Kuala Lumpur, 10 September 2026: Malaysia’s green transition should not be treated as a choice between economic competitiveness, environmental protection and social inclusion, says the Institute for Democracy and Economic Affairs (IDEAS).

In its latest policy report, Towards an Economically Competitive, Inclusive, and Green Malaysia: Policymaking to Create Sustainable Jobs and Industry, co-authored by Dr Stewart Nixon, Afiqah Zulkifli, Jazreen Harith Jefri, Sharmila Suntherasegarun, Nimitraa Youganesparan, and Durrah Sharifah Ahmad Azlan, IDEAS calls for a more integrated approach to policymaking that considers these three objectives together, from policy design through implementation and evaluation.

“IDEAS’ commitment has always been to promote evidence-based policy reforms that support sound governance and sustainable economic reform for all Malaysians. The green transition presents both challenges and opportunities. Policymakers need to ensure that climate action also supports economic opportunities, protects vulnerable communities and enables small businesses to participate in the transition. This report provides decision-makers with practical tools to help achieve these objectives together,” said Aira Azhari, IDEAS CEO.

The report highlights the need for climate, economic and social objectives to be considered together in policymaking. Taking these objectives in isolation can make it harder to identify trade-offs, anticipate unintended consequences and ensure that the benefits of the green transition reach vulnerable communities and smaller businesses.

Good policy design must be matched by effective implementation and monitoring. Without clear mechanisms to assess outcomes, identify who may be affected and adjust policies when necessary, well-intentioned green policies may create unintended costs or leave certain groups behind.

To support policymakers, the report introduces a set of practical tools to help assess and navigate these challenges, including:

1. Competitiveness–Green–Inclusion (CGI) Health Scorecard and Checklist: An ex-ante screening mechanism to assess whether existing and proposed policies contain clear design provisions for competitiveness, inclusion and greenness.
2. Integrated Indicators (CIDI): Introduces the Competitiveness, Inclusion and Decarbonisation Index (CIDI) to track synthesised inclusive green competitiveness outcomes.
3. Analytical Trade-off Tools: Identifies and explains potential uses for decision-making tools, including Multi-Criteria Decision Analysis (MCDA), Extended Cost-Benefit Analysis (ECBA), CGE modelling, lifecycle assessment and spatial vulnerability mapping, to quantify trade-offs and test assumptions.
4. Policy Instrument Toolkit: Explores what makes sound green industry policy and provides guidance on how fiscal incentives, standards, public procurement, R&D support, skills and transition measures, and carbon pricing can be sequenced and conditioned.
5. Procedural and Stakeholder Mapping: Provides practical approaches to clarifying institutional responsibilities, eliminating internal agency silos and aligning the incentives of GLCs, private firms, workers and civil society.

“Malaysia needs to build a future that is economically prosperous, socially inclusive, and environmentally friendly at the same time. These goals are deeply intertwined and must be approached with an integration mindset. This report forms part of IDEAS’ ongoing efforts to support policymakers to navigate an increasingly dynamic and complex landscape for sustainable development policy.” said Dr Stewart Nixon, Director of Research at IDEAS and co-author of the report.

Sustainable development should not be evaluated through GDP growth alone, nor should climate action be viewed as a zero-sum constraint on industrial productivity or social equity. A more integrated approach can help Malaysia respond to the demands of a greening global economy while supporting high-value industries, quality jobs and more inclusive growth.

Download the full report on our website.

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Download the Media Statement PDF File Here

For enquiries, please contact:
Ryan Panicker
Pengurus, Advokasi dan Program
T: 03 – 2070 8881/8882 | E: ryannesh@ideas.org.my