Is Jagdeo’s bubble about to burst?

Dec 25, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – Despite the presence of the acclaimed Champion of the Earth at COP 28 – the annual United Nations Conference on climate change – there was, to put it mildly, little progress in respect of advancing forest carbon markets.

If the truth were to be told, there is a creeping indifference developing towards the commodification of forest carbon. As part of this commodification, carbon credits are produced and sold.

In the case of Guyana, they are sold in what is known as voluntary markets. Jagdeo’s hopes of trading forest carbon in the compliance market were dashed at COP 28.

The voluntary carbon trading market is now facing a crisis. The fear is that much of the forest carbon credits traded in this market are ‘phantom’ credits and do not actually represent any cuts in emissions. Their conclusion is based on the math used in calculating these carbon credits and the suspected overestimation of deforestation reductions.

The capacity of voluntary markets to significantly alter global warming is now also being called into question. As one recent UN report stated, “Neither the price currently paid for forest carbon nor the volume of REDD+ transactions in carbon markets is in line with the goal of the Paris Agreement to keep global temperature increase below 1.50C.”

Carbon offsets are also facing a crisis of legitimacy. One of the ways in which countries and companies cancel out their polluting emissions is through what is known as carbon offsets. Instead of reducing their own emissions, these countries and companies pay for reducing emissions elsewhere.

The vulgarity of carbon offsets has been compared to a man seeking to lose weight. But instead of losing the required weight, he simply pays another man to lose weight and he buys that as a credit for himself.

This is what passes for carbon offsets. Countries and firms pay other countries to reduce emissions and then they use these offsets to reach the targets which they are required to do in their countries.

One of the arguments against carbon-offsets is that they do not reduce emissions. All they do is cancel out one set of emissions with an offset.

One form of offsets is the forest protection scheme. This is what Guyana is seeking to capitalize on. Under this arrangement, companies and countries pay other countries such as Guyana to keep its forests intact or to replant forests. The offsetting country is paid for this service.

A great deal of controversy now surrounds these carbon-offset schemes. Apart from the overstating of reduced deforestation, there have been concerns that these schemes end up harming indigenous peoples. These two push backs are affecting the legitimacy and integrity of carbon offsetting schemes.

Guyana had been hoping for greater progress during COP 29 on carbon credit trading. But that progress was not forthcoming.

If, as some are predicting, the voluntary forest carbon credit markets collapse, it will represent a major blow to Jagdeo’s plans to leverage Guyana’s high forest cover to obtain financing through the sale of forest carbon credits. If the forest carbon markets collapse, it will bring an ignominious end to the international career of Bharrat Jagdeo.

Jagdeo has championed two issues regionally and internationally: climate change and food security. Incidentally these are two issues on which President Ali pledges to make Guyana a global leader.  If voluntary carbon markets collapse, it would mean that these two platforms would have collapsed.

COP 28 saw a subtle shift.  Instead of a stronger focus on monetization of forest carbon, the emphasis is now on preserving and protecting forests. Eighteen countries endorsed a Joint Statement on Climate, Nature and People. Surprisingly, Guyana was not among those 18 countries. Jagdeo should offer an explanation as to why Guyana did not endorse this statement.

The Statement on Climate, Nature and People speaks more to the scaling of finance and investment for climate and nature. But this can hardly be the reason for Guyana not endorsing the statement since Guyana has been advocating for more financing for climate adaptation.

With the World Bank getting into the act through its Forest Carbon Partnership Facility, Guyana may now face a further backlash in terms of more rigorous standards for avoided deforestation. Fifteen countries have signed on to an arrangement that would allow them to earn income from carbon credits generated from preserving their forests. Guyana is not among those fifteen countries, and for good reason.

The new arrangements being put in place under that existing facility has the potential to affect Guyana’s forest carbon credit sales because of the anticipated higher standards and relatively lower prices for carbon. The World Bank has already signaled that the credits must be unique, real, additional, permanent, and measurable.

Jagdeo may be facing his Waterloo – a climate Waterloo.  The ground beneath his feet appears unsteady.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• Champion, COP 28, earth, Peeping Tom, progress

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