Guyana could soon enter into a deal that will see the country earning some US$300 million by selling its carbon credits.
This is according to Vice President Bharrat Jagdeo, during an interview with the Newsroom that was aired on Sunday evening.
Back in April, President Dr Irfaan Ali had announced that Guyana signed a letter of intent with US-based non-profit organisation (NGO), Emergent Finance Accelerated Inc, to market the country’s carbon credits through a credit contract – a deal that could earn the country millions of US dollars.
A carbon credit is a tradable permit or certificate that allows the holder of the credit the right to emit a stated tonnage of carbon dioxide or an equivalent of another greenhouse gas. Countries and companies that exceed their permitted limits can purchase carbon credits from other nations that have low emissions such as Guyana.As such, Jagdeo revealed during the interview that Guyana’s carbon credits have been listed on the Architecture for REDD+ Transactions (ART) platform. ART is a voluntary international initiative that, among other things, serves as a global quality benchmark for forest emission reductions that can enter fungible carbon offset markets and provide buyers of REDD+ emission reductions credits with credible results, according to its website.
Guyana’s 18.4 million hectares of largely pristine forest stores approximately 5.31 gigatons of carbon.
“In a matter of months, we believe decisions would be made that could see upwards of US$300 million approved for Guyana… through the ART programme – the Architecture for REDD+ Transactions. So, we’ve now been listed there,” the VP noted.
He went on to explain that going into this market, Guyana had its first carbon written at about US$10 per tonne, which though underwritten is double the US$5 per tonne the country was earning in the Norway agreement. However, he pointed out that should Guyana’s carbon be traded at a higher price, then this would mean more revenues for the country.
The Vice President outlined that Guyana had lost its momentum over the last five years under the APNU/AFC coalition Government, which had scrapped Jagdeo’s Low Carbon Development Strategy (LCDS) under which the deal with Norway was signed back 2009 and from which the country earned some US$250 million for preserving its forests.
According to Jagdeo, that deal with Norway was way ahead of its time and instead of trying to preserve the arrangement to enter a second phase, the David Granger-led regime went on an adventure with its “Green State” economy initiative.
“Had they only continued with second phase, the natural progression of the Low Carbon Development Strategy, we would have seen a new agreement with even more than the US$250 million. So, we had to immediately strip out… and we had to make some structural changes but refocus on the sector that was earning us revenue… And now, we’re on the cusp of getting US$300 million for Guyana in just short period of time that APNU totally ignored. In fact, their Green State [Development] Strategy was more of a burden on the treasury,” VP Jagdeo posited.
Nevertheless, even as it is seeking international markets to sell its carbon, the current PPP Administration is also working on renegotiating its agreement with Norway.
In addition to this, Guyana could potentially earn from a global public-private initiative that was launched back in April to accelerate climate action by providing results-based finance to countries committed to protecting their tropical forests.
The Lowering Emissions by Accelerating Forest finance (LEAF) Coalition was established by the United States, United Kingdom and Norway along with nine leading Private Sector companies to provide substantial financial support to tropical and subtropical countries that successfully reduce emissions from deforestation and forest degradation.
This initiative aims to mobilise at least $1 billion in financing that will be used for the protection of tropical forests, to the benefit of billions of people depending on them, and to support sustainable development. Emergent Finance Accelerated Inc, the same company marketing Guyana’s carbon credits, is one of the nine private partners in the LEAF Coalition and is also the administrative coordinator of the initiative.
“We understand that Guyana, like a number of other jurisdictions, is considering submitting a proposal and we look forward to receiving their submission,” a spokesperson from the US State Department told this publication last month.
Nevertheless, at the launch of the LEAF initiative during President Biden’s Leaders’ Summit on Climate back in April, VP Jagdeo had welcomed the initiative, stating that countries like Guyana have long pressed for the ecosystem services provided by their standing tropical forests to be properly valued, through both public and private finance.
The Vice President, who has long championed the use of forests in climate mitigation, previously told this publication that the forests tend to lose a lot of ground in the global fight against the climate crisis since developed countries are more focused on retrofitting buildings or mitigation solutions that deal with decarbonising energy.
A similar view is shared by United States Renewable Energy Specialist Jeffrey Logan, who believes that developed countries need to play a greater role in assisting emerging economies to preserve their forests.
Logan, who is an Associate Director of Energy, Policy, and Analysis of the Renewable and Sustainable Energy Institute (RASEI) at the University of Colorado, USA, was one of the presenters during a three-week Virtual Report Tour (VRT) on “Combatting the Climate Crisis Through US Innovation” sponsored by the US Department of State’s Foreign Press Centers back in May.
Logan explained to this publication that for countries like Guyana, it’s neighbour Brazil – both of which are part of the Amazon Rainforest and the Guiana Shield – and even Indonesia, forests are an extremely important part of the carbon calculus.
“There are a growing number of carbon offsets available to investors around the world that want to help preserve forests in emerging economies. Unfortunately, the rules are often somewhat unclear even if the goal is clear: developed countries should help developing countries to preserve their forests as carbon sinks as this is a win-win for both parties if done properly,” he stated.