…Govt commits to transparent management of carbon credit funds
The Architecture for REDD+ Transactions (ART), which is in charge of certifying forest carbon credits so that they can be sold on the international market, has announced its approval of Guyana’s registration for 2021 to 2025, as well as the monitoring report for Guyana’s forests.
In a statement on Friday, ART noted that it approved these two documents for Guyana and that they are now available for stakeholder comments which must be submitted within 30 days. The first document is a TREES (The REDD+ Environmental Excellence Standard) registration document for 2021 to 2025, while the second is a TREES monitoring report for 2021.
Hess Corp became the first purchaser of Guyana’s 2016-2020 legacy carbon last year
“The approval of these documents indicates their completeness and the programme’s eligibility to move forward with independent validation and verification by an accredited verification body. Following successful validation and verification, the ART board may approve the issuance of serialised TREES credits to Guyana,” ART announced in their statement.
ART’s approval of Guyana’s 2021-2025 registration document and monitoring report are important follow ups on its approval last year of 33.47 million forest carbon credits for Guyana, dating from 2016-2020. These credits were verified by a third-party against ART’s robust environmental and social requirements.
The People’s Progressive Party/Civic (PPP/C) Government has said that having carbon credits from 2016 to 2020 certified, was intended to ensure Guyana does not lose out on retroactive payments for the period when A Partnership for National Unity/Alliance For Change (APNU/AFC) were in power and failed to capitalise on the potential of Guyana’s forest carbon.
Earnings
During a pre-budget interview, Vice President Bharrat Jagdeo spoke about the Government’s approach to forest carbon and the process they went through. Guyana is currently earning money from the 2016-2020 legacy carbon.
“We worked early, as soon as we got back in (to office), to get our forest carbon certified. Now that’s a rigorous process. And we’re the only country (to do this). It’s a great achievement, to have a jurisdictional scale, national scale, certification for forest carbon in the whole world,” Jagdeo said.
“And some of this now, can be used by the airlines for the compliance markets. So that is why people wanted to buy our forest carbon. Because it’s offered at US$15 a tonne, for vintage carbon. That’s legacy carbon from 2016 to 2020. So, the period that has passed, we’re still getting paid for that.”
He pointed out that this will then increase to US$20 a tonne, from 2020 to 2025 and US$25 a tonne in the future. Additionally, there’s the benefit of Guyana getting a percentage if someone purchases the carbon to sell at a profit. All things considered, Jagdeo noted that significant money will flow into the treasury from the forest carbon.
“So that has brought in a significant and will bring in a significant amount of money to the treasury. At a minimum, US$700 million for just 30 per cent of our forest carbon. We still have 70 per cent that we can sell in the future,” Jagdeo added.
Transparency
Meanwhile, the Government sent out a statement on Saturday in which they emphasised that transparency is at the heart of all transactions concerning Guyana’s carbon credits. This comes only a short while after it was announced that US$150 million in carbon credit earnings would be available for use in the 2023 national budget.
It also comes after reports in the media painted this announcement in an unflattering light. In their statement, the Ministry of Finance lambasted any implication that the money is not being handled in a transparent manner, noting that the PPP/C Government has always been upfront in how the earnings from forest carbon would be used.
“Forest carbon revenues and the approach being applied represent every facet of a transparent and legally underpinned process for the allocation and utilisation of carbon credits revenues using Guyana’s national system for doing so – the National Budgetary Process,” the Ministry said in their statement.
“It also represents a stark contrast to the very recent practices of the previous Administration where the signing bonus on OIL CONTRACTS were not declared and hidden away, subject to no scrutiny or financial structure, understood to be a gift by some, devoid of any recognition of legal requirements such as the national budgetary process and parliamentary oversight.”
The Ministry noted that following feedback received from the Guyanese public for the draft Low Carbon Development Strategy (LCDS) 2030 during seven months of consultations, a commitment was made for all forest carbon financing to be publicly declared, transparently administered, and legally scrutinised.
“Any view that seeks to distort or falsely represent the facts surrounding the structures that have been publicly communicated, legally grounded and anchored by transparency and accountability provisions of our Fiscal Management and Accountability Act including the work of our Public Account Committee with the deliberate intent to mislead the public… is disingenuous and dangerous,” the Ministry further added.
Last year, Guyana signed a historic, multi-year US$750 million agreement with Hess Corporation for the purchase of 37.5 million carbon credits. Guyana is, in fact, the first country to conclude the ART process of certifying its forest carbon.
These serialised credits, listed on ART’s public registry, are available to buyers on the global carbon market, including for use by airlines for compliance with the International Civil Aviation Organisation’s global emission reduction programme, CORSIA, as well as for use toward voluntary corporate climate commitments.
Guyana’s completion of the ART process paved the way for other governments that are looking to receive carbon market finance for success in protecting and restoring forests. At the time Guyana was issued with the credits, 14 other countries and large sub-national jurisdictions are working toward their own issuances of TREES credits.
