responsibility to ensure the welfare of its current and future citizens. There are wide-ranging catastrophic consequences to climate change, from the sinking of capital cities to extreme weather conditions that will wreak havoc on communities all over the world. Since governments are already being forced to inject economic stimulus to sustain economies through the ongoing COVID-19 pandemic, they should be using this opportunity to target environmentally friendly policies. This will help slow the rate of climate change and lower our global carbon footprint. 

Malaysia can lead ASEAN in adopting more progressive green policies

 A common theme seen across green COVID-19 economic stimulus around the world is increased priority on renewable energy. Countries like Luxembourg, Norway, Lithuania and South Korea offered various forms of support for installations of renewable energy sources in households, industrial or public buildings. In Malaysia, ongoing initiatives and incentives in the renewable energy sector include feed-in tariff programme, extension of green investment tax allowance and green income tax exemption until 2023, Green Technology Financing Scheme 2.0 and competitive open tenders for large scale solar (LSS) plants. In fact, the ongoing fourth round of LSS bidding process – LSS@MenTARI – which offers up to 1,000 MWac represents the largest tender to date since the LSS programme commenced in 2016. The Ministry of Energy and Natural Resources (KeTSA) expects LSS@MenTARI to generate 12,000 job opportunities as 1MW of solar can create 12 jobs. While the aforementioned measures contribute towards Malaysia’s aspiration of 20% renewable energy capacity mix by 2025, more comprehensive and ambitious plans need to be implemented in order to escalate the pace of renewable energy adoption in Malaysia’s energy mix which is still reliant on fossil fuels.

Another potential industry that Malaysia could delve into is the market for hybrid and electric-vehicles (EV). This industry is gaining traction fast, with a few countries such as Germany planning to upgrade their city infrastructure with charging stations to facilitate the shift to EVs, and include incentives for EVs in their COVID-19 stimulus package.The total sales for EV in Malaysia are far cry from the volume in the advanced market due to the exorbitant price tag and limited charging stations across the country. By incorporating policies for the EV industry in the stimulus package, large investment in advanced technologies could allow Malaysia to prioritise the development and manufacturing of EV and enhance the infrastructure and support for the vehicles. This will set precedent to the region and allow a green economy to flourish through the creation of green jobs.

To conclude, green policies and investments are the way forward in moving towards a resilient economy in a post-COVID world. With the ongoing COVID-19 pandemic, this is the most opportune time to rebuild Malaysia’s economy in a green direction. We strongly urge the government to incorporate environmental considerations in Malaysia’s next stimulus package, be it in response to COVID-19 or recession, creating a sustainable future for both Malaysia, and the world.

References

ASIA AND THE PACIFIC SDG PROGRESS REPORT (2019) UNESCAP. Available at: https://www.unescap.org/sites/default/files/Executive_Summary_Asia-Pacific_SDG_Progress_Report2019.pdf.

Building back better: Green COVID-19 recovery packages will boost economic growth and stop climate change (2020) University of Oxford. Available at: http://www.ox.ac.uk/news/2020-05-05-building-back-better-green-covid-19-recovery-packages-will-boost-economic-growth-and.

Davies, R. (2019) Norway’s $1tn wealth fund to divest from oil and gas exploration, The Guardian. Available at: https://www.theguardian.com/world/2019/mar/08/norways-1tn-wealth-fund-to-divest-from-oil-and-gas-exploration.

Gek, S. K. (2020) Views on the PENJANA Stimulus Package, Deloitte. Available at: https://www2.deloitte.com/my/en/pages/tax/articles/penjana-stimulus-package.html.

Lakritz, T. (2019) These 11 sinking cities could disappear by 2100, World Economic Forum. Available at: https://www.weforum.org/agenda/2019/09/11-sinking-cities-that-could-soon-be-underwater/.

Meckling, J. and Allan, B. B. (2020) ‘The evolution of ideas in global climate policy’, Nature Climate Change, 10(5), pp. 434–438. doi: 10.1038/s41558-020-0739-7.

Meeting Asia’s Infrastructure Needs (2017) Asian Development Bank. Available at: https://www.adb.org/sites/default/files/publication/227496/special-report-infrastructure.pdf.

NST Business (2020) Malaysia can be electric car hub, New Straits Times. Available at: https://www.nst.com.my/business/2020/02/567302/malaysia-can-be-electric-car-hub.

ROADMAP FOR ASEAN SUSTAINABLE CAPITAL MARKETS (2020) ASEAN Capital Markets Forum. Available at: https://www.theacmf.org/images/downloads/pdf/ACMF_Roadmap_high.resolution.pdf.

