$360M approved to offset cost of validating new forest payment venture 

Guyana, in a historic move, has been able to secure payments for its forest saving efforts and the Parliamentary Committee of Supply on Monday approved $360 million in supplementary funding requested by the government to validate the new venture. 

Minister of Natural Resources Vickram Bharrat told the National Assembly that the government is in need of additional resources to pay the verification fees to the Architecture for REDD+ Transactions (ART).

“In order for countries to sell carbon credits, it must be validated, it must be checked. 

“Otherwise, we cannot put it into the market… nobody will buy carbon credits if it is not verified,” Minister Bharrat explained. 

This supplementary funding will cater specifically to the payments Guyana will be getting for the period 2016 to 2020. 

Already, Guyana brokered a degree with the US oil giant Hess Corporation for the sale of 30 per cent of its carbon credits. Through that deal, Guyana expects some US$187.5 million (GY$39.2 billion) for the 216 to 2020 legacy period. 

ART is a global initiative that seeks to incentivize governments to reduce emissions from deforestation and forest degradation (REDD), as well as restore forests and protect intact forests. 

And ART is the body the government has chosen to assess and verify Guyana’s forests. With that done, a total of 33.47 million credits, known specifically as REDD+ Environmental Excellence Standard (TREES) credits- are available to buyers. Hess is Guyana’s first buyer. 

For context, a carbon credit is a kind of tradeable permit or certificate that represents the removal of a certain amount of carbon dioxide from the environment. 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.

What Guyana is hoping to do, as it did before with Norway, is sell these credits to countries or companies. This would essentially mean that the countries or companies would pay Guyana to keep its forests intact.

Overall, the government is seeking parliamentary approval for another $47 billion in supplementary funding to offset the costs it incurred by agreeing to absorb the increase in electricity rates and other much-needed works such as the completion of roads and bridges.

Members of the National Assembly are considering this request on Monday.