Inadequate pricing of emissions is one of the culprits. An international emissions trading system covering all countries could, in principle, provide for equal pricing of emissions. In practice, this has proved difficult to establish. Getting developing countries to sign on to such an agreement is understandably difficult. It is hard to demand that the polluter pays in countries where much of the population is still below the poverty line. The transition to low-carbon technologies in emerging markets is, however, essential for reaching global emissions targets. The pricing of emissions also encounters opposition in rich nations. Some would argue that higher emissions taxes will simply cause emitters to move elsewhere. This argument may be relevant for some sectors. But there is also opposition from groups who consider themselves better served by financial support to make changes rather than having to bear the costs themselves. For the political authorities, subsidies may therefore appear a more attractive option. The result is a more costly and less effective climate policy. Chart: Price of emissions Norway was among the first countries to introduce a carbon tax. In addition, several industries are covered by the EU emissions trading system. But a glance at the cost of carbon emissions in Norway shows that even here we have a long way to go before the principle of equal pricing of emissions is realised. Some sources of pollution are completely exempt.
LNG capacity start-ups in Australia and North America which will boost new LNG supplies amidst stagnating demand will put more pressure on LNG prices, hence further disrupting the LNG market. Due to low oil and LNG prices, the profitability of oil majors and National Oil Companies (NOCs) has been severely eroded. The impact has been pronounced. More than 300,000 oil and gas workers have been laid off globally since mid-2014; some USD 380 billion of global oil and gas projects have been deferred or cancelled; and more than USD 150 billion worth of assets have been planned for disposal or divestment. Given Malaysia’s openness and high financial and trade integration with the rest of the world, the Malaysian economy is not isolated from these developments. On the external front, lower global demand continues to weigh down on Malaysia’s export performance. Investment activities especially in the upstream oil and gas sector, contracted for the first time since the global financial crisis in 2015, after expanding by an average of 16% from 2010 to 2014. However, investment activity in the manufacturing and services sectors remained  BIS central bankers’ speeches  1  resilient, and is expected to underpin investment growth moving forward. Private consumption remained relatively resilient and anchored domestic growth, especially during the first half of the year, driven by sustained income and employment levels. Going forward, domestic demand is expected to remain a key driver of economic growth in Malaysia. We should expect Malaysian economic growth to range between 4.0 to 4.5 % for 2016.