Kota Kinabalu: Sabah aims to unlock greater economic value from its forests by diversifying beyond traditional timber production into nature-based solutions, such as carbon trading, forest recreation, agroforestry, and renewable energy, while maintaining one of the highest forest coverages in the region.
Deputy Chief Conservator of Forests, Sabah Forestry Department, Indra Purwandita Herry Sunjoto
(pic), said the move is aimed at balancing biodiversity conservation with socio-economic development, as forests currently generate relatively low financial returns despite covering more than half of the State.
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He said Sabah is actively exploring new sustainable revenue streams that recognise the value of ecosystem services rather than relying solely on timber production.
“Our challenge today is how to monetise our productive forest areas while continuing to conserve biodiversity and maintain sustainable landscapes,” he said during the Forestry and Nature-positive Food Economy session at the Sabah Asia Pacific Impact Investing for Sustainable Development Summit 2026.
Indra said Sabah continues to maintain approximately 63.8 per cent forest and tree cover, equivalent to 4.6 million hectares of its total landmass, underscoring the State’s long-standing commitment to sustainable forest management.
He explained that forest cover does not refer solely to forest reserves, but also includes the Permanent Forest Estate and forests located on State land.
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Of the total forest cover, around 3.5 million hectares are within the Permanent Forest Estate, while another 700,000 hectares comprise State land forests.
He added that about 784,000 hectares consist of State land forests and de-gazetted forest areas that remain dynamic and may be developed for various land uses.
Despite Sabah’s extensive forest resources, only around 25 per cent of the forest cover, or approximately 1.5 million hectares, is categorised as productive forest.
“In other words, only about a quarter of Sabah’s forests are considered productive. The rest are largely maintained for conservation purposes,” he said.
He noted that while Sabah has nearly 1.9 million hectares designated as productive forests, they contribute only around RM160 million annually to State revenue.
The State also has approximately two million hectares gazetted as production forests, presenting both opportunities and challenges in improving economic returns without compromising environmental sustainability.
Indra stressed that Sabah’s forest landscape is conservation-oriented rather than production-driven.
“If we look at the proportion of forest cover, Sabah prioritises conservation more than production. That is one of our biggest challenges because we are managing more than half of Sabah’s land area under forests, yet the economic productivity remains relatively low,” he said.
To address this, Sabah is introducing a Conservation Area Network (CAN) approach designed to support sustainable landscapes by integrating biodiversity conservation with economic development.
He said the State has identified 10 large landscapes as Key Biodiversity Areas (KBAs) covering approximately 2.5 million hectares, or about 33 per cent of Sabah’s total land area.
These landscapes include legally protected conservation areas such as forest reserves, Sabah Parks and wildlife sanctuaries, as well as conservation zones located within production forests.
Indra explained that production forests are not entirely designated for timber harvesting, with significant portions retained for conservation to safeguard biodiversity.
The conservation network also extends to important ecological areas located on State land, alienated land and mangrove ecosystems.
“This is something quite unique to Sabah. I am not sure whether similar approaches are practised in Peninsular Malaysia or Sarawak,” he said.
He also highlighted Sabah’s significant mangrove resources, noting that the State possesses the largest mangrove forest in Malaysia, covering about 325,000 hectares, or roughly 60 per cent of the country’s total mangrove forests.
However, he acknowledged that one of the greatest challenges facing forest conservation is the substantial difference in economic returns compared with other land uses.
Using a conservative comparison, he said production forests currently generate only around RM110 per hectare annually, whereas oil palm plantations can produce between RM7,000 and RM10,000 per hectare each year.
“In terms of ringgit and sen, oil palm outperforms forests by about 170 times. This illustrates the enormous economic challenge of maintaining forests while foregoing more profitable land uses,” he said.
To narrow this gap, Sabah is pursuing several nature-based programmes that can generate sustainable income while preserving forests.
Among the initiatives being explored are Payment for Ecosystem Services (PES), forest-based recreation and eco-tourism, carbon trading, agroforestry programmes integrating tree planting with oil palm cultivation, and renewable energy projects through hydroelectric power generation within forest reserves.
“These initiatives are intended to diversify sustainable forest revenue while ensuring our forests continue delivering environmental, climate and biodiversity benefits,” he said.
Following the presentation, the session moderator emphasised that conserving forests carries a significant opportunity cost, extending far beyond the expenses associated with patrolling and enforcement.
He said the true cost lies in the substantial difference between the economic returns from maintaining forests and converting land to more profitable uses such as agriculture.
Citing a McKinsey REDD Readiness Report published in 2008, he noted that the opportunity cost of retaining tropical forests in countries such as Guyana and Indonesia was estimated at around US$20,000 per hectare at the time, adding that the figure is likely to have at least doubled today.
He also pointed out that while voluntary carbon credits were selling for only about US$5 per tonne then, the opportunity cost of avoiding carbon emissions was estimated at around US$30 per tonne, a gap that has likely widened further.
The moderator stressed that financial incentives for forest conservation must be substantial enough to bridge this economic gap.
“We need more than goodwill and love for forests. Good intentions alone are not enough. We need mechanisms that come much closer to bridging the opportunity cost of conserving forests,” he said, adding that Sabah’s foresters face the difficult task of justifying the value of maintaining forests despite the comparatively low financial returns.
