The Tribune

• Trust chief: ‘It’s a long process’ to certify assets

• Backs calls for more direct Bahamian ownership

• And agrees: ‘We can’t afford to get this wrong’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior Bahamas National Trust (BNT) executive has warned this nation “won’t get a dollar from carbon credits for many years” as he backed calls for more direct local ownership in the fledgling industry.

Eric Carey, the BNT’s executive director, told Tribune Business in a recent interview that the process of identifying, verifying and certifying this nation’s various “carbon sinks” - chiefly its seagrass and mangrove assets - to determine their monetary value could take an unknown number of years to accomplish.

Estimates that this could require a $50m-$60m investment were not unrealistic, he added, revealing that the BNT is seeking to work with the Government to determine the potential value of The Bahamas’ national parks and Marine Protected Areas (MPAs) when it comes to sequestering carbon dioxide from the earth’s atmosphere.

And Mr Carey said he “absolutely” backs more direct Bahamian ownership in the entities being formed to fulfill the Davis administration’s carbon credit ambitions, given that the still-evolving sector is being “touted as a very lucrative” opportunity from both a career and investment perspective.

Pointing out that significant on-the-ground field work must be done before The Bahamas’ carbon trapping assets can be valued, and converted into a commodity, the BNT chief nevertheless told this newspaper that Bahamians should be “excited” that the Government is moving quickly to develop the regulatory framework for a potential new multi-million dollar industry.

Echoing Rochelle Newbold, the Government’s climate change adviser in the Prime Minister’s Office, Mr Carey said: “We cannot afford to get this wrong. We have to get this right.” Yet he cautioned that The Bahamas may have to be patient when it comes to realising the financial benefits from carbon credits.

“As has been said by everyone, there’s a process that takes a long time,” he told Tribune Business. “We have to identify our stocks. We have to go through verification and certification. We won’t get a dollar from carbon credits for many years. It’s a long process that requires sustained investment....

“It depends how quickly we proceed for the first 18-24 months. I don’t think that, until we’ve gone through that immediate period of a year-and-a-half to two years, we will be able to say whether it’s a three, four or five-year period. It will be determined by how difficult it is to map, find good sinks and get international verification. That’s the big question. It will take us the first year to two years to make that determination.”

Philip Davis QC, in unveiling legislation designed to regulate the trading of Bahamian carbon credits, indicated that the Government is hoping to move slightly quicker than the timeline outlined by Mr Carey as research has already been completed on “what is now considered to be the largest seagrass meadow in the world in Bahamian waters”.

The findings on that 5,000 square kilometre seagrass plot are due to be submitted to Vera, the environmental verification group, for certification of its potential blue carbon credit value. This process will ultimately convert such environmental assets into a commodity by monetising them.

The research on this plot was conducted by Beneath The Waves, which was founded in 2013 as a non-profit focused on Marine Protected Areas, threatened species, deep sea conservation and blue carbon, during a shark study in Bahamian waters. It has subsequently been awarded the management contract for Carbon Management Ltd, together with a 49 percent equity stake in the latter business that will oversee The Bahamas’ carbon market participation.

The Government and unspecified non-governmental organisations will hold the remaining 49 percent and 2 percent equity stakes, respectively, in Carbon Management Ltd, but Opposition MPs have argued that there should be more direct Bahamian ownership in this entity along the lines of the collective 20 percent stake that local retail investors have in Arawak Port Development Company (APD).

Backing such calls, Mr Carey said: “I would say there should be broad Bahamian ownership. The Government is saying that the Bahamian benefit is going to come through the investment in the sovereign wealth fund [which will initially own the carbon credits].

“That is admirable, but I would hope that either for this company or other companies that come along there may be opportunities for Bahamian ownership. If this business is financially rewarding and viable, as we are being advised, there’s no reason why more Bahamians shouldn’t be involved...

“If you ask me if I think there should be opportunities for Bahamians, I think absolutely, yes. These are our resources. There’s no reason why either in this company [Carbon Management] or, hopefully, there will be other companies where Bahamians could participate in ownership in what is touted to be a very lucrative industry.”

The Trust chief, adding that The Bahamas has “fairly robust” ecosystems that act as carbon sinks, said: “What the BNT is going to be exploring is opportunities for getting carbon sequestered in these areas that we’ve done a phenomenal job of protecting. 

“We’re working with the Government to establish methodologies to get the carbon sinks in our national parks and Marine Protected Areas assessed and valued, and becoming part of the carbon stocks we trade. We’re still looking at working with a partner.”

Mr Carey said “you’re looking at a $50m investment over a multi-year period” to identify, verify and assess carbon credit potential in the areas managed and overseen by the Bahamas National Trust - a figure that is in line with the sum that Mr Davis asserted Carbon Management will have to raise to finance its own mapping exercise.

Carbon credits are viewed as a “bridge to a net-zero future”, and the reduction - if not elimination - of greenhouse gas emissions to levels agreed by countries in international treaties. High carbon-emitting countries and companies will buy The Bahamas’ carbon credits to enable them to temporarily exceed present emissions restrictions while compensating this nation for its role in cleaning up the earth’s garbage by removing carbon dioxide from the atmosphere.

The revenues generated would be used to enhance The Bahamas’ environmental assets, and shore up their protection, while any surplus income could be used for other means such as paying down the $11.8bn national debt or eliminating the fiscal deficit.