Framework of Sarawak’s Carbon Governance under the Environment (Reduction of Greenhouse Gases Emission) Ordinance 2023

Sawarak is the first state in Malaysia having law to lower greenhouse gas (GHG) emissions which is the Environment (Reduction of Greenhouse Gases Emission) Ordinance 2023. This shows a big change in how climate is governed by the level of subnational jurisdiction which is setting up a legally biding system that consists of carbon market mechanisms, regulatory control, and economic tools.
This paper examines the principles characteristic and structure of Sawarak’s carbon governance frameworks as set out in the Ordinance. This paper discusses by applying a conceptual and doctrinal framework regarding the regulation of GHG emissions through mandatory registration and emissions reporting, the development of emission thresholds, and the application of compliance measures which consist of caron capture and storage, carbon levies, abatement obligations. This also consists of the processes for issuing and verifying credits, activities that can earn credits, the duties of the Carbon Credit Units Register, and safeguards against double counting.

Carbon Governance, Greenhouse Gas Regulation, Sarawak Ordinance 2023

1. Argus Media. (2025). Malaysia unveils 2026 budget, to implement carbon tax. Argus Media. https://www.argusmedia.com/en/news-and-insights/latest-market-news/2741520-malaysia-unveils-2026-budget-to-implement-carbon-tax [Google Scholar] [Crossref]

2. Averchenkova, A., Fankhauser, S., & Finnegan, J. J. (2021). The impact of strategic climate legislation: Evidence from climate change laws. Climate Policy, 21(4), 473–491. https://doi.org/10.1080/14693062.2020.1819190 [Google Scholar] [Crossref]

3. California Air Resources Board. (n.d.). Compliance Offset Program (Cap-and-Trade Program): About and program requirements. Sacramento, CA: CARB. [Google Scholar] [Crossref]

4. Ernst & Young. (2025). Malaysia’s Budget 2026: Advancing fiscal reform and economic resilience. EY Malaysia Newsroom. https://www.ey.com/en_my/newsroom/2025/10/malaysias-budget-2026-advancing-fiscal-reform-and-economic-resilience [Google Scholar] [Crossref]

5. European Commission. (n.d.). EU Emissions Trading System (EU ETS): Use of international credits. Brussels: Directorate-General for Climate Action. [Google Scholar] [Crossref]

6. Federal Constitution. Federal Legislation. Attorney General's Chambers of Malaysia. https://lom.agc.gov.my/federal-constitution.php [Google Scholar] [Crossref]

7. United Kingdom of Great Britain and Northern Ireland and Federation of Malaya, North Borneo, Sarawak, Singapore (1963). Agreement relating to Malaysia (July 9, 1963), 750 United Nations Treaty Series 3 (No. 10760). United Nations. https://treaties.un.org/doc/publication/unts/volume%20750/volume-750-i-10760-english.pdf [Google Scholar] [Crossref]

8. Harding, A. (2012). The constitution of Malaysia: A contextual analysis. Hart Publishing. [Google Scholar] [Crossref]

9. Integrity Council for the Voluntary Carbon Market. (n.d.). Core Carbon Principles (CCPs). London: ICVCM. [Google Scholar] [Crossref]

10. International Civil Aviation Organization. (2025). CORSIA Eligible Emissions Units (EEUs): Eligibility criteria and lists. Montreal: ICAO. [Google Scholar] [Crossref]

11. Karisma, K. (2025). Strengthening Malaysia's Legal Readiness for Climate Mitigation and Adaptation. Available at SSRN 5501099. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5501099 [Google Scholar] [Crossref]

12. Malaya, North Borneo, Sarawak, and United Kingdom: Report of Inter-Governmental Committee on the Proposed Federation of Malaysia. (1963). International Legal Materials, 2(3), 423–463. http://www.jstor.org/stable/20689628 [Google Scholar] [Crossref]

13. National Disaster Management Agency (NADMA). (2025). National Climate Change Bill to be tabled in Parliament in coming months. NADMA. https://www.nadma.gov.my/bi/media-en/news/5284-national-climate-change-bill-to-be-tabled-in-parliament-in-coming-months [Google Scholar] [Crossref]

14. Newell, R. G., Pizer, W. A., & Raimi, D. (2014). Carbon market design, stability, and reform. Energy Policy, 75, 14–22. https://doi.org/10.1016/j.enpol.2014.08.004 [Google Scholar] [Crossref]

15. Sarawak Government. (2023). Environment (Reduction of Greenhouse Gases Emission) Ordinance 2023 (Laws of Sarawak, Chapter 85) [Google Scholar] [Crossref]

16. Setzer, J., & Higham, C. (2021). Global trends in climate change legislation and litigation. Grantham Research Institute on Climate Change and the Environment. https://www.lse.ac.uk/granthaminstitute [Google Scholar] [Crossref]

17. Shad Saleem Faruqi. (2018). Our Constitution. Sweet & Maxwell Asia. [Google Scholar] [Crossref]

18. Stern, N. (2007). The economics of climate change: The Stern review. Cambridge University Press. [Google Scholar] [Crossref]

19. United Nations Framework Convention on Climate Change. (2015). Paris Agreement. https://unfccc.int [Google Scholar] [Crossref]

20. United Nations Framework Convention on Climate Change. (n.d.). The Paris Agreement: Article 6 (cooperative approaches and market mechanisms). Bonn: UNFCCC. [Google Scholar] [Crossref]

21. Voluntary Carbon Markets Integrity Initiative. (2023). VCMI Claims Code of Practice. London: VCMI. [Google Scholar] [Crossref]

22. WWF-Malaysia. (2014). State government has jurisdiction over forest and land matters. WWF-Malaysia. Https://Www.Wwf.Org.My/?18445%2FSTATE-GOVERNMENT-HAS-JURISDICTION-OVER-FOREST-AND-LAND-MATTERS= [Google Scholar] [Crossref]

• Regional Development Planning Strategy Through the Integration of Strengthening Village-Owned Enterprises and the Transparency Utilisation of Village Funds
• Corporate Governance, Corruption and Financial Performance of Listed Fast Moving Consumer Goods (FMCG) Companies in Nigeria.
• The Impacts of Digital Governance in Strengthening Tax Compliance and Enhanced Revenue Mobilisation in Sierra Leone
• Gender Impact of Values Education and Good Governance on National Development: A Study of Bangladesh
• Knowledge, Attitudes and Practices towards Infrastructural Developments along the Riparian Ecosystem of the Nairobi River Basin, Kenya