Towards a green economy: Malaysia can learn from Finland

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Helsinki region transport agency's new shared-use bike station at Esplandi park promenade.

A mini-evolution in our economy akin to Finland’s circular economy is what we need to pave the way towards an environmentally friendly economy, says Benedict Lopez..

Green technology has been earmarked as among the main pillars of Malaysia’s thrust to accelerate the national economy and promote sustainable development.

At the 2009 UN Climate Change Conference in Copenhagen, Malaysia reiterated its commitment to reducing carbon emissions intensity by 40 per cent by 2020, compared with 2005 levels.

Various measures have been introduced by the government (through the Ministry of Energy, Green Technology and Water) such as:

  • introducing a National Green Technology Policy in 2009,
  • establishing the Malaysian Green Technology Corporation,
  • providing financing under the Green Technology Financing Scheme,
  • boosting human capital development, and
  • instilling public consciousness in sustainable development.

The Renewable Energy Act 2011, with mechanisms for feed-in tariffs, also provides incentives to further encourage the use of renewable energy.

Although Malaysia has around 60 per cent under some form of greenery, the World Bank estimates that trees are being cut down at four times the sustainable rate.

Environmental degradation is becoming a prime concern in many parts of the country. In many residential areas, urban townships and cities in Malaysia, there is so little greenery that they now resemble concrete jungles.

Even the residential area where I reside, Bangsar, in the heart of Kuala Lumpur, lacks the desired greenery able to soak up carbon emissions from the pollution emitted mainly from the traffic along our congested city streets

We need to ensure that future generations are not burdened by the lack of our foresight in ensuring sustainable development. Malaysia’s pace of industrial development should factor in environmental considerations. While in school, Malaysians should learn the value of recycling, concerns regarding the environmental destruction, the adverse effects of climate change and the dangers of global warming.

In this respect, we can draw attention to Finland’s move towards a circular economy, which is a good paradigm for Malaysia to follow.

Concept of a circular economy

Finland is now emphasising the immense benefits to be derived from a circular economy, which emphasises various important practices: preservation, recycling and remanufacturing of equipment. One key feature of a circular economy is the use of waste, which can be recycled into other raw materials while generating energy.

The concept of a circular economy is now the hallmark of the Finnish government as it attracts new investments in targeted sectors of the country’s economy. Finland has ample expertise in innovative technologies, which can be used in crucial sectors, especially in producing materials and minimising waste.

In a circular economy, all materials are fully used, and recycling becomes increasingly important in a world facing grave problems such as climate change, global warming and fast depleting natural resources.

An art installation at the Ateneum Art Museum made of used shirts by Kaarina Kaikkonen, titled Blooming Spirit (Kasvun Henki in Finnish).
An art installation at the Ateneum Art Museum made of used shirts by Kaarina Kaikkonen, titled Blooming Spirit (Kasvun Henki in Finnish).

Moving towards a circular economy requires a broad spectrum of activities besides recycling of waste and takes into account various types of raw materials, new product designs and service models.

The established Finnish pulp and paper industry is an excellent example of a major industry in which almost all the materials and the remnants generated during wood processing are already used to generate various products and renewable energy.

Finnish companies are quickly finding new applications for innovative bio-materials derived from wood – enabling increased consumption of bio-mass from Finland’s well-managed forests, where more tress are grown in relation to the expanses cut down every year.

In contrast to Norway, Finland has no reserves of fossil fuels, and with practically harsh winters every year, Finns have for long time recognised the need to maximise – in small but significant ways – the efficiency of energy use in industry, office buildings, schools, colleges, universities, streets and homes.

Finland is now a beacon in contributing towards lowering carbon emissions and thus decreasing the rate of global warming. Besides moving towards a sustainable carbon-neutral bio-economy by making better use of bio-mass from its forests, Finland is actively bringing the concept of the circular economy into other key areas of economic development.

The manufacturing of machinery and electronic equipment is increasingly designed for diverse materials and components that can be recovered for recycling. Innovative Finnish forestry machine manufacturer Ponsse has developed integrated multi-purpose parts in a machine, enabling it to effortlessly recover materials for maintenance and recycling.

Firms are encouraged to follow companies that are setting good examples in recycling. One such firm is Interface, one of the world’s largest carpet tile manufacturers, which leases carpets to other companies. After the life-span of the carpet is over, it is returned to the factory so that the material can be reused to produce new carpets.

