$100M set aside from carbon credits’ sales to fund more projects in hinterland communities – VP

…says village leaders free to accept or reject allocated funds

More communities are increasingly seeking to participate in the programme that provides funding from the sale of Guyana’s carbon credits. To accommodate these requests, the government has announced that $100 million from this innovative initiative will be allocated directly to the communities.
Under the People’s Progressive Party/Civic (PPP/C) Government’s sale of carbon credits to Hess Corporation, it was initially agreed that 15 per cent of proceeds would go to indigenous communities. Last year, a total of 242 communities benefitted from these funds, based on the village development plans they submitted.
On day two of the National Toshaos Conference at the Arthur Chung Conference Center (ACCC) on Tuesday, Vice President Bharrat Jagdeo announced that even more communities, including some that are not necessarily fully Amerindian, want to opt in to the programme. He explained that hinterland villages and Community Development Councils (CDC) have approached the government seeking funding.
“We have 242 villages that benefitted last year. And, you know, over 800 projects have been done. This year, we have a number of CDC’s that have applied. We decided that we will stick with the 242 villages, but we’ll set aside another $100 million for those communities that are now coming and have asked to be part of it.”
“Some of them are not villages. They’re run by CDC’s and some are not fully Amerindian, but they will get small grants. So, we want to be fair. But we did not want to dilute the amount that you will get or what you got last year for the 242 villages,” Jagdeo explained.
For 2024, the government has already decided to increase the indigenous people’s share of the carbon credit sales, to 26 per cent. This fact, according to Jagdeo, is in addition to the government’s intentions of spending significant sums from their own share, on projects that will also benefit the indigenous community.
“This year, we have about (US$87.5 million), the second tranche. And you would have been eligible for $2.7 billion, for this year’s distribution. The President graciously agreed to increase this so we reduce the government’s amount that we were gonna use for adaptation measures and a lot of them back into Amerindian communities too.”
“The remaining 85 per cent would be spent all across Guyana, including Amerindian communities. But we decided that 15 per cent will go directly to the villages and the villages will decide how they spend the money. The President increased it to $4.8 billion,” the Vice President further explained.
Free to accept/reject
Meanwhile, the vice president also told village leaders that they have the option to either accept or reject the funds allocated to them from the carbon credits sale.
“Any Toshao, who believes that this programme is not serving your people and your community, is free to opt out,” he said, adding “we give you that chance to opt out; you are free not to take it. The money can easily be reallocated to the villages that want it.”
Last year, Guyana received a total of US$150 million, from which a total of 242 indigenous villages benefitted from US$22.5 million. Hess Corporation, which is one of the partners operating in the Stabroek Block offshore Guyana, had agreed to buy 2.5 million credits per year for the period 2016 and 2032, valuing US$750 million.
The deal with Hess came on the heels of Guyana being the first country to receive a certification of more than 33 million carbon credits by the Architecture for REDD+ Transactions (ART) on December 1, 2022.
However, while the deal is for 10 years, that is, 2022 to 2032, the government was able to negotiate, as part of the sale agreement, for the oil major to also purchase some 12.5 million carbon credits from the period 2016 to 2020 – referred to as “legacy credit”.
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 credit will be put on the market for future sale agreements.
For the period 2021 to 2025 in the Hess deal, Guyana’s carbon credits would be sold for US$20 per tonne, thus earning the country another US$250 million; while another US$312 million is expected during the 2025-2030 period when the credits would be sold at US$25 per tonne.
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 nations that have low emissions such as Guyana. (G3)