AS Sarawak starts on the path of monetising its forest resources through the trading of carbon stocks, Awang Tengah Ali Hassan told the state’s timber companies that the dynamics of the timber industry will change with the passing of the forests amendment bill.

The deputy premier called on them “to respond positively” and give their support to “this new approach towards sustainable forest management”.

He called them to embrace the new opportunities presented by the amendments by revising their business models “because logging and felling of merchantable timber would have to be reduced gradually to a sustainable level to mitigate adverse environmental effects from logging”.

Awang Tengah urged them to grab opportunities to invest in schemes promoting forest carbon activities and other conservation and reforestation activities for carbon sequestration and carbon stocks for carbon credit units.

Local and foreign environmental activists have long accused timber companies of deforesting the state, contributing to global warming and climate change.

Twenty assemblymen spoke on the bill, which was passed with a couple of minor amendments this afternoon.

Awang Tengah, who is also the second minister for natural resources, described the “forest carbon activity” as a new source of income for the state “in a non-destructive manner”.

He projected the state could earn RM315 million annually based on the current World Bank carbon price of US$5 (RM22) per tonne of carbon.

He said the estimation was also based on 30% of the state’s permanent forest having carbon yielding carbon credit units at the rate of 200 tonne carbon per hectare.

Sarawak has a land area of about 12.4 million ha, with 7.7 million or 62% still under forest cover.

Under the Sarawak land use policy, seven million hectares have been earmarked for sustainable forestry and conservation.

Out of these, six million hectares are permanent forests while one million hectares are totally protected areas.

Awang Tengah said it is from these forested areas that carbon sequestration could be carried out to form carbon stocks in which the credit units are derived.

Sarawak’s forests ordinance regulates the management and use of its forests and the taking, removal, export and sale of forest produce and the amendments, and among other things would widen the interpretation of “forest produce” to include carbon stocks and greenhouse gas (GHG) stocks produced through licensed forest carbon activity undertaken in permanent forests, state and alienated lands.

The new law now empowers the forestry director to issue licences for forest carbon activity. It also makes it mandatory for any person to obtain a licence before undertaking any forest carbon activity.

“The state government will promote activities in our forests that would reduce the adverse impact on climate change. This will be achieved through carbon sequestration and carbon sink, with carbon stocks thereby created,” he said.

He added that through rules to be made, these forest carbon activities would be verified in accordance with the Verified Carbon Standard or other recognised global institution for the issuance of tradeable verified carbon units.

“The verified carbon units will be registered in accordance with carbon standard rules that could be traded globally.

“The rules will also empower the state government to collect royalties, premia, levies or taxes for or in connection with a forest carbon activity.”

Padungan assemblyman and Sarawak DAP chief Chong Chieng Jen said while carbon credit trading might contribute to the state’s coffer, it will not help to reduce global GHG emissions.

Chong said the would-be prospective purchaser of the carbon credit would be the “greenhouse gas emitters”.

He said when the GHG emitters are “presented with the easy way out” to purchase carbon credit to satisfy the regulatory or conventional requirement of their carbon credit, it would be a disincentive for these would-be prospective purchasers of carbon credit to innovate to reduce their GHG emissions.

“At the end of the day, with the purchase of carbon credits, these purchasers will continue to pollute our environment with GHG.” – May 19, 2022.