Wetlands hold answers to climate mitigation, adaptation  

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Along Asian coastlines, there are many areas where rural communities are experiencing alarming rates of sea-level rise due to the loss of their mangrove cover. Europe also has lost half of its wetlands, much of it through drainage.

Last year, the Andalusian parliament legalized the widespread abstraction of underground water by strawberry farmers, which is drying up the Doñana wetland and leading to the desertification of Spain.

Degradation of Sahelian wetlands in north-central Africa has caused resource scarcity, undermining human well-being and compelling people to migrate.

In Indonesia, peat swamps are rapidly being logged, burned, and converted for agriculture, causing massive forest fires affecting the respiratory health of millions of people.

Meanwhile, as you read this, the world’s largest tropical wetland ecosystem, the Pantanal of Brazil, is being scorched by wildfires.

What, you may ask, does this have to do with an annual UN climate conference, COP28, which is focused on emissions reduction and coping with the impacts of a globally heating world?

Well, everything.

Mitigation

Mitigation refers to reducing the amount of greenhouse gases trapped in the atmosphere to slow the rate of climate change. The most important action needed in this aspect is rapid and ambitious emission reduction. 

The UN Environment Program’s Emissions Gap Report tracks the gap between where global emissions are heading with current country commitments and where they ought to be to limit warming to 1.5 degrees Celsius. The 2023 report shows that progress has been made since 2015 but much deeper emissions cuts need to be made this decade to limit global warming. 

Research has shown that nature-based solutions can provide more than one-third of the cost-effective climate mitigation needed to stabilize warming to below 2 degrees by 2030. Alongside aggressive-fossil fuel emissions reductions, nature-based solutions offer a powerful set of options for nations to deliver on the Paris Climate Agreement.

Wetland ecosystems like mangroves, marshes, peatlands and seagrass beds absorb and store carbon. They are essential parts of Earth’s natural carbon cycle and crucial to mitigating climate change.

Last year’s State of the World’s Mangroves report estimated that mangroves sequester carbon at up to four times the rate of terrestrial forests. 

Peatlands are some of the most misunderstood habitats on our planet. Viewed for decades as wastelands, peatlands – though only covering about 3% of our planet’s land – store about twice the amount of carbon as all the world’s forests combined. 

While mitigating climate change is essential, adapting to it is an equally urgent matter, and wetlands have some solutions. 

Adaptation

The effects of climate change are already being felt. The five warmest years on record in Europe have all occurred since 2014, leading to multiple heatwaves. Floods and landslides from extreme rain took hundreds of lives across Asia this year.

We can only expect the frequency and intensity of disasters caused by climate change to increase especially as new UNEP analysis shows insufficient progress made by countries. And unfortunately, the hardest hit are those who contributed least to its cause. 

Wetlands can curb some of these effects. The sturdy roots of mangrove forests and leaves of seagrass meadows protect shorelines from storm surges and sea level rise by preventing erosion and softening the force of waves. Peatlands act as sponges, slowly holding and releasing water, reducing the intensity of both floods and droughts. 

Conversely, the loss and degradation of wetlands exacerbates the climate crisis by releasing greenhouse gases and leaving ecosystems, and the people dependent on them, more vulnerable to the effects of climate change. The draining of peatlands alone releases the equivalent of about 4% of all annual emissions caused by human activity.

To enable global warming to remain below 1.5 degrees, at least half of drained peatlands should be restored by 2030, and further peatland loss should be prevented. 

Despite ample evidence in support of nature-based solutions, the amount of public international funding flowing to them for adaptation accounted for less than 1.5% of total climate finance flows in 2018, and public multilateral and bilateral adaptation finance flows to developing countries declined by 15% in 2021.

But the news is not all bad. Recent analysis shows a growing inclusion of coastal and marine ecosystems in climate strategies. For instance, Belize plans to protect and restore mangrove and seagrass ecosystems to enhance their carbon sequestration capacity, while Liberia has committed to fully integrating mangrove emissions and absorption into the national greenhouse gas-inventory by 2030. 

Healthy wetlands are a powerful solution to the climate crisis. What we need now is urgent action. Governments, business, and civil society must collaborate to scale up the safeguarding and restoration of wetland ecosystems, as well as tackle the drivers that destroy wetlands.

