By Kimberly Ramkhalawan
December 9, 2022
In what is being hailed as a historic move for the country of Guyana, even as it is on the cusp of becoming the richest western hemisphere’s oil nation, the government of Guyana and Hess, one of the largest investors in its oil and gas sector, has agreed to the sale of a minimum of $750m worth in high quality carbon credits between 2022 and 2032.
To Guyana, the sale agreement represents its efforts to protect the world’s largest natural resource critical to climate change and maintaining the earth remains on track to reducing global temps by 1.5C, Guyana’s forest, and part of the Amazon.
In the same breath, safeguarding this aspect of nature redounds to providing the capital necessary to improving the lives of Guyana’s people, through investments made in return via its Low Carbon Development Strategy (LCDS) 2030.
What makes this particularly interesting, is that a majority of it goes to the indigenous people and its communities in Guyana, something that has prompted cause for high praises from varying sectors across the country.
The move also involved Guyana becoming the first country to complete the ART process (Architecture for REDD+ Transactions) for generating high-integrity, Paris Agreement-aligned carbon credits that will allow Guyana to access market-based finance to continue to implement forest stewardship strategies.
Congratulating the nation, its private sector including Guyana’s Chamber of Commerce and Industry, GCCI, the Federation of Independent Trade Unions of Guyana (FITUG), its Private Sector Commission (PSC), joined in applauding Guyana for the becoming REDD compliant.
The announcement comes following COP27, while the REDD+ (Reducing Emissions from Deforestation and Forest Degradation) Web Platform, mandated after COP 13 Norway, in decision 2/CP.13, was established with the purpose of making available such information on the outcomes of activities relating to REDD+, including activities on capacity building, demonstration activities, addressing drivers of deforestation and mobilization of resources.
GCCI noted that is saw this second agreement as an indication that highly developed nations are increasingly recognizing the value of forest climate services.
Iwokrama International Centre for Rain Forest Conservation and Development, also added their commendation, with its CEO, Dane Gobin, describing it as “exciting times for Guyana as it continues to mobilize its forest services in the fight against climate change”. Iwokrama has a million-acre forest, integral to Guyana’s conservation efforts, and with rising sea levels, warmer temperatures, and more adverse weather conditions, climate change is evident.
The country also experienced severe flooding back in June 2021, causing adverse damage to its agriculture and infrastructure sector. With the latest agreement, such funds, help build resilience climate change contributing to the economy with safeguards in place.
In case you are not sure what exactly a carbon credit is by now and how its purchase works, carbon credit represents a permit that represents one tonne of carbon dioxide removed from the atmosphere. It can be purchased by an individual or, more commonly, a company, to make up for carbon dioxide emissions that come from industrial production, delivery vehicles or travel. Carbon credits are often created through agricultural or forestry practices. A credit can also be made by nearly any project that reduces, avoids, destroys or captures emissions.
More often, Individuals or companies looking to offset their own greenhouse gas emissions can buy those credits through a middleman or those directly capturing the carbon. The credits are in the case of a farmer that plants trees, the landowner gets money; the corporation pays to offset their emissions; and the middleman, if there is one, can earn a profit along the way.
The sale of carbon credits which covers ten years 2022-2032, will see Guyana being compensated for keeping its rainforests intact. The purchase by Hess will represent 2.5 million credits per year for the years 2016-2030, while the purchases will occur in the period 2022-2032. Last Friday, a US$750m deal was inked in Georgetown, with the expectation that all of the monies would be disbursed to Guyana within the next 18 months.