2012 drhezri green

7/31/2019 2012 Drhezri Green

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Green Economy:Foundation and Emerging Influence

Hezri Adnan, Ph.D

Avillion Legacy, Malacca, 7-9 October

Rio+20 Kick Off Workshop


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Presentation Outline

1. Debate on green ideas & products

2. Approach to green economy

3. Key concepts of green economy transition

4. Political acceptability of green economy

5. Development ofgreen economy in Malaysia


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OLD OR NEW DEBATE?

Green Economy Transition


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Growing Green Investment

The total world market for environmental products and

services is currently estimated at around $1370 billion, and is

set to double by 2020 (UNEP/ILO 2008).

Several indicators confirm these forecasts.

An increasing number of major industrial and service groups are

diversifying and investing in cleantech and renewable energy sectors(Fritz-Morgenthal et al. 2009, Makower et al. 2009); IEA 2008, NEF 2009).

A rise in the number and size of stock market operations in these

sectors, in the USA , Europe and developing countries (UNEP/NEF 2009;

NVCA 2009; Payton and Kneller 2009; NEF 2009).

Venture capital firms, ethical funds and pension funds increasinglyinvest in green business (Cleantech Network 2007).


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Growing Green Investment

South Korea embraces a low carbon green growthvision with USD31 billion allocations to fund research

in 27 green technologies.

Green New Deal: government-led investment inenergy efficiency

Green banking

National economic stimulus package adopted in late 2008

& early 2009 had a green investment component


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The Green Economy Debate

Driven by the 3 F Crises, pointing to weakness of current

economic system

The world needs to diversify from fossil fuels, and move

towards a sustainable low-carbon economy. How to break out of the current lock-in to fossil fuels?

What are the most promising ways forward?

The low carbon goal recalls the complex relationship between

the triad sustainable development, industrial competitiveness, and technological

change.

Creating the Next Industrial Revolution The globalisation of the market economy often makes technical change and its

diffusion seem inevitable.

It is unlikely for the market to deliver a sustainable energy future by itself

Indeed the world is seeing a race for leadership in the low-carbon age


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New buzzwords

Green growth (Korea [low carbon, greengrowth]; Cambodia)

Green job (UN Labour)

Green collar economy

GreenEconomy

Firm level innovation and efficiency

Greener supply chain

WaveRidersGreen Wave

Not only clean technology

Governance of sustainable technology

New Industrial Revolution

GreenTechnology


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International GE Formulation 1

The Organisation for Economic Co-operation

and Development (OECD) promotes green

growth, acknowledging that green and

growth can go hand in hand by fosteringeconomic growth and development, while

ensuring that natural assets continue to

provide the resources and environmentalservices on which our well-being relies


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UNEP makes a macroeconomic case for jobs and

output

Towards a Green Economy(UNEP 2011) presents a

working definition of a green economy as one thatresults in improved human well-being and social

equity, while significantly reducing environmental

risks and ecological scarcities. For UNEP, a green

economy is one which is low carbon, resourceefficient and socially inclusive.


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The basic principles for greening growth in

UNESCAP countries are quality and eco-

efficiency of economic growth as well as

environmental sustainability vis--visenvironmental performance. UNESCAP

identified four pillars for the transition to a

greener growth namely: eco-tax reform;sustainable infrastructure; the greening of

business; and sustainable consumption


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Steps to Greening the Economy

Pollution

Control

Effluentmanagement

Eco-

efficiency

Produce morewith fewerresources

Eco-

effectiveness

Productionwithoutpollution andenvironmental

degradation

Sustainable

Economy

Cradle-to-cradleresource usewithinenvironmentallimits,

mimickingnatureYesterday

Today

Tomorrow

Future

Source: Ekins; UNESCAP


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Common approach

All responses subscribe to mainstream economicthinking, arguing that proposed solutions will

contribute to economic recovery, to fight against

poverty, and to promote justice, since greener

growth would also ensure that planet resources areavailable to develop the poorest countries and their

populations. The framing of the problem is mainly

in terms of allocation, a traditional and a central

concern of mainstream economics, which seeks

solutions through the well-rehearsed pursuit of

greater resource

Bina and La Camera 2011


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KEY CONCEPTS

Green Economy Transition


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Old and new greening

Hezri & Ghazali 2011


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Key Ideas

Redefinition of wealth, from quantityto quality What are the conditions for the compatibility between

economic growth and environmental sustainability?