Commitments and efforts under the Convention on Wetlands can be leveraged to deliver climate action but finance needs to be made available to support wetland projects. With the conclusion of the first Global Stocktake, COP28 should be the time countries rapidly include ambitious wetland actions in their Nationally Determined Contributions. 

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Achieving climate equity for the Commonwealth

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The Commonwealth of Nations has demonstrated a long-standing dedication to tackling climate change and assisting member countries in mitigating its adverse effects.

The unified political determination to safeguard the planet for succeeding generations has been precise and robust, dating back to the Langkawi Declaration on the Environment in 1989. During this pivotal moment, Commonwealth leaders pledged to take concerted action, both independently and collectively, through a program focused on environmental initiatives and addressing the challenges of climate change. 

Climate action plays a vital role in the resilience and prosperity of small island developing states (SIDS), particularly within the Commonwealth. SIDS, despite their diversity, face significant vulnerability to the impacts of climate change, posing existential threats to their economies and ecosystems.

The Commonwealth actively supports SIDS in advocating for increased climate action, recognizing the unique challenges they confront in the face of climate change. The commitment of the Commonwealth heads of government to various goals, including climate action, underscores the interconnectedness of health, education, gender equality, and climate resilience for SIDS. 

Access to electricity is essential for economic progress and poverty reduction. However, many less developed nations in the Commonwealth face limited power availability, which hampers such social services as health and education. Additionally, it is crucial to decarbonize the energy sector and ensure climate equity to promote sustainable development objectives. 

Energy access disparities are prominent in the Global South, where both power access and the proportion of renewable energy lag behind the global average. African Commonwealth nations, in particular, require significant electricity availability development despite being leading renewable energy producers.

Bridging these disparities is essential to fulfill the objectives of Sustainable Development Goal 7 (SDG 7), which aims to achieve universal access to affordable and reliable energy services.

The Commonwealth Sustainable Energy Transition (CSET) Agenda is a collaborative platform for concerted efforts among member countries to expedite the shift toward low-carbon energy systems and attain SDG 7. This initiative is grounded in three fundamental pillars: inclusive transitions, technology and innovation, and enabling frameworks.

It champions actions led by members to accelerate inclusive and equitable energy transitions, ultimately realizing the objectives of SDG 7. The CSET Agenda has introduced three new member-led action groups focusing on energy literacy, geothermal energy, and a crosscutting youth action group. 

Transitioning to a low-carbon economy is vital for achieving decarbonization targets and addressing climate change. However, this transformation poses challenges due to the historical reliance on hydrocarbon energy sources.

Moreover, the shift toward decarbonization may lead to stranded hydrocarbon assets, affecting not only their owners, but suppliers, staff, entire communities and regions. A comprehensive and inclusive policy framework is necessary to guide member nations in aligning their efforts with the UN Sustainable Development Goals and the COP21 Paris Agreement.

While policy frameworks and climate targets are essential, they must be accompanied by binding rules and regulations. Legislation can enforce energy-efficiency standards, promote the adoption of renewable energy, and phase out carbon-intensive practices. As already done in the UK and Canada, prohibiting internal-combustion engines or coal-fired electricity generation can expedite the energy transition and propel positive climate action.

Climate injustice is a significant concern within the Global South, where poorer nations often contribute more to combating climate change than wealthier countries. Evaluating national emissions capabilities and historical emissions reveals stark disparities, emphasising the need for fair burden-sharing.

Wealthier nations have an opportunity to address climate injustice by supporting renewable energy projects in Commonwealth countries, thereby reducing energy poverty.

To this end, the Commonwealth Climate Finance Access Hub (CCFAH) facilitates unlocking climate finance for small and vulnerable member states. This initiative assists countries in bidding for and gaining increased access to climate finance by supporting the development of grant proposals and project pipelines.

The process also involves building human and institutional capacity, providing technical advisory services, and fostering cross-Commonwealth cooperation. Commonwealth national climate finance advisers, deployed and embedded in relevant government ministry departments, play a key role in facilitating sharing of experiences and expertise among member states. 

