Guyana has the chance to earn more from carbon credits than the market price back in 2010, considering the fact that there is increased interest in the market and also the fact that prices have only increased as time went by and moreover, continues to increase.
This was explained by Pradeepa Bholanath, who is the Senior Director for Climate and REDD+ (Reducing Emissions from Deforestation and forest Degradation) in the Ministry of Natural Resources.
During her recent presentation at the Energy Conference and Expo, she said that monetising Guyana’s forest credits will allow them to fund programmes under the Low Carbon Development Strategy (LCDS) and transition to various levels of implementation.
“You can see that even without a full market mechanism being in place, we have been able to use the proceeds of the Guyana-Norway agreement to advance so many programmes that were low carbon development over the past 12 years. So, imagine the opportunities that will be available, through a multi-party type of arrangement that is akin to the market.”
“Multiple buyers, the price levels could potentially be higher. Under the Guyana-Norway agreement, we were seeing something around US$5 per tonne. From recent indications from the market, this is currently at US$15 per tonne,” she also said.
In fact, the Director said that the price for carbon credits can potentially go much higher in the near-term future. She noted that Guyana has an even higher level of forestation per capita than its neighbour to the south, Brazil.
“There is already greater interest, the price levels are rising and it is seeking to value something, not in any way to remove or reduce the status of what we have been doing over the last decades in Guyana,” she explained.
It was at that very conference and expo, that Climate Change Advisor Kevin Hogan had announced that the Government plans to put at least 8 million carbon credits on the market for sale by July of this year.
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. Guyana’s 18.4 million hectares of largely pristine forest stores approximately 5.31 gigatons of carbon.
Last year, Vice President Bharrat Jagdeo had said that Emergent Finance Accelerated Incorporated would soon be commencing work towards marketing Guyana’s carbon credits on the world stage. He made this revelation during a press conference, where he also spoke about the marketing process and expressed hope that over the next few months the process of seeking proposals from various players in the market desirous of investing in these credits would kick start. In fact, Jagdeo had said that he would be meeting with the group that will market the country’s carbon.
“You know the marketing arrangement has an upside to us too. Because although it gets underwritten at US$10 a tonne, if it’s sold for higher, we still get the higher price, of course deducting admin costs. And the US, I think UK and Norway endorse this. This group, I think they’re putting some money into it.”
“So, we’re hoping over the next four months or so, we will be looking to finalise all these arrangements and work the markets, see all the people who will be interested and then we will probably get the proposals through Emergent. But whatever we put in, it is going to be underwritten at US$10 a tonne,” Jagdeo had explained.
Back in April 2021, 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.
