The Guyanese Government has distributed US$22M to over 200 Indigenous communities in recognition of the role they play in protecting the forests and maintaining the hinterland ecosystems from the country’s historic sale of certified carbon credits. Guyana’s forest is hailed as a carbon sink with more than 87 percent of the landmass—18.4 million hectares — remaining uninhabited. The country’s forest, according to experts, stores approximately 20 billion tonnes of Co2 equivalent. The country’s carbon credit sale has been in motion since 2007 and is now being realised in its expanded 2030 Low-Carbon Development (LCD) vision.
First Carbon Credit deal
When the government first announced that it would be tapping into the carbon credit market, it pledged that 15% of every carbon credit sale will go towards the development of indigenous communities. Hess Corporation, one of the partners in Guyana’s lucrative offshore oil block, on December 2nd 2021 announced the purchase of carbon credits here. The payment from Hess, a mega emitter, for their carbon emissions will be utilised to enhance community lifestyles by supporting infrastructure and sustainable projects, thus promoting climate justice. Indigenous communities in Guyana have been at the forefront of the climate impacts despite being a carbon-negative emitter.
Throughout the years, these communities which are located miles away from the capital of Georgetown, have faced severe flooding and droughts. The phenomenon has placed his villages in a tough place with their food security being threatened as a result of unpredictable weather. In February, 241 communities received between US$47,000 and US$165,000. Bharrat Jagdeo, the Vice President of Guyana, explained that the population size of each community was used to determine the number of money a community receives. This formula was used after consultations with the National Toshaos Council (NTC) and regional organisations. The remaining 85% of the funds from the carbon credit sale will support climate mitigation and adaptation measures, which indigenous communities will also benefit from. Guyana earned US $750 million for the sale of carbon credits between 2022 and 2032.
In a bid to support transparency and accountability in the effective management of the fund to allow all indigenous people to benefit, communities are required to set up a special bank account to fund projects identified and agreed to by the community.
“Although we’re putting the money in your account, you cannot draw down this money until you give it to your finance committee and you complete your village development plan. You have to complete that, and that plan must be done by the village, would have to have an endorsement by the village and you’ll have to share with us the minutes of the meeting in which the village endorses the plan,” Jagdeo told the leaders.
But while the government is being praised for achievement, the payout has attracted heavy criticism from environmental and indigenous rights activists over the carbon credit deal. There is a call for indigenous communities to receive a higher percentage and calls for better negotiation with indigenous groups in compliance with the UN declaration of Free Prior and Informed Consent (FPIC). The deposit of US$75 million as the first payment represents: US$37.5 million for 2.5 million ART-TREES credits from 2016 at a price of US$15/tonne of CO2e; and US$37.5 million for 2.5 million ART-TREES credits from 2017 at a price of US$15/tonne of CO2e. Jagdeo disclosed that the current disbursement of funds is from the sale of 30 percent of the total certified credits sold. The indigenous communities he added stand to benefit from the future sale of the remaining 70 per cent of credits.
“Of the US$700 million in the next 10 years, the Amerindian communities will be entitled to a US$112.5 million or $23.6 billion, which is what your share is of only 30 per cent. Remember when we sell more, if we sell the other 70 per cent, you are going to get 15 percent of that too. So, it will run into a significant sum of money, over US$300 million you’ll be getting from that alone, if we get the same terms,” Jagdeo announced to a room full of indigenous leaders.
More funds in the future
During the engagement with the local indigenous leaders, the former Guyanese president explained that the carbon credits sector has the potential to become a US$ 4 to 5 billion dollar sector for Guyana. With all 100% of the credits sold, he stated that Guyana can earn approximately US$ 2 billion. At the announcement of the sale agreement, Guyana’s President Irfaan Ali underscored the country’s commitment to fighting climate change. He emphasised on the commitment against the backdrop of curiosity from the international community on the country’s nascent oil and gas sector.
“We are committed to playing our part in this global environment. We are committed to playing our part in climate change, in providing energy security and we are equally committed to the social and economic transformation of our country and our people. And to do this, we are committed to the oil and gas sector, ensuring that we optimise the totality of benefits in this sector and bring to fuel the transformation that is required for our country. In doing so, we know how important time is,” President Ali elaborated at the signing of the deal.
This story was originally published by Island Press Box, with the support of the Caribbean Climate Justice Journalism Fellowship, which is a joint venture between Climate Tracker and Open Society Foundations.