The cost of climate resilience

CLIMATE change is real, but there is also an argument to be made that it’s naturally occurring. The history of the world is one of constant climate shifts.

Nonetheless, the impact of climate change is undeniable, and nations around the world are trying the stymie its effects.

Carbon taxes, underground carbon storage and green initiatives have all come to the fore in recent years.

The elephant in the room, however, is the cost of warding off climate change.

When Securities Commission chairman Datuk Mohammad Faiz Azmi says Malaysia will need more than RM4 trillion by 2050 to strengthen its resilience against climate change, it is a figure that surely pops out.

That figure is about twice Malaysia’s current nominal gross domestic product and is an extraordinary amount to contemplate raising and funding.

Spread over the years to 2050, Malaysia would need more than RM173bil annually to fund these initiatives – more than double the development expenditure in Budget 2026.

Even though RM4 trillion figure is from the World Bank’s Country Climate and Development Report on Malaysia, the gargantuan estimate shows just how costly – and some will say, unrealistic – the burden of addressing climate change can be.

Faiz was correct to point out that many adaptation and resilience projects are unbankable.

“Adaptation projects have long tenors and limited standalone cash flows. A seawall generates no direct revenue. A flood-resilient drainage system may sit idle for years,” he says in a report.

Another important point he makes is noting that developing countries would require between US$310bil and US$365bil annually by 2035 to meet climate adaptation needs, but international public adaptation finance amounted to only US$26bil in 2023.

The hard truth about tackling climate change is that it will come at a cost to the public.

The question is whether it is politically palatable to ask the people to shoulder a growing burden when living costs and low incomes remain priorities that need overcoming first.

For now, addressing and funding climate change is a first-world problem.

But that doesn’t mean developing countries should not get involved – they can contribute in their own ways that hopefully can expand over time.