A Guyanese Amerindian village of about 1,200 residents heard from the government that they were allocated GYD $35 million (approximately US$166,000) to spend on their development. All they had to do was decide on the capital projects, and the implementation would begin.
Moraikobai, situated in southern Region Five, is the district’s only Amerindian village. Its predominantly Arawak residents primarily engage in logging, fishing, and farming. But the leaders of this village are about to revolutionise tourism, attracting more visitors and catalysing its economic growth.
Moraikobai’s village council has initiated six interconnected tourism projects, the government reported. These include the purchase of a pick-up truck for tourist transport, a canoe for creek paddling, bicycles for excursions, and camp gear. Additionally, Moraikobai’s Toshao, Derrick John, said construction is nearly complete on a kitchen and dining area for comfortable culinary experiences, and work is underway on two eco-cabins to supplement the Ubudee Eco-Lodge, which was commissioned in 2021. The village will also use some of the money to develop an ‘Ubudee’ website for bookings.
Agricultural projects are also a focus to enhance food security. John said the village has started a 10-acre cassava cultivation project, which is doing well despite heavy rains impacting watermelon crops. Plans include a cassava milling and packaging facility, pineapple cultivation, a shade house for affordable seedlings, and rearing 500 broilers in a new pen for the local market, with potential for regional expansion. Challenges, such as unusually dry conditions, had delayed these agricultural programmes, necessitating the purchase of water pumps. Despite these challenges, the village is eager to proceed, with drainage work underway due to recent rains.
John is also the chairperson of the National Toshaos’ Council, which represents Amerindian leaders across the country. He has lauded the government for the allocation. “We’re really excited about this project,” he said.
Moraikobai is just one of 248 Amerindian villages to benefit from government allocations and the right to self-determination about how to develop their villages.
How did this happen?
In December 2022, American oil company Hess signed a deal with the Guyana government for the purchase of 37.5 million of Guyana’s carbon credits for at least US$750 million. The payments are set to be made in tranches over the period 2022–2032.
The government intends to set aside 15% of the proceeds from the sale of its credits for the country’s indigenous Amerindians. Of the US$750 million expected from the deal with Hess, Amerindian communities are expected to receive US$112.5 million. As of June 2024, Guyana had already received US$187.5 million from the deal with Hess.
Senior Director for Climate and REDD+ at Guyana’s Ministry of Natural Resources, Pradeepa Bholanath, said US$22.5 million (GY$4.74 billion), equivalent to the amounts received by the end of 2023, has been paid to 242 Amerindian villages so far. “Over 800 projects are in implementation by villages in food security, income generation activities in low-carbon sectors, and social upliftment activities,” Bholanath said.
With US$562.5 million expected in the future, Amerindian communities are on course to benefit from another US$84.375 million in direct funds for their development.
What makes carbon credits so valuable?
More than 80% of Guyana’s land mass is covered in forests, making it one of the most highly forested countries in the world. The government said the country’s forests, numbering more than 18 million hectares, store over 19.5 gigatonnes of carbon dioxide (CO2). Government data shows Guyana is a standout performer with its extremely low deforestation rates.
Guyana had received payments from Norway for conserving its forests. Following the 2020 election, the new government launched the Low Carbon Development Strategy 2030—a strategy for the sustainable development of the country for the decade ending in 2030, including a plan to offer others an opportunity to pay for its forest conservation. The government decided to apply to Architecture for REDD+ Transactions (ART) to get its credits certified.
The organisation ART manages a comprehensive framework designed to incentivize and facilitate the Reducing Emissions from Deforestation and Forest Degradation (REDD). REDD+ is a framework created by the United Nations to guide activities in the forest sector that achieve these means. ART reviewed Guyana’s proposal and issued 33.47 million TREES credits to Guyana on December 2, 2022. TREES stands for ‘The REDD+ Environmental Excellence Standard’. The credits issued were for the five-year period 2016–2020, called legacy credits. These serialised credits, listed on ART’s public registry, became available to buyers on the global carbon market, including for use towards voluntary corporate climate commitments. Hess announced its purchase deal with Guyana just a day later.
ART said Guyana was the first country to be issued carbon credits specifically designed for the voluntary and compliant carbon markets for successfully preventing forest loss and degradation. It noted that endorsement for the government to sell credits from Guyana’s indigenous lands was given by the National Toshaos’ Council, an organisation comprising the elected leaders of the Amerindian villages in Guyana.
But why would an oil company purchase carbon credits?
