20140312 dato abj@ukti smartcitiesseminar_kl

The Required Regulatory Measures and the Necessary

Economic Policy Instruments for the Transformation of Waste Management Services to Resource Recycling Industries in

Malaysia

Dato' Ir Dr A. Bakar Jaafar, PEng, FIEM, FASc

Chairman of Association of Environmental Consultants and Companies of Malaysia (AECCOM)

Professor, UTM Perdana School of Science Technology Innovation Policy www.utm.my and Co-Chair, UTM Ocean Thermal

Energy Centre (OTEC), Kuala Lumpur, Malaysia

12 March 2014 InterCon KL

UK Trade & Investment Smart Cities Seminar

PREAMBLE: NOT TO LITTER, DO RECYCLE!

• Is it yet in the blood?• Not yet; not in practice, nor even part of the

culture in Malaysia, and the like of it!• So! What’s the solution? “… money in everyone’s pocket?” Government intervention: not only through

regulatory measures, but also the application of a number of economic & fiscal policy instruments

CITIES that I have been to … How SmartClean?• Singapore, Hong Kong; Tokyo, Osaka, Niigata, Kyoto, Yokohama, Fukuoka, Imari,

Naha, Kumejima; Seoul, Pohang;• Newcastle, Armidale, Sydney, Wollongong, Canberra, Brisbane; Auckland, Rotorua,

Wellington, Dunedin, Christchurch;• Honolulu, Los Angeles, San Diego, San Francisco, Reno, Eugene, Seattle,

Cincinnati, Chicago, Houston, Columbus, Washington DC, Pittsburgh, New York, Lexington, Buffalo,

• Edison, Vancouver, Calgary, Winnipeg, Ottawa, Toronto, Montreal, St.Johns, Halifax, Hamilton; Beunos Aires, Rio de Janeiro;

• London, Liverpool, Manchester, Glasgow, Oxford, Cambridge, Edinburgh, Bradford, Cardiff, Brighton, Bristol, Bath, Reading;

• Paris, Strasbourg, Nancy, Geneva, Lausanne, Basel, Zurich, Munich, Hannover, Frankfurt, Bonn, Stockholm, Uppsala, Copenhagen, Rotterdam, Brussels, Rome,

• Mecca, Medina, Riyadh, Dhahran; Bahrain; Dubai, Abu Dhabi; Nairobi, Johannesburg• Karachi. Mumbai, New Delhi, Hyderabad, Chennai;• Bangkok, Phuket; Manila, Baguio City; Bali, Jakarta, Jogjakarta, Bandung, Bodor,

Surabaya, Palembang, Pekanbaru, Dumai, Medan; Hanoi, HoChiMinh, Danang; • Alor Star, Ipoh; JB, Kuala Lumpur, Kuantan, Kangar, KK, Kuching, KB, KT, Labuan,

Melaka, Penang, PJ, Putrajaya, Seremban, Shah Alam,

UK Trade & Investment Smart Cities Seminar 5

OUTLINE OF PRESENTATION

1. Policy in Review

2. Proposed Policy Framework: Regulatory Measures with Appropriate Economic Instruments

3. Proposed Policy and Institutional Arrangements

4. Policy-Driven Technology Development

5. Conclusion

1972 Statement of Malaysia at the UN Conference on Human Environment in Stockholm

In urban areas “solid waste collection was satisfactory but the disposal system was largely by controlled tipping and burning. The disposal of waste was like those in many countries, and an organized programme in this direction was needed. The local authorities in many cases were hampered by lack of trained and experienced personnel, financial resources and knowledge of the effects of health.” In rural areas, “solid wastes were buried or burnt but there was room for considerable improvement in this area.” (Malaysia, 1971:10, 12).

The Outline Perspective Plan (2001-2010) (OPP3),

• To adopt “a comprehensive waste management policy … as well as to formulate strategies for waste reduction, reuse, and recycling.” (Malaysia, 2001:187).

The 8th Malaysia Plan (MP) (2001-2005)

inter alia “to introduce various initiatives and appropriate economic approaches such as incentives and collection charges to reduce the amount of solid waste.”(8th MP: 550).

EXISTING POLICY FRAMEWORK

GENERAL:

• OPP-3: waste-recycling industry;

• 8th & 9th Malaysia Plans: “Polluters-pay Principle” (PPP)?;

SPECIFIC:

• Non-Applicability of PPP; thus, the need for the “Indifferent Consumers-pay” (ICP) Principle and other economic-instruments

NON-APPLICABILITY OF “POLLUTERS-PAY” PRINCIPLE

1. Policy in Review

2. Proposed Policy Framework: Regulatory Measure with Appropriate Economic Instruments

5. Conclusion

LEGAL FRAMEWORK

LAW: • Solid Waste and Public Cleansing

Management Act 2007;

• Solid Waste and Public Cleansing Corporation Act 2007

SPECIFIC REGULATIONS:• Waste Segregation or Separation

@Source?

