Though many countries have agreed to protect and monetise forest services, Vice President Dr. Bharrat Jagdeo recently lamented that few have stepped up to put real action behind their words. In fact, the chief policy maker for Guyana’s oil sector said Hess Corporation has actually done more for forests than most countries.
During his participation at CERAWeek 2023, the official shared that Hess and Guyana had signed a historic agreement for the American oil explorer to purchase high-quality carbon credits for a minimum of US$750 million between 2022 and 2032. The agreement serves to provide capital that would be used to improve the lives of citizens through investments outlined in the Low Carbon Development Strategy (LCDS) 2030. The first payment for carbon credits valued at US$75 million was received from Hess in January 2023.
The Vice President was keen to note that Guyana is the only country in the world that has a jurisdictional scale certification of its forests which opens the door to numerous development opportunities for its people.
He said, “Hess has bought 30% of our credits for approximately [US$750 million], and that is a minimum because if it’s traded in secondary markets at a higher rate then we get to share some of the upside…but Hess is doing more for forests now than many countries.”
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Jagdeo said there are many countries that have gone to the United Nations (UN) Climate Change Conference and have tendered lectures on the preservation of forest. He said some have even signed memoranda of understanding towards this end but there was no real action taking place.
“You need to have the right incentives…and that’s the only way, in the long run, you’ll be able to preserve forests; not by philanthropy or anything else…You’ll never be able to achieve net zero without tackling forces and abatement solutions,” the Vice President said, adding that Guyana will soon share its experience on this front with Sri Lanka.
Thanks to the Hess deal, he said the company has helped to de-risk the nation’s carbon credits and set a new benchmark on prices. He said there is already heightened interest and lots of offers flowing in. Be that as it may, he said authorities are not buying into any of those at the moment as it is working on getting the most competitive deals for the country.
Preservation of forests globally is foundational to the Paris Agreement’s aim of limiting the world’s average temperature rise to well below 2°C. It was also one of the major commitments made at the COP26 climate summit, where more than 130 countries, including Guyana, pledged to end deforestation by 2030.
Guyana’s more than 18 million hectares of forests are estimated to store approximately 20 billion tonnes of carbon dioxide equivalent. Through the LCDS 2030, the country is aggressively implementing plans to preserve and monetize its forests, while growing its economy using a healthy mix of gas and renewable energy sources.