The plan, expected to be published this year, will consider what steps Malaysia must take to ensure the true cost of water is considered in adaptation initiatives, said Dr Ching Thoo Kim, secretary general of the Ministry of Natural Resources and Environmental Sustainability (NRES).
“MyNAP will be looking at how we can address the water sector from the perspective of adaptation – making sure we can ensure supply to [match] demand and put in measures to conserve water,” he told Eco-Business.
Speaking last week at the launch of Malaysia’s first fair share carbon budget report by think tank Rimbawatch and the Sunway Centre for Planetary Health (SCPH), he also highlighted how deforestation has affected water resources.
“The water sector is often forgotten [but] 95 per cent of water that flows to [Malaysian] houses comes from surface water – dams, for example,” he said on a panel discussion. Surface water refers to water from rainfall, rivers, lakes and other reservoirs, in contrast to ground water.
“But building dams also flattens hills, [leading to] the issue of deforestation,” he said. “Yet water is so cheap – so we need the right pricing mechanisms that reflect the true cost of a cubic metre of water.”
Residential tariffs for water in Malaysia are among the lowest in Southeast Asia, which at RM1.22 (US$0.25) per cubic metre in 2024 was about a fifth of Singapore’s, at RM5.88 (US$1.27).
In January, the United Nations said that the world has entered an era of “global water bankruptcy”, moving beyond a water crisis to a scenario of persistent shortages as water systems can no longer return to their historical baselines.
Protecting Malaysia’s forests, which serve as critical watersheds and carbon sinks, has been difficult for the federal government, said Ching, despite the country being committed to keeping its forest cover at 50 per cent.
“At the ministry, we are dealing with very difficult decisions – balancing economic considerations and ecological benefits,” said Ching. He cited the example of the environment department being under pressure to allow mining in forest reserves because “the money is big. Rare earths are big.”
Dr Ching Thoo Kim, secretary general of Malaysia’s Ministry of Natural Resources and Environmental Sustainability (left) and Dr Jemilah Mahmood, executive director of the Sunway Centre for Planetary Health (right), discussed how financial incentives are needed to encourage forest conservation among state authorities. Image: Sunway Centre for Planetary Health
Financial pressures
Although the federal government is responsible for the national target, forests and land use are governed by state authorities, often resulting in conflicting priorities and decisions.
Ching acknowledged that state governments receive “barely enough” funding to incentivise forest protection, referring to the RM250 million (US$64.3 million) allocated annually by the federal government to states via the Ecological Fiscal Transfer mechanism.
Conservation experts have told Eco-Business that the scheme can also be improved by making it more permanent and strengthening safeguards for protected areas.
Ching noted how the East Malaysian state of Sabah decided to degazette over 16,000 hectares of forest reserve for development in July 2025. Since then, however, the state has separately expanded its Total Protected Areas by gazetting some 216,000 hectares of commercial forest reserves and state land last month.
Fellow speaker Dr Jemilah Mahmood, executive director of SCPH, also attested to the need to align state policies and plans with national biodiversity protection efforts, supported by adequate financial incentives.
“I know for sure that RM1 billion (US$257 million) is available [for nature conservation]. Someone has asked me to programme RM1 billion,” she said. “But the complication here [is] that different states have different legislations.”
She suggested that the declaration of a national climate emergency could help as it would require states to adopt certain rules and concessions with regards to forested land.
Leveraging carbon budgets
Ching said that data on how Malaysia must respond to climate change, such Rimbwatch and SCPH’s report on Malaysia’s fair share carbon budget, can also help NRES argue for the protection of forests as carbon sinks.
“We need these kinds of figures or reports for us to say no to allowing mining in forest reserve areas,” he said.
What is a fair share carbon budget?
The concept of a carbon budget is based on the maximum level of greenhouse emissions the world can produce in order to keep global temperature rise below the 1.5°C limit under the Paris Agreement.
Dividing this budget by country results in the concept of a fair share, which accounts for countries’ historical emissions and their current capacity to reduce emissions, including economic size, and total population.
The report argues that by most measures, Malaysia has exceeded its fair share carbon budget, meaning the country has emitted more than what could be considered equitable based on its historical emissions, economy and population size. [See box]
This budget was exceeded in 2024, the report said, meaning that it has been contributing more to worsening global emissions and resulting in disproportionate harm to other countries that have done less to cause climate change.
“The numbers may appear daunting…but we must remember that data is not a threat,” said Maisarah Faiesall, head of policy, strategy and advocacy at the SCPH. “[Data] is clarity. It removes any ambiguity about where we stand – and we must be able to confront the evidence in front of us.”
“We must also remember that if we continue to exceed our fair share [of the carbon budget], we are effectively stealing from future generations and communities who contributed least to the problem,” she added.
The report recommends that the Malaysian government establish an official carbon budget and take immediate steps to limit greenhouse gas emissions. This includes committing to a phase-out of all fossil fuels and imposing an immediate moratorium on forest degradation and conversion.
