$23.5B from carbon credit sales will go to Indigenous communities – VP Jagdeo

– says communities will determine how to use money based on village development plans

Over the duration of Guyana’s 10-year agreement with Hess Corporation for the purchase of 37.5 million credits, Indigenous communities will receive 15 per cent or $23 billion, which they will spend according to their village development plans.
This was explained by Vice President Bharrat Jagdeo, during a recent press conference during which he pointed out that the National Toshaos Council (NTC), comprised of elected Indigenous leaders, has been the primary interlocuter between the State and the Indigenous people.
“We’re so pleased that the Indigenous communities worked on this… the National Toshaos Council is the primary interlocutor with the Government. At that meeting, a resolution was passed that they wanted this to go forward. And they said that the 15 per cent will go directly to Amerindian communities,” he said.
The Government’s Low Carbon Development Strategy (LCDS) 2030 sets out that 15 per cent of all revenues from forest carbon markets, will be dedicated to Amerindian communities who choose to opt-in and produce their own Village Sustainability Plans.
According to Jagdeo, it is envisioned that this money will make a big difference in the lives of the Indigenous people since these communities have been working on their village development plans for a long time. He noted that the Indigenous people will make their decisions on what they want to be funded from these plans.
“There would be more money going, but through other things. For example, if we have to do a project on addressing drought in the Rupununi. That would be funded from other sources. The 15 per cent goes directly to the Indigenous communities. They will determine its use.”
“Over the period, $23 billion will go to the Indigenous communities. Based on the payments in two weeks’ time, you will have $2.4 billion that will be ready to go to the Amerindian communities immediately. Their 15 per cent share in a couple weeks’ time, will be equivalent to $2.4 billion,” the Vice President further explained.
Only recently, Guyana inked a historic, multi-year agreement for the sale of high-quality carbon credits to United States energy major, Hess Corporation, to the tune of a whopping US$750 million – the 1st payment from which is expected by Dec 15, 2022.
Addressing stakeholders at the packed Baridi Benab, President Dr Irfaan Ali had pointed out that Guyana continues to take the lead globally on the forest and carbon credit fronts. The Head of State had disclosed that this historic agreement will see Hess Corp, which is one of the partners operating in the Stabroek Block offshore Guyana, buying 2.5 million credits per year for the period 2016 and 2032, valuing US$750 million.
However, it was explained that while the deal is for a 10-year period, 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”.
This deal came on the heels of Guyana being the first country to receive a certification of over 33 million carbon credits by the Architecture for REDD+ Transactions (ART) on December 1, 2022. That issuance of the REDD+ jurisdictional carbon credits paved the way for the signing of the sale agreement by Hess Corp Chief Executive Officer, John Hess, and Permanent Secretary of the Office of the President, Abena Moore, at State House.
Unlike the arrangements with the Norway deal, payments from this Hess agreement go directly into the Treasury as revenue but will be placed in a separate account for auditing and parliamentary accountability purposes as well as to allow for easy access to financing.
The 37.5 million credits being sold to Hess Corp is just 30 per cent of the carbon sink contained in Guyana’s vast forest cover. 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 carbon credit will be put on the market for future sale agreements.
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. development plans