Crooked Carbon Business: Architecture for REDD+ Transactions, Guyana
Far from solving the problems of REDD projects, jurisdictional REDD magnifies the problems.
A new briefing by Simon Counsell and Jutta Kill takes a detailed look at the Architecture for REDD+ Transactions (ART) programme in Guyana.1 The briefing can be downloaded here:
Formed in 2018, ART was supported by the Norwegian government’s International Forests and Climate Initiative and the Rockefeller Foundation among others.
ART describes itself a “standalone, independent program that develops and administers standardized procedures for crediting emission reductions and removals from national and large sub-national REDD+ programs”.
In 2020, ART published the first version of its standard, the REDD+ Environmental Excellence Standard (TREES). The scheme applies only to large jurisdictions, such as states, provinces, or entire countries.
The only carbon credits issued so far under the ART-TREES scheme are from Guyana — the country’s entire 18 million hectares of forests.
In December 2022, Aster Global Environment Services verified 33 million carbon credits for the period 2016 to 2020. The Norwegian government called it a “Historic breakthrough for the forest carbon market.”
In 2021, 7.1 million carbon credits were issued, and 8.7 million more in 2022.
Guyana’s fake credits
Under the ART-TREES system, Guyana doesn’t have to implement any new policies or actions. ART-TREES carbon credits are calculated against a baseline of previous years’ forest cover and loss.
Guyana is a “high forest, low deforestation” (HFLD) country. Countries with more than 50% forest cover and less than 0.5% annual deforestation are eligible to be considered an “HFLD country”.
HFLD jurisdictions can make an “adjustment” to the way the “crediting level” (baseline) is calculated. Instead of the baseline being the average rate of emissions from the forest over a five year period before the crediting period, an addition can be made to the baseline, based on the “HFLD score” and the amount of carbon stored in the forests. Credits issued under the HFLD methodology are based on the amount of carbon stored in the forest, rather than emission reductions.
A group of climate consultants and carbon traders calculated that, “Some 84% of the 33.5 mln jurisdictional ART/TREES credits issued for Guyana resulted from this HFLD adjustment.” Their diagram reveals the scale of the problem:
Guyana’s carbon credits were “created purely through accounting manipulations allowed under TREES,” Counsell and Kill write.
In the ten year period from 2011 to 2020, the Guyana Forest Commission claims that the country lost 107,000 hectares of forest. But according to Global Forest Watch, the country lost 150,000 hectares.
In 2024, deforestation in Guyana shot up. In 2024, the rate of primary forest loss increased to 64,400 hectares — well over three times the previous record, which was in 2023.
No free, prior informed consent
The Amerindian Peoples Association (APA), a Guyanese Indigenous Peoples organisation, argues that a proper process of free, prior and informed consent was not carried out before the ART-TREES programme started in Guyana. APA made a formal complaint to Winrock International, the organisation that runs to ART Secretariat.
The complaint was rejected. APA appealed, but was subsequently “forced to withdraw” the appeal.
Oil
Since 2015, oil corporations have made a series of massive oil discoveries off the coast of Guyana. The Stabroek oil field is being exploited by a consortium of ExxonMobil, Hess Corporation, and China’s CNOOC.
On 2 December 2022, Guyana’s president, Irfaan Ali, announced that Hess Corporation would pay US$750 million for 37.5 million of Guyana’s carbon credits.
Guyana’s vice-president Bharrat Jagdeo claims there is no contradiction between Guyana extracting fossil fuels and the country’s climate targets:
“We support net zero. We support early decarbonisation . . . but in countries like Guyana, we have to secure our funding to continue to make our contribution to global climate change objectives . . . developing the oil and gas sector can allow us to get the revenues to fund the billions of dollars of adaption needs.”
APA’s Nicholas Peters would disagree. At Climate Week 2024 in New York, Peters gave a presentation in which he said, “Another critical issue raised by the APA is the sale of carbon credits to an oil company, a move that raises contradictions within Guyana’s Low Carbon Development Strategy.”
Counsell and Kill compare the 33 million forest carbon credits generated under ART-TREES with the emissions that will result from burning the 11 billion barrels of oil in the Stabroek oil field which amount to somewhere between 3.3 billion and 5.5 billion tonnes of CO₂.
The authors conclude that jurisdictional REDD schemes “do not, as is often claimed, resolve the systemic flaws that best offsetting at a smaller, project, level”. Additionality, baselines, leakage, and accounting tricks remain serious problems, and under jurisdictional REDD they are at a far larger scale.
This is the first in a new collection of posts on REDD-Monitor under the headline “Crooked Carbon Business”. The posts are based on a series of briefings about carbon offset projects written by Simon Counsell and Jutta Kill.