Carbon Trading And How Renewable Energy Adoption will Benefit Companies in Malaysia
Progressture Solar featured on Yahoo! Finance, has shared opinions about Carbon Trading and How Renewable Energy Adoption will Benefit Companies in Malaysia.
KUALA LUMPUR, Malaysia, Nov. 25, 2021 /PRNewswire/ — In recent weeks, the world watched as delegates from over 200 countries contested, reaffirmed, and agreed to climate mitigation pledges at the COP 26 UN Climate Change Conference in Glasgow, Scotland. The impassioned opening speech by Sir David Attenborough called upon world leaders to “rewrite our story”, a plea to act swiftly on keeping global warming below 1.5°C by adopting more sustainable practices and cleaner energy. Progressture Solar has shared their opinions on this topic.
As world leaders closed the climate talks amidst developing countries’ calls for financial aid and last-minute amendments on the agreement for fossil fuel cuts, the discussion on global carbon trading saw a positive breakthrough as rules were finally set after 6 years of debate – signalling a more transparent and standardised platform for countries to trade carbon on.
Fortunately, Malaysia is also preparing to enter carbon markets with the booming demand for offsets. The government had made a declaration of domestic carbon trading through the voluntary carbon market (VCM) platform and domestic emissions trading scheme (DETS), in an effort to achieve the status of a carbon neutral country by 2050 under the recent Malaysia’s Budget 2022 and the country’s revised Nationally Determined Contributions (NDC).
To further drive the development of the carbon trading platform, the Ministry of Finance (MOF) is currently working with the Environment and Water Ministry (KASA) and Bursa Malaysia in an effort to get buy-ins from the state government, as well as attract investments from potential carbon credit buyers. Bursa is slated to launch the Voluntary Carbon market as a voluntary platform for carbon credit trading between green asset owners and other entities.
Carbon markets traditionally allow for the pricing of carbon and the selling of rights to produce emissions within a cap set by the governing body. The policy aims to limit overall emissions produced by the state government or private sector, via the purchasing and selling of carbon credits – certificates that give rights to emit a ton of emissions.
While the VCM and DETS act along similar fundamentals, the DETS operates at a national level while the VCM covers the international trade of carbon credits or offsets. The DETS, which will be launched at Bursa Malaysia, plays a pivotal role in setting emission limits in the private sector. Such markets are already practiced or undergoing development in countries such as China, The United States, Japan, Switzerland and New Zealand, the most well-known and largest market being the EU ETS, a common prototype for developing carbon markets following its reformation across the years. Studies have shown that it has saved more than 1 billion tons of carbon emissions (CO2).