Guyana is to sell US$750 million carbon offsets to Hess Corporation, a US-based oil corporation that is extracting oil in Guyana. The saga of false solutions to the climate crisis continues
Guyana is to sell US$750 million carbon offsets to Hess Corporation, a US-based oil corporation that is extracting oil in Guyana. The saga of false solutions to the climate crisis continues
Since 2015, oil corporations have made more than 30 oil discoveries in the Stabroek exploration block off the coast of Guyana. Currently the Stabroek block is producing 360,000 barrels a day, a figure that the oil corporations hope will, by 2030, reach one million barrels.
The 2.6 million hectare Stabroek block is owned by: Esso Exploration and Production Guyana Limited (an affiliate of ExxonMobil), which owns 45% interest in the block; Hess Guyana Exploration holds 30% interest, and China’s CNOOC Petroleum Guyana holds 25% interest.
Obviously, burning the estimated 11 billion barrels of fossil fuel in the Stabroek block will exacerbate the climate crisis.
Guyana and the oil corporations drilling for oil in the country are promoting a false solution to this inconvenient truth: carbon offsets.
US$750 million of carbon offsets
Last week, Guyana’s President Irfaan Ali announced that the US-based company Hess Corporation would buy 2.5 million carbon offsets every year from 2016 to 2030. Hess Corporation is incorporated in the tax haven of Delaware.
Guyana stands to make a total of US$750 million from the deal.
President Ali said that,
“This has not happened by accident, it took hard work, long hours and strong commitment. And as we have said before, our commitment to climate change and to work towards environmental issues and protecting the forest as the main tool in addressing climate change is beyond question.”
Which is funny, coming from a country that is currently exploiting one of the largest oil discoveries in recent years. And which is doing practically nothing to protect its forests.
ART TREES
Guyana’s carbon offsets have been generated through the Architecture for REDD+ Transactions scheme under its The REDD+ Environmental Excellence Standard (TREES).
On 1 December 2022, Architecture for REDD+ Transactions announced that it had “issued the world’s first TREES credits to Guyana”.
In total, ART has issued 33.47 million carbon offsets to Guyana for the period 2016 to 2020. The offsets are registered on ART’s public registry.
Guyana expects to receive US$187 million for offsets from the period 2016 to 2020. For the next five years, the country anticipates receiving US$250 million, and a further US$350 million for 2025 to 2030.
Out of the total of more than US$750 million, Indigenous communities will receive US$112 million, or 15% of the deal.
Jagdeo: “Truly transformative”
Bharrat Jagdeo, Vice President of Guyana said,
“It is truly transformative and it moves us closer to two objectives that we were working on for 15 years, where the world will value more forest carbon and we’ll move closer to a compliance market, even now with this major deal we hope that the voluntary market, the prices would go up in the voluntary market were hovering at some abysmally low levels and this one major deal will have global resonance and make a major change.”
This comment is typical of Jagdeo, who has been trying to cash in on the carbon stored in Guyana’s forests since 2009 – without actually doing anything much to protect those forests.
The threats to Guyana’s forests are still present. In February 2022, President Ali said that logging in the country could more than double:
“We can sustainably harvest one million cubic metres per year, at present we harvest 400,000 cubic metres valued at US$80 million a year. The sector presents opportunities for large scale downstream processing, prefab housing, prime value added species for niche markets, partnering with environmental services, reforestation programmes and forest plantation, all linked to new emerging and potential markets.”
Net zero means not zero
Jagdeo claims that Guyana is already a “net zero” country. He sees no contradiction between oil extraction and “net zero”.
“The big challenge has been,” he said in August 2021 at a meeting at the US-based think tank, the Baker Institute, “whether we can become an oil producer and still maintain our environmental credentials and continue to advocate globally for a zero carbon economy. And we believe the answer is yes.”
But while Guyana’s forests should certainly be protected, and Guyana’s Indigenous communities should be supported, carbon trading as a method of funding is accelerating the climate crisis and is a dangerous distraction from the need to leave fossil fuels in the ground.