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Carbon credits to help fund climate needs of oil-producing Guyana?

Guyana hopes to achieve net zero by 2050 and it believes that greater global recognition and support for its carbon credits venture and wider, its Low Carbon Development Strategy (LCDS), will help.

The country’s Vice President Dr. Bharrat Jagdeo has been at the forefront of Guyana’s international climate advocacy for years. For him, there isn’t just one solution for adapting to and mitigating the effects of the climate crisis.

“… what we are advocating (is) a menu approach to net zero that would see the target as a balance sheet rather than a fixed target with only one solution which is cutting fossil fuels,” Jagdeo said at a recent press conference.

He added, “We have mapped our national plan and our national climate strategy to align ourselves to a net zero target by 2050 and… we don’t have to alter any of our plans to do that.”

[Photo of Jagdeo: Vice President Dr. Bharrat Jagdeo engaging Toshaos about the carbon credits deal (News Room/ Vishani Ragobeer photo) –

He offered these comments when asked about the first-ever Global Stocktake which should be widely discussed at this year’s global climate talks, COP28. Stemming from the Stocktake will be discussions on the progress made to stop global warming and those focused on determining the next steps needed to meet global climate goals.

Already though, Jagdeo said matter-of-factly that the Stocktake shows that the world is not cutting enough emissions and there remains a huge need for greater climate financing.

So, for him, Guyana has to figure out how to protect itself while funding developing needs on its own terms.

But what’s Guyana’s national climate strategy?

The national strategy- or the LCDS as it is commonly called- is a framework intended to map Guyana’s robust economic growth, underpinned by developments in the offshore oil and gas sector, while maintaining low levels of harmful carbon emissions.

Its four interlinked objectives are: valuing ecosystem services, investing in clean energy and stimulating low carbon growth, protecting against climate change and biodiversity loss and aligning with global climate and biodiversity goals.

Through this strategy, the country thinks it will remain a carbon sink because of its 18.4 million hectares of intact forests- among the world’s highest national forest cover, second only to Suriname- even as it is set to produce more than one million barrels of oil by the end of the decade.

Production at the Payara project started on November 14, 2023. Production has not yet reached its full potential. Source: ExxonMobil production data

The forests help to trap the harmful gases released by burning fossil fuels, like those Guyana is now producing.

Jagdeo contends that even with 10 Floating Production Storage and Offloading (FPSO) vessels in the oil fields offshore, Guyana’s forests will still offset more emissions than they produce. So, Guyana is serious about its carbon credits and getting better prices for those credits internationally.

A US$750 million voluntary agreement with the Hess Corporation, one of the three coventurers currently operating in the lucrative offshore Stabroek Block, was signed last December. About 30% of all the available, ART TREES certified credits Guyana went to Hess for a period up to 2030.

Guyana isn’t stopping there. First, it wants better global recognition and better prices for its credits. And it is believed that COP28 is the best place for its advocacy in this regard.

The country’s President Dr. Irfaan Ali, in August, said Guyana and other Caribbean nations need billions of dollars to fund their climate adaptation and mitigation needs. Because promised international financing isn’t trickling down as needed. He says Guyana will lobby for a higher carbon credit price- ideally US$70 per tonne.

“How is it we can get the world to agree that the price for carbon credits, based on what we want to achieve, net zero, must be US$70? Are we willing to make that bold and important decision?” the Guyanese Head of State said during a conversation with Former United Kingdom Prime Minister Tony Blair.

And why is Guyana so keen on the carbon credits trade?

As per the LCDS, all proceeds from Guyana’s carbon credits venture have a specific purpose: helping the country adapt to the effects of climate change.

A huge focus is on beefing up defences against floods. This is a sore concern because a majority of the population lives and works on a low-lying coastal plain constantly threatened by the Atlantic Ocean and heavy rainfall. Major floods in 2005 and 2021 wiped out significant chunks of Guyana’s Gross Domestic Product (GDP).

With the carbon credits payments already secured, the government is building massive drainage and irrigation systems to help send excess water out into the ocean when needed. Jagdeo previously said about US$2 billion is needed to help protect the coastline.

Jagdeo also noted that Guyana needs much more money to create more climate-resilient agri-food systems if the country is to lead the regional effort of slashing the costly, annual food import bill by 25% by 2025.

Beyond those national priorities, a designated 15% of whatever money is earned from the sale of carbon credits has to go directly towards Indigenous communities. They will then use the funds for community development or livelihood projects.

Guyana’s Indigenous peoples are regarded as the custodians of the vast forests. A majority of the people who comprise the nine Indigenous groups in Guyana live in about 12% of Guyana’s forested area; this is why the Indigenous population, collectively, is getting the 15% allotment per carbon credit transaction.

But this is also where at least some concerns lie.

One Indigenous rights group, the Amerindian People’s Association (APA) believes that the nation’s first people and the custodians of the forest weren’t consulted enough and as such, the deal violates the United Nations (UN) declaration for Free Prior and Informed Consent (FPIC).

“This isn’t about stopping money from flowing or stopping the carbon deal. Our concerns have been about indigenous people not being properly consulted,” the APA’s Governance and Rights Coordinator, Laura George told Climate Tracker. 

Because of its concerns, the APA has been engaging the Architecture for REDD+ Transactions (ART) Secretariat- the body that issued the jurisdictional carbon credits to Guyana. The APA filed an appeal with the Secretariat but that appeal was withdrawn and the body, in a statement, accused the ART Secretariat of biases.

George said the APA is still open to engaging the Secretariat and the government because it just wants to see Indigenous people centrally involved in the makings of any deal that involves forests on Indigenous territory.

The Governance and Rights Coordinator, however, fears that the concerns raised may cause a rift among Indigenous people in Guyana if it hasn’t already. That rift, she explained, could possibly be between those who see the venture as a good one and those who have raised concerns with the APA about inadequate consultations.

Indeed, a different sentiment about the venture emanates from the National Toshaos Council (NTC), the body comprising Indigenous leaders (Toshaos) from all the Indigenous communities across the country.

The NTC Chairman and Toshao of the Moraikobai community, Derrick John said the lump sum being disbursed to communities is helping them implement much-needed projects.

Many of the projects include ventures that will boost tourism or agriculture activity in the communities. These are detailed in Village Improvement Plans, a prerequisite before any community could access any money.  John said the current implementation of these projects signals widespread support for the venture.

Concerns or support aside, as of November 2023, all 242 Indigenous communities tapped into the funds disbursed following Hess’ first payment earlier this year.

“None of the communities have so far responded in a negative way.”

“… I know that the APA wrote to the ART secretariat on two occasions asking for the funds- the disbursement- to pause but they were unsuccessful because they didn’t consult with communities before they wrote that,

– John told Climate Tracker

Concerns or support aside, as of November 2023, all 242 Indigenous communities tapped into the funds disbursed following Hess’ first payment earlier this year.

If Guyana is able to successfully lobby for higher carbon prices, it can then get more money for climate adaptation, to allocate to Indigenous communities and to help fund its mitigation plan of using cleaner sources of energy. COP28, it seems, is a crucial lobbying platform.


Picture of Vishani Ragobeer

Vishani Ragobeer

Vishani is a 22-year-old Guyanese journalist, with a special interest in science journalism. She is a Climate Tracker alum fellow, having reported on the COP26 climate negotiations. Vishani loves travelling, meeting new places and getting on top of high places.

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