Prime Minister Philip Davis is hoping the placement of Bahamian blue carbon assets on the voluntary markets this year will generate four times more than the initial $350 million to $400 million unsolicited offers government got when it announced it would take on the venture.
The Davis administration passed the Carbon Trading Bill, 2022 in July ahead of the planned December listing of the world’s first blue carbon credits on carbon markets.
The country’s carbon assets are currently before multinational environmental verification group VERA (Verification of environmental technologies for agricultural production), which Davis said is the final step before the credits can be priced and issued.
“Let me put it this way. Once the word got out that we were pursuing monetizing carbon credits, I had unsolicited offers to buy them, with numbers ranging from $350 million to $400 million. So for me to have had that, it tells me it’s probably four times that. And that’s only dealing with one aspect of it,” Davis said in an interview with Bloomberg News in New York yesterday, which was shared with local media.
The government has engaged a private, Bahamas-based firm, Carbon Management Ltd., to manage the sale of carbon credits in the secondary markets. The government would get 85 percent of potential revenue.
This, the prime minister said yesterday, is just one approach his administration is taking to meet financing needs as it refrains from international borrowing over the short term.
“I’m acutely aware of our debt situation, I think we are managing it well. I am also looking at it two ways, I’m impressing upon the industrialized nations that it’s time for them to pay and if the international community can get together and say we should be held accountable for what’s happening with these countries and we’ll deal with the loss and damages, most of our debt is a result of loss and damages accumulated over many, many years. If they look at that and look at how they can assist with debt forgiveness and/or grants,” he said.
“Myself, I’m not waiting for the international community. I am looking at ways and means to see how I can help myself, and what I have come to realize from the scientific studies that have been made known to me that The Bahamas has one of the biggest carbon sinks in the world, spread over 100,000 square miles, so why don’t I identify my carbon assets and trade them?”
Since gaining office, Davis has rallied behind a message that The Bahamas and other small island developing states (SIDS) have suffered the most due to climate change perpetuated largely in part by large, industrialized nations. He has said time and time again that it is time for them to pay for the damage they have caused to the global environment, which has led to stronger natural disasters that disproportionately affect SIDS.
In recent months, global regulators have said SIDS, though they contribute significantly less greenhouse gases, must also do their part in reducing carbon emissions.
“Conventional wisdom has it that solar is now the cheapest means of producing energy. It’s dropped by almost 90 percent in cost and value from 2009 and I would like to do that. But I don’t have the resources to do that. And when you talk about this alternative financing, it’s still a debt. So, when you talk about debt sustainability ratio, how that’s impacted, do we need to rethink that in the context of small island developing states? We need to move to alternative energy, I would like to do that. But as we speak a hurricane has just brushed one of my islands, Mayaguana, and as we speak there’s another one behind barreling towards The Bahamas,” Davis said.
“So, I move to put up solar panels and we’re hit by a hurricane – and it isn’t whether, we will get hit – so I have to be prepared to respond, for recovery and getting people’s lives back to normal. That’s going to cost. So I have those choices to make. I’d like to put up solar panels tomorrow, but for me to do that I have to add more debt onto the existing challenges of debt, and I have to continue to understand the economic outlook for my country.”
He continued, “It could look like debt forgiveness, or we have to find a way to make these industrialized countries accountable for what we have had. What you must remember is most people are now talking about mitigation and adaptation, loss and damage is still not making its way to the agenda. And when you look at mitigation you’re talking about reducing carbon emissions, when you talk about adaptation you’re talking about building for resilience and being able to adapt. But what you have to realize is there is still a lot of carbon in the air. It’s not enough to reduce our emissions. There’s still a lot of carbon in the air that has to be sucked out it.”
