This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025

Minister of Economy Rafizi Ramli’s words, according to which Malaysia is set to adopt nuclear power generation as one of its energy sources in the coming years, are extremely welcome.

According to Rafizi, nuclear power is a cleaner energy source compared to others, which could help the country achieve its goal of net zero carbon emissions by 2050. This is in line with what the Center for Market Education (CME) argued in a policy paper published in February 2023, Energy Transition in Malaysia: An Ecomodernist Approach, authored by Praharsh Mehrotra and Bryan Cheang.

The paper applied the philosophy of ecomodernism to the energy policy in Malaysia. Ecomodernism is a particular approach in environmental ethics that believes in the importance of human innovation, smart technologies and governance strategies in bringing about environmental outcomes.

The proponents of ecomodernism believe that environmental problems are best solved when technology and innovation are harnessed, creating practical solutions that maintain growth and sustainability. This does not always require a laissez-faire approach, although capitalism and market-based growth help contribute to innovation that improves the natural environment for human welfare.

The core objective of an ecomodernist approach is to develop an energy transition policy framework that allows one to achieve both economic growth and environmental progress, as opposed to radical environmentalism that is common today, which instead divorces both goals.

An ecomodernist agenda for Malaysia must take into account, among its pillars, a gradual phasing out of inefficient subsidies and, as suggested by Rafizi, getting back to nuclear energy production in the conversation.

While designing an energy policy, it is very important to consider the various problems that an energy policy should aim to address. Among them, the first is the need for supply to meet growing demand. The real point should not be, as someone suggests, to reduce consumption but rather to grow sustainable production: Economic development should be fuelled by clean and affordable energy.

Why nuclear power? While solar power and natural gas are extremely important for the country’s shift to renewable energy, their energy efficiency remains relatively low at the current stage of technology. Therefore, a complete reliance on these would make energy transition costly and inefficient, adding the impossibility of meeting growing energy demand.

Mehrotra and Cheang’s paper show how nuclear power has the highest capacity factor (92.5%) among the green energies, with solar having the lowest (24.9%). The biggest advantage of nuclear energy is the energy efficiency it provides. Nuclear energy has by far the highest energy output of all options. For comparison, a single pellet of uranium weighing 6g contains the same amount of energy as 17,000 cu ft of natural gas, 149lb of oil or one ton of coal.

Nuclear has a much higher energy output compared to its fuel intake. A great way to compare efficiency is to compare land use (sq m) per MWh of energy generation: While small hydropower plants require 33 sq m of land per MWh, concentrating solar power 22 sq m, coal power 21 sq m and large hydropower plants 14 sq m, nuclear power requires only 0.3 sq m per MWh.

At the same time, nuclear energy is one of the cleanest forms of energy in terms of emissions produced. When compared to other sources of energy, carbon dioxide emissions (tonnes) per GWh produced from nuclear energy are the lowest, compared with coal 970, oil 720, natural gas 440, biomass 78 to 230, hydropower 24, wind 11, nuclear energy 6, solar eight to 83 (Our World in Data). This is an important point because it illustrates the central feature of ecomodernism: the use of technology to decouple human development from its environmental impact.

Currently, the biggest barrier to nuclear energy, especially after the Fukushima accident in 2011, is posed by safety concerns and public sentiments against the production of energy using nuclear plants. However, the concerns are not supported by actual data. These are the figures on the number of deaths per TWh of electricity produced from various energy sources: coal 24.6, oil 18.4, natural gas 2.8, biomass 4.6, hydropower 1.3, wind 0.04, nuclear energy 0.03, solar 0.02 (Our World in Data).

Therefore, one important task is to further enhance the energy transition road map by listing practical and implementable measures and then being able to properly communicate them to the people, so that shared acceptance may arise from the bottom up.

As highlighted in the CME paper, it is important to run education initiatives and public awareness campaigns to educate people on nuclear energy and especially on how concerns regarding safety are overexaggerated. Moreover, the public also needs to be educated on its benefits and which steps need to be undertaken to ensure safety in a nuclear plant.

In terms of target, we recommend recommissioning nuclear plants from 2025 and aiming to have 10% of the country’s energy being supplied by nuclear power in 10 years. This could be achieved with enhanced and streamlined rules for new nuclear-based firms and tax incentives for energy companies engaging in nuclear-intensive reseach & development.

An additional step is to keep pushing subsidy rationalisation. A gradual removal of subsidies, with the consequent elimination of price distortions, works as a co-incentive to the adoption of renewable energy and, among them, the ones that are more cost-effective.

As explained by Mehrotra and Cheang, additional policy support could be the one represented by sandboxes. Such sandboxes therefore aim to catalyse innovation in a controlled fashion, and this option should be considered by Malaysia in new clean energy technologies. The relaxation of regulations is in turn part of a larger package of market reforms that help in achieving environmental goals in an efficient way.

Finally, let’s not forget the importance of the right set of institutions. Energy transition should be built with the effort of developing local expertise and industrial capacity.

The first and most important condition to develop an ecosystem conducive to innovation is to nurture an economic and intellectual freedom framework.

Malaysia ranks No 29 out of 165 countries and territories included in the Economic Freedom of the World: 2024 Annual Report (Fraser Institute), strongly improving from the previous position at No 43. This was driven by gains in three areas — size of government, freedom to trade internationally and regulation. Continuous efforts are needed to improve the size of government and, in particular, minimise government interference in the economic system.

Furthermore, Malaysia ranked No 30 out of 125 countries in the International Property Rights Index (IPRI) 2024, released by the Property Rights Alliance in Washington DC, recording a slight improvement when compared to No 31 in 2023. The report shows that high-income countries consistently demonstrate the strongest protection for property rights, while lower-middle-income countries often impose significant restrictions on foreign ownership of intellectual property and investments. This disparity highlights the critical role of property rights in fostering economic growth.

Fostering economic freedom and the protection of property rights in a stable political system governed by the rule of law is pivotal to creating the right conditions for innovation to thrive in the field of energy transition, so that an energy transition platform can emerge that is non-ideological, but rather based on science and on the recognition that green sustainability must walk together with economic sustainability, making people better off and not worse off.

Carmelo Ferlito is with the Center for Market Education, a boutique consulting firm based in Kuala Lumpur, Bryan Cheang is from King's College London, and Praharsh Mehrotra is a post-graduate student at UCLA

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.