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Who pays to stop the haze?
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MORE than 200,000 pupils and students in Serian, Sarawak, have been caught in a cycle of closing and reopening of schools as the haze worsens and then temporarily clears.

For the children in the 108 schools, a move to online lessons is itself difficult because they lack devices or reliable Internet connections.

Even rain has offered only temporary relief.

Cloud seeding helped clear the air, but the haze returned while fires continue and prevailing winds carry pollution across the region.

School closures and emergency measures are responses to pollution that has already arrived. What could have made some of those fires less likely in the first place?

Weather is part of the answer. Dry conditions increase the risk that forests and peatlands will burn, and not every hotspot is evidence of deliberate burning.

The condition of the land, how it is managed and the resources available for fire prevention also affect what happens when conditions deteriorate.

Research on Indonesian agriculture show the economic problem. Burning is a cheaper way to clear land than manual or mechanical alternatives.

World Bank research has also found that more expensive but low-fire-risk clearing can become economically attractive when combined with better agricultural practices.

For some producers, the obstacle may therefore lie in making the transition: meeting the initial cost, acquiring equipment and changing the way land is managed.

The problem differs according to who is involved.

Smallholders and local communities may face constraints in adopting fire-free practices.

Plantation companies and concession holders have different resources and responsibilities.

Fire-free practices directly benefit local communities in Indonesia, but the dividends of cleaner air also spill over borders to reach households and businesses in Malaysia and Singapore.

This creates a financing difficulty. Someone paying for better land management in one place does not necessarily capture all the benefits produced when a fire never occurs.

Useful prevention can therefore be worth more to the region than to the person or community being asked to pay for it.

Harmful commercial practices still need to face enforcement, liability and corporate accountability. Financing has a more plausible role where access to resources or local capacity is itself preventing change.

Asean has recognised elements of this problem for years. Its efforts on peatlands, sustainable land management and fire prevention long predate the present haze.

What it is now trying to do is mobilise resources on a much larger scale.

The Asean Investment Framework for Haze-Free Sustainable Land Management aims to mobilise about US$1.5bil by 2030 and support at least 100,000 smallholders in adopting haze-free agricultural practices.

Asean’s review of earlier initiatives found that limited access to resources had significantly hindered implementation, particularly at national and local levels.

Many of the approaches to reducing fire risk have already been identified.

The difficulty is applying them across enough farms, landscapes and communities to make a difference.

The US$1.5bil is an investment target rather than a pot of money already available for distribution.

Malaysia has reason to think carefully about where financing might help. It is examining possible transboundary haze legislation and has proposed what it calls a Sustainable Haze Fund.

Asean ministers, meanwhile, have agreed to examine whether the existing Asean Transboundary Haze Pollution Control Fund could attract more diverse contributions and support a broader range of activities.

Important details about Malaysia’s proposal remain unclear, and the idea raises an uncomfortable question.

Why should Malaysian resources help finance activities taking place in another country?

Indonesia remains responsible for enforcing its laws, while companies should bear costs that properly belong to them.

Malaysian money should not replace spending that other governments or businesses would have undertaken anyway.

However, where money is spent matters less than whether it serves national self-interest.

A ringgit spent outside Malaysia might produce additional prevention that would otherwise not occur and reduce health and economic costs borne inside Malaysia.

Or it might simply shift an existing obligation onto Malaysian taxpayers.

Any financing proposal should therefore face a demanding test.

It would have to show that Malaysian participation changes what happens on the ground, produces benefits that would otherwise be lost and does not reward governments or companies for doing what they should already be doing.

Making this principle work in practice requires strict governance and verifiable metrics.

Any cross-border co-financing must be tied to measurable outcomes and funding disbursed in tranches conditional on performance, ensuring full auditability.

Without transparent verification safeguards, well-intentioned regional funds risk morphing into passive subsidies that fail to alter behaviour on the ground or protect air quality at home.

Different sources of fire risk will still require different responses.

Enforcement matters where laws or corporate responsibilities are being breached.

Elsewhere, better peatland management, equipment, technical assistance or access to finance may make practices with lower fire risk easier to adopt.

For Malaysia, the issue is not simply whether money is spent at home or abroad. The useful question is what an additional ringgit actually changes.

If it merely pays somebody else to meet an existing obligation, there is little economic case for it.

If it makes prevention possible that otherwise would not happen, the calculation is different.

That is the standard by which any Malaysian contribution to regional haze prevention should be judged.

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.
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