Economic valuation of soil carbon sequestration services in Malaysia’s forest sector: a review of possible approaches

The carbon in the soil of tropical forest ecosystems, such as Malaysia, is substantial and plays a key role in climate mitigation and enhancing forest health and productivity. The measurement of soil carbon stock and estimation of its economic value is, therefore, essential for accurate reporting of national carbon inventories, conservation and policy making decisions. However, research on the economic valuation of carbon in the Malaysian forest sector concentrate on the carbon in biomass and neglect the contribution of soil carbon, despite the significant amount of carbon held in the soil. A useful approach to economic valuation of soil environmental services is by determining their benefits and costs to the society. Fundamentally, the soil serves as a carbon sink, in the case of sequestration and carbon source, in an event of mineralization or decomposition of organic matter. Another approach is to quantify the services rendered by organic matter (greater percentage of which is organic carbon) in improving soil quality. This paper reviews some economic valuation methods in the literature for the purpose of valuing soil carbon and sequestration services and have categorised them into ‘climate mitigation-based methods’ and ‘soil quality-based methods’. The review identified wide variations in economic values of carbon stock and carbon dioxide emission. The uncertainties associated with estimates obtained by applying most of the existing methods are also highlighted. The soil quality-based methods are specific to the agricultural ecosystem and need to be modified to suit peculiarities of the forest ecosystem. The review has provided opportunity for taking informed choices in selecting appropriate valuation method(s) of valuing soil carbon and sequestration services in the forest ecosystem. This study concludes by recommending the use of market price method as a convenient method for valuing soil carbon sequestrations services in the Malaysianforest sector.