Sabah state in Malaysia establishes biodiversity bank; palm oil producers will buy biodiversity credits

In Malaysia, New Forests and the Sabah state government have agreed on the establishment of a conservation bank for the region. Under the agreement, palm oil producers will purchase biodiversity credits from the group in return for the right to expand their production.

In turn, the bank will invest those credits in biodiversity projects and plantations, The immediate beneficiary is the 34,000 hectare Malua Forest Reserve, home to several endangered species including orangutans.

Cap-and-trade systems have been popular with policymakers. The Kyoto Treaty contains extensive provisions for  trading of carbon credits. In the US, Sen. Barack Obama has said: “A cap-and-trade program draws on the power of the marketplace to reduce emissions in a cost-effective and flexible manner. Companies are free to buy and sell allowances in order to continue operating in the most profitable manner available to them.”

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