New philosophy ecology as a productive force

A more constructive role of technology

Greening the economy refers to the process of:

reconfiguring businesses and infrastructure to deliver

better returns on natural, human and economic capitalinvestments while at the same time reducing GHG

emissions, extracting and using less natural resources,

creating less waste and reducing social disparities (UNEP)


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GreenEconomy

Soft EnergyPath

SustainableInfrastructure

Greening ofbusiness &

industry

SustainableConsumption

Innovation

Pillars of Green Economy


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Green WaveInternational USA

1 BP Johnson & Johnson

2 Shell Baxter

3 Toyota DuPont

4 Lafarge 3M

5 Sony Hewlett-Packard

6 Unilever Interface

7 BASF Nike

8 ABB Dow

9 Novo Nordisk Proctor & Gamble

10 Stora Enso SC Johnson

11 Philips Kodak12 Bayer Ford

13 Holcim IBM

14 STM Microelectronics Starbucks

15 Alcan Intel

Can commerce lead us to sustainable

society? When does it pay to be green?

PRESSURE:

The limits of the natural world could:

1.Constrain business operations

2.Realign markets

3.Threaten the planets well-being

Companies face a growing spectrum ofstakeholders who are concerned about

the environment

NEW LOGIC:

Recognition the business strategy of

using the environmental lens to

promote innovation

E.g. The 2001 SONY Playstation

Cadmium Crisis, cost $130m

Source: Esty & Winston 2006, From

Green to Gold

WaveRiders


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Criticisms on green economy

1. Trade barrier or green protectionism, i.e.

the strategy of using environment for trade

protection

Not limit the policy space or by enforcing

technical standards that their exporters cannot

meet

Not impose new conditionality on developingcountries for aid, loans, and debt rescheduling or

debt relief


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Criticisms on green economy

2. Intensify technology transfer and its attendantproblems

Technology transfer is still a stuck issue in international

negotiations

3. Urban bias and rural vulnerability

Poverty eradication objective and improving rural welfare

4. Greenwashing not all green is green

5. Business-as-usual, where quantitative growth is stillkey

6. Social dimensionsjustice take a back seat


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Country Positions Following Prepcom I

Supportive: Barbados, China, EU, Indonesia,Norway, Republic of Korea, Senegal, Sweden,Switzerland, USA, FAO, UNEP, UNIDO, Workersand Trade Unions

Unclear: Argentina, Australia, Colombia, Ecuador,Egypt, G77 and China, Mauritius, Mexico,Uruguay, Women, NGOs, Local Authorities

Sceptical/Negative: Bolivia, Brazil, Cuba, Japan,Indigenous Peoples


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MALAYSIAN CASE STUDY

Transition to Green Economy


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Total CO2 Emissions in

Malaysia by Sectors


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Policy Challenge

How to managedeep change on a wide scalethroughout Malaysia?

what obstacles have to be negotiated?

what means have we to negotiate them?


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Policy Direction for Renewable Energy

The Malaysian energy sector is still heavily dependent on non-renewable fuelsuch as fossil fuels and natural gas as a source of energy

The Seventh (7th MP)

Renewable energy was made the fifth fuel in the energy mix togetherwith oil, gas, coal and hydro

The Eighth (8th MP) In-house biomass-based cogeneration for the production of electricity;

Extension of financial and fiscal incentives for as biomass, biogas,municipal waste, solar and mini hydro; and

Promotion of co-operation between government agencies and privateinstitutions

The Ninth Malaysia Plan (9th MP) Development of other RE sources such as stand alone systems of solar

hybrid and Municipal Solid Waste (MSW), especially through theimplementation ofClean Development Mechanism (CDM) projects.