Africa Caribbean Pacific
Mauritius Antigua & Barbuda Fiji
Eswatini Belize Solomon Islands
Namibia Grenada* Tonga
Seychelles* St Lucia Vanuatu
Zambia Barbados, Jamaica & Guyana*  
Regional Technical Assistance – Commonwealth Regional Climate Finance Adviser, Indo Pacific Incoming – Regional Technical Assistance Regional Technical Assistance – Commonwealth Regional Climate Finance Adviser, Africa
* Countries that have previously been supported by a Commonwealth national climate finance adviser.
CCFAH Beneficiary Countries | Source: The Commonwealth and Climate Change Report

Examining how energy is generated, delivered, and utilized is essential to achieving decarbonization goals and fostering socioeconomic growth. Accelerating the energy transition requires strong political will, technological advancements, and cost reductions. Finally, ensuring inclusive processes during this transition is crucial for achieving sustainable and people-centered social development.

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IFRC wraps up Hanoi meeting with calls for better disaster preparedness in Asia Pacific

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ISRAEL-HAMAS WAR

The Israel-Hamas conflict, into its seventh week, has displaced more than 1.7 million people in the Gaza Strip, according to the United Nations’ children’s agency UNICEF.  

Multiple aid organisations, including the IFRC, have renewed calls for an extended humanitarian ceasefire and pleaded for desperately needed aid to be allowed unimpeded into the devastated enclave.

“(We) express deep concern about the protracted crisis in the Middle East and express solidarity with Palestinian Red Crescent Society and Magen David Adom,” said Tunku Puteri Intan Safinaz, chairwoman of the Malaysian Red Crescent Society, in a statement at the conclusion of the conference. Magen David Adom is Israel’s national emergency medical, disaster, ambulance and blood bank service.

Dr Hossam Elsharkawi, IFRC’s regional director for Middle East and North Africa, also read to delegates the organisation’s recommendations regarding developments in Gaza.

“Endorsing the truce is insufficient. We must actively call for a permanent ceasefire,” he said.

“It is crucial to issue a statement condemning the violations and denouncing atrocities, specifically the deliberate targeting of civilians, medical personnel and hospitals,” he said.

Other recommendations include advocating for additional access points to Gaza, avoiding forcing people to leave their homes in population transfer scenarios, and providing support to the Palestinian Red Crescent.

The aid network said that civilians are paying the “highest price” in the hostilities, and has called on all parties to allow humanitarian organisations to safely access and support those impacted by the crisis.   

Delegates said the conflicts in Gaza and Ukraine take away huge amounts of attention and resources from programmes on climate action.

“The biggest challenge is that we have more and more diversified types of humanitarian crises,” said Mr Ma Wenbo, a representative from the Red Cross Society of China.

“We have natural disasters, and we also have man-made ones like war, armed conflicts, etc., which is stretching our resources.”

CLIMATE RISKS

Even as these conflicts divert public attention, the IFRC highlighted the need for the region to guard against growing climate risks.

Delegates at the conference agreed on a call for action for Asia Pacific, which is the world’s most disaster-prone area.

Nearly 45 per cent of the world’s natural disasters occur in Asia and the Pacific, and more than 75 per cent of those affected live within the region, according to the UN.

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At COP28, a chance for the West to make amends

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The West often engages in moral grandstanding when addressing critical global issues like climate change, emphasizing the need for action and accountability. But when it comes to taking responsibility for historic carbon emissions, the developed world often falls short of its obligations.

This disparity between rhetoric and action has significant implications, particularly for vulnerable nations. The Loss and Damages Fund, a significant achievement of the COP27 summit last year in Egypt, highlights this disconnect.

The increasing severity, breadth, and regularity of climate calamities has disproportionately affected developing countries, as evidenced by the Global Climate Risk Index 2021. Of the 10 most affected territories and countries between 2000 and 2019, all were in the developing world.

The Gr9up of 77 and China played a pivotal role in including finance for loss and damages at COP27. The emphasis was on framing this mechanism as a global commitment rather than liability or compensation. The result was collective acknowledgment of the asymmetric impacts of climate change and a step toward rectifying these imbalances.

However, the path to operationalizing the fund is fraught with obstacles. The impasse at an October meeting on the topic cast doubt over the process, particularly concerning the fund’s practical implementation.

Fortunately, a breakthrough was achieved at a follow-up meeting in Abu Dhabi this month. The text adopted there will form the basis of a final decision at COP28 in Dubai in December. Even before that meeting starts, the deal on loss and damages already has the potential to become one of the meeting’s greatest achievements.

Yet even amid progress, the adopted text reveals three issues that hint at how difficult it will be to implement the fund. The success of COP28 in addressing these issues will be a test of the international community’s commitment to equitable climate action.