Parallel business models that are held up for others to emulate include aviation engine manufacturer Rolls-Royce, elevator manufacturer Kone and engineering company Kamppi.

Blueprint for the implementation

Finnish families have for quite some time now led the way in conventional recycling when it comes to drinks containers and paper. Improvements in collection, sorting and processing focus on recyclable materials including plastics, metals and textiles.

Finns are nevertheless candid about their success and admit they have not attained their set targets. Currently, only 54 per cent of all waste in Finland is recycled or reused. Only a few innovative service concepts concerning the maintenance, reuse or remanufacturing of equipment have emerged.

The Finnish Innovation Fund Sitra has an ambitious vision to extend its cooperation to other key players: businesses, municipalities and cities, households and public administration.

Sitra assumes a pivotal role in the development of Finland’s circular economy by being in the forefront as a focal agency to collaborate with other key players, formulating new business models for companies and assessing operational prototypes vital for the evolution towards a circular economy.

Companies across Finland are zealously promoting low-carbon eco-systems in all industrial sectors which will enhance the changeover completely along the value chain. The Helsinki Metropolitan Area is designated as a reference centre for companies developing new low-carbon solutions, testing innovation and providing clean-tech expertise.

Sitra assists companies attaining carbon neutrality by providing the necessary assistance required for this transition. Carbon neutrality schemes enable companies to tackle global climate challenges, while concurrently improving their competitive edge.

Finland is also fully committed to becoming a model country in nutrient recycling, and among the key projects of the current government is investing in the recycling and utilisation of nutrients and measures designed to safeguard the Baltic Sea and surrounding seas. The experimentation programme on nutrient recycling grosses more than EUR12m a year which will be used for the development and testing of innovative technologies and logistics solutions.

Driving another change for Malaysia

Malaysia, too, is no stranger to economic transformation. Upon attaining our independence in 1957, our economy was commodity-based with rubber, tin, oil palm, timber, cocoa and pepper being the mainstay.

When the price fluctuations of these commodities had adverse effects on the economy and failed to contribute meaningfully towards our economic growth and generate employment opportunities in the 1960s, we diversified into the manufacturing sector in the early 1970s.

When we chartered our own course in industrial development, modifications were made as and when necessary to suit the country’s demands. Initially, we embarked on our industrialisation push in the 1970s, focusing on attracting labour-intensive industries, creating employment opportunities for our people.

Subsequently, we rerouted to a different direction in the 1980s, when we emphasised the promotion of downstream resource-based and heavy industries.

We once again shifted our focus from the 1990s, when we witnessed the genesis of high technology, high value-added, knowledge-based and skills-intensive industries, and later much emphasis was given to the development of the services sector.

Consequently, stemming from our present experiences, we have to once again navigate a different course. We need to recognise prevailing realities, global developments and now, environmental considerations. Economic growth and development should be in tandem with our environmental concerns and sustainable development.

And like Finland, we must do our part to decrease carbon emissions and reduce global warming.

Wood anemone flowers in Helsinki's central park. These flowers are associated with the end of winter and Mother's Day in Finland at the start of May.
Wood anemone flowers in Helsinki’s central park. These flowers are associated with the end of winter and Mother’s Day in Finland at the start of May.

First and foremost, we have to come to terms with the stark realities and start by tackling the perennial problem of the haze, and it should be on top of the agenda.

A mini-evolution in our economy akin to Finland’s circular economy is the response we need to pave the way towards an environmentally friendly economy that is not exclusively motivated and solely fixated on profits and avarice.

We can show the world that we do care and are fulfilling our obligations in global environmental matters and are ready to take the quantum leap necessary for a change. As the maxim goes, “Necessity is the mother of invention.”.

Benedict Lopez would like to acknowledge his Finnish friend for the research done for this article.

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Benedict Lopez
Benedict Lopez was director of the Malaysian Investment Development Authority in Stockholm and economics counsellor at the Malaysian embassy there in 2010-2014. During the course of his work, he covered all five Nordic countries. An eternal optimist and now an Aliran member, he believes Malaysia can provide its citizens with the same benefits and privileges found in the Nordic countries - not a far-fetched dream but one that he hopes will be realised in his lifetime.

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