By 2010, the target for electricity generation from RE resources was setat 300MW in Peninsular Malaysia and 50MW in Sabah


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Fiscal Incentives for Renewable Energy

2003

Pioneer status and Investment Tax Allowances incentives for biomass extended toinclude the usage of hydro electric power of not more than 10 megawatts as wellas to solar energy

2004

Incentives for existing companies using oil palm biomass with the following:Pioneer Status with tax exemption of 100% for 10 years on the increased incomefrom reinvestment; and Investment Tax Allowance of 100% for 5 years onadditional investment

2005 Capital allowance for expenses incurred by companies in generatingenergy from renewable and environment friendly resources for their own

use be reduced from between 4 and 8 years to one year.


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Fiscal Incentives for Renewable Energy

2006 Tax exemption under Pioneer Status from 70% to 100% for 10 years, and

the rate of Investment Tax Allowance from 60% to 100% for five years.

2007 Bank Pembangunan established the Biodiesel fund of RM 500 Million to

further develop Malaysias Biodiesel Industry

2009

Pioneer Status with income tax exemption of 100% of statutory income for 10 years;

or Investment Tax Allowance of 100%. The allowance to be set-off against 100% ofstatutory income for each year of assessment; and

Exemption of import duty and sales tax on solar photovoltaic system equipment; andsales tax on locally manufactured solar heating system equipment;


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Renewable Energy Resources Potential

RE Resource Potential (MW)

Palm oil EFB 2000-3000 In consideration that theEFB is fully utilised for power generationonly

Biogas from POME 480

Hydro 20,000

Solar PV Limited by production capacity of PVpanels and financial resources

Landfill gas n.a

MSW 240 Projection as provided by KPKT

Source: MGTC


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Small Renewable Energy Power Programme (SREP)

SREP activities are targeted at Peninsular Malaysia and Sabah, as SREP is a

federal government initiative and the federal government has no

jurisdiction over the electricity industry in Sarawak.

SREP was launched on 11 May 2001. Objectives are to promote the

growth of small power generation plants that utilise RE and to facilitate

the implementation of grid connected RE.

RE project developers can sell up to 10 MW of their electricity output to the state-

owned electricity utility, Tenaga Nasional Bhd and Sabah Electricity Sdn Bhd (SESB)

under a 21-year license agreement.

A power plant can be more than 10 MW in size, but the maximum capacity that will be

allowed for power export to the distribution grid must not be more than 10 MW. Under SREP, the utilisation of all types of RE, including biomass, biogas, municipal waste,

solar, mini-hydro and wind, are allowed.

SREP target: to generate 5% or 600MW of the countrys electricity from RE

by 2005. Only 0.3% was achieved


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Status of SREP Projects in Malaysia as of April 2009

No

Status Mini hydro Biomass Biogas

No of

project

Capacity No of

project

Capacity No of

project

Capacity

1 Licensed projects 5 15.8 MW 9 79.5MW 1 2MW

2 Approved Projects(yet to be licensed)

10 61.5 MW 7 65MW 7 17.85MW

Total 15 77.3MW 16 144.5MW 8 19.85MW


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There are three 10MW biomass plant and 2MW landfill gas plant currently

operational and export to the grid.

a) TSH Bio Energy Project Palm Oil EFB Fired Grid Connected

Cogeneration Project employing EFB fired boiler (10MW)b) Kina Biopower plant Project - Biomass-based power generation plant

utilizing EFB fired boiler (10MW)

c) Seguntor Bioenergy power plant project - biomass based power plant

utilizing EFB (10MW)

d) TNB Jana landfill Biogas Project - Landfill Gas (LFG) Power Generation(2MW)


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Other Energy Efficiency Initiatives

Malaysian Industrial Energy Efficiency ImprovementProject (GoM, UNDP, GEF)

