National Seminar on Socio –Economic Impacts of Extreme Weather and Climate Change

“Incorporating Climate Change into The National economic Development”

S. Muthusamy Economic Planning Unit 22 June 2007 Putrajaya

Outline

1. Climate Change an Integrated Framework 2. Why Climate Change issue important to developing countries 3. Climate Change activities in Malaysia 4. Emissions, scenario & trends in energy sector 5. GHG reductions measures & potentials

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Climate Change - An Integrated Framework Climate Change Temperate rise Sea-level rise Precipitation change Droughts and floods Impacts on human and natural systems Food and water resources Ecosystem and biodiversity Human settlements Human health Emissions and Concentrations Greenhouse gases Aerosols Adaptation Socio-economic development paths Economic growth Technology Population Governanace

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  

WHY..?

No emission reduction commitments for developing countries under FCCC & Kyoto Protocol, but:

 

CO 2 emissions in developing countries grow much faster Cost for remedy in the future expensive Damage could be irreversible Possibility of accepting emission reduction commitments Potential financial flow



To promote a cleaner development path

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Policy Options:

Regulatory:

   

Emission standards Fuel quality Emission targets Standards for equipments Economic Instruments:

  

Trading permits Carbon tax Tax rebate

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i.

Sectoral: Energy ii.

Transport iii.

Buildings iv. Industry : : : : Improved supply and distribution efficiency Fuel switching Renewable energy Efficient fuel vehicles Cleaner fuel Model shifts Non-motorised Efficient lighting Efficient electrical appliances Efficient end-use electrical equipment Heat and power recovery Material recycling Control of non-CO2 emissions

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iv. Agriculture v.

Forestry vi. Waste : : : Improved crop and land management Improved cultivation techniques Controlled fertilizer applications Sustainable forest management Reduced deforestration Forest bioenergy Landfill methane recovery Incineration energy recovery Composting Recycling and minimization

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Constraints/barriers:

     

Climate change global “tragedy of the commons” – why bother?

Determining “Trade-offs” between climate change and development – resource allocations Choosing appropriate policy options – regulatory; economic instrument Conflicts with social and economic development objectives Political consideration – mitigation vs. adaptation Insufficient relevance of available information

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Climate Change Commitment Milestones

Year

1989 1994 1995 2000 2002 2004 2006

Milestones

Ratified Montreal Protocol Ratified UNFCCC Setup National Committee on Climate Change Submitted Initial National Communications • Ratified Kyoto Protocol Setup National Committee on CDM Begins preparation for Second National Communication CDM projects registration with EB (15…) 9

Emissions Scenario

 

National Initial Communication, 2000 IEA publications

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Malaysia GHG Emissions Scenario 1994 Sector Energy Industrial processes Agriculture Land use change & forestry Waste Total emission Net total (after subtracting sink) CO 2 equivalent 97,852 4,973 6,925 7,639 26,925 144,314 75,593 Source: Malaysia Initial National Communication

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Final Energy Use by Sector ktoe

40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1990 Agriculture Non-energy 0 908 Resid. & Comm. 1,646 Transport 5,387 Industrial 5,276

Source: Pusat Tenaga Malaysia

1995 2000 2001 2002 2003 2004 2005 446 2,994 104 2,250 98 2,378 96 2,511 98 2,345 87 2,183 101 2,173 2,837 3,868 4,048 4,387 4,399 4,754 5,134 7,827 12,071 13,137 13,442 14,271 15,385 15,340

Final and Industrial Energy Intensity Toe/RM Million (at 1987 Prices)

155 145 135 125 115 105 95 85

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Final Energy Intensity* Industrial Energy Intensity** 119 121 94 99 124 124 106 108 125 133 107 117 132 133 115 110 140 142 142 138 128 127 150 152 138 143 149 150 137 138 146 138 Notes: * Final Energy Demand/GDP at 1987 Prices ** Industrial Energy Demand/Industrial GDP at 1990-2005 Source: Pusat Tenaga Malaysia

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Trends of Primary Energy Supply, Electricity Demand, & Final Energy Demand Per Capita ktoe

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Electricity Dem and per Capita Final Energy Dem and per Capita 0.1

