Shared responsibility

obmar · Shared responsibility

Shared responsibility

By Datuk Dr Mikaail Kavanagh

CURRENTLY, there is a lot of interest in providing state governments with financial incentives for protecting the environment. The Mentri Besar of Pahang, for instance, has suggested that the state would not need to log its forests if it were to be provided with an annual grant of RM250mil for forest conservation.

Ancient trees with huge buttresses and trailing roots are found in the Danum Valley Conservation Area in Sabah, which harbours endangered wildlife. – Pictures by CHOU K.S.
We at WWF-Malaysia are not saying that state governments should automatically be compensated for not logging their forests. However, we believe that various options for financing conservation efforts should be considered.

Ideally, we would like to see more forest areas reserved for conservation. However, the reality is that logging will continue for many years to come, given our dependence on timber.

In fact, revenue from timber is an important source of income for several state governments. This is provided for under the Federal Constitution, which identifies forest and land resources as “State Matters” and hence as legitimate sources of state income. If state governments were to forgo such revenue, they would have to find alternatives.

Unfortunately, the current tax system does not provide much opportunity for states to achieve this. For example, ecotourism has long been touted as a way of generating state income. While this is true for the overall economy, the reality in Malaysia is that most of the income from ecotourism is in the form of returns from service industries, such as travel and hospitality.

Their income goes to the private sector and to the Federal Government via service taxes and not to state governments even though they bear most of the responsibility for protecting our natural resources. Given this scenario, state governments are bound to worry about balancing their budgets if asked to stop logging in favour of ecotourism.

One way to address this would be to give state governments a portion of the Federal service tax. Ecotourism would then contribute directly to the states’ income.

Forests, of course, provide other services, such as clean water supply. Forests on water catchments act like giant sponges over the land, absorbing and filtering water from rainfall and releasing it cleaner and at a more even rate than would otherwise be the case. A bare hillside is useless as water catchment in our environment because the heavy tropical rain rushes down the slope, carrying a huge load of loose soil, stripped from the hillside.

And when it is not raining, there is a lack of water flowing in rivers and streams. We simply cannot afford to store and treat water from catchments that are not forested. Common sense tells us that forested catchments provide us with a service that would cost a fortune to replace.

It follows, that as we continue to lose forests, the remaining forested catchments become increasingly valuable. A few states are facing water deficits and have to rely on water from other states for their domestic and industrial needs.

Ancient trees with huge buttresses and trailing roots are found in the Danum Valley Conservation Area in Sabah, which harbours endangered wildlife. – Pictures by CHOU K.S.
A case in point is Kedah, which provides 80% of Penang’s water supply, free of charge. This arrangement was threatened in 2002 when the Kedah Government proposed to log the Ulu Muda forests in the main catchment area. Fortunately, that did not happen, but Kedah still gives away its water rather than being paid for it, even though it decided to forego alternative income from logging.

Selangor, the most developed state in the country, is predicted to suffer severe water shortages within the next five years and may soon be dependent on water from Pahang. We have to ask ourselves if it is acceptable for the more industrialised states to continue developing rapidly while the less developed ones bear the cost of protecting their forests for the national benefit.

Other developing countries have been more successful in finding answers to the question of who should pay for forest conservation. In Costa Rica, the National Forestry Finance Fund (FONAFIFO) operates a scheme that allows donors to direct the financial support that they give to specific tracts of forests.

Thus donors can directly help to ensure the conservation of forest where it will affect them. For example, a company that draws water from a river can invest in the protection of its catchment. The idea is to give incentives to support forest conservation, based on legitimate self-interest.

It appears to work. As of 2002, FONAFIFO had received payments from four hydro-electric companies with a total investment of US$5.5mil (RM20.9mil) under this scheme.

In the Philippines, the local government of San Fernando and WWF-Philippines established a water fund in 2005 to finance enforcement and reforestation activities of about 60 households of indigenous people residing in the upper reaches of the Cantingas and Panangcalan water catchments.

A seed fund of 700,000 pesos (RM48,410) was set up jointly by the local government and WWF-Philippines. The partners have successfully enforced laws against illegal logging and rehabilitated degraded areas in the Cantingas catchment.

Together with CARE, the leading humanitarian organisation fighting poverty, WWF-Philippines is also implementing a payment for environmental services (PES) programme in Mount Guiting-Guiting Natural Park and Mount Isarog. This 18-month project will develop a PES business case for these two sites, which will build on several studies of the willingness-to-pay by buyers, opportunity costs of sellers, and how these relate to local lifestyles and institutions.

These examples show us what can be done by using common sense and reasonable self-interest. Payment for environmental services is a practice that is in its infancy. We have to nurture it if we want to continue to benefit from what have so far been taken as free gifts from the natural world. In the Malaysian context, we need to develop fair ways of sharing costs and benefits between the states that provide the resources and those that benefit, be they other states or the nation as a whole.

The writer is executive director of WWF-Malaysia.