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IPW: World Energy Outlook report, and Malaysia’s 2024 budget

31 October 2023

In this week’s Infrastructure Policy Watch, a report assesses the global clean energy transition, and Malaysia’s infrastructure investment priorities.

IPW: World Energy Outlook report, and Malaysia’s 2024 budget
Public transport is one of Malaysia's infrastructure priorities. Image credit: Shutterstock

2023 World Energy Outlook published

The International Energy Agency (IEA) has published its annual World Energy Outlook for 2023.

The report analyses what government policies around the world mean for the clean energy transition and global energy security.

It suggests that:

  • By 2030 renewables will be nearing half of the global power mix, up from around 30% today.
  • Investment in clean energy has risen by 40% since 2020, driven by governments’ need to lower emissions and increase energy security.
  • The momentum behind clean energy means demand for coal, oil and natural gas could all peak this decade.

Major infrastructure policy frameworks, such as the Inflation Reduction Act in the United States, are delivering transformational change.

For example, the IEA forecasts that half of new US car registrations will be electric in 2030.

But much stronger policies are still needed to limit global warming to 1.5°C, warns the IEA. Meeting the Paris Agreement goal is still possible, but increasingly difficult.

In particular, fossil fuel demand is set to remain too high based on current policies.

The report sets out five pillars to get the world on track:

  • tripling global renewable capacity;
  • doubling the rate of energy efficiency improvements;
  • slashing methane emissions from fossil fuel operations by 75%;
  • innovative, large-scale financing mechanisms to triple clean energy investments in emerging and developing economies; and
  • measures to ensure an orderly decline in the use of fossil fuels, including ending new approvals of unabated coal-fired power plants (those without measures to reduce their emissions impact).

The ICE’s view

Earlier this year, it was reported that the world isn’t on course for meeting any of the energy targets under Sustainable Development Goal (SDG) 7.

The IEA’s research indicates current policies won’t achieve the Paris Agreement target either.

The progress to date shows the benefits of setting clear targets supported by long-term policy visibility.

But governments can and should be more ambitious.

The IEA report provides a robust evidence base to help decision makers pursue rapid energy transitions that deliver the SDG and Paris targets.

The ICE-led Enabling Better Infrastructure programme highlights the importance of evidence-based policymaking.

This is vital to ensure governments maximise the benefits of infrastructure investment to meet long-term national objectives, like decarbonising energy.

Malaysia announces 2024 budget

Malaysia’s government has announced its budget for 2024.

The government’s overall focus is on reducing the country’s budget deficit to boost investor confidence.

But the announcements also indicated the government’s current infrastructure priorities.

These include public transport, the electric vehicle (EV) transition and flood defence.

In 2024 infrastructure investment will include:

  • urban light rail projects and extending public transport subsidies to protect services;
  • several major road projects, including widening the country’s main interstate highway;
  • expanding Malaysia’s EV charging programme and rebates to encourage EV adoption; and
  • 33 high-priority flood mitigation projects.

There’s also RM2bn to support Malaysia’s National Energy Transition Roadmap, which the government published earlier this year.

The ICE’s view:

The ICE promotes the benefits of certainty and long-term infrastructure planning.

Malaysia’s budget recognises the wider economic, environmental and social benefits of maintaining infrastructure investment, even in times of fiscal restraint.

The government’s commitments to public transport access, adapting to extreme weather and the clean energy transition are all key to Malaysia’s long-term national prosperity.

In case you missed it

  • The ICE and APPGI are welcoming responses to a consultation on what the public can do differently to support the net zero transition.
  • ICE Policy Fellow Simon Webb examines how the UK can decarbonise is energy sector by 2035.
  • The ICE discusses the key infrastructure takeaways from this year’s Conservative Party Conference.

Check back in a fortnight for the next edition of the ICE's Infrastructure Policy Watch.

You can also sign up to ICE Informs to get a monthly digest of the latest policy activities from ICE, including calls for evidence to support our ongoing advice to policymakers.

  • David McNaught, policy manager at ICE