Sabah and Sarawak at the Center of Malaysia’s Climate Governance Challenge

In Malaysia's Borneo states of Sarawak and Sabah, climate change is not a distant warning. It is visible in flooded towns, damaged roads, landslides, droughts, and coral bleaching along the coast. Communities are already feeling the pressure, and state governments are spending heavily on repairs and disaster response.

At the same time, Sarawak and Sabah are home to some of the world's richest rainforests. These forests store huge amounts of carbon and support extraordinary biodiversity, including orangutans and pygmy elephants. What happens in Borneo matters not only for Malaysia but for the global climate.

Malaysia has pledged to cut its carbon intensity and reach net zero emissions by 2050. But the new World Bank assessment argues that achieving these goals will depend heavily on how well Sarawak and Sabah manage their own institutions.

Power at the State Level

Malaysia is a federal country, and many climate-related responsibilities sit with the states. Land, forestry, water, and local government are largely under state control. Sabah and Sarawak have even greater autonomy under special constitutional arrangements.

This means they have a strong influence over forests, land use, and natural resources. It also means they play a central role in determining Malaysia's emissions and conservation outcomes.

Sarawak has invested heavily in hydropower and is exploring hydrogen and carbon capture technologies. Sabah is advancing sustainable palm oil certification and strengthening forest protection. Both states have introduced their own climate-related laws.

However, autonomy also brings challenges. Climate responsibilities are spread across different ministries and agencies. In some cases, roles overlap. In others, coordination is weak. This can slow decision-making and reduce the impact of good policies.

Big Plans, But Gaps in Coordination

Both states have development strategies that mention sustainability and climate resilience. Sarawak's long-term plans emphasize green growth, while Sabah's policies aim to balance development with environmental protection.

Yet the report finds that climate risks are not always fully integrated into planning decisions. Environmental Impact Assessments do not consistently include strong climate analysis or long-term emissions tracking. Different departments collect data separately, using different systems, which makes it harder to see the full picture.

To improve coordination, both Sarawak and Sabah are setting up Climate Change Centers. These centers are meant to act as hubs for climate planning, emissions monitoring, and policy alignment. If properly staffed and funded, they could help break down silos and improve cooperation across agencies.

But success will depend on technical capacity. There are shortages of specialists in carbon accounting, climate finance, and environmental monitoring. Forest departments, responsible for millions of hectares, often have limited staff and resources for enforcement.

The Money Question

Another major issue is finance. Both states rely heavily on revenues from oil and gas, timber, palm oil, and land development. This creates tension between earning income today and protecting the environment for tomorrow.

Federal support for conservation exists, but it is small compared to the scale of forest management and restoration needed. The report notes that neither state has fully adopted tools such as green budget tagging, which would help track how much public spending supports climate goals.

There is potential to do more. Carbon markets, green bonds, and sustainable certification systems could attract investment. Renewable energy expansion also offers opportunities. But these mechanisms require strong governance and technical expertise to ensure they are credible and effective.

Without reforms in how money is raised and spent, climate ambitions may remain difficult to achieve.

Transparency and Community Voices

The report also highlights the importance of transparency and public participation. Access to information about land use, forest concessions, and environmental approvals is uneven. Better data sharing would improve accountability and build public trust.

Indigenous communities play a crucial role in protecting forests. Research shows that areas under customary management often experience lower deforestation rates. However, land rights disputes and inconsistent consultation processes remain concerns.

Strengthening indigenous rights and involving communities more meaningfully in planning could improve both social justice and environmental outcomes.

A Test of Institutions

The central message of the assessment is clear: climate action is not only about technology or targets. It is about institutions.

Sarawak and Sabah have shown leadership and ambition. But to turn ambition into results, they need clearer mandates, stronger coordination, better data systems, more technical expertise, and smarter financing.

Borneo's forests are often described as Malaysia's ecological treasure. The report suggests they are also a test of governance. If Sarawak and Sabah can reform and strengthen their institutions, they could become models of decentralized climate action. If not, even the best climate pledges may struggle to deliver real change.