KOTA KINABALU: Sabah's Nature Conservation Agreement (NCA) is unlikely to be certifiable or saleable to any internationally-recognised carbon standard, say environmental experts.
The agreement, signed in Oct 2021, would grant monopoly rights irrevocably to a Singapore company, Hoch Standard Pte Ltd, for the monetisation of natural capital in up to two million hectares of Sabah lands.
Prof David Burslem from the University of Aberdeen and Datuk Dr Glen Reynolds, director of the South East Asia Rainforest Research Partnership (SEARRP), in a joint statement, said the question of 'additionality' needs to first be addressed.
Burslem is no stranger to Sabah environmental matters, having conducted numerous research projects in Sabah, often in partnership with the Sabah Forestry Department and Yayasan Sabah, since the mid-1990s.
His work includes a 20-year Danum Valley-based study on carbon recovery rates in logged-over and restored rainforests.
Reynolds, meanwhile, has worked in the state for over two decades and has a PhD in forest restoration from Imperial College.
Through SEARRP, he has led and collaborated on many climate change, carbon financing and forest recovery research programmes in Sabah and the wider region.
Citing a report titled "Technical and financial impediments to the viability of the Nature Conservation Agreement", they said carbon is only regarded as "additional" and therefore marketable if generated as a direct result of the project's activities, over and above what would have happened had the project not taken place.
They said for the NCA to create additionality, the project would need to demonstrate that action taken will help the forest to absorb additional carbon above and beyond what would have happened under existing protection and restoration obligations already in place in Sabah's conservation areas.
The report, which focused on additionality requirements in forest-based carbon financing projects, said existing Totally Protected Areas (TPAs) in Sabah generally have high carbon stocks, averaging 165 tonnes per hectare in forests gazetted as Parks and 110 tonnes per hectare in Class I forest reserves.
"It has been stated that the NCA will operate in up to two million hectares of pre-existing TPAs. This constitutes the entirety of Sabah's current TPAs.
"The carbon stored in trees in pre-existing TPAs would not meet additionality criteria and would not be saleable under the NCA.
"Carbon accumulation as a result of the natural regeneration of forests within existing TPAs, such as the recovery of previously logged forests without active restoration, would have occurred in the absence of the project.
"This is not additional and would also not be saleable through the NCA," read the statement.
The report stated that the only feasible route for the NCA to achieve additionality within TPAs would be through forest restoration, namely increasing the forest's capacity to absorb carbon over and above quantities that would have accumulated through natural regeneration.
However, they said achieving additionality through the active restoration of degraded areas within pre-existing TPAs is not standard practice and may not meet additionality criteria.
The report also questioned the scale of restoration proposed under the NCA – restoring at least 50,000 hectares of degraded forest within two years (the NCA's performance target) is an effort that has never been achieved in the tropics.
Furthermore, even if restoration of 50,000 hectares was achieved it would lose money, because under the terms of the NCA, the Sabah government would have to bear restoration costs which could total over RM600 million during the first five years of the project alone, while generating carbon revenues of only RM40 million over the same period based on current carbon prices.
"It is highly unlikely that the NCA could generate sufficient saleable carbon to meet the costs of restoration. There is no reasonable prospect of the project generating any additional revenue for the state for several decades.
"Revenues projected under the NCA are based on highly unrealistic forest recovery rates and inflated carbon pricing assumptions," the authors said.