The World Health Organization estimates that climate change-related deaths will increase by approximately 250,000 per year between 2030 and 2050. In addition to the threat of deaths posed by this environmental enemy, climate change also adversely affects agricultural productivity, reducing vital nutrients in crops and threatening food security and nutrition.
Climate change is primarily caused by human activities that release greenhouse gases into the atmosphere. The burning of fossil fuels such as coal, oil, and natural gas for energy is a major contributor, releasing carbon dioxide (CO2) and other greenhouse gases. Deforestation, industrial processes, and other agricultural activities also contribute by releasing methane and nitrous oxide. These greenhouse gases trap heat in the Earth’s atmosphere, leading to global warming and changes in climate patterns.
CO2 emissions in Malaysia have exhibited a consistent increase over the years, paralleling the nation’s economic growth. For instance, in 2022, Malaysia’s CO2 emissions from energy use amounted to 272.9 million tonnes, reflecting a 13% increase compared to 2017. Simultaneously, Malaysia’s GDP grew by 8.65% in 2022, significantly higher than the 4.8% GDP growth rate recorded in 2017. This correlation can be attributed to the fact that economic development typically entails higher energy consumption, leading to the release of greenhouse gases such as CO2 into the environment. Balancing economic growth with environmental sustainability poses a major challenge. This dilemma has historically led economists to adopt a strategy of “grow first, go green later.”
However, considering the significant threat climate change poses to our environment, health, and lives, it is evident that true wealth extends beyond monetary measures to include the richness of our natural environment and the longevity and quality of human life it supports. Consequently, the world is now moving away from the traditional “grow first, go green later” approach. If we delay our efforts to go green until after we have achieved economic development, we may face severe consequences, as famously stated by Keynes, “in the long run, we are all dead.” Therefore, it is crucial to take action now to mitigate climate change and reduce CO2 emissions to protect public health and the environment.
A healthy environment is not only essential for ecological balance but also has profound impacts on human health and longevity. Furthermore, investing in environmental health is not only morally imperative but also economically sound. Valuing ecosystem services and integrating environmental considerations into decision-making processes unlock opportunities for sustainable development and innovation, including the creation of green jobs, development of clean technologies, and enhancement of ecosystem resilience.
In light of this, Malaysia must put sufficient investment in green technology for both economic growth and sustainable development. National savings play a crucial role in economic development by making funds available for investment. This investment drives technological innovation, specialization, and large-scale production, leading to economic prosperity. However, the impact of investment extends beyond just economic growth. When investments are directed towards eco-friendly businesses, known as green investment, they can help reduce environmental degradation. This emphasizes the importance of sustainable practices that promote environmental health and resilience, such as responsible stewardship of natural resources, the promotion of renewable energy sources, and the conservation of biodiversity.
Unfortunately, the share of savings in Malaysian GDP has been decreasing, reaching 25.99% in 2021. However, there was a slight improvement in 2022, with savings rising to 26.59%. On the other hand, Malaysia’s gross savings as a share of GDP is expected to decrease slightly from 26.59% in 2022 to a projected 25.4% in 2023. To sustain the increment experienced in 2022 and exceed the projections for the coming years, concerted efforts are required from all stakeholders.
Shared responsibility among the government, private sector, and citizens is crucial in generating wealth for green technology. The Malaysian government can increase its savings and create a favorable fiscal environment for investment, economic growth, and sustainable development by adopting measures that strike a balance between raising revenue through taxes and managing expenditures efficiently. In addition, policies that create a favorable environment for businesses to retain earnings and stimulate investment in green technology should be adopted. However, there is a need for balancing incentives for savings with a fair tax system that promotes economic competitiveness and social welfare. The government can also promote a saving culture and provide the necessary tools and incentives for effective financial management among households.
By promoting national savings and directing investments towards green technology, Malaysia can simultaneously enhance economic performance and mitigate environmental degradation, fostering sustainable development. This conjecture challenges the conventional belief that economic development and environmental quality are inherently trade-offs. In other words, the economy of Malaysia can provide evidence that there is no need to wait till we grow before going green.