The first point of contention concerns identification of fund contributors. Developing nations advocate for financial commitments from developed countries, while the United States and Europe assert that emerging economies, notably China and Gulf nations such as Saudi Arabia, should share financial responsibilities equitably.

During preparatory meetings for COP28, the Saudi delegation reportedly referred to historical “failures on obligations and gaps in action” by Western nations during and after the Industrial Revolution, an opinion shared by many leaders in developing countries.

The West has a history of falling short in funding climate action. A 2009 promise to mobilize US$100 billion annually for developing countries by 2020 was never met. It’s high time the West matches its rhetoric with financial commitment. COP28 is the place to deliver.

While the developing world is open to funding from non-governmental sources like the private sector and humanitarian groups, the primary responsibility lies with Western governments. Failure to step up could mean either the loss and damages fund remains non-operational, or its scale is too small to impact climate-change mitigation and adaptation significantly.

The second key challenge for COP28 is pinpointing which nations should benefit from the fund. At COP27, the definition of “particularly vulnerable” sparked debate – a matter still unresolved. COP28 must clarify this. It’s a complex issue; assessing loss and damages goes beyond simple economic factors to include losses that are less tangible and harder to measure, like those from gradual environmental changes.

There’s also a gap between what affected communities experience and the data collected by governments and organizations. Localized impacts may seem more pressing than the broader climate context, complicating the creation of effective responses.

The third challenge revolves around the location and administration of the fund. Western countries, particularly the US and the European Union, favored housing the fund within the World Bank, an idea that developing countries have strongly opposed.

Opposition was rooted in concerns that the World Bank’s loan-based financing model was unsuitable for debt-burdened developing countries, and that the bank’s decision-making process was too heavily influenced by its major donors, particularly the US. Moreover, high administrative fees associated with the World Bank have further fueled resistance.

Despite these reservations, developing countries made a substantial concession by agreeing to an interim arrangement where the fund would be housed in the World Bank for four years, under conditions that included direct access to grants and inclusivity of non-World Bank member states. But if the rest of the demands of the developing world are not met, they can easily do away with this concession.

Thus COP28 faces a crucial task in making the Loss and Damages Fund operational. If successful, next month in Dubai will mark a significant victory for the Global South and those communities bearing the brunt of the West’s historical emissions. This momentous step could pivot the scales toward a fairer climate future.

This article was provided by Syndication Bureau, which holds copyright.

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School Strike 4 Climate: Australian students with ‘sick note’ demand climate action

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Climate protestors in SydneyGetty Images
By Tiffanie Turnbull
BBC News, Sydney

Thousands of Australian students have walked out of class to attend School Strike 4 Climate rallies, backed by a “sick note” from “climate doctors”.

Signed by three prominent scientists, it concludes: “It is my recommendation that they take a sick day to protest for a sick planet.”

The students called for greater climate action, as the country faces another summer with natural disasters.

However some state education officials said schools will not accept the note.

Penned by Dr David Karoly, Dr Nick Abel and Dr Lesley Hughes, the letter was available online for students to download.

It said they were unfit to attend school because of “increased anxiety” around government inaction, “elevated stress” due to the impact of climate change, and “feelings of despair” about their future.

The note is not a formal medical certificate, and education departments in New South Wales and Victoria said it will not be accepted in their schools.

The Minister for Education Jason Clare also said students should not be at the Friday strike. “I want our kids to be passionate, I want our kids to care about democracy and I want our kids to care about the future, but I also want our kids at school,” he said.

But students who attended the protests across nine cities said the government’s response demonstrated a failure to take their concerns seriously.

“[They are] throwing our future under the bus by approving new coal and gas [projects] in Australia,” year 10 student Joey Thompson told the Australian Broadcasting Corporation in Melbourne on Friday.

In Sydney, protesters chanted “shame” outside the office of Environment Minister Tanya Plibersek.

One 16-year-old, Min Park, told the Australian Associated Press she was striking because of Ms Plibersek’s approval of new coal and gas projects.

“She is listening to the fossil fuel lobby instead of doing her job and taking responsibility to protect the health of the planet,” she said.

Australia has long faced international criticism for being slow to respond to the threat posed by climate change.

While the Labour government led by Anthony Albanese promised greater action to halt climate change when elected in May 2022, experts say Australia is still not keeping pace with key allies like the US and the UK.

