Dear Editor,
I am having fun!
Two distinguished Guyanese scholars, namely, Professor Janette Bulkan and Professor Andre Brandli, having been challenged by this author on an erroneous claim that the sale of carbon credit is illegal and fraudulent, have now changed their arguments.
In his letter published in the Wednesday’s edition of the Stabroek News dated July 12, 2023, Prof. Brandli joined Prof. Bulkan in a 360-degree shift from the legality of the carbon credit deal to whether it’s the best deal that the Government could have brokered.

For this, I would like to commend the Editor of Stabroek News for assigning an appropriate caption to his letter, obviously from following the debate between myself and the two esteemed scholars; wherein, the caption states “the position that Government of Guyana is acting illegally by selling carbon credits of titled Amerindian villages remain uncontested”.

Most notably, when a Professor of Professor Brandli’s caliber presents “assumptions” or “speculations” as facts, it becomes worrying. I am referring specifically to the last paragraph in his letter under a subheading that reads “the facts”, and I quote:
“The question however arises whether the Government of Guyana could not have obtained a far better deal for the carbon credits on offer and subsequently sold to Hess Corporation in December 2022? Why was no international auction of the carbon credits carried out and sold to the highest bidder? The government’s approach leading to the sale of carbon credits to Hess Corporation was untransparent and did not allow for other interested parties to participate. In other words, did the Ali administration sell Guyana’s natural resources under price?”

Editor, the above assertion by the distinguished Prof. Brandli, which he, in no uncertain terms claimed are the facts, are in fact, not factual. So, what are the facts? Hereunder stated, I present to you the facts of the matter.
First, the notion that the carbon credit transaction with Hess Corporation was done in an “untransparent” manner is inaccurate. There was a request for proposal (RFP) by the government which was published in the Stabroek News edition of March 1, 2022, see link here: https://www.stabroeknews.com/2022/03/01/news/guyana/govt-invites-proposals-for-carbon-credits-transactions/.

The RFP was posted on the Low Carbon Development Strategy (LCDS) website with a deadline for submission on March 14, 2022. So, the process was transparent, and Hess Corporation presented a proposal with the most favorable terms.
Second, did the Government broker the best deal with Hess? The short answer is yes.

Hess purchased 2.5 million credits every year from 2016-2030. The phases of payment and price levels are as follows:
 Hess will pay US$75M before the end of this year 2022.
 Hess will pay for all the 2016 to 2020 credits (Legacy Credits) that they have purchased within the next 18 months.
 Total payments for all legacy credits will be at a minimum: US$187.5M
 Payment for 2021 to 2025 credits will be at a minimum: US$250M
 Payment for 2026 to 2030 credits will be at a minimum: US$312.5M
TOTAL minimum payment for the contract for 37.5M ART TREES Forestry Credits to be paid over 2022 to 2032 is US$750M.
 Hess will pay a minimum price for 2016 to 2020 credits (a total of 12.5M credits) at a unit price of US$15 per ton.
 Hess will pay a minimum price for 2021 to 2025 credits (a total of 12.5M credits) at a unit price of US$20 per ton.
 Hess will pay a minimum price for 2026 to 2030 credits (a total of 12.5M credits) at a unit price of US$25 per ton.

Guyana’s share of upside:
If prices go above a respective floor price for that year as specified under Price Levels above, Hess will pay Guyana 60 per cent of the price difference of that year’s credits at the higher market price, and the floor price under contract. The benchmark to be used, will be comparative market index or Guyana’s other carbon market transactions.

How do we know that this is the best deal? Well it’s simple. In 2021, carbon credit price per ton was trading at US$12.70 per metric ton. According to the deal brokered by the government with Hess, for the period 2016-2020 and 2021, Guyana is earning, minimum US$15 and US$20 per ton, respectively. So, the minimum Guyana is earning is above the market price carbon credit was trading at per ton in 2021.

The current carbon price is US$30 per metric ton. And current credit levels are US$35/ton and US$50/ton for use and storage respectively, according to a Bloomberg report. The new projected levels are US$60/ton and US$85/ton, respectively.
This means that, pursuant to the terms of the purchase agreement with Hess Corporation and the Government of Guyana, Guyana is likely to gain more from the upside arrangement as mentioned above.

In relation to Prof. Brandli’s other contentions, I would like to point him to my most recent response to Prof. Bulkan where I addressed those other concerns he raised.
Editor, in closing, if this is not the best deal for the country, can Professor Brandli advice the Government what better deal than the terms described above that he is capable of arranging for the country?
Yours respectfully,
Joel Bhagwandin