Last Updated on Friday, 29 October 2021, 0:53 by Denis Chabrol
President Irfaan Ali on Thursday made it clear that Guyana was tapping into the multi-trillion dollar oil and gas sector to invest in the social sectors, technology, infrastructure while eventually hoping to rake in billions of dollars annually from the sale of carbon credits.
The document states that the Emission Reductions Purchase Agreements (ERPAs) for the sale of carbon credit would be made public and would be “independently audited.” Studies estimate that the economic value that Guyana’s eco-system services provide to the world are up to US$5.4 billion annually.
Sources, however, project Guyana’s actual earnings from such services would be about US$300 million.
The LCDS provides for credits to be issued under the Guyana Carbon Registry and any other structure that is
associated with the Guyana credit issuance.
The document explains that credits can be purchased by buyers who recognise the the Architecture for REDD+ Environmental Excellence Standard (ART-TREES Standard) – and sales will take place in line with a process established by ART-TREES to ensure environmental integrity, in accordance with the United Nations Framework Convention on Climate Change (UNFCCC) rules on carbon standards.
The strategy states that buyers of credits could be sovereign governments or private companies with voluntary commitments to support the maintenance of the world’s forests or to take action on climate.
As announced at the Climate Summit convened by the President of the United States, some of the world’s major companies (led by Amazon.com), along with leading sovereigns such as Norway, the US, the UK, anticipate adopting ART-TREES as a standard by which they will meet some of their climate pledges. They will pay for these credits through several channels, including the Lowering Emissions by Accelerating Forest (LEAF) Coalition.
Speaking at the launch of Guyana’s Low Carbon Development Strategy (LCDS) 2030, he said Guyana hoped to make headway by next year in the trade in carbon credits as Guyana continues to profile its standing tropical standing forests that absorb climate change-causing carbon emissions.
“We hope that progress can be made in the next six to twelve months towards the next step with forest climate services. This can bring us a step closer to a day when their true value will enable them to increase their significance as part of the domestic economy in Guyana. Guyana will support such markets, and hope that in years to come, global markets for ecosystem services will start to rival those for fossil fuels,” the President said.
The draft LCDS, which will be the subject of nationwide discussions, envisages Guyana earning payments through a market mechanism that will include a market standard to generate carbon credits and marketing them to potential buyers.
The Guyana government has already inked a memorandum with a United States-based company to market this country’s carbon credits.
The LCDS states that Guyana will receive credits for any reductions in deforestation against the previous five-year
average, starting with 2016-2020 as the reference period, restoration of deforested or degraded forest; the long-term storage of carbon in Guyana’s standing forest, providing that Guyana’s deforestation rate does not increase significantly above historic averages.
According to the document, revenues from market-based payments will finance LCDS activities identified within the
LCDS or activities related to the principles of the LCDS and its themes – and approved by the National Assembly via the National Budget process.
The designated allocation of 15% of all earnings for Indigenous villages and forest-based communities, earned under a forest carbon financing mechanism, will be administered through a separate mechanism under the management of the Ministry of Finance and advice of a multi-stakeholder mechanism.
The document restates the Guyana government’s position that effectively rules out Guyana aborting or scaling back oil and gas production because of the need to reduce greenhouse gas emissions. “If Guyana were to prematurely forego oil and gas revenues, it would simply mean a continuation of a de facto monopoly where incumbents would meet demand and benefit from the industry which will be worth trillions of dollars for decades to come. It would also mean that Guyana would remain poor and unable to invest in lifting the living standards of its people,” the LCDS states.