OCTOBER 3 — Yesterday, our Minister of Finance issued a statement calling on the world’s major powers to take responsibility for their policy decisions that have impacted the global economy. This came in light of the concerns and queries received on the state of Ringgit Malaysia and our domestic economic situation. The statement is timely since we are still reeling from stagflation due Covid-9 that dwindled demands due to lockdowns. Just as we had hoped that 2022 will be kinder, Russia-Ukraine conflict erupted. The already volatile global economy was rocked by supply shocks and skyrocketing prices.
If US’ hegemonic power is a preview of our new normal, then their decision to raise the interest rate by 75 basis points, to a range of 3 per cent to 3.25 per cent aimed at restraining the high inflation can only be surmised in one word: selfish. In its literal term, lacking consideration for other people in favour of own profit and pleasure. What the US wants, US gets. The old saying that there is no permanent foes and friends, only interests ring truer today than it ever did. 77 years after the end of the World War II, we are back to living during the time when the US and Russia engaged in an intense ideological and geopolitical struggle for dominion despite their successful temporary alliance against the WWII belligerents in 1945.
The combination of sanctions, interest hike and price cap on Russian oil exports put an unprecedented burden on the developing countries, including Malaysia to fight inflation and keep our dollar reserves. Analysts anticipate that the Fed will continue to raise interest rate, leaving more vulnerable and destitute families to suffer the consequences. It also means more economical, social and political risks to the developing countries and emerging markets. Will anyone care if the poor households have no food to eat and gas to heat their homes? Ironically, the same powers are also the ardent proponents of the 2030 Sustainable Development Goals (SDGs) that promises to leave no one behind.
Their preferred policy decisions that seek to curtail Iran, Russia and to some extent China will not cripple the flow and workings of energy markets. Rather, without access to energy, food, house, peace and security, the global community will not be able to end poverty, fight hunger, promote prosperity, champion inclusive growth and build peaceful and just societies. More innocent lives will become the collateral damage.
For although we exist in the era of Elon Musk who wants to colonise Mars to end the age of oil, we are also living at a time of great peril marked by decisions that favour conflicts than world peace. Russia has already cut off natural gas supplies to Europe via the Nord Stream 1 pipeline. Winter is coming, and the Europeans are nervous. Men do not need to battle in the arena anymore now. Instead, energy can be weaponised given the tight oil and gas markets. Lo and behold, the conflicts have also accelerated the calls for energy transition to haste. Unlike the conventional human evolutions and revolutions that have been a story of renewal, the world’s major powers want out our energy transformation to be a story of replacement.
History is key to unpacking these complexities of our time. Humans began burning wood for cooking and heating approximately 7,000 years ago. When we found ways to harness the energy in coal, it did not replace our use of wood but added to the energy mix. When oil began to flow in the 1800s, it revolutionised the transport industry, but humans continued to burn coal for industrial processes and electricity generation. In 1900s, we started to utilise natural gas to generate electricity and for heating. Coal, oil and natural gas all added to the mix.
The world’s major powers are talking about replacing coal, oil and natural gas to prevent the greenhouse gases (GHG) emissions from further damaging our climate. They insist for us to radically transform our energy mix, never mind the different national circumstances and varying level of development. However, a series of challenges and unexpected events rendered the consumers unprepared to surrender the abundant energy supply such as oil and gas.
So, we negotiated a balanced solution to mitigate climate impacts by reducing GHG emissions without forsaking energy security and economic growth. An energy poor society risks losing access and connection to power that could empower livelihood. To accelerate Malaysia’s energy transition, our society has to be literate whilst our energy affordable and sustainable. On September 19, 2022, the Prime Minister launched the National Energy Policy 2022-2040 (DTN). It highlighted Malaysia’s Low Carbon Nation Aspiration in tandem with the global trend of energy transition to clean energy solutions. The time for the energy sector to change from our business-as-usual is finally here.
DTN underscores Malaysia’s strategies to balance the trilemma of energy security, affordability, and environmental sustainability. The oil and gas industry has to be resilient while the energy ecosystem explores ways to enhance capabilities and venture into the adjacencies such as renewable energy, hydrogen, CCUS, energy storage, green mobility and decarbonisation in the name of clean energy solutions. These are the complementary elements to create new opportunities for growth, meet our energy demands and fulfil our climate goals.
How to promote an energy-conscious society in the age of energy transition? First off, the 33 million strong Malaysians understand how we are contributing in this journey. As consumers, we must adjust our attitudes and behaviours in the way we consumer energy for work and leisure. Policymakers and energy providers must understand the motivation and rationales driving consumers’ behaviours and decision makings. Improved energy literacy would create more balanced dialogue around all matters energy, including agreeing to disagree on matters of polarised debates such as energy subsidies. Yet, let us never lose sight of the fact that the policies and alignments require massive changes in many sectors that affect the very fabric of our economy, especially energy.
While the idea of an energy literate citizenry is sound, our challenge remains among others to identify what energy literacy actually is. Is literacy about numeracy such as emission data, or is it about technology and society? I am of the view that in the context of Malaysia, energy literacy can be construct as an understanding of the nature and role of energy in the world and daily lives accompanied by the ability to apply this understanding to answer questions and solve problems.
Notwithstanding these conceptions, we now face a transformational moment in our energy story. Energy is at the heart of the human predicament of the 21st century. How we embrace this moment may well dictate our future especially those living on the peripheries. Energy transition is nothing short of a herculean endeavour. It requires the right policies, political resolve, strong leadership and a whole-of-nation approach so we can leave our economies and societies better than we found them. We owe this to our future generation.
I am confident that we can meet this challenge. We all have a stake in this because energy transition is a journey for all Malaysians, not just a select few.
* This is the personal opinion of the writer or organisation and does not necessarily represent the views of Malay Mail.