REGULATORY MEASURE

Segregation,

Separation

or Sorting @Source

THE FIRST STEP FORWARD: SEGREGATION @SOURCE

THE SECOND STEP FORWARD: HOUSEHOLD COMPOSTING

1. Policy in Review

5. Conclusion

INDIFFERENT CONSUMERS-PAY (ICP) PRINCIPLE

• Those who recycle, get rewarded with “smart credit points”;

• if not, pay a certain “Blue or Green” Levy when purchasing new targeted items e.g. goods in plastic bottles or containers

PROPOSED SCHEME by INDIFFERNT CONSUMERS-PAY PRINCIPLE

GOVERNMENT

CONSUMERS

- NP2O•Non-Profit +

•Non-Private Org.

RETAILERS

WASTEEXCHANGER

MANUFACTURINGINDUSTRIES

W2ECOMPANY

LANDFILLOPERATOR

STORAGE

SALES OF GOODS CONTAININGRECYCLED MATERIALS

SALES OF GREENELECTRICITY

•Soft Loan•Study Grant•R&D•Policy Studies•Education•Training•Awareness•Investment

Return old items

Receipt ofCredit Points

Pay Levy or Redeem Credit

Points

Return of Levy

AnnualPolicy Review

PerformanceReport

Purchase ofGoods

WASTETO

MATERIALS

Commission

INDIFFERENT CONSUMERS-PAY (ICP) PRINCIPLE & STRATEGY

• Principle: Indifferent Consumers Must Pay!

• Strategy:1. Consumers to purchase new item by returning the old

one or by exchanging the goods with smart credit points; and

2. Consumers earn smart credit points by returning old items

COMPARATIVE APPROACH BY COUNTRY

Polluters

Litterbugs

Proposed Approach

for Malaysia

CONSUMERS

Enforcementeg: Singapore

Polluters Pay

Principle/Take-Back

Policyeg: Germany

INDUSTRIES

EXISTING POLICY FRAMEWORK

GENERAL:

• OPP-3: waste-recycling industry;

• 8th & 9th Malaysia Plans: “Polluters-pay Principle” (PPP)?;

SPECIFIC:

• Non-Applicability of PPP; thus, the need for the “Indifferent Consumers-pay” (ICP) Principle and other economic-instruments

INSTITUTIONAL ARRANGEMENT

1. SWM Corp/Local Authorities (LAs) “… waste segregation @source … ”;

2. Ministry of Finance (MOF): “… blue-green LEVY … & SMART Credit Points”; Malaysia ReCyclable ExCHANGE;

3. Ministry of International Trade and Industry (MITI): “… Producers’ Responsibility … ”;

4. Ministry of Domestic Trade and Consumer Affairs (MODTCA/SIRIM): “…Product Eco-Labelling … ”; Ministry of Energy,

5. Green Technology and Water (MEGTW): “Very Attractive Feed-in-Tariff”;

…INSTITUTIONAL ARRANGEMENT

6. MNRE/Department of Environment (DOE): “Trust Fund for sorted HHW …”

7. Ministry of Agriculture (MOA): Quality of Compost

8. Ministry of Natural Resources and the Environment (MNRE): “CDM Project Approval & Carbon Credit … ”;

9.Ministry of Women Affairs and Family Development (MOWAFD): Household & Public Awareness Campaigns

10. PM’s Department: Policy Directive & Coordination; KPIs by Constituency

1. Policy in Review

5. Conclusion

Envisaged Practices Drawn From the ICP-Principle

Waste generators would voluntarily sort the items to be “disposed off” into: “Toxic”, “Dry” or not perishable, and “Wet” or perishable, and deposit them, in order to earn “credit points” with equivalent cash value, at designated collection centres,

Those who gather, sort, and deposit any “toxics” at the designated centres would earn premium credit points.

CONCLUSION

For integrated solid waste management in Malaysia to be in place, it would require at least:

• ONE Policy Directive, • ONE Awareness Campaign;• ONE Regulatory Measure; • ONE Fiscal Measure; • EIGHT Enviro-Economic Policy

Instruments

THE EIGHT ENVIRO-ECOMOMIC POLICY INSTRUMENTS

1. Indifferent Consumers-pay Principle and Levy;

2. Recycling Reward Points;

3. Recyclables in Commodity Exchange;

4. Producers’ Responsibility;

5. Eco-Labelling;

6. Attractive Feed-in Tariff for Energy from Waste;

7. Compost Product Certification; and

8. Carbon-Credits.

TERIMA KASIH

شكر(syukran)

谢谢 (xìe xìe)

Thank You

Gracias

Спасибо

Prof Dato’ Ir Dr A Bakar Jaafar, PEng, FIEM, FASc, KMN, JSM, DPMPBE (Hons) (Newcastle), MEn (Miami), PhD (Hawaii)

Professor, UTM Perdana School &[1 June 2013-31 May 2016](www.utm.my)

Co-ChairUTM Ocean Thermal Energy Centre (www.otec.utm.my)

Chairman of AECCOM(www.aeccom.org.my)

20140312 dato abj@ukti smartcitiesseminar_kl

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