Originating in Sweden, School Strike 4 Climate is an international movement of students who skip classes on Friday to press for political action on climate change.

The Friday rallies are the 11th held in Australia, and the largest since 2019 when an estimated 300,000 people turned out across the country.

They come after former diplomat and public servant Gregory Andrews was forced to end a hunger strike outside Parliament House in Canberra. Mr Andrews had refused to eat until the government declared a climate emergency, but was taken away by an ambulance on Friday morning.

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Xi and Biden at summit speak of conflict avoidance

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State leaders of China and the United States met on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders’ meeting on Wednesday to discuss trade, Taiwan and other geopolitical issues. 

Chinese President Xi Jinping and US President Joe Biden had a face-to-face meeting at Filoli estate, a historical site in San Francisco. The two had not met each other since they had a talk in Bali, Indonesia a year earlier.

“Sino-US relations have not always been smooth, but the two countries still have to deal with each other,” Xi said in his opening speech at the meeting. “Confrontation is not a practical move. The earth can accommodate both China and the US.”

“Although the two countries have different development paths, as long as they adhere to mutual respect, peaceful coexistence and win-win cooperation, they can transcend their differences and find a way for the two countries to get along with each other,” he said. “The future of China and the US is bright.”

Biden said both China and the US should make sure that their competition will not lead to conflicts. He said both countries can work together in artificial intelligence and climate change issues. 

Before the two leaders’ meeting, China and the US said in a joint statement that they recall, reaffirm, and commit to further the effective and sustained implementation of the April 2021 US-China Joint Statement Addressing the Climate Crisis and the November 2021 US-China Joint Glasgow Declaration on Enhancing Climate Action in the 2020s. 

They said they decided to operationalize the Working Group on Enhancing Climate Action in the 2020s, to engage in dialogue and cooperation to accelerate concrete climate actions.

Win-win situation

On Tuesday and Wednesday, China’s state media published a series of articles, saying that the Xi-Biden meeting would help significantly improve Sino-US relations. 

“We hope that the positive stance shown by the US in its recent interactions with China is not political calculation and tactic, and that the verbal commitments it has made will become concrete policies and substantive actions,” Xinhua said in a commentary on Wednesday.

“We also hope that the US will not be fettered by domestic party disputes and the selfish interests of politicians, and will work together with China to make long-term efforts to accumulate good news and momentum in China-US relations and promote the real stabilization and improvement of bilateral relations,” it said.

It said the general trend of the world is peace, development, cooperation and win-win situation, and that no country or group of countries can dominate world affairs alone.

Xinhua also said cooperation, not competition, should dominate the perception of Sino-US relations. It said if both sides define their entire relationship with competition, antagonism will continue to increase while the two nations will face a risk of slipping into the abyss of a “New Cold War.”

It said China and the US can boost bilateral trade, work together in the carbon neutrality and medical sectors and encourage mutual investment. It said China’s middle-class population will provide growth potential for American farmers. 

Besides, the China Central TV said in an article that Xi had paid a lot of effort to encourage informal exchange between Chinese and US people over the past three decades. His effort included an invitation of the wife of late American physicist Milton Gardner to visit Fuzhou, where the scientist spent 10 happy years of his childhood, in 1992.

“We’re not trying to decouple from China. What we’re trying to do is change the relationship for the better,” Biden told reporters at the White House on Tuesday.

He said the US was wary of investing in China due to Beijing’s business practices, which require foreign investors to turn over their trade secrets. 

He said that, by meeting with Xi, he wanted to get back on a “normal course of correspondence,” such as being able to have emergency phone calls or military talks whenever there is a crisis. 

China’s ‘real problems’

In early 2023, political tensions between China and the US were heightened by the Chinese spy balloon incident, Taiwan matters and Washington’s chip exports ban against China. The two sides could only resume dialogues in May.

Xi’s US trip happened against a backdrop of China seeing a decline in its foreign direct investment (FDI) and exports this year. The Chinese economy is also facing deflationary risks. 

On Tuesday, Biden said at a fundraiser in San Francisco that China has “real problems.”

“President Xi is another example of how re-establishing American leadership in the world is taking hold. They’ve got real problems,” he said, without further elaboration.

