AS a result of an agreement signed in December between the Guyanese government and Hess Corporation, the country’s first carbon credits, which have been in the works for a long time, have earned and transformed lives. Between 2022 and 2032, Hess has committed to buying 37.5 million carbon credits from Guyana for a minimum of US$750 million.

According to Vice President Bharrat Jagdeo, as this is a long-term agreement, if the credits appreciate in value when they are traded on secondary markets, the arrangement might actually generate considerably more money than that. The carbon stored by trees can be valued through issuing forest carbon credits by independent verification agencies. Businesses that produce greenhouse gases can offset their emissions by purchasing these tradable credits. One metric ton of carbon emissions that have been decreased, prevented, or sequestered is represented as one carbon credit.

Speaking at the International Energy Conference and Expo Guyana that was held in February, Dr. Jagdeo said that 15 per cent of the proceeds from Guyana’s carbon credits will go directly to Amerindian villages in the country’s hinterland, “recognising the stewardship role they’ve played over forests.”

At that time, he mentioned that he will meet with the leaders of 242 villages and that the government will allocate a total of US$22.5 million to Amerindian villages out of the first US$150 million payment. At his recently held press conference on July 27, 2023, Dr. Jagdeo conveyed that following the setting up of individual village bank accounts, and disbursement of the funds to these accounts, as of July 2023, 220 villages have already submitted village plans and have commenced implementation of livelihood and economic activities that the villages have determined that they need for development.

At the press conference, Vice President Jagdeo stated that the agreement with Hess accounted for 30 per cent of Guyana’s internationally recognised carbon credits and that the government may enter into similar deals of this nature in the future. He asserted Guyana plays a significant role in absorbing carbon from the atmosphere because about 90% of the nation is covered in forests.

“We’re making our contribution to the global fight against climate change, but we are monetising these resources and reutilising these resources for the development of our country,” he said.

An estimated 18 million hectares of mainly intact forests are found in Guyana, a country that is a part of the Amazon Basin. This is a bigger area that is the size of England and Scotland combined. According to Government estimates, these forests store approximately 20 billion tons of carbon dioxide and sequester close to 154 million tons of CO2 from the atmosphere each year.

President Dr. Irfaan Ali has also emphasised the need for the international community to advance in understanding the potential of carbon storage and biodiversity. According to him, “This is visionary, proactive, sustainable, and it catalyzes the value of our natural resources.” President Ali added that the agreement is consistent with Guyana’s Low Carbon Development Strategy 2030, which he said he hoped would become “a global model on sustainability.”

Vice President Jagdeo, who presided over Guyana from 1999 to 2011, stated during a panel discussion at the most recent energy conference that his nation began looking into the potential of payment for forest preservation in 2007.
“We thought, what if we were to deploy our forests in the fight against climate change? Would there be enough global incentives to allow us to outcompete alternate uses for the forests?”

He stated that although some would argue against any tree cutting, it is a reality that people rely on the forests for life.
“So clearly, we had to find a balanced approach that would allow people to continue to have a decent livelihood using the forest, but at the same time preserve these forests, because if we don’t, we’d never achieve net zero,” Dr. Jagdeo said. (Deforestation and land degradation account for about 16% of the world’s greenhouse gas emissions, he added.)
“That’s the only sustainable way to approach forests,” Dr. Jagdeo noted.

Guyana sought a bilateral partner to demonstrate the idea, and in 2009 it signed a contract with Norway. According to the Low Carbon Development Strategy, Guyana received more than $220 million in payments from Norway under that agreement for forest climate services from 2009 to 2015.

A “robust” monitoring, reporting, and verification system for forest carbon was established in Guyana during that time period, according to Dr. Jagdeo, laying the foundation for international certification.
Through a global project known as the Architecture for REDD+ Transactions (ART), Guyana became the first nation in the world to be granted so-called TREES credits in December. “Reducing emissions from deforestation and forest degradation in developing countries, and the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks” is how the United Nations defines REDD+, a strategy for mitigating climate change.

The REDD+ Environmental Excellence Standard is known by the acronym TREES.
According to Frances Seymour, Chair of the ART board of directors, the awarding of carbon credits to Guyana acknowledges the success of the nation in preserving its forests.

“Guyana is the first to complete the ART process for generating high-integrity, Paris Agreement-aligned carbon credits that will allow the country to access market-based finance to continue to implement forest stewardship strategies,” she said in a press release.