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Imposing Efficient and Green Enabled Five Key Sectors to Save Malaysia’s Environmental Plague and Economy

In the Plague, Albert Camus tells the story of the Algerian city of Oran in the 1940s. Illnesses and deaths plagued the city. The book narrates how the Government of the day was completely in denial, slow to react and slow to take action.

We too are facing a “Plague” in the form of global warming and climate change that we ourselves have caused, and the evidence of such extreme climate change is now irrefutable; except to the fanatic group that is classified as “climate change deniers”.

We once thought that the Haze which follows the El-Nino that sweeps across Malaysia almost every year is the epitome of climate danger. We have been regretfully forced to “celebrate” it by wearing our N90 masks and even having to close down our schools for the health of our children. The normally happy go lucky Malaysians turn gloomy and morose as the blue sky turns grey, dark, and smelly.

It is a well-known cliché that “ignorance is bliss”. So, while we clamour against the El-Nino caused haze, unknowingly, with each breath that we take, every day we inhale something that is far more dangerous; the silent killing toxic air in our atmosphere. It is more persistent with serious long-term consequences.

This is the pollution caused by our common daily rituals from our transportation needs and energy usage. Just because we do not see it and it is not tangible, doesn’t mean that it isn’t there. Welcome to the world of CO2, NOx (oxides of Nitrogen) and other nefarious pollutants. These pollutants are poisonous to human and animal life, and prolonged exposure can lead to fatality.

But, there is a way out if we are willing to understand the root causes of the problem and take action to resolve them. Let us see what is already in place and consider if what we are doing is enough, or make up our minds to do more for our future well-being. More importantly, are we doing it correctly?

UN Framework Convention on Climate Change (UNFCCC)

The UNFCCC is an international environmental preservation organisation established in 1994. Its objective is to stabilize greenhouse gas (GHG) concentrations in the atmosphere to an acceptable level which will reduce anthropogenic interference with the climate system. Hitherto it has been ratified by 197 countries including Malaysia giving it broad legitimacy with its membership.

At the 15th Conference of Parties (COP) meeting in Copenhagen in 2009, Malaysia made a voluntary commitment to reduce its carbon intensity to GDP by 40% from 2005 value by 2020. At the 21st COP in Paris, France, Malaysia was not only the leading negotiator on behalf of the developing nations, but also increased its carbon intensity reduction commitment to an unconditional 35% by 2030, with the promise of further reducing it by 45% if international financing and technology transfer support is made available. So, where are we now?

In 1965, Malaysia emitted 7 million tonnes of carbon dioxide. The emissions rose to 100 million tonnes in 1996 and spiralled to an alarming 258 million tonnes in 2014. Regretfully, there is no monitoring for NOx, which is more hazardous than CO2 emissions.

Here’s the conundrum, if you target to reduce emissions, it might be argued that you may need to restrict industrial development. But setting a carbon intensity to GDP target can end up as creative accounting which can be achieved just by increasing the GDP without reducing emissions from existing development. Alternatively, we could also benchmark using emission per capita, which is actually increasing!

Let’s visit five key sectors that contribute most to CO2 and NOx emissions and see what we can do about it. The “Big Five” are Energy, Transportation, Construction, Water, and Waste Management.

Green Energy – Renewable Energy and Energy Efficiency

To fully discuss Energy, we need to understand both sides of the equation which includes the demand (consumption) and the supply (power generation). Both need to be managed optimally to ensure stable and reliable supply to consumers in a sustainable manner with minimal impact on the environment, without sacrificing economic development.

In the region, Malaysia is one of the most in-efficient energy users; considering our high level of energy intensity. Our neighbours are so much ahead than us in EE. This offers a no brainer opportunity where the consumption side could contribute more to the greater good for our nation in terms of cost saving for the consumers and minimizing negative impacts to the environment through the adoption of efficient use of energy, or Energy Efficiency (EE).

Focusing on EE alone could have saved the nation over RM60 billion over a 10 year period (by delaying of new power plant construction, fuel for energy generation savings and gas subsidy savings) according to KeTHHA, as planned under the preliminary National Energy Efficiency Master Plan (NEEMP), which was then “watered down” to the National Energy Efficiency Action Plan (NEEAP) in 2014.

According to the Natural Resources Defense Council (NRDC), EE is the greatest energy resource – reducing energy wastage and making the most out of what we already have. This is also true for Malaysia. If Malaysia can save even 20% of its Energy demand, then that is already equivalent to about 3,000 MW or three nuclear power plant generating units. Imagine that!

