Greening Malaysia’s Post Pandemic Recovery
This was my submission for a writing exercise for a climate change movement I joined in 2021. The exercise was to propose a 500-word policy recommendation on climate change action for the government.
As of July 2021, the severity of the current COVID-19 wave in Malaysia has severely strained Malaysia’s healthcare and economic sectors. The restrictive measures put in place to address the pandemic have significantly crippled the economy.
Once the pandemic is contained, the next pressing concern will be financing the country’s social and economic recovery. This presents an opportunity to embed climate finance as a core component of Malaysia’s post COVID-19 rebuilding strategy. Failing to do so will lead to the risk of reduced or delayed funding for climate change mitigation and adaptation infrastructure.
The government can lead the way on 3 fronts to ensure that Malaysia’s COVID-19 recovery simultaneously tackles climate change.
Issuance of “green” government bonds and expansion of private sector climate financing
Globally, green bond and loan issuance has increased from USD 171 billion in 2018 to USD 269.5 billion in 2020, on the back of strong interest by investors in green projects (Green Infrastructure Investment Opportunities Malaysia Report, 2020)
The 2020 Global Infrastructure Outlook forecasts that Malaysia has a USD 77 Billion investment gap between acquired and required funds between 2020-2040 for infrastructure investment. The government can ensure the sustainability of climate finance in Malaysia by lowering interest rates specifically for climate financing and issuing “green” government bonds.
Upskilling & job creation in green infrastructure sectors
In tandem with the efforts to increase the level of climate finance in Malaysia, the government can ensure that there is suitable labour for these projects by introducing upskilling and education programs in the green sector. This can be done through apprenticeships and training programs in collaboration with private sector entities. Additionally, tax incentives can be offered to the developers within the green infrastructure sector to hire locally. This is a timely policy measure given the tremendous potential for green infrastructure development in Malaysia. Additionally, it provides crucial support for the Malaysian labour force, at a time where the unemployment rate is at 4.8% in Q1 2021 compared to 3.5% in Q1 2020.
Incentivising residential energy efficiency and decarbonisation
A survey by Pew Research Centre indicates that 73% of Malaysians are in favour of environmental protection action, even at the cost of some economic growth. This could indicate a willingness among consumers to change their consumption habits to be more climate-friendly. The government can make the most of this sentiment by introducing incentives for the residential sector to electrify and decarbonise homes. Policy measures to support this include tax rebates on energy efficiency purchases and subsidies for the installation of residential solar energy systems.