Pursuant to Guyana’s extended Low Carbon Development Strategy (LCDS), Indigenous communities will receive GYD$28 million of the revenues obtained by the Government for the sale of carbon credits to Hess Corporation.
Within the next 18 months, it is anticipated that Guyana will accumulate US$187 million from the sale of 30% of its ‘legacy’ carbon credits to Hess Corporation from 2016 to 2020. The company has agreed to purchase 2.5 million carbon credits annually at a cost of US$15 per tonne. The oil giant has also pledged to buy carbon credits beyond the legacy period from 2016 to 2020, all the way to 2032 at a minimum of US$750 million.
Vice President, Dr. Bharrat Jagdeo during the signing of the sales agreement on Friday said that 15% of the profit will go towards the development of the indigenous communities across Guyana.
“We made a commitment that 15% of all of the proceeds from any sale of forest carbon will go to Amerindian communities,” Jadgeo announced. He said that this move is in keeping with the commitments the Government made during the National Toshaos Conference that forested and non-forested Amerindian communities will benefit in an equitable manner.
He pointed out that while the credits are being sold at a minimum of US$750 million dollars, the agreement outlines that should the market prices increase, Guyana will retain 60% of the upside costs.
Jagedo further divulged that the 33.47 million carbon credits Guyana received from Architecture for Reducing Emissions from Deforestation and Degradation (REDD+) Transactions (ART) are valuable and part of the global compliance market.
The Vice President reiterated that Guyana is still on track in achieving its climate change objectives. He said even though the country has ten Floating, Production, Storage and Offloading (FPSOs) operating offshore, Guyana is still carbon negative.
The Government has promised to reduce emissions in the energy sector by 70%.