KUALA LUMPUR: Malaysia needs an estimated USD85bil (RM392bil) to adapt to climate change in the next 50 years, says Nik Nazmi Nik Ahmad.
The Natural Resources, Environment and Climate Change Minister said that transitioning to renewable energy would play a crucial role in addressing climate change through the reduction of carbon emissions.
He, however, added that the cost of the energy transition—which is at the heart of successful climate action—is immense.
Nik Nazmi said while the exact total investment required to reach net-zero emissions is still being determined through comprehensive studies, it is estimated that a total of RM637bil of new investments in renewable energy is required.
“The government is committed to accelerate the deployment of renewable energy and increase its share as the source for Malaysia’s power generation to 70% by 2050,” he said at the Climate Finance Summit held in Sasana Kijang here on Thursday (July 13).
“This transition definitely requires substantial financial resources. Therefore, an estimated new investment for renewable energy alone of approximately RM637bil up until 2050 is required,” he added.
Nik Nazmi said this includes investments in renewable energy generation sources, strengthening of grid infrastructure, energy storage systems integration, and grid system network operation augmentation.
“Malaysia updated its first Nationally Determined Contributions (NDC) in 2021 with a more progressive and ambitious target of unconditionally reducing economy-wide carbon intensity, against gross domestic product (GDP) of 45%, in 2030, compared to 2005 levels,” he said.
“It highlights our ambition to further reduce emissions compared to our previous submission in 2016. Malaysia had also announced our aspiration to achieve net-zero greenhouse gases (GHG) emissions as early as 2050,” added Nik Nazmi.
Nik Nazmi also said that Malaysia has suffered a total loss of RM622.4mil due to floods last year – an obvious cost of climate change to the country.
He added that the total loss was equivalent to 0.03% against the nominal GDP.
“The ‘cost’ of climate change to us is obvious,” he said.
In February, the Statistics Department’s special report on the impact of floods in Malaysia in 2022, stated that losses to public assets and infrastructure made up 37% of the country's total losses, agriculture and living quarters at 25%, respectively, business premises at 8%, vehicles at 4% and manufacturing at 1%.
The Climate Finance Summit brings together businesses, regulators, financiers and the public to identify Malaysia's position in the global climate narrative.
It also aims to explore ideas on how to accelerate the financing of the country's mitigation and adaptation efforts.
“Climate finance is not just an abstract concept but a fundamental requirement for addressing the global climate crisis.
“It is crucial that we recognise the urgency of the situation and mobilise the money needed to mitigate greenhouse gas emissions, support vulnerable communities, and foster economic growth,” he added.
