A $31 billion Supplementary Appropriation Bill was endorsed by the National Assembly during Thursday’s sitting, paving the way for funds to be injected into climate adaptation measures and support for Indigenous communities.
It was successfully piloted by Senior Finance Minister within the Office of the President with responsibility for Finance, Dr Ashni Singh.
The Bill, comprising Financial Paper Number 1 and 2 of 2023, was first presented on April 24 during the 63rd sitting of the National Assembly, and allocates US$150 million in revenues from carbon credits towards two critical priorities under the Low Carbon Development Strategy (LCDS).
Some $4.7 billion will be set aside for the Indigenous communities across Guyana while over $26 billion will be dedicated to climate action.
This significant step follows the recent payment of US$37.5 million from the Hess Corporation for carbon credits, bringing the total payments received to date to US$150 million, the highest revenue stream of its kind in the world.
As outlined in the bill, the allocated revenues will be directed towards two major priorities of the LCDS.
The first priority is empowering villages through investments. In line with the LCDS objectives, 15 per cent of the revenues are being dedicated to bottom-up investments through community plans outlined in village sustainability plans.
Villages have the autonomy to choose whether or not to participate in the benefit-sharing mechanism, and thus far, 200 out of Guyana’s 242 Indigenous villages have produced their village plans. The strategic investment empowers villages across Guyana by providing the necessary resources and support to enhance their social, economic, and environmental well-being.
“By involving villages in the planning and decision-making process, this allocation promotes community ownership and ensures effective utilisation of funds to address their specific needs. The village plans designed by community members include infrastructure development, education and healthcare initiatives, entrepreneurship support, cultural preservation, and other projects that foster sustainable development within the communities,” the Finance Ministry has disclosed.
On the forefront of the second priority is promoting climate adaptation and resilience. Recognising the urgent need to address the impacts of climate change, the Government is prioritising one of the largest investments in climate adaptation in Guyana’s history.
A substantial portion of the allocated funds, approximately US$127.5 million, will be dedicated to implementing comprehensive climate adaptation measures throughout the country.
“Guyana, with its extensive coastal areas and diverse ecosystems, is particularly susceptible to the effects of climate change, such as rising sea levels, extreme weather events, and shifting rainfall patterns. By investing in climate adaptation, Guyana will enhance its ability to mitigate these risks and build resilience, ensuring the protection of its people, infrastructure, and natural resources.”
This considerable investment will support various climate adaptation initiatives, including the construction of two major canals in Regions Five (Mahaica-Berbice) and Six (East Berbice-Corentyne); the rehabilitation of 20 sluices in Regions Two (Pomeroon-Supenaam), Three (Essequibo Islands-West Demerara), Four (Demerara-Mahaica), Five and Six, as well as the procurement of pumps and excavators for use across multiple regions.
Carbon credits
Hess Corp, which is one of the partners operating in the Stabroek Block offshore Guyana, will be buying 2.5 million credits per year for the period 2016-2032, at a value of US$750 million.
The 33.7 million credits being sold to Hess Corp is just 30 per cent of the carbon sink contained in Guyana’s vast forest cover. The country’s more than 18 million hectares of forests are estimated to store approximately 20 billion tonnes of carbon dioxide equivalent. The remaining 70 per cent of Guyana’s carbon credits will be put on the market for future sale agreements.
Indigenous communities were slated to receive 15 per cent of Hess Corporation’s payment for Guyana’s carbon credits, which amounted to the $4.7 billion.
The carbon credit inflows are being allocated to programme components of the LCDS 2030, and come on the heels of the Government’s engagement in further consultation over the past months to determine the structure of the two disbursement channels outlined in the LCDS 2030.
Advancing low-carbon development while addressing the impacts of climate change is a core focus of this investment, and attention will be aimed at supporting the strong stance that Guyana has maintained