Schulze, E. (2019) ‘Sustainable’ investors match the performance of regular investors, new IMF research finds, CNBC. Available at: https://www.cnbc.com/2019/10/10/imf-research-finds-esg-sustainable-investment-funds-dont-underperform.html.

Smith, E. (2020) The numbers suggest the green investing ‘mega trend’ is here to stay, CNBC. Available at: https://www.cnbc.com/2020/02/14/esg-investing-numbers-suggest-green-investing-mega-trend-is-here.html.

Wehrmann, B. and Wettengel, J. (2020) Germany gives energy transition mild boost with economic stimulus programme, Clean Energy Wire. Available at: https://www.cleanenergywire.org/news/germany-gives-energy-transition-some-extra-boost-economic-stimulus-programme.

Written by: Abdul Rahim Ismail, Chew Ai Hui, Justin Liew Jin Soong, Robin Goon Wooi Yeang

Applying Lessons from COVID-19 to Climate Policies

Introduction

The world is at a standstill due to the outbreak of the global COVID-19 pandemic. In Malaysia, we are seeing small victories in a slow decrease of daily cases with a relatively high recovery rate of 80% (Ministry of Health, 2020) as businesses cautiously return to operation. However, it still remains that COVID-19 continues to claim thousands of lives, push healthcare infrastructures to breaking points and debilitate the global economy. As the crisis rages on, governments around the world are under scrutiny for their lack of national priority and adequate preparation, weak policies preceding the outbreak and lacklustre responses.

Unfortunately, a parallel can be drawn between the current situation and climate change issues. In this article, we will elaborate on how the Malaysian government can improve its climate change approach by examining the lessons learned from this devastating pandemic.

 

 

Effective Leadership Requires A Clear National Priority

Currently, the national priority of every country is to act quickly and decisively on managing the COVID-19 crisis. Regardless of their respective styles of government, we are seeing a rare but not impossible exercise of political will translating directly into policy and substantive action, albeit to varying degrees of success. Here, we provide a comparative analysis of different countries to explore the governing practices and political styles that could more effectively address a crisis and can be emulated in the context of climate policy.

Despite views that a strong centralised management is preferable in dealing with a pandemic, there have been more promising results when a delicate balance is struck between central federal power and regional state power. This is because sub-national authorities are able to finetune approaches according to the specific needs of their localities, learn lessons from successful neighboring states and even ward off potentially misguided decisions made by the federal government. For example, the model in Germany yielded favourable results as Angela Merkel’s strong presence in the central government still allowed for important decisions to be made by local governments. As such, it may be advisable for countries to encourage cooperation between regional and central governments on the issue of climate change to find viable, tailored and effective solutions.

Furthermore, available data has shown that whether a government is democratic or autocratic does not determine their success in handling a crisis. This can be seen in the juxtaposition of China’s success in keeping its number of new cases down in a relatively short time period and Iran’s inability to produce similar results. In addition, there have been varying degrees of success across the democratic countries, from South Korea and Germany to the United States and Italy.

Meanwhile, bureaucratic agility and evidence-based governance have proved to be essential in managing the pandemic. This is most evident in the relatively successful Taiwanese and South Korean models, where evidence-based procedures were proactively and preemptively constructed. These procedures featured a strong emphasis on data transparency, information sharing vis-à-vis rapid implementation of contact tracing technologies and rigorous briefings by the government. Malaysia should consider applying this scientific and technology-based approach to anticipate and handle a climate crisis.

Drawing a parallel to climate change, the Paris Agreement allows its signatories across the world a large margin of flexibility when providing their Nationally Determined Contributions (NDCs) on fighting climate change. NDCs are decided by national governments based on their own capacities and priorities. Therefore, this is an opportunity for Malaysian government to prioritise and follow up the climate agenda with clear strategies and actionable solutions, just as they are doing during the COVID-19 disaster.

 

Preparation is Key

Generally, the countries that were prepared and equipped to provide large-scale healthcare services, with established institutions and comprehensive patient access systems, experienced a far less devastating impact of the COVID-19 outbreak and were in a better position to respond effectively to the crisis. This can be seen in countries, such as Taiwan, South Korea, Germany and Malaysia, which have sufficient national capacity to accommodate their goals of universal healthcare. As climate change may be just as devastating a crisis as COVID-19, we ask whether Malaysia is equally prepared to tackle climate change in terms of policy and institutional establishment.

