*4.1. Legal Dimension*

The existing CDM framework is seen to be lacking in terms of guidelines for improving sustainability performance [30]. Most of the CDM projects involved in development or positioning in RE technologies have been criticized for their negative impact on the environment and social fields. Supported by the results in Table 5 from the palm oil companies, the Malaysian palm oil industry particularly offers a promising platform for CDM projects. However, proper monitoring needs to be performed in order to ensure the projects' positive impact. Furthermore, a set of sustainability criteria should be developed to promote the achievement of sustainable development and the criteria should reflect the local context in which the projects are carried out. In other words, the effort must be holistic in order to reach an equilibrium state for sustainability.

The legal dimension factor's results showed that three out of seven respondents indicated "not compatible with national regulations." In Malaysia, there are no regulations to dictate that the palm oil industry should implement carbon trading. Carbon trading implementation, such as CDM, was made as a result of climate negotiations and, therefore, governments with different views on carbon trading's commodification influence the outcome [31].

The analysis of the collected data revealed that the majority of the interviewees on carbon trading implementation in Malaysia considered the "legal dimension" as the crucial factor in implementing carbon trading. As argued by a representative from Company A, the regulatory constraints hinder the implementation of CDM and the development of the carbon market, which indicates the perception of the crucial legal dimension factors in carbon trading implementation (Company A, 2018).

However, Companies B, C, E, and G considered the legal dimension as one of the incentives to meet the sustainable palm oil standard and development in palm oil plantation areas. As stated by [32], the firms respond to the institutional pressure that emphasizes the importance of the regulatory, normative, and cognitive factors that have affected the firms' decisions to adopt some environmental practices. Beyond the institutional pressures' perspective, perhaps more symbolic actions have been a long-standing priority for palm oil companies to provide emission-related investments and to

participate in voluntary initiatives that allow them to demonstrate their commitment to the governmen<sup>t</sup> as core corporate strategy elements on climate change [33].

The results relating to the "di fficulty to engage with international policy" show that Companies D, E, and G have a ffected the managemen<sup>t</sup> decisions to continue in CDM projects. The representative from Company E (2018) argued that the project developers and consultants are essentially dependent on each other and, if they don't comply with each other and there is a problem, then the consultant needs to be changed. This was explained further by the representative from Company G (2017), "There are a lot of problems, and they don't want to share the loan equally. You are the industrialized country, I am also the industrialized country, the ratio that we want to split is not agreeable."

There are many arguments that have advocated carbon trading implementation related to the environmental market and policies governance. While governance is important in policy formation, the critical factor on strict additionality in implementing carbon emission projects has contributed to confusion in continuing with the projects. From the findings, "strict additionality in emissions projects" shows that four of the seven palm oil companies agreed with the problem. As stated by representatives from Company B (2018), "Review the entire procedures of the data monitoring, collections and compilation and documentations ... once wrong, another problem will start ... typical accounting procedures."

Moreover, when climate change became a big issue, there were two di fferent sorts of arguments that economists used to explain e fficient methods for reducing emissions [34]. Although the world has recognized Malaysia as being ready to replace non-renewable energy with renewable fuels, the implementation of various policies and programs by the Malaysian governmen<sup>t</sup> has increased the awareness of the important role of RE in sustainable energy systems [35]. The existing policy, however, appears to not be indicative of such progress.

The ongoing revision from the Malaysian perspective has contributed to the development of a mechanism that complies more sustainably with the palm oil industry. More importantly, the enhancement of carbon market policies has shown a positive impact. This analysis provides links between the legal dimension perspectives with the current Malaysian policies. The challenge of addressing carbon trading stresses the palm oil industry's potential to contribute to several SDGs, especially for sustainable palm oil, RE, waste management, and water treatment of palm oil waste, which appear to be beneficial for promoting sustainable development.
