SAO PAULO, (Reuters) – In its race to be the first country to sell carbon credits under a new Paris Agreement scheme, Suriname has set a price of $30 per credit in a bid to raise $144 million, the country’s environment minister told Reuters yesterday.
The sale would bring much-needed resources to help fight deforestation in a country 93% covered in forests, said Marciano Dasai, Suriname’s Minister of Spatial Planning and Environment.
“This is just the beginning. This will be a basis for protecting our forest,” Dasai said.
Reuters exclusively reported last month that Suriname planned to be first to sell the Paris Agreement credits known as internationally transferred mitigation outcomes, or ITMOs.
The 2015 Paris Agreement provides for international trading of reductions in greenhouse gas emissions, with companies or countries able to buy the reductions as credits to offset their own emissions.
But countries only agreed to a carbon trading rulebook in United Nations climate talks in December 2021, with trading yet to begin.
Suriname’s forest credits are generated using a baseline it registers with the United Nations stating how much carbon stock its forest contains. If the country protects its forest so the carbon stock rises, every additional metric ton of carbon dioxide absorbed can be packaged as one carbon credit.
The proceeds of the sale would go toward employing local workers to patrol the forest, providing an alternative to illegal logging and gold mining, Dasai said.
The country would also build flood-resistant infrastructure on the coast and help adapt agriculture to cope with extreme rainfall events, he said.
The price of $30 per credit is high compared to the so-called voluntary carbon market, where different registries set their own standards. Companies have grown wary of buying from private initiatives in the voluntary market after studies found several projects failed to deliver promised climate contributions.
Voluntary credits backed by “nature-based solutions,” such as forest protection, peaked in January 2022 at $15.75 on the Xpansiv, the world’s largest spot market, but have since fallen to around $3.
Dasai said that the fact that ITMOs follow United Nations standards and be endorsed by national governments merits the premium.
The minister said Suriname is in talks with both companies and countries to potentially buy the credits, but he declined to name interested parties.
Carbon credits are just one mechanism to finance the fight against climate change and the proceeds of the potential sale would not be much compared to the billions of dollars in climate finance promised by rich countries and needed to fight climate change, he said.
Dasai said he hopes other rainforest nations can follow their lead in selling ITMO carbon credits to unlock the necessary financing.
“We can lessen deforestation, that will contribute to the world because we will absorb all the CO2 the world is producing,” Dasai said.
“And if all the rainforest nations can do this, we have less of a problem concerning CO2.”