Targeting industrial energy consumers

Energy audit activities carried out in eight energy intensive

industrial sectors (wood, food, glass, cement, rubber, pulpand papers, iron and steel, ceramic) revealed potential

energy savings amounting to 7.1 million gigajoules (GJ) per

year with an estimated capital expenditure of RM100.4

million (US$ 28.7 million). Malaysian Green Building Index (MAA /ACEM)

Malaysian Building Integrated Photovoltaic

Technology Application Project (MBIPV)


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Biofuel Policy National Biofuel Policy by 2025, at least 5% of the national energy mix

must come from biofuel

In 2005, Malaysia utilized less than 1% of its biomass resource potential forrenewable energy. Be that as it may, Malaysia is now one of the key biodiesel

producers in the world

Endogenous R&D and technology developed by MPOB, now exporting

Financing

To support the biodiesel industry, government allocated US$ 16 million in low-

interest loans in 2004 ;US$ 3.3 million in federal grants ; US$ 3.8 million fromPetronas for demonstration projects; and further US$ 3.69 million for research and

development in 2006

Dubai Ventures plan to build the 500,000 metric tonne processing plan in LahadDatu

The volatile price of palm oil has impeded the implementation of palm-based

biodiesel. During 2006 and 2007, 92 biodiesel projects in Malaysia were approved, but only 14

functional biodiesel plants have since been built, eight being operational in 2008

Lesson learned.

From an economic viewpoint, the decision to concentrate on one feedstock shows a

lack of foresight ?


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Clean Development Mechanism (CDM) Prospect

Opportunities to develop new markets for innovative andenvironmentally-friendly technologies

Current CDM potential in Malaysia is associated with

biomass, biogas, hydro, waste management, landfill gas, MSW and

composting Future potential transport sector, biofuel, oil and gas, agriculture sector

Over 18 million tonnes CERs/yr (Energy) and over 12 million tonnes

CERs/yr (Composting) are anticipated by 2010

CERs Issued in Malaysia


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CERs Issued in MalaysiaTitle of Project Date of

Issuance

CERs Issued Other Parties

Biomass Energy Plant-Lumut. 06 Jan 10 34,171 Denmark

Sahabat Empty Fruit Bunch

Biomass Project

27 Aug 09 25,139 Switzerland,

U.K. & N. Ireland

LDEO Biomass Steam and Power

Plant in Malaysia

09 Oct 08 34,245 Canada

Switzerland

Germany

SEO Biomass Steam and Power

Plant in Malaysia

06 Oct 08 43,977 Canada

Germany

Replacement of Fossil Fuel by

Palm Kernel Shell Biomass in the

production of Portland Cement

22 Dec 06 366,260 France

Total CER Issued as of Feb 2010 708,028

NB: CERs, or Certified Emission Reductions, are carbon credits generated by CDM projects which have completed

the registration process. Each CER represents the abatement of one tonne of carbon dioxide equivalent, and CERs

are only issues by the CDM Executive Board once estimated abatement volumes have been validated independently,

and a stringent verification process is in place for ongoing monitoring.


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CDM Projects in

Asia and EstimatedRevenue for

Malaysia


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Greening of business


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Policy development in motion

Najib Administration: Introduced the Green Technology portfolio into the

Water/Energy function - KeTTHA

Formulated Green Technology Policy

Green Technology Financing Scheme Rebranded PTM to Malaysian Green Technology

Corporation

In the pipeline: Efficient Management of Electrical Energy Regulation is to be

introduced

Uniform Building By-Laws to be amended to incorporate EE features


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GreenEconomy

Soft EnergyPath

Sustainable

Infrastructure

Greening ofbusiness &

industry

SustainableConsumption

Innovation

POINTS FOR DISCUSSION

What are other Green Economyinitiatives in Malaysia?

Your impression of the energyindustry in Malaysia

What can we learn from pastpolicy goals in Malaysia ICT,

industrialization policy,agriculture?

Pill f G E

2012 drhezri green

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