“Nations that have no problems do not exist in this world,” Mao Ning, a spokesperson of the Chinese Foreign Ministry, said in a regular media briefing on Wednesday in what may have been a retort to Biden’s remark. “China is confident that it can achieve better development and achieve brighter prospects,” she said. “It is hoped that the US can also seriously solve its own problems and bring better life to the American people.”

Prior to this, Biden said on August 10 that China’s economic situation was a ticking time bomb. He said China was in trouble as it had a slowing growth and high youth unemployment rate.

China’s FDI fell 14.7% year-on-year to about US$132.9 billion in the first nine months of this year. The figure is an estimation calculated by Asia Times with the FDI in renminbi terms.

In January-October, China’s exports fell 5.6% to US$2.79 trillion from the same period of last year. The country’s imports dropped 6.5% to US$2.11 trillion.  

People also reduced spending due to falling or unstable income. In October, China’s consumer price index (CPI) fell 0.2% year-on-year, according to the National Bureau of Statistics (NBS). It was the second contraction in prices since the last one in July. 

NBS officials said falling consumer prices were a result of rising food supply and weaker demand after long holidays.

The Chinese economy has been hit by a property and local government debt crisis over the past two years. Many property developers were struggling to sell their apartments, return loans and finish their construction work. 

The central government is going to issue 1 trillion yuan of sovereign bonds but the sum is only enough for local governments to pay the interest on their outstanding debt. 

According to China’s Ministry of Finance, the outstanding amount of local government debt grew 15.1% to 35.06 trillion yuan at the end of last year from 30.47 trillion yuan a year earlier.  

Read: End to decoupling tops China’s pre-summit demands

Follow Jeff Pao on Twitter at @jeffpao3

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US and China reach ‘some agreements’ on climate – John Kerry

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US Special Envoy for Climate John KerryJeff J Mitchell
By Nick Marsh & Kelly Ng
BBC News

The US has reached some agreements with China ahead of the COP28 Summit in Dubai at the end of this month, Washington’s climate envoy has said.

“We felt that our days of talks were very successful. We did come up with some agreements”, John Kerry told the BBC at a business summit in Singapore.

Details will be shared “at the appropriate moment soon”, he said.

The world’s two biggest polluters finding common ground is considered a crucial part of any consensus at COP28.

Mr Kerry had met with his Chinese counterpart Xie Zhenhua in California this week for four days. He described the meetings as tough and serious.

In response to a question, Mr Kerry refuted observations that US climate policies and technologies are “anti-China”.

“Like any other country in the world, [China] benefits from a new technology. We’re trying to develop that… Every country I’ve heard from Germany and France, and other countries, do the same thing. We need to all move faster,” he said.

It is hoped that COP28 – to be held from 30 November to 12 December – will help keep alive the goal of limiting long-term global temperature rises to 1.5C. This was agreed by nearly 200 countries in Paris in 2015.

Contentious topics on the table in Dubai include details of a fund for richer countries to compensate the poorest nations as they cope with climate change.

The US and some other developed countries have been wary of the fund and sought to limit access to the most vulnerable countries not covered by development banks and relief funds.

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Australia offers climate refuge to Tuvalu citizens

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Breaking News

Australia has offered refuge to citizens of Tuvalu because of the impacts of climate change, in a landmark pact.

Tuvalu – a series of low-lying atolls in the Pacific – is among the nations most at risk from rising seas.

It is home to 11,200 people and has repeatedly called for greater action to combat climate change.

Australian Prime Minister Anthony Albanese on Friday said it was a “ground-breaking” agreement.

“It will be regarded as a significant day in which Australia acknowledged that we are part of the Pacific family, and with that comes the responsibility to act,” he told reporters.

The new treaty – known as the Falepili Union – is the “most significant” agreement between Australia and a Pacific country ever, he added.

Along with setting up a new migration pathway for residents of the country, the agreement also commits to providing assistance to the nation on climate action and security.

This is a breaking news story – more to follow.

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Malaysia’s net zero transition: expediting ESG | FinanceAsia

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The Joint Committee on Climate Change ( JC3 ) of Malaysia met last month to discuss working together to improve the financial sector’s ability to develop climate resilience. & nbsp,

According to a spokesperson for Bank Negara Malaysia( BNM ),” sustainable assets are gaining momentum in Malaysia with key investment styles built around the need for accelerating sectoral transition and climate resilience, such as energy transition, circular economy, food security, and freedom change.”

