It has been 51 years since John Lennon penned the iconic song ‘Imagine’. In a pacifying voice, he pleaded for peace and tolerance in a turbulent time with the raging Vietnam war, soaring inflation and the oil embargo.
Is history – the 1970s – repeating itself? Today the Russia-Ukraine conflict comes with grave economic repercussions. Just like in the seventies, inflation is once again surging globally. But the energy crisis is worse now, with a combined scarcity of oil, gas and electricity sources.
Together with the pandemic and climate change, these forces overlap and reinforce each other. The Global Challenges Foundation has designated 2022 as the year of 'polycrises'.
As elsewhere, Malaysia will face global headwinds in 2023, compounded by many domestic challenges. Add to the global risks mentioned above, post-election radicalism threatens the fabric of Malaysian society.
While Lennon sang 'Imagine' to heal a sombre mood, US President Jimmy Carter envisioned a different future for his country. The first architect of a green economy, Carter imagined a world powered by solar energy.
Today, environmental improvements drive economic growth in a big way. The advisory firm Oxford Economics predicts the green economy in 2050 to be 5.2% of global GDP that year, or US$10.3 trillion. This is an understatement, as the projection relates mainly to energy transition efforts.
The market size is several trillion larger if we include the potential of the bioeconomy and the circular economy. This is likely because the next era of the industry will combine the physical, digital and biological worlds.
From tin and fossil fuels to rubber and palm oil, Malaysia’s economic history and wealth have always been intertwined with the global demand for commodities. As the world economy turns green, Malaysia can be one of the powerhouses.
Imagine Perak as a green industrial state powered by hydrogen. Water is essential to realise the full potential of hydrogen, and Sg Perak is water-rich and, above all, clean. If Singapore can turn its water scarcity into an industrial strategy and crown itself the Silicon Valley of water, what is stopping us from attracting the leading hydrogen investors to Perak? With new jobs for young people, Ipoh could regain its lost glory as a city of millionaires.
Sabah is known worldwide as a prime ecotourism destination. Imagine if we could entice tourists to visit large agrivoltaic farms as part of agrotourism. Agrivoltaic is a technology where we produce solar energy and grow food on the same land. Sabah is a perfect area for solar energy as it is located in a sun-drenched region with a potential of 1500 kWh/kWp. One megawatt (MW) of solar brings approximately 4 direct and 28 indirect jobs. Imagine how many new jobs there will be for Sabahan in the rural areas if the government makes significant investments in agrivoltaic.
Other states can also green their economies based on their strengths. Kedah and Kelantan - the rice bowls - have unused, unmonetised rice husks from their vast paddy fields. Yet with each harvest season, the rice fields release 6 million kg of CO2 into the atmosphere, a damage equivalent to cutting down 6,800 trees. Rice husks have a high cellulose content and are suitable feedstock for making biodegradable plastic, contributing to Malaysia's drive for a circular economy. Alternatively, states can build biomass power plants and create direct employment, for example, by collecting and transporting rice husks to the power plants. Farmers earn additional income as the rice they produce receives added economic value.
And no more short-term profits at the expense of people. States rich in minerals should refrain from exporting raw minerals and instead develop them as local green industries. A decade ago, Indonesia banned the export of metals to China so they could build processing factories at home. We remember how the same miners came to Kuantan and painted the town red with bauxite.
Financing the green transition is no longer a pipe dream. The size of sustainable investment mechanisms is rising to trillions of dollars. But ESG investing, the new corporate North Star, is being developed from a financial compliance mindset. ESG funds must also align with strategic economic policy and flow where it matters, namely into fledging green businesses and SMEs.
Can we not imagine Malaysia leading the green race if it can muster its resources? We can, because Malaysia is one of the world's most open economies, ready to implement economic reforms when needed.
Now is the season to dream big again, walk the green talk, and go beyond mere slogans. It is time for a "brotherhood of man", sings Lennon. That is when we put aside our differences and march together to regain our standing in the world.
Another version of this piece was published in New Straits Times, December 12, 2022.
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