Why is it that there is no Law nor Policy to regulate EE in Malaysia? This is clearly what we need most urgently now. A comprehensive regulatory framework must be put in place. We can start by regulating all our industrial and commercial buildings to be EE compliant!

The supply side will need to focus on the substances and not the ‘packaging’. In Malaysia, power generation from wind, tidal power, and wave power have limited potential. We need to recognize that the economically viable and potentially viable solutions would be renewable sources from small hydro and solar (PV), solid waste, biogas, plantation waste, biomass from palm oil empty fruit bunches, and palm oil mill effluent. These are the options that we should be focusing on.

According to the Sustainable Energy Development Authority (SEDA), the target for renewable energy generation should reach 2,080 MW or 11% by 2020. Including the PV Farms would have raised that target to 3,140 MW. However, as of 2016, generation from renewable energy is only 2%. Are we not giving the right emphasis for the promotion of Renewable Energy (RE) generation in Malaysia?

According to SEDA, in 2015, a total of 128 projects in RE (RM1.37 billion) were approved where 84 are solar power energy projects, 33 biogas projects, 4 mini hydro and 7 biomass projects. Within the same year, a total of 31 projects in EE (RM406.5 million) were approved.

Question is, where has the money gone to and what improvement has it brought about to us?

A notable observation is that while incentives had been given, the RE targets have failed to be realised as the prospective developers are unable to make their projects viable or raise the required project financing.

The Feed-in Tariff (FiT) are considered low and the subsidies given to fossil fuelled power make RE less competitive. The current FiT in Malaysia (excluding solar; now using net energy metering) is at 0.05-0.10 USD/kWh as opposed to Indonesia at 0.13-0.22 USD/kWh, Philippines at 0.11-0.19 USD/kWh and Thailand 0.12-0.19 USD/kWh.

By increasing FiT without transferring the cost to the consumers and taking away fossil fuel-related subsidies, you will see that RE can be competitive.

Another incoherence is on the tender process for RE plants. Several solar power plant tenders have been awarded through direct negotiations and their terms and conditions were classified under the Official Secrets Act 1972.

Public Transportation – Increasing Ridership

For transportation, the way forward must include reducing the number of private vehicles, increasing shares of ridership on public transport, and most importantly moving away from fossil fuel based transportation. How can we achieve this and where are we now? Are we on the right track?

Back in 1980, 30% of Malaysians took public transportation as their means of transport. This was the era of the mini buses that have gone extinct as a result of transportation policies that favoured private vehicle ownership versus public transport ridership. The number had then drastically dropped to 12% in 2008, before rising slightly to 17% in 2015, way below that of 62% in Singapore and 90% in Hong Kong, as reported by the World Bank.

The 5% increase in the last seven years was attributed to the Light Rail Transit (LRT). Nonetheless, 17% is an alarming sign that we are still far behind and Malaysia needs to rethink its future direction in terms of transportation.

What of private vehicles? The Journal of Traffic and Logistics Engineering (2015) indicates that as of 2012, there were at least 20 million registered vehicles in Malaysia. Car ownership in Malaysia is the third highest in the world at a whopping 93% with 54% of households having more than one car.

The trend is not healthy, more private vehicles are being registered as opposed to public transportation (bus). According to the World Bank, in Kuala Lumpur, people spend more than 250 million hours a year stuck in traffic! And such traffic congestion is an opportunity cost of 2% of GDP or RM80 per hour per driver.

The construction of Mass Rail Transit (MRT) and the proposed construction of East Coast Rail Line (ECRL) and High Speed Rail (HSR) are among necessary remedial steps for developing suitable public transportation infrastructures but the costs are exorbitant and this approach alone is insufficient.

The estimated construction cost for the MRT has skyrocketed from an initial of RM40 billion to now RM120 billion (cost 2-3 times more than global standard), with the ECRL estimated at RM55 billion, while the HSR at RM60 billion.

All three fall into different categories of urban transportation and people movers but industry analysts have argued that the cost escalation is outrageous and unjustified. The only reason it is not getting heated objections from the general public is because the public desperately wants more public transportation. It is such a regret that it has been taken advantage of.

The MRT that will only provide an additional 2 million ridership per day even escaped scrutiny when it was announced as a government project and then changed to a private project recently in Parliament. It is eye popping that RM120 billion will be spent solely for MRT which will benefit mostly the Klang Valley residents.