0.1 0.12 0.13 0.13 0.16 0.18 0.2 0.21 0.21 0.23 0.2330.241 0.25 0.260 0.26

0.74 0.79 0.85 0.89 0.96 1.07 1.14 1.21 1.15 1.18 1.28 1.31 1.357 1.38 1.46 1.45

Prim ary Energy Supply per Capita 1.11 1.11 1.21 1.34 1.4 1.49 1.68 1.77 1.64 1.62 2.18 2.1002.069 2.16 2.44 2.51

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Source: Pusat Tenaga Malaysia

RM Million (at 1987 Prices) Trends in GDP and Final Energy Demand ktoe

300,000 45,000 250,000 40,000 35,000 200,000 150,000 100,000 GDP (RM million) 50,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 111,061 120,609 130,012 140,864 153,881 166,625 183,292 197,120 182,237 193,422 210,557 211,227 220,422 232,359 248,954 261,395 0 10,000 5,000 30,000 25,000 20,000 15,000

Source: Pusat Tenaga Malaysia

Energy Intensity in ASEAN

Mtoe/Millions 4 4 3 3 2 2 1 1 0

1971 1973 1980 1990 1995 2000 2002 2003 2004 Brunei 0.800

0.900

1.150

1.400

2.233

2.367

1.800

1.900

2.025

Indonesia 0.056

0.064

0.139

0.208

0.264

0.345

0.357

0.347

0.389

Malaysia 0.350

0.326

0.467

0.737

1.061

1.258

1.353

1.382

1.486

Myanm ar 0.050

0.038

0.044

0.025

0.039

0.046

0.044

0.053

0.054

Philippines 0.162

0.177

0.164

0.156

0.219

0.232

0.231

0.229

0.230

Singapore 0.600

0.768

1.263

2.280

2.446

2.580

2.919

2.843

3.362

Thailand 0.144

0.173

0.200

0.395

0.638

0.683

0.755

0.792

0.846

Vietnam 0.159

0.152

0.064

0.064

0.109

0.152

0.191

0.209

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Source: Energy Balances of Non-OECD Countries (2002-2003), 2005 Edition, International Energy Agency (IEA) 0.264

CO

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Emission Trend

1990 1995 1998 1999 2000 2001 2002 % change 90-02

•CO2 Sectoral

Approach (Mt of CO2) 47.40

75.54

92.65

99.75

106.80

110.92

115.65

144.0%

•CO2/Population

(t CO2 per capita) 2.60

3.67

4.18

4.39

4.59

4.66

4.76

83.1% Source: IEA, 2004

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Policy Direction:



Lack of clear indication in National Plans



Insufficient evidence on the effects of climate change in Malaysia-Environment



However many climate change initiatives / measures implicitly / indirectly refered

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Fuel Mix for Power Generation (%)

Gas Coal Hydro Oil Others Source: Ninth Malaysia Plan 2000 77.0

8.8

10.0

4.2

0 2005 70.2

21.8

5.5

2.2

0.3

2010e 55.9

36.5

5.6

0.2

1.8

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GHG Emission Reduction Potentials 1. Use of Palm Oil Biomass EFB (million tons) 2000 2005 2010 2015 2020 10.5000

11.9364

13.4841

13.3623

14.5887

Potential Energy (m toe) 2.2586

2.5676

2.9005

2.8743

3.1381

Source: DANIDA studies

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2. Energy Efficiency in the Industrial Sector MEEP study on 8 industrial sectors – Glass; Cement; Iron & steel; Pulp & paper; Rubber; Ceramic; Wood; and Food i) Cement ii) Iron & steel iii) Glass iv) Pulp & Paper : : : : 30.0% 3.8% 2.0% 5.0%

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Climate change related initiatives:

i.

Transportation ii.

Energy iii.

Indusrty : Restructuring public transport system (30:70).

Adopting stringent emission standards ; Cleaner fuel.

Encouraging use of natural gas.

: Promote utilisation of renewable energy.

Energy efficiency-building, transport sector.

Eco-labelling to promote energy efficient appliances.

: Promote alternative process techniques.

Energy efficiency activity in energy intensive industries.

Studies / research to reduce GHG.

Recovery of heat / power from waste treatment

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Thank You Terima Kasih

www.epu.jpm.my

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