Malaysia is increasing funds for state governments to protect the environment. The allocation grew from RM70mil in 2021 to RM100mil in 2022, and RM150mil in the current year.
These funds, known as Ecological Fiscal Transfers (EFT), are provided by the Federal Government to incentivize state governments in preserving natural surroundings and wildlife habitats, including forests, coastlines, sea areas, and rivers and lakes.
However, in order for states to access the funds, more action is needed. Currently, not all state governments have fully utilized the funding.
States must fulfill the terms and criteria set by the Federal Government to access the fund.
Experts believe that the EFT should be consistently provided each year instead of being given as a special allocation.
“The EFT is currently provided based on the fiscal situation of the country at the time,” says Dr. Khairul Naim Adham, an official with the Natural Resources, Environment and Climate Change Ministry.
Dr. Khairul Naim suggests the need for a stronger legal framework to ensure a consistent provision of the EFT scheme.
“The government currently uses a guideline for the state governments to follow,” says Dr. Khairul Naim, who is the ministry’s deputy undersecretary for biodiversity and forestry management division.
Dr. Khairul Naim was among the panelists in a dialogue on enhancing the EFT mechanism organized by the United Nations Development Programme (UNDP) in Putrajaya.
Panellists discussing how to enhance the EFT mechanism in Malaysia. (From left) Environmental lawyer Preetha Sankar; Forest Research Institute Malaysia deputy director-general (operations) Dr Lilian Chua Swee Lian; Natural Resources, Environment and Climate Change Ministry biodiversity and forestry management division deputy undersecretary Dr Khairul Naim Adham; and UNDP Malaysia climate and energy head of nature Gan Pek Chuan. — Other
According to the ministry’s EFT For Biodiversity Conservation guidelines, 70% of the allocation is based on the width of protected areas in each state, while the remaining 30% is calculated based on six factors.
The six factors include maintaining and adding new protected areas, restoration efforts, facility management, enforcement operations, community engagement and capacity building, and adherence to forest management practices.
During the dialogue, the speakers emphasized the need for the EFT scheme to be provided annually to protect nature and its rich biodiversity.
Environmental lawyer Preetha Sankar suggests the implementation of a legislative framework to ensure a continuous flow of EFT funds.
Dr. Lilian Chua Swee Lian, deputy director-general (operations) of the Forest Research Institute Malaysia, believes that the EFT mechanism can change as long as there is annual budgeting for environmental protection.
In the 2023 Budget, Prime Minister Datuk Seri Anwar Ibrahim announced a RM150mil allocation for the EFT scheme, benefiting states such as Kedah, Kelantan, Pahang, Perak, Sabah, Sarawak, and Terengganu.
Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad stated the distribution will consider the gazetting of new protected areas and tree replanting.
According to Dr. Khairul Naim, there has been a positive trend in utilizing the EFT allocation, but not all state governments have fully utilized it.
“We acknowledge that there are some operational challenges. The capacity of states to plan and manage EFT funds can also be improved,” he adds.
Regarding the initiative, Gan Pek Chuan, UNDP Malaysia’s head of nature, explains that the UN agency is supporting the ministry in assessing the effectiveness of the current EFT mechanism.
“We are identifying areas for improvement and engaging state governments to increase their capacity in utilizing the funds effectively,” she says.
UNDP resident representative Niloy Banerjee highlights the ease of financing green initiatives today, given the heightened awareness of environmental issues.
“Ten years ago, nobody knew the concept of ESG [environmental, social, and governance]. But now, most are aware of such an approach,” he says.
An Orang Asli settlement in the Royal Belum rainforest. Local community engagement and capacity building is one of the requirements states have to fulfill under the EFT scheme.
At the event, it was revealed that the ecosystem services provided by three protected areas in Malaysia are valued at RM2.659bil per year.
The Taman Negara National Park has the highest value at over RM1.7bil annually for its positive impact on Malaysia’s ecosystem.
This is followed by the Royal Belum state park in Perak at RM531mil yearly, and the Endau-Rompin National Park in Johor at RM428mil per year.
The Economics of Ecosystems and Biodiversity Reports, produced by environmental economists Yeo Bee Hong and Dr. Luke Brander, were launched at the event.
Credit: The Star : News Feed
