KUALA LUMPUR: The best solution to combat climate change is to drastically impose hefty carbon emission taxes.
YTL Group executive chairman Tan Sri Francis Yeoh said although there were many mechanisms to combat climate change, he was in favour of stringent pollutant taxes imposed in many countries like Sweden.
"Studies have shown that although we can promote renewable energy, nuclear power, electrification, afforestation and reduced use of heating elements, climate change can be minimised by doing away with using fossil fuels, coal, and hydrocarbons that emit harmful gases (like methane, carbon dioxide and nitrous oxide).
"High carbon taxes will accelerate the use of green technology at a very significate rate," Yeoh said in his keynote address at the 'EU-Malaysia Dialogue: Fighting Climate Change with Market Mechanisms' at the Ritz-Carlton Kuala Lumpur in Bukit Bintang.
Sweden reportedly has the highest carbon tax rate worldwide at US$137 per metric ton of carbon dioxide equivalent, while Poland has a tax rate of less than US$1 per metric ton of carbon dioxide equivalent.
A carbon tax is designed to reduce carbon dioxide emissions by increasing prices of the fossil fuels that emit them when burned.
This both decreases demand for such goods and services that produce high emissions and incentivises efforts to make them less carbon-intensive.
In his welcoming address, European Union ambassador Michalis Rokas said that he was encouraged by Malaysia's commitment to reduce by 45 per cent, its emission intensity of its gross domestic product in 2030.
This, he said, was compared to the baseline in 2005, and especially to achieve carbon neutrality by 2050.
"The EU stands ready to collaborate with Malaysia to find sustainable solutions to achieve such targets, including sharing our own experience with the Emission Trading Scheme.
"The EU is committed to become the first carbon neutral continent in 2050 with its 'Green Deal' and its climate legislation, leading the way in this direction.
"We should not debate about financial burden, but about ways to make the 'Green Transition' a source of economic opportunities, skilled jobs and an avenue for growth," said Rokas, adding that reducing dependence on fossil fuel was all the more important.
In September last year, the EU launched its 'Strategy for Cooperation in the Indo-Pacific'.
"Together, the Indo-Pacific and Europe account for over 70 per cent of the global trade in goods and services, and over 60 per cent of foreign direct investment flows.
It is understood that this scale of trade implied a considerable environmental footprint.
"The share of the region in global carbon dioxide emissions has grown from 37 per cent to 57 per cent since 2000, and the region will account for more than 70 per cent of growth in global energy demand by 2030.
"Therefore, the region is vital for mitigating climate change and protecting our planet's delicate ecological balance," said Rokas.
France's ambassador to Malaysia, Roland Galharague said EU's Carbon Border Adjustment Mechanism (CBAM) could prevent 'carbon leakage' outside the EU in countries such as Malaysia.
"It is a climate change related measure, non-discriminatory and World Trade Organisation-compliant. It should be enforced in stages starting next year," said Galharague.
He added that CBAM would facilitate and not hamper trade and cross investment between the EU and Malaysia, ans it would benefit third-world countries with an incentive for them to decarbonise their production, thus, reducing the greenhouse gas intensity.
"Fighting global warming and its disastrous consequences should remain the overarching priority of all mankind. Nothing less than our survival is at stake," Galharague said.
Petronas vice-president and chief sustainability officer Charlotte Wolff-Bye stressed that combating climate change needed concerted efforts and a strong will-power from all quarters.
"Bold, fast, and wide-ranging action needs to be taken by governments and businesses. Te trahnsition to a low-carbon world also requires the participation of citizens, especially in advanced economies.
She added that carbon pricing was regarded as the most effective policy tool to decarbonize economies, when coupled with other complementary measures.
Charlotte added that carbon pricing instruments would expedite Malaysia to reach its nett-zero aspiration by 2050.
"Carbon pricing instruments need to be complemented by other policy instruments that together reduce greenhouse gas emissions effectively at lowest cost.
"Contradicting legacy policies should be phased out," said Charlotte.
She explained that Petronas aspired to achieve net-zero carbon emissions by 2050, delivering clean energy and low carbon solutions to people internationally.
"To preserve a livable climate, greenhouse-gas emissions must be reduced by half by 2030 and to net-zero by 2050.
Malaysian Industrial Development Finance (MIDF) Berhad group managing director Datuk Charon Wardini Mokhzani stressed that the largest producers of carbon dioxide were the big economies.
He said China had a total emission of 10.7 billion tonnes, as compared with the United States (4.7 billion tonnes); the EU (2.6 billion tonnes); Russia (1.6 billion tonnes); Saudi Arabia (0.6 billion tonnes); Asean (1.6 billion tonnes); and Malaysia (0.3 billion tonnes).
However, China's emission per capita was only 7.4 tonnes against the US (14.2 tonnes), EU (5.8 tonnes), Russia (10.8 tonnes), Saudi Arabia (18 tonnes), Asean (2.4 tonnes) and Malaysia (8.4 tonnes).
"Due to strict EU climate change policies, carbon leakage may occur when EU based companies move carbon-intensive production abroad to take advantage of countries without carbon pricing.
"CBAM can help reduce carbon leakage, as European importers will need to pay a price for the carbon emissions that is comparable to the price paid by EU domestic-producer countries," said Charon.