Jagdeo disappointed with non-advancement on carbon markets at COP28

…says forests are not museum piece, countries should benefit from preservation efforts

Vice President Dr Bharrat Jagdeo has expressed disappointment over the failure of talks on advancing carbon trading mechanisms at the recently concluded COP28 in Dubai.
Article 6 of the Paris Agreement sets out the principles for carbon markets. Article 6.2 caters for bilateral or multilateral emissions trading agreements between countries, while Article 6.4 outlines the creation of a global carbon market overseen by a United Nations (UN) entity.
It was expected that countries would further develop rules to govern these markets at COP28. Following days of intense discussions, however, countries failed to agree on the key principles to trade carbon offsets bilaterally. The marathon negotiations collapsed after two opposing sides, one pushing for carbon markets to be available as soon as possible with virtually no restrictions, and the other pushing for integrity and transparency to be upheld, failed to come to a consensus. This failure to advance Article 6 now leaves discussions to resume at the next UN climate summit.
Vice President Jagdeo underscored that while Guyana will not be affected, this delay will have major setbacks for forested countries that were hoping to broker new deals under the much-anticipated global UN-sanctioned market.
“We’re disappointed that Article 6, which dealt with carbon markets, did not make any advancement… We thought that advancing the carbon markets will create greater incentives for countries that are forested, to ensure that they can raise money through the market mechanism to outcompete alternate use, and therefore preserve their forest without taking away their forest as a development tool in the arsenal of these countries, because people live in the forest, they earn from the forest. The forests are not museum pieces for anybody in the northern part of our world, and we had a setback on that,” the VP contended.
Jagdeo, who during his presidency was labelled as one of the “Heroes of the Environment” in 2008, and given the “Champion of the Earth” award in 2010, was crucial in crafting Guyana’s Low Carbon Development Strategy (LCDS), and was the driving force behind the country’s historic carbon credits deal with Norway.
In 2009, Guyana signed a historic forest protection accord with Norway which saw the heavily forested South American nation receiving payments for sustaining its rainforests to absorb global carbon emissions. Guyana earned some US$220 million from this five-year deal.
According to Jagdeo, Guyana has been pushing for a market-based mechanism to aid forested countries since 2007. However, he noted that the Global North was unprepared to put up the money at the time, hence Guyana embarked on its own path through its LCDS to sell its forest carbon to Norway.
That agreement came to an end in 2015 with failure by the previous Coalition Government to have it renewed.
Nevertheless, when the current People’s Progressive Party/Civic (PPP/C) Administration returned to office in 2020, it expanded the LCDS and sought certification of some 33.7 million carbon credits from the Architecture for REDD+ Transactions (ART) on December 1, 2022.
The Guyana Government subsequently signed a historic multi-year agreement for the sale of its certified carbon credits to United States energy major Hess Corporation to the tune of US$750 million.
The 33.7 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 Guyana’s carbon credit will be put on the market for future sale agreements.
According to VP Jagdeo, Guyana lucked out with this Hess deal, and will not be majorly affected by the COP28 delays, but the same cannot be said for other forested countries that were banking on the successful outcome of those discussions.
“Because of the non-movement in Article 6, those countries — unfortunately, a lot of very good countries that have good policies in Africa surrounding the forests, who have preserved their forests — they will not get that financing at magnitude like we got; because we struck out on our own, but they are working within the framework of the UN system, and unfortunately, [the failed talks] would delay these countries getting the resources which they should get because they perform a service [with] their forest to the global community.
“And so, we’re very, very disappointed that this would not happen, not so much from our perspective, because we’ll continue doing our work in the voluntary markets. That’s what we’ve done, but right now you have no compliance market… But I’m very sad because you have some really great practices in a lot of countries, particularly in Africa… and they deserve to get the payments now, but they will not get it because of what happened there [at COP28],” Jagdeo stressed.
There are two categories of carbon offset markets in which carbon credits are traded: the voluntary carbon market, and the compliance carbon market. In the voluntary carbon offset market, organisations or countries in Guyana’s case create carbon credits by lowering their own greenhouse gas emissions and sell to other organisations or countries that have high emission levels.
With the compliance market, however, there are certain caps on emission levels set by governments and other regulators as a means of achieving carbon reduction targets. This market is also known as the cap-and-trade, and similarly allows organisations that emit less to sell to high emitters; but this is driven by legal mandate.