Chong calls for carrot-and-stick budgetary mechanism on GHG-producing states

Chong debates the Forests (Amendment) Bill 2022 in the DUN sitting today (May 19, 2022). Screenshot taken from a Sarawak Public Communications Units (Ukas) Facebook livestream.

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By Nur Ashikin Louis

KUCHING, May 19: The Sarawak government should push for a carrot-and-stick approach on the federal budgetary mechanism so that States producing greenhouse gases (GHG) would pay commensurable cost for any externalities.

In stating this, Chong Chieng Jen (DAP-Padungan) explained that an externality refers to the cost in production which is not factored in by the producer of the product, and thus the pricing of the product does not reflect the true cost.



He opined GHG emission is an externality because society is the one which suffers from the deterioration caused by climate change in the forms of greater rainfall, and stronger storms and floods.

“Internalising these externalities means that for those who produce GHG which has incurred externalities on society, the lawmakers have to put the cost (of externalities) to them and make them pay for it.

“To start with, I would propose that the State government push for a carrot-and-stick budgetary mechanism of the federal budget.

“Thus, states having more carbon credits should be rewarded with greater budgetary allocation by the federal government while states found to have net GHG emission should find their federal budgets slashed,” he said when debating on the Forests (Amendment) Bill 2022 in the Sarawak Legislative Assembly (DUN) sitting here today.

While he supported the Bill, Chong who is also the Sarawak Democratic Action Party (DAP) chairman stressed the importance of the ‘carbon-index budgeting process’ for the State government to ensure the integrity of reporting GHG emissions to the United Nations Framework Convention on Climate Change (WNFCCC).

He said the proposed budgetary mechanism will work to the advantage of Sarawak which has large forest reserves compared to the other states.

He also noted that the proposed budgetary mechanism reflects departure from the conventional budgetary principle in which more developed states would get disproportionately higher allocation every year because of the greater population, larger tax contribution and greater need for development.

“However, their development also comes with externalities of GHG emissions which, in the past was not factored into consideration.

“For the more developed states which are normally associated with industrial activities, more cars, less trees and less forests, there should be a reduction of their federal budgetary allocation so as to compel these states or the businesses in these states to move towards greener economic activities and contribute more in this global and national movement in GHG reduction,” he added. – DayakDaily