What’s needed is a holistic public transportation that is sufficient to cover from point A to point B with the best overall coverage which needs to be incorporated with other modes of transportation; like the Bus Rapid Transit (BRT) which supplements the rail. For every kilometre of the MRT, we can build 20 kilometres of BRT. More coverage means more access to the public.

Public Transportation – Reducing Fossil Fuels and Harmful Emissions

Efforts to bring the Electric Vehicles (EV), the Energy Efficient Vehicles (EEV) and the Hybrid vehicles to Malaysia must be lauded. All these will definitely help reduce GHG emissions and make Malaysia a regional hub for these green vehicles. However, like the exorbitant case of our Rail infrastructure, there are focus misalignments. The incentives are being channelled to the wrong target.

Why should we incentivise individual luxury EVs which would end up as toys for the rich and the wealthy to parade? First, it is not affordable to a majority of people. Secondly, the power used to charge the cars come from the national grid which -in Peninsular Malaysia- is 95% powered by fossil fuel.

However, electric traction can be considered for public transportation be it LRT, MRT, Monorail, and also the introduction of the BRT, intra-city buses, intra-city rail, etc. These will be green. The objective is to increase shares of ridership, reduce private vehicles on the roads and ultimately reduce emissions.

Alternatively, while we are turning our grid green, we can put higher incentives on government procurement of buses that run on biogas or ethanol. These are the low hanging fruits that are readily available, but not normally utilised. We can easily obtain biogas from the abundant biomass that is available in Malaysia or from the municipal waste.

If the government is planning to spend money to procure electric buses, we can use that to buy buses that run on biogas instead. Whilst it can be argued that biogas buses are more expensive than conventional buses, it will be very competitive if you take away fossil fuel subsidies.

Another misaligned incentive is on the locally assembled high-end models of hybrid vehicles including Audi, BMW, and Mercedes-Benz which are beyond what the majority of Malaysians can afford.

We should instead focus on giving more incentives and tax break for more affordable vehicles like the Honda and Toyota models with less than 2,000 cc engine capacity. When the government introduced tax exemption on the EV and Hybrid Cars in 2012, we saw a spike of purchase from the consumers. Unfortunately, this was ended in 2014 and the purchasing has diminished significantly.

Green Building – Construction Industry and the Green Building Index (GBI)

The construction industry can also play a pivotal role in saving Malaysia from the Plague. The construction industry is a major consumer of non-renewable resources and a massive producer of waste. In addition, the operation of buildings is responsible for around a third of the total CO2 emissions.

About 30-40% of natural resources were exploited by the building industry, including 50% of energy used for cooling in buildings. Almost 40% of world consumption of materials converts to build environment and 30% of energy is used for housing. Clearly, the construction industry can also play a role in conserving the environment and reducing harmful emissions.

The Construction Industry Development Board Malaysia (CIDB), the body in charge of Malaysian construction industry has always taken proactive actions to address the issue of sustainable construction and assist the stakeholders in its adoption of the Industrialised Building System (IBS) and steel based construction which is greener and more energy efficient compared with the traditional methods used in Malaysia.

This could be measured by the Green Building Index (GBI), a national ranking system and a set of guidelines for green development that was also established in 2009. It is a rating metrics that ranks building for everything green, from sustainable site planning and construction to efficient operation as well as its contribution to social wellbeing. The better the score, the higher level a GBI certification is earned, and the more prestige and green tax incentives a building can take advantage of.

In Malaysia, a prime example of certified GBI buildings would be the Suruhanjaya Tenaga’s Diamond Building in Putrajaya. Other examples would be the Malaysian Green Technology Corporation (MGTC)’s building and the Security Commission Building.

Unfortunately, it stops there. We should be moving toward transforming all new future development as sustainable green buildings. A more aggressive effort is clearly needed in this area. One way to do it is by getting PR1MA to adopt this in its implementation considering they will be contributing the most for new residential developments in Malaysia. For commercial development, more enforcement can be introduced in stages for moving towards green sustainable buildings target.

Water – Smart Monitoring

In Malaysia, 1,389 million litres per day (MLD) is lost due to pipe leakages and theft and that stands at 32% of water supplied as non-revenue water (NRW) level. The World Bank recommends every country to target 25% or below. We are far behind and something must be done urgently. Moving forward, we should aim to achieve comparatively to developed nations such as Singapore at 5% and Germany at 7%.

More technology in the management and utilisation of water resources is required to source better quality, efficiency, procuring, recycling, and filtering of water; which can be achieved through various high technology projects. A good start will be the implementation of smart metering which allows reduction of leakage, usage efficiency, and provides usage awareness among consumers. However, none of this will work without effective management, which must begin now.

