KUALA LUMPUR: Environmentalists and biodiversity experts are eagerly anticipating Budget 2025, set to be tabled on Oct 18, with hopes that the government will continue advancing the nation’s environmental protection agenda.
Reflecting on Budget 2024, which was unveiled last year, a total of RM7.1bil was allocated to the Natural Resources and Environmental Sustainability Ministry, up from RM6.5bil in 2023.
Key highlights included various measures to support the nation’s Environmental, Social, and Governance (ESG) objectives, such as RM2bil for the National Energy Transition Roadmap (NETR) and the issuance of a RM1bil biodiversity Sukuk to replant degraded forests and generate carbon credits.
Additionally, a total of RM200mil was allocated for ecological fiscal transfers aimed at biodiversity conservation, including RM60mil to double the number of community forest rangers and RM10mil to support individuals affected by human-wildlife conflicts.
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However, analysts and experts interviewed by Bernama suggested that the government should introduce more robust measures in Budget 2025 to implement biodiversity initiatives and achieve the desired outcomes effectively. This includes safeguarding indigenous and local communities, protecting green spaces, and conserving wildlife.
President of the environmental non-governmental organisation (NGO) Sahabat Alam Malaysia, Meenakshi Raman, emphasised the need for increased allocations for the Ecological Fiscal Transfer for Biodiversity Conservation (EFT) incentive.
She said EFT was a vital instrument to transfer financial resources from Putrajaya to states to promote the protection and conservation of forests and biodiversity.
"The RM200mil allocated this year is insufficient to better protect critical forest and marine areas, especially larger areas. More financial resources are needed for states to do more," she told Bernama.
Meenakshi, who is also a Senior Legal Adviser and Coordinator at Third World Network, noted that higher EFT allocations would encourage state governments to conserve and expand protected areas.
"Otherwise, they may be tempted to convert forests to other uses such as logging or plantations in search of more revenue," she said.
Climate finance policy analyst Muhammad Shaqib Shahrilnizam said aligning the upcoming Budget 2025 with climate and environmental objectives is crucial. This alignment ensures that fiscal policies not only support economic growth but also contribute to sustainability goals.
"By factoring in the environmental impact of spending decisions, governments can ensure that their budgets effectively address climate challenges and promote long-term ecological balance," he said.
He also suggested that the government establish an Environmental Quality Incentive Programme (EQIP) to provide financial and technical assistance to farmers and landowners. This programme would support the implementation of conservation practices aimed at improving biodiversity, soil, water, and wildlife resources.
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"This study is from the United States Department of Agriculture (USDA), specifically from the National Resources Conservation Service's flagship conservation programme, which assists farmers, ranchers, and forest landowners in integrating conservation practices into their working lands," he said.
Malaysia Forest Fund (MFF) Chairman, Dr Yasmin Rasyid said Budget 2025 should also include financing facilities to support the pilot implementation of additional carbon projects across the country.
"Carbon credits remain a relatively new and emerging industry in Malaysia. For it to really take off, we need strong collaboration between the Federal and State Governments, as well as with the private sector, civil society, local communities, and other key stakeholders.
"We still have a long road ahead before we see a fully developed carbon market in the country, but I believe we are moving in the right direction. It is encouraging to see growing interest from various sectors," she said.
She added that one of the key challenges in the carbon market space is the significant funding required for projects, particularly in the early stages before they can be registered.
"Carbon credits generated from projects can be bought and sold in carbon markets, either voluntarily or in compliance with regulatory requirements.
"This is the ultimate goal of the Forest Carbon Offset (FCO) programme, which helps companies operate more sustainably and offset their carbon footprint as needed," she said.
FCO is a market-based instrument designed to promote the protection and conservation of forested areas by assigning monetary value to forests through carbon credits. This incentivises the protection, restoration, and expansion of forest areas, providing both environmental and economic benefits to those involved in carbon projects.
Yasmin suggested that forging greater partnerships with the private sector to support biodiversity and forest conservation is crucial.
"This aligns with the envisioned whole-of-nation approach, which enables the government to achieve its aspirations, relying significantly on public-private partnerships.
"A blended financing model in collaboration with the private sector can significantly boost participation in carbon projects and catalyse a thriving carbon market in Malaysia," she added.
She said Malaysia has substantial potential to secure climate finance to support its net-zero agenda, adding that collaborating both regionally and globally can enhance the effectiveness of collective climate action.
Meanwhile, Meenakshi suggested that the government should continue to explore accessing international funds like the Green Climate Fund to secure additional funding for forest protection initiatives.
On Oct 16, 2023, NRES minister Nik Nazmi Nik Ahmad told Dewan Rakyat that Malaysia has received a total of US$76.95mil (RM364.8mil) in allocation from the Global Environment Facility (GEF) since joining in 1994 and has carried out a total of 21 projects nationally.
He said Malaysia as a signatory to the Paris Agreement is also eligible to receive funding under the Green Climate Fund (GCF) to implement climate change mitigation and adaptation actions.
Echoing this sentiment, Yasmin emphasised the importance of actively pursuing international funding options for forest protection.
"Forest protection is a shared responsibility and a global call to action that transcends borders. This effort requires all the support it can garner, including technology transfer, technical assistance, and the mobilisation of financial resources," she said.- Bernama
