These challenges include meeting a fast-growing demand, fulfilling environmental needs, enhancing efficiency in the allocation of resources and reducing wastage, said Center for Market Education (CME).
In its just released policy paper titled “Energy Transition in Malaysia: An Ecomodernist Perspective”, the think tank noted that coal now accounts for 24% of the energy production in Malaysia.
However, there is now a need to diversify its energy mix and move away from a dependence on natural gas, oil and coal, said authors of the policy paper Praharsh Mehrotra and Dr Bryan Cheang from the Adam Smith Center in Singapore.
They proposed taking an “eco-modernist” approach, which entailed a greater reliance on an economic philosophy that emphasised on practical and constructive policies that harnessed technological innovation and economic growth.
“Where radical environmental discourse crowds out sensible discussion, ecomodernism offers a distinctive perspective, and it promotes a market-based approach to environmental policy due to its efficiency and growth benefits,” CME said.
In their evaluation of the history of Malaysia’s energy policy, Praharsh and Cheang noted that strategies such as the feed-in tariff (FiT), which capped the number of energy producers, slowed down renewable energy expansion.
It said the third iteration of the net energy metering (NEM 3.0) policy, which was designed to encourage increased consumption of renewable energy, also required consumers to install costly solar panels themselves.
The authors also pointed out that the government’s high allocation for electricity subsidies was also the biggest hindrance to the growth in the renewable energy market in the country.
“These subsidies discourage consumers from adopting renewable energy,” the duo pointed out.
However, they noted that the government has now recognised that it was a problem and had moved to resolve it by adopting a more targeted approach to energy subsidies.
On nuclear energy, they said its adoption could greatly increase energy efficiency. They also stressed that the safety concerns had been “overblown”.