WITH 70 per cent of its carbon credits still to be sold, Guyana is pushing negotiations with the United Nations Framework Convention on Climate Change (UNFCCC) to create room for a compliance market for carbon credits, as the country continues to levy the benefits of its vast forested area.

This was according to Vice President, Bharrat Jagdeo, on Wednesday, in his update on Guyana’s Low Carbon Development Strategy (LCDS), which focuses on monetizing the role that Guyana’s forest plays in making the country a carbon sink.

After gaining US$220 million from its 2009 agreement with Norway to avoid deforestation, and selling 30 per cent of its jurisdictional carbon credits last year to Hess Corporation for at least US$750 million, Jagdeo said the next step is a robust compliance market.

“If we can have a compliance market then the price [for carbon credits] would escalate. We got really good prices at US$15 per tonne of carbon credits for the 2016 to 2020. It would be US$20 for 2021 to 2025, and $25 between 2026 and 2030. Those are good prices compared to what is in the voluntary markets now. But it has the potential to go to as much as US$80 to US$90 per tonne,” the Vice President highlighted.

Guyana has more than 18 million hectares of forests, storing an estimated 20 billion tonnes of carbon dioxide equivalent. For the past two years, Guyana has been working with the architecture for REDD+ transactions to certify its carbon credits.

Last year, the Architecture for REDD+ Transactions (ART) issued REDD+ Environmental Excellence Standard (TREES) credits to Guyana, marking the first time a country has been issued carbon credits specifically designed for the voluntary and compliant carbon markets for successfully preventing forest loss and degradation – a process known as jurisdictional REDD+.

“We are the only jurisdictional scale country certification in the world. Our forest carbon is the highest quality forest carbon in the world, because we’ve had 10 years of robust monitoring reporting, verification systems in place,” Jagdeo related.

He added: “And that is why it has such a great value. We managed to sell 30 per cent of that to Hess for a minimum of US$750 million. Because if the prices move as is traded for the secondary markets, we would be able to share the upside. So, this is potentially at US$2 billion dollars deal.

“[The remaining] 70 per cent of our credit. We have a number of people who are trying to buy those credits. We are a bit cautious now but soon we will enter the markets further. These credits are CORSIA certified, and CORSIA is a compliance market.”

CORSIA refers to the Carbon Offsetting and Reduction Scheme for International Aviation, a global scheme to address emissions from international air travel.

Agreed on in 2016 by the International Civil Aviation Organisation (ICAO), it obliges airlines to monitor and report their emissions from 2019 and to purchase emission reduction units, such as carbon credits, generated in other sectors, to cover any growth in CO2 emissions above 2020 levels from 2021.

In Guyana, funds garnered from environmental preservation measures such as carbon credits can be used to fund adaptation and mitigation measures to address climate change.

Guyana’s coast is highly affected by rising sea levels caused by global warming. So, the country is in great need of funding to put in place climate resilient infrastructure.

“The significant amount of funds required for adaptation is over maybe US$2 billion dollars just for flood control and water management, in Guyana’s case, which is our biggest vulnerability. Some of our climate funds will be used for that purpose. Some will come from the oil and gas industry.

“We can’t wait for climate funds or adaptations funds to come through the global mechanism. I think most country in the regions are waiting for that and it will be a long wait a hundred years. We don’t have time for that,” Jagdeo said.