The JC3 board was established in September 2019 to ensure a cogent approach to ESG initiatives, with its founding serving as” great testimony” to how proponents of Malaysia’s capital markets intend to work closely to improve sustainability practices in Malaysia, according to Angelia Chin – Sharpe, CEO of BNP Paribas Asset Management, which operates in Southeast Asia.

Its members include representatives of the market’s central bank, BNM, capital markets regulator, Securities Commission Malaysia ( SC ), stock exchange, Bursa Malaysia, and 21 other financial industry players, including Chin-Shawni at BNP AM, insurance companies Allianz, Swiss Re and Zurich, as well as banks like RHB Islamic and CIMB.

The committee outlined five initiatives at the meeting that” emphasise the crucial part of the banking sector in enabling a lasting plan” with the goal of expediting the economy’s low-carbon practices. A pilot project to switch industrial parks and their operational infrastructure to low-carbon practices was one of these, along with three data-related initiatives and a RM1 billion($ 0.210 million ) guarantee to provide funding to smaller market players to support their ESG agendas. & nbsp,

The BNM spokesperson stated to FA that one of the goals of” Ekonomi Madani” is to encourage Malaysia’s green growth in the direction of climate resilience. This goal aims to put Malaysia on a strong development path by realizing and addressing key national issues.

There are numerous opportunities for industry players, including international investors, to achieve the National Energy Transition Roadmap ( NETR ) targets set for 2050, she said.

Energy efficiency( EE ), renewable energy( RE ), hydrogen, bioenergy, and green mobility and carbon capture, utilisation and storage( CCUS ) are the six energy transition levers that Malaysia’s NETR identifies as its ten flagship projects. These are anticipated to catalyze and quicken the market’s energy transition, reduce greenhouse gas ( GHG ) emissions by at least 10 metric tons of carbon dioxide equivalent ( MtCO2eq ) annually, create 23, 000 high-impact job opportunities, and improve corporate ecosystem growth opportunities with benefits to society.

According to the BNM touch, their powerful supply necessitates investments in infrastructure, engineering, and human capital totaling between RM1.2 trillion and Rs1.3 trillion up to 2050. In addition to & nbsp,

While Malaysia’s administrative society is capable of reviewing such an option and is aware of the significance of incorporating ESG into purchase technique,” there is still a need to teach” smaller scale investors on the opportunities and risks associated with sustainability strategies, according to Chin-Sharpe, BNP Paribas AM.

Having said that, she added,” Most banks in Malaysia are committed to playing a more active role to align and help their clients understand the[ relevant ] Malaysian taxonomies.”

Purchase and regulation

The five new initiatives have been included in the government’s budget for 2024 and” complement other policies such as the NETR, the New Industrial Master Plan ( NIMP ) 2030 and the Mid-Term Review of the 12th Malaysia Plan ( MTR – 12MP ,” according to YB Nik Nazmi Nk Ahmad, minister of Natural Resources, Environment, and Climate Change.

All governing events, including JC3 users, Malaysia’s Corporate Guarantee Corporation, and pertinent ministries, are committed to putting the tasks into action, the BNM representative confirmed with FA.

The regulatory environment in Malaysia keeps up with the country’s continued energy transition and the funding needed to make it happen. To obtain conservation and environment goals, the money market should be prepared to help finance raising and investments. Since 2011, when Sustainable and Responsible Investment ( SRI ) has been included as a crucial growth strategy in the Capital Market Masterplan CMP2, the SC has paved the way for sustainability, according to Dato ‘ Seri Dr. Awang Adek Hussin, its chairman.

A Climate Chance and Principle-based Taxonomy was published by BNM in 2021. In December 2022, SC unveiled a Principles-Based SRI Taxony for the Malaysian Capital Market. This year, in June of this year. SC also established the International Sustainability Standards Board’s ( ISSB ). & nbsp,

Meanwhile, the BNM spokesperson emphasized last month’s Energy Efficiency and Conservation legislation as having the potential to significantly lower energy use by 2050 — by 2, 017 million gigajoules, or RM97 billion in savings— and to” create new jobs in energy management and auditing ,” she said.

According to Adrian Wong, mind of jobs and director at the Singapore-based law firm Prolegis, which has a formal legal ally with Herbert Smith Freehills( HSF ),” investment has increased in Malaysia in part because the regulatory environment has done more to promote appetite in renewables.”