As part of companies’ Corporate Social Responsibility (CSR), they have to show that they care about the communities they operate in, from both social and environmental perspectives. Guyana’s President, Dr. Irfaan Ali, said that Guyana is forfeiting tremendous economic potential by leaving its forests standing. The government said in its LCDS 2030 that the forests’ ecosystem services provide an estimated US$40–54 billion in value to the world annually.
When he signed the US$750 million deal with Guyana, Chief Executive Officer of Hess Corporation, John Hess, said, “We admire the efforts that Guyana has undertaken for years to protect the country’s forests and the government’s constant emphasis on practical solutions to climate change and strong focus on providing a global model for stopping deforestation and preserving forests.”
People, governments, and companies also purchase carbon credits to meet sustainability commitments by “offsetting” their emissions. Typically, each carbon credit represents the reduction or removal of one metric tonne of carbon dioxide equivalent (CO2e) from the atmosphere. The Norwegian government procures carbon credits to meet its ambitious emissions reduction goals. American singer-songwriter Taylor Swift purchases carbon credits to offset the emissions from her frequent private jet usage.
When it comes to the Hess deal, the credits from Guyana over the 10 years would ‘offset’ the company’s emissions for multiple years. Hess reports its annual Scope 1 and 2 greenhouse gas emissions (GHG) i.e. emissions from energy it generates and energy it purchases and consumes. The company reported its 2022 toll as being approximately 3.9 million tonnes. That means the 37.5 million credits Hess will purchase from Guyana represent an ‘offset’ of nearly ten times the emissions it generated in 2022.
A growing part of the American oil company’s business is in Guyana, which explains why it made a deal to purchase the credits from that government. Hess is partnered with American oil major ExxonMobil and Chinese state oil company CNOOC as stakeholders in a massive venture offshore, collectively producing about 630,000 barrels of oil per day (bpd). The partners are expected to increase their oil production capacity offshore Guyana to 1.3 million bpd by 2027. A seventh project is in the application stage and could lift that number to 1.5 million bpd once it is approved and brought to production. ExxonMobil also continues to explore offshore Guyana to add to the 11 billion barrels of oil and gas resources it has already discovered.
In the fourth quarter of 2023, American oil major Chevron announced that it would acquire Hess Corporation. However, Guyana’s Vice President, Bharrat Jagdeo, said the government received assurances that the Hess deal to purchase Guyana’s credits would not be affected.
Guyana’s carbon credit scheme has not gone without controversy.
One non-governmental organisation, the Amerindian Peoples Association (APA), protested the certification of Guyana’s credits, arguing that the country’s indigenous people had not been adequately consulted.
The APA said that the government submitted its proposal for carbon credit certification to ART in December 2020 without any prior consultation with Indigenous peoples and their communities. “It proposed to sell carbon credits generated from all forests in the country, including forests on Indigenous peoples’ traditional lands, some of which are titled under national law,” the APA said in a February 2024 report, in collaboration with the Forest Peoples Programme and Rainforest Foundation US.
The report said that while the government held information-sharing sessions regarding LCDS 2030 with communities, it did not consult with indigenous peoples within the meaning of international human rights law. It said that though the National Toshaos Council endorsed the carbon credit scheme, the Council does not have the authority to give consent on behalf of indigenous peoples.
The APA said it filed a complaint with ART’s grievance mechanism in March, arguing that its programme requirements had not been met, including concerns about the validation and verification process for the Guyana government’s proposal for the certification of the credits. ART reviewed the complaint and concluded that its processes were above board. An appeal of this decision by the APA was dismissed in November 2023 on procedural grounds.
In February 2024, ART announced that it had issued 7.14 million ‘vintage’ carbon credits to Guyana for the year 2021. It said the credits are the first of their kind, eligible for use by airlines towards their targets in the 2024–2026 phase of a global emission reduction scheme led by the International Civil Aviation Organisation (ICAO).
ART is expected to continue to certify and issue more of Guyana’s credits.
The eco-tourism initiatives in Moraikobai exemplify a community-driven approach to climate justice. By utilizing funds from carbon credits sold to Hess, the village has empowered itself to pursue sustainable development. This initiative highlights how indigenous communities can leverage global climate finance mechanisms to secure economic opportunities while preserving their environment. The projects in Moraikobai, such as eco-cabins and cassava cultivation, not only foster economic growth but also reinforce food security and environmental stewardship. This model of development ensures that the benefits of climate action are equitably distributed, supporting both the ecological and cultural resilience of indigenous populations.
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This story was originally published by the Guyana Standard, with the support of the Caribbean Climate Justice Journalism Fellowship, which is a joint venture between Climate Tracker and Open Society Foundations.
