Promoting the green economy

Justin Santiago

Modified 12 Feb 2010, 9:48 am

A peek into most middle-class landed homes in the suburbs around Kuala Lumpur would reveal at least two or even three automobiles in the driveway. Closer inspection will reveal the blades of air-conditioner compressors whirring and lights turned on even during the day. One wonders whether these homeowners have even heard of the term ‘carbon emissions.’

Carbon emissions are a measure of the amount of carbon as well as Greenhouse Gases (GHG) that are released into the atmosphere from our all daily activities. Carbon and GHG ‘eats up’ the ozone layer, a protective coating around the Earth which protects us from harmful radiation from the sun and keeps global temperatures and weather patterns in check. A large portion of carbon and GHG comes from the burning of oil for all sorts of purposes from power generation to driving our vehicles.

Malaysia had consistently ranked poorly in the global ranking of carbon emitters (number 157 out of 224 countries) and according to several reports and studies done by the US based International Energy Agency, Malaysia’s carbon emissions per capita had increased from 3.1 tons per capita to 7.2 tons per capita over a 16 year period from 1990-2006. By 2010, this figure is expected to touch 8 tons per capita putting Malaysia third behind Vietnam and China in terms of the growth rate of carbon emissions.

Realising that 28 million Malaysians were burning more and more fuel, Prime Minister Najib Razak in July 2009 launched the Green Technology Policy under the newly renamed ministry, the Energy, Green Technology and Water Ministry which replaced the former Energy, Water and Communications Ministry.

In his launch speech, Najib said that the time had come for Malaysia to go green, citing global concerns to adopt and embrace sustainable and renewable best practices. But what was more important in his message was his plan to facilitate the growth of the Green Technology industry that was named as one of the key drivers that would contribute to the national economy. In other words he was saying that going green was not just for tree-huggers, it was for entrepreneurs, industrialists, inventors and consumers at large.

This two-pronged strategy would achieve the objective of reducing total carbon emissions by 15% and reducing total emissions per GDP by 40% by 2020 compared to 2005 levels and catalysing Malaysia’s capability and capacity for innovation in Green Technology development.

This is not going to be an easy task considering that Malaysia has embarked on its fully industrialised nation status by 2020. The problem is made more difficult by the provision of the various subsidies for fossil fuels.

Take for example the subsidies for gas. The independent power producers (IPPs) in Malaysia produce electricity out of gas that is provided to them at a fraction of the cost. The rationale is that these IPPs need to be compensated in order to produce electricity cheaply for local industries and that local industries need cheap electricity to produce goods at competitive prices for the world market.

The downside is that most industries have become so comfortable with low energy costs that there is less incentive for them to become energy efficient or look to alternative energy sources. While the technology for energy efficiency and alternative energy sources is available, the costs of implementing the technology is expensive compared to cheap, subsidised power produced by the IPPs.

For a business whose main aim is profit by producing the maximum at minimum cost, becoming energy efficient is, ironically, less profitable. Only if switching costs become cheaper will businesses switch. The answer to that is the gradual removal of subsidies to bring up the price of energy to market prices. At market prices, businesses will start thinking about energy efficiency and alternative energy.

Increasing power generation and power-utilisation from biomass and biogas and solid waste and tapping the sun’s energy is a noble goal. But in order for green innovation to work, educating the public and creating awareness about energy efficiency and energy alternatives is simply not good enough. Funding to companies that supply and utilise green technology is also not good enough.

Environmental consciousness needs a swift kick where it hurts most. Not the minds and hearts of the people but their wallets. For example, if it costs less to buy and use Malaysian-made solar panels that can trap unlimited solar energy 365 days in the year compared to fossil fuel produced electricity that is derived from depleting gas reserves, Malaysians WILL go green.

Ultimately these solar panels will become cheaper to produce and will be able to be exported around the world providing jobs for Malaysians and contributing to the Malaysian economy and developing Malaysian technology.

The gradual removal of subsidies not only for gas to produce electricity but for petrol, diesel, and liquefied petroleum gas (LPG) will benefit Malaysia in the long run, not only environmentally but economically as well. The Green Technology policy is giving us a way to build not only a greener and more sustainable future but a more economical and profitable one at that.

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