Large-scale solar auctions in Malaysia’s peninsular and projects along the Sarawak Corridor of Renewable Energy ( Score) are two of the renewable infrastructure projects his team is helping clients with.

The transport industry is anticipated to play a significant role in the demand for renewable energy, with electric vehicle ( EV ) usage expected to reach 80 % of the car market in 2050.

However, he informed FA that the greatest possibility is present in projects involving solar, water, and biofuel. In 2040, it is anticipated that all three sources will increase and account for roughly 17 % of Malaysia’s total energy mix.

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Data and the potential of emerging technologies to support Malaysia’s conservation plan are the three activities that were announced at the event.

The first builds on the accomplishments of JC3’s Greening Value Chain ( GVC ) pilot program, which began in 2022 and has so far assisted 80 small and medium enterprises( SMEs ) in tracking and reporting greenhouse gas ( GHG ) emissions across the length of their supply chains. In order to provide public listed companies( PLCs ) capacity-building support, reporting tools, and additional financing facilities, which the BNM spokesperson said could be accessed” at competitive rates via the Low Carbon Transition Facility( LCTF ), the updated plan connects Bursa Malaysia’s sustainability data platform with the GVC program.

Access to an” ESG jump-start portal,” through which Malay businesses can obtain useful information on ESG-related capacity-building programs, certification, as well as financial and opportunity methods, and the introduction of a Green AgriTech program to promote the adoption of green technology and sustainable agriculture techniques among local producers, are additional data related initiatives.

According to the BNM director,” Green AgriTech offers substantial potential for Malaysia’s agricultural field by opening up new possibilities and addressing vital difficulties.”

Wong concurred that emerging technology has the potential to modernize and alter Malaysia’s ESG strategy, particularly in the agricultural industry. From ensuring a sustainable supply of food sources to raising general health and environmental criteria, he mentioned the potential for positive effects.

To ensure that farmers may conduct their financial transactions online, he suggested the Malaysia Digital Economy Corporation’s project, which linked small farmers to online marketplaces offering bright warehouse facilities, supply, and farming solutions.

Through a thorough approach to alternative solutions, this catalytic pilot program encourages farmers to use technologies and follow greener and ecological practices. Participating farmers can obtain grants and LCTF to purchase natural systems, the BNM spokesperson added.

” Technology use may improve produce stability and quality while also assisting in the resolution of food safety issues.”

maintaining speed

The efforts to enlist input from all parts of Malaysia’s market, both the public sector and the private sector, is at the core of the country as it transitions. The BNM spokesperson informed FA that” efforts to level public-private partnerships are even continuing, with fresh initiatives.”

She stated that the GVC program is an excellent illustration of a cutting-edge blended financing initiative in Malaysia that supports the country’s move toward enlightenment.

BNM continues to support private institutions’ participation in the government’s loan offerings, the call emphasized,” BNM also supports such attempts by facilitating the release of Government of Malaysia Sustainable Sukuk for registration by both domestic and foreign investors.”

According to SC chairman Hussin at the conference, the SRI-linked Sukuk Framework was introduced last year, giving the Indonesian capital market access to a full range of frameworks to assist businesses in financing transitional projects as well as alternative, social, and sustainability initiatives.

Fitch recently released an ESG document that showed a steadfast global appetite for the sukuk. The data shows that by the end of 3Q23, ESG sukuk issuance had increased by 66 % year over year( YoY ) to reach$ 33.3 billion worldwide.

Due to built-in sharia filters, there is a cross between Islamic funding and ESG principles, according to the ratings agent’s research. & nbsp,

Over the moderate name,” Fitch Ratings anticipates more rise.” According to the review, the company’s growth is largely driven by governments’ sustainability initiatives and issuers’ funding diversification goals toward both sharia and ESG-sensitive investors.

” ESG sukuk could receive an awareness and issuance boost ,” said Bashar Al-Natoor, Fitch’s global head of Islamic Finance, with the United Arab Emirates( UAE) hosting the Conference of Parties( COP ) 28 this year.

It is motivating to see the Indonesian government adopting a” full of state” approach to addressing the impact of climate change on economic conservation, Hussin said at the conference’s conclusion. The nation’s interests and sustainable development methods are outlined in roadmaps and masterplans that have been made available by the relevant ministries.

I want to say it again:” Our planet is facing an unprecedented problem, one that necessitates immediate and coordinated effort from all countries, sectors, and individuals.”

 

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