Malaysia experiences a multitude of climate change impacts within the dimensions of agriculture, forestry, biodiversity, water resources, coastal and marine resources, public health, infrastructure and housing and energy. It is crucial for Malaysia to take appropriate steps to prepare for a climate crisis. To bring this point closer to home, this article will present case studies on agriculture, food security and flooding in Malaysia to illustrate that the government needs more effort to face current and future climate issues.

Agriculture and Food Security

Covid-19 affects overarching stakeholders of the food supply value chain and it covers all the processes which connect farm production to the final consumer as countries have taken proactive measures such as home confinement, lockdown and borders’ closure. Farmers working across borders or had to travel further are restricted to go to work despite agriculture being deemed essential. Farmers are facing disruptions in sudden decline of demand as people’s spending capacity in this uncertainty period owing to reduced income and job losses. For example, the Cambodian Farmer Federation Association of Agriculture Producers (CFAP) mentioned that the farmers in Cambodia are facing several hiccups to market the local produce in the absence of collectors that act as the major means of transportation (World Farmers’ Organisation, 2020).

Food insecurity has severely threatened the livelihoods of 820 million or about one in every nine people around the world even before Covid-19 (FAO, IFAD, UNICEF, WFP and WHO, 2019). In this pandemic scenario, without timely and effective policies, a slight shortage of food supply will trigger a massive impact to the vulnerable segments of population including migrants, the displaced, and those in conflict areas who are already grappling with hunger and other crises (FAO, 2020). The period between March and May is particularly fertile for various fruits and vegetables. Covid-19 has limited the amount of marketable produce and it leads to food wastage by leaving surplus perishable items dumped at farms (Food Forward, 2020).

Homogeneously, the agricultural sector in the worsened climate will jeopardize non-traditional food security. As the agricultural ecosystem heavily depends on good climate, the changes lead to the disruptions on agricultural climate elements especially on temperature, precipitation, and sunlight with further implication to the arable and hydrology sectors. In arable sectors, climate change affects the seasons, quality and shift of areas suitable for cultivation (Kim, 2014). Current literature proves that the expected reduction in crop yields because of climate change will impact the  agriculture sector significantly. Vaghefi et al.(2011) stated that RM162.53 million will be lost annually in the Malaysian rice industry with a 2°C increase in temperature. An analysis of 28 years of data shows that the increase of 1°C and 1mm in rainfall would decrease the yield of paddy between 43% and 61% (Ali and Ali, 2009). Even though Malaysia is a rapidly developing country, it has not yet reached self-sufficiency in the production of food to be able to sustain its population in the climate change worsened future (Alam, 2014).

In 2015, Malaysia’s Agriculture and Agro-Based Ministry recorded RM299 million loss in several states in the agricultural sector due to the damage of produce, infrastructure, and assets. Another post-flood study focusing on Kelantan in 2015 found agricultural losses incurred by farmers at 5% level of significance for almost all the reported crops, livestock, and agricultural assets (A. Jega, 2018).

Flooding in Malaysia

Climate change induces more severe and frequent weather events, such as monsoon rainfalls. Malaysia as a country with two monsoonal seasons might experience increasing frequency and magnitude of rain-induced flooding at river and coastal areas.. While the Integrated Shoreline Management Plan (ISMP) has been developed for coastal states to minimise flood risk and implement adaptation strategies, it has yet to be implemented throughout Malaysia(Mokhtar et al., 2019).

Malaysia’s economic activities are centred in dense areas which are vulnerable to flooding. Malaysia increasingly continues to build on vulnerable flood plains, without proper planning and flood risk assessments (Yeganeh and Sabri 2014). At this current point, the Malaysian government has to invest in building resilient communities and infrastructure. Strategies that have been recommended by scientists include the relocation of high-risk coastline cities, reducing paved areas, adding green roofs and using more absorptive pavement materials (Tan, 2020)

Furthermore, flooding is a threat to public health. A case study conducted in Malaysia also found a doubling of leptospirosis (a rare bacterial infection) cases post-flooding (Firdaus et al., 2018). With links to vector borne diseases, increased exposure to raw sewage and limited access to medical facilities, the World Health Organisation asserts that it is very likely that multiple epidemics will develop simultaneously during a flood crisis. Therefore, access to medical care systems in mitigating and adapting to floods must be considered.

In the best case scenarios of climate change impact, global access to clean water is predicted to drop to 22-24% due to flooding (Arnell and Lloyd-Hughes 2014). This will have a disproportionate impact on native and rural communities as their existing access to clean water, medical care and emergency services are already limited. As flooding events worldwide are expected to increase by 66% over the next 30 years due to climate change (Pregnolato, 2017), it is clear that the Malaysian government needs to address this impact of climate change. The National Adaptation Plan must consider risk planning, healthcare infrastructure, emergency services and resource mobilisation.

