The report “Socio-Economic Impacts of The Energy Transition: Malaysia” published by IRENA concludes that economic growth in Malaysia has slowed, but the economy remains resilient despite recent global uncertainties, including slowing global growth, geopolitical tensions and the impact of climate change. Between 2010 and 2024, Malaysia’s economy grew at an annual rate of approximately 4%, recovering steadily from the COVID-19 pandemic. Under the 1.5°C Scenario, Malaysia is projected to add an additional USD 533.3 billion to its GDP, building on the growth already anticipated under the PES from 2024 to 2050. Investment (private, and public investment and spending), induced social-directed payments from revenue recycling, domestic responses to carbon price shifts, technology prices, power sector capacity, fossil fuel subsidies and trade to a lesser extent, are the main macroeconomic drivers influencing the GDP differences between the scenarios throughout the transition
Renewable energy employment in Malaysia is projected to quadruple between 2021-2050 under the 1.5°C Scenario. Growth is led mainly by solar and bioenergy. As a major global solar PV manufacturer, Malaysia is well placed to leverage this global shift. Employment in solar is expected to reach around 90 000 jobs by 2030 and 224 000 by 2050, accounting for more than half of total renewable energy jobs. Bioenergy follows closely, with a share of 40.9%. These trends underscore the significance of the sector in Malaysia’s energy transition and suggest potential opportunities in terms of socio-economic benefits. The energy transition is a challenging process, and an inclusive just transition implies there should be alignment between energy policies with broader economic and development priorities. Socio-economic disparities should be addressed with the help of comprehensive policies.
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