‘Hundreds of millions of US dollars’ could come from new plan to seek rainforest payments – Pres. Ali
The government is pursuing a new initiative that could see Guyana earning “hundreds of millions of US dollars” for keeping the rainforest intact, President Irfaan Ali announced on Wednesday.
It is known that Guyana has 18.4 million hectares of largely pristine forest, covering more than 87% of the country’s landmass. This gives the country the reputation of having the world’s second-largest percentage of rainforest cover and the second-highest carbon stock per capita globally.
“To advance our participation in the carbon market, we have signed a letter of intent with Emergent Finance Accelerated Inc., a US-based non-profit organisation, to sell our carbon credit through credit contract.
“This Agreement has the potential of earning us hundreds of millions of US dollars annually,” the President announced at a press conference at his State House, Georgetown residence on Wednesday.
Under a legally binding global climate change agreement, countries are allowed to emit a certain amount of greenhouse gases, which are harmful to the environment, in the operation of industries and other means. If they go over their limit, they can then then “trade” that carbon with a country such as Guyana which is way below its limit.
Since carbon dioxide is the principal greenhouse gas that harms the environment, it is tracked and traded like any other commodity, and hence the name carbon market.
Guyana’s total forest cover hold carbon in unusually high density (up to 350 tons/hectare) and store some 5.31 gigatons of carbon, which can be sold to countries which are above their emissions limited.
That amounts to approximately 6,638 tons/person, the second-highest forest carbon stock per capita of any country on earth.
The authorities have determined that Guyana’s enormous forest carbon stocks, together with other significant ecosystems services – including abundant fresh water and biodiversity- make it the ideal country to continue to test and refine the economic viability of the so-called REDD+ payment scheme under the United Nations Framework Convention on Climate Change.
Guyana has already reaped the benefits of such a scheme, signing a landmark agreement, under the then President Bharrat Jagdeo’s Low Carbon Development Strategy, with the Kingdom of Norway and earned US$250 million.
But with this new agreement, Emergent will act as an intermediary between Guyana and the global private sector for large-scale transactions.
Last week, Emergent announced the launch of Lowering Emissions by Accelerating Forest finance (LEAF) Coalition, which already includes Norway, the United Kingdom, the United States, and leading companies including Amazon, Airbnb, Bayer, Boston Consulting Group, GSK, McKinsey, Nestlé, Salesforce, and Unilever.
According to Emergent, participants in the Coalition will support high-quality emissions reduction from tropical and subtropical forest countries, enabling efforts to reduce and end deforestation.
Emergent will provide a platform to facilitate transactions and serve as the administrative coordinator of LEAF.
LEAF aims to expand to include support from additional countries and companies in the months ahead and the final list of governments and companies participating in this initiative, and the total financial support mobilised through the Coalition, will be announced when emissions reduction purchase agreements are signed with tropical forest countries by the end of the year.
President Ali said the expanded Low Carbon Development Strategy is the platform through which Guyana’s development pathway will be embedded and this was recently reinforced at a Commonwealth Heads of Government Americas, roundtable discussion which was hosted by HRH Prince Charles.
The roundtable discussed how to advance green recovery post-COVID, and initiatives to be taken for consideration at the 26th UN Climate Change Conference of the Parties (COP26) later this year.