 

 

Robust Policies and Strategies Leads to Effective Crisis Response and Management 

The lack of climate policies as robust as health emergency policies in Malaysia

Reflecting on Malaysia’s experience with SARS, MERS, and H1N1, the effectiveness of our COVID-19 response must be credited to the healthcare emergency policies. The Ministry of Health devised a health emergency work plan (MySED II 2017-2021) and a Crisis Preparedness and Response Centre in 2007 to prepare and respond to pandemics like COVID-19. However, when it comes to climate change, Malaysia has yet to formulate any action plan for climate mitigation, adaptation, or disaster risk management in line with Paris Agreement guidelines.

 

Call for strengthening climate commitment

At the international level, Malaysia is a signatory to the Paris Agreement, SDG 2030 Agenda and Sendai Framework for Disaster Risk Reduction(SFDRR). However, we have not yet seen the same level of ambition reflected in our international and local climate commitments. Malaysia’s Nationally Determined Contributions(NDCs) to the UNFCCC was unambitious to contribute to a limited global warming of 1.5°C. Moreover, the topic of climate change and disaster risk management was only recently and vaguely mentioned as part of the 11th Malaysia Plan mid-term review.

The priority for Malaysia as a developing economy requires evidence-based mitigation and adaptation policies. Mitigation refers to the reduction or stabilisation of current levels of greenhouse gases, while adaptation refers to the reduction of  vulnerabilities and building resilience in light of current or expected climate change impacts.

Moving forward, Malaysia needs to urgently begin preparing the country to face climate change. Firstly, the government needs to draft implementable policies and specific mitigation and adaptation plans. Secondly, it needs to produce a legal framework to enforce climate change mitigation and adaptation strategies. As the Climate Change Centre has been established, this is a great opportunity for Malaysia to convene experts to address pertinent climate change issues. This is a crucial avenue for long-term planning and inter-ministerial coordination. Since 2018, the previous government had expressed commitment to draft a National Climate Change Act. We hope that the government continues on with this effort to address climate change.

Conclusion

In the long run, Malaysia will need to implement more comprehensive climate change mitigation policies to cut emission rates, increase the capacity of carbon sinks and reduce levels of greenhouse gases.

The lessons learned from the collective experience of dealing with the COVID-19 pandemic should be utilized by governments of all levels in shaping their policies to deal with the already-present symptoms of a bigger climate crisis.


References

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Ali, R. & Ali, A.K. 2009. Estimating the Prospective Impacts of Global Warming on Malaysian Agriculture. Proceeding of 2nd National Conference on Agro-Environment 2009, MARDI, Malaysia, Mar 24-26.

Arnell, N.W., Lloyd-Hughes, B. The global-scale impacts of climate change on water resources and flooding under new climate and socio-economic scenarios. Climatic Change 122, 127–140 (2014). https://doi.org/10.1007/s10584-013-0948-4

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Firdaus M, Radi M, Hashim J H, Jaafar M H, Hod R, Ahmad N, Nawi A M, Baloch G M, Ismail R,  Ayub N I F (2018) Leptospirosis Outbreak After the 2014 Major Flooding Event in Kelantan, Malaysia: A Spatial-Temporal Analysis The American Journal of Tropical Medicine and Hygiene, Volume 98, Issue 5, p. 1281 – 1295

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Kim, C. (2014). The Impact of Climate Change on the Agricultural Sector. Seoul: Korean Rural Economic Institute.

Mokhtar, A. et al. (2020) ‘Planning the Malaysian Coastline – Integrated Shoreline Management Plan’, Apac 2019, pp. 1169–1176. doi: 10.1007/978-981-15-0291-0_160.

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World Farmers’ Organisation. (2020). Covid-19 Pandemic Outbreak: Overview of the Impact on the Agricultural Sector. Rome: WFO.

Tan, W. S. (2020). “Green rooftops and permeable pavements can help reduce risks of floods.” The star, [online] Available at: https://www.thestar.com.my/opinion/letters/2020/04/27/green-rooftops-and-permeable-pavements-can-help-reduce-risks-of-floods [Accessed 29 May 2020].

Yeganeh N, Sabri S (2014) Flood Vulnerability Assessment in Iskandar Malaysia Using Multi-criteria Evaluation and Fuzzy Logic Research Journal of Applied Sciences, Engineering and Technology 8(16): 1794-1806

Written by: Bryan Yong Bo Ou, Saef Wan, Zue Wei Leong, Robin Goon Wooi Yeang, Justin Liew Jin Soong, Tan Win Sim, Rahim Ismail