Financing through carbon trading was somewhat effective during its initial use under Clean Development Mechanism policies. This is essentially financing through other, wealthier countries receiving emissions credits in exchange for investment in projects within developing countries that would reduce GHG pollution. Examples of successes from this project include the production of electricity from the Air Hitam sanitary landfill, which takes advantage of biogas produced from unused landfills; but more importantly, the Takon palm oil mill in Sabah. It has an “annual input capacity” of 129,600 cubic meters/year of palm oil mill EFB. Not only can this represent a “monetary value” of $2 million per year on average, but it will reduce the threat of methane release as an externality of palm oil production. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essay In theory, however, this does not promote sustainability for recipients of emissions credits in richer countries, as they buy to avoid reducing their emissions. own GHG pollution. If ethics are ignored, carbon trading can lead to more renewable projects for a green economy. Funding also comes from the Green Technology Financing Program as well as support from Islamic banks. The GTFS secures promising green projects by providing 60% of financial requirements with a low interest rate of 2%, to reduce risk for financial institutions. Furthermore, this is a serious effort by the Malaysian government as the program planned to allocate RM3.5 billion ($850 million) for sustainable projects, which would also encourage further borrowing from banks. Under the program, 109 projects were funded. [24] As an Islamic country, Malaysia can take advantage of the Islamic banking system to further reduce the risk of green projects by sharing profits through Mudarabah and Musharakah agreements, allowing the bank and the contractor to provide assets, with both parties reaping the benefits; also utilizing banking expertise for “profit generation and financial management,” necessary for green projects that require extended periods of time to solidify the value of their returns as an investment. Furthermore, it is a pro-Islamic belief that the environment must be well maintained, which could (although unlikely) influence the decisions of Islamic banks. However, the green market is hampered by the lack of coordination between experts in this field and financial institutions, leading to information asymmetry. Keep in mind: this is just a sample. Get a personalized article from our expert writers now. Get a Custom Essay Sustainable projects are relatively still a young industry (especially in Southeast Asia) in which financial institutions may be uncomfortable compared to financing traditional businesses with expected returns. But it can be expected that this obstacle can be circumvented as more countries become familiar with methods of reducing CO2 emissions. At the same time, the financing of green projects can thus be independent of the financial problems of the current economy; If its implementation is successful, financial institutions could eventually produce a financing structure suitable for green projects, with..