KUALA LUMPUR, March 1 ― Environment and Water Minister (Kasa) Datuk Seri Tuan Ibrahim Tuan Man told Parliament today that the Sabah state government did not inform Putrajaya about its controversial Nature Conservation Agreement (NCA), which has drawn flak from environmentalists.

He said this prevented his ministry from providing any detailed information as to the content of the said agreement.

Tuan Ibrahim said that the information received by the ministry was only through media statements and written statements from representatives of the Sabah state government as reported in the media. 

"For the information of the honourable member, the federal government was not informed, consulted, and involved by the Sabah state government in the negotiation process for the NCA agreement. In this regard, Kasa is unable to provide a detailed explanation of the contents of the agreement.

"If the NCA agreement has aspects of international carbon credit transactions, then it will have a direct impact on the NDC’s (Nationally Determined Contributions) achievements and the country’s net-zero GHG (greenhouse gas) emission aspirations. The Environment and Water ministry also always welcome the Sabah state government to consult and involve the federal government and other stakeholders in discussions on the NCA agreement and the carbon market mechanism in the future,” he said.

Tuan Ibrahim was responding to a question by Wong Hon Wai (Bukit Bendera) who asked for the ministry’s stance in regulating carbon trading activities such as carbon trading agreements between the Sabah government and foreign companies.  

Sabah had early this year come under scrutiny for a controversial carbon credit deal that could see up to two million hectares, or more than half of Sabah’s forests, being put up for a pilot project.

The deal drew flak for its lack of transparency, and for also involving a little-known Singapore-based firm that was to receive 30 per cent of profits.

In January, Sabah’s deputy chief minister Datuk Seri Jeffrey Kitingan said that the state aims to earn up to RM5.6 billion annually by leveraging on its forests in carbon credits and other nature monetising deals.

The state agriculture and fisheries minister said the state has taken steps to modernise the industry and create a new source of income by monetising Sabah’s many natural assets.

"This funding with nature conservation and carbon trading will unlock the conservation assets. We expect to raise RM2.2 billion to RM5.6 billion annually without cutting a single tree, and at the same time, preserve and safeguard the interests of indigenous communities.

"The success of the Nature Conservation Agreement is expected to attract private funding of up to US$10 billion (RM41.8 billion),” he said.

In December last year, Tuan Ibrahim told the Dewan Rakyat that the planned domestic carbon trading market, a complex mechanism to incentivise a reduction in carbon emission, will be Shariah-compliant.

The federal government said it would seek to follow the European Union in setting up a domestic carbon trading market to cut carbon emissions.

Tuan Ibrahim was reported saying in September that a domestic emissions trading scheme will be developed by the Environment and Water Ministry and carried out jointly with the Finance Ministry, Bursa Malaysia and other "stakeholders”.

Details of the carbon trading market is scant but the Voluntary Carbon Market (VCM) initiative is expected to be launched on Bursa Malaysia in efforts to achieve carbon-neutral status by 2050, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz announced in October last year.

He said the initiative would act as a "voluntary platform for carbon credit trading between green asset owners and others in the move towards low-carbon practices”.

The VCM will be part of Putrajaya’s green technology and sustainable drive.

Tengku Zafrul had said future spending plans would be aligned to green budgeting, in line with the government’s commitment to environmentally-friendly development projects and programmes.