Waste Management – Say no to Landfills

Waste management includes waste water treatment, utilisation of solid waste and sanitary landfills. The waste would come from industrial, municipal, agricultural, sewage, and organic waste. Excluding construction, Malaysia is now generating solid waste of roughly 33,000 tonnes a day; where two-thirds of it comes from urban households with very low recycling rates of 9.6%.

A significant problematic issue to be highlighted would be the alarming unsanitary landfill dumpsites in Malaysia. If we can target a 40% diversion from landfill by 2020 we would benefit by a potential avoidance of 5.8 million tonnes of CO2 which is equivalent to emissions from 1.2 million cars on the road per year. We would potentially save RM 80 million (land acquisition), RM16 million per year (leachate treatment) and RM 5.2 billion (CAPEX avoidance).

Furthermore, the existing unsanitary landfills will remain unusable for at least another 20 years after proper closure. Not to mention that the average life-span of a landfill is only 10 years. At the moment, we are continuously extending our landfills by acquiring adjacent lands to existing landfills. What a waste of our land which could put to better use such as allocating it for low-cost housing. We need to move fast and divert our waste from the landfill that is producing dangerous methane emission.

The technology for waste recycling, waste to energy, waste as fertilizer, waste reduction can be imported from leading countries in Europe. As we speak, there are many companies coming in to invest and to carry out transfers of technology, but we need to provide an economical amount of Tipping Fee to make these projects economical and feasible. The Tipping Fee currently provided from the government makes waste management from landfills only to be feasible and not any other options. As a comparison, Thailand, Indonesia, and the Philippines provide almost double the Tipping Fee.

Saving the Environment and Growing Malaysia’s Sustainable Economy

Let’s now kill two birds with one stone. We can actually preserve our environment and generate economic benefits from it, and in the long run, take the opportunity to be the technology leader in the region. This is also a form of adding value to the economy and moving away from our current “rentier capitalism” into techno-industrial capitalism.

Immediate action must be taken now to “walk the talk” on Malaysia’s commitments made at COP 15 (in 2009) and COP 21 (in 2015).

On Energy, we need to first focus on EE which is the low hanging fruits, and then develop a greater share of RE, and only then can we even consider if it is necessary to add more fossil-fueled powered generation plants.

We must urgently adopt an EE Act and a Policy to comprehensively regulate and enforce EE in Malaysia. To further promote the RE, a revisit of the FiT and incentive prioritisation must be conducted urgently.

For transportation, the exorbitant amount of money spent for our ongoing transportation projects must be seriously revisited and questioned. A holistic transportation that includes all modes of transportation must be introduced.

Incentives being granted to moving towards personal electric mobility, reducing private vehicles, and increasing ridership shares of public transportation use must be more thoroughly evaluated to prioritize them appropriately.

Hybrid and EEVs for personal transport are a better option than EVs, as they are more affordable for wage earners who would use them for regular commuting to work. However, for public transportation – a mix of electric powered transportation and adaptation of biogas as fuel is an antidote we currently require.

More focus should be given towards pushing for sustainable buildings and smart cities. Funding for R&D in all green technology related initiatives must also be significantly increased. We need to resolve our NRW water issue with the latest technology to save our water leakages. Nothing significant has been done for waste management and time is ripe for a more focus on the subject. A task force must be assembled to tackle this portion of the industry.

To supplement the government and the private sector, third party players from civil society must be supported as they will be able to go deep into the grassroots level and increase the awareness of Malaysians at large. Such example would be of the Malaysia’s National Coalition of Environmental (MENGO), a coalition of 30 NGOs founded in 2009 which have been very active in fostering and creating green awareness in the Malaysian public.

All the above call for every stakeholder to relentlessly push for changes with full support from the government, including the agencies, the private sector and also the third-party players; the NGOs and every Malaysian.

We can help to preserve the Environment, kill the “Plague” now confronting us, and at the same time develop our economy by prioritizing our economic development initiatives to get the “biggest bang for the bucks”.

The capital investments under our 5-year development plans; especially for the ongoing 11th Malaysia Plan, and the export of our technology services and expertise regionally by becoming the green technology leader in the region, are viable options to bring in bigger profits and sustainable economic growth while still keeping our Carbon footprint controlled.

Implementing all the above proposals must be executed now for the Five Key Sectors. Malaysia Boleh!

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