By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has “the ability to be first out the gate” in the Caribbean, and earn a potential multi-million dollar boost from the climate change fight, through legislation tabled in Parliament yesterday.

Eric Carey, the Bahamas National Trust’s (BNT) executive director, told Tribune Business that the Climate Change and Carbon Markets Bill enables this nation “to lead from the front” in developing a legal and financial framework to regulate the potential trading of its carbon credits.

Prime Minister Philip Davis QC, tabling the Bill for its first reading in the House of Assembly, said the legislation would allow The Bahamas to benefit from its natural resources - chiefly mangroves, seagrass, coral reefs and forests - that act as a “carbon sink” by removing this gas from the earth’s atmosphere.

The Davis administration, ever since it took office, has been exploring how to monetise these assets and generate a potentially lucrative revenue stream that could finance the preservation, restoration and conservation of these ecosystems with any surplus helping to narrow The Bahamas’ annual fiscal deficits.

Aiming to exploit the outcome from the COP26 climate change conference, where participating countries agreed rules on global carbon market co-operation, the Prime Minister said these now allow countries to trade carbon credits - and sell excess ones - as a means to reduce harmful emissions and minimise climate change impacts.

“The Bahamas has significant resources that, with conservation and restoration, can remove carbon from the earth’s atmosphere,” Mr Davis said. “The sale of carbon credits can aid the country in further protecting our seagrasses, mangroves, forests, and coral reefs. This means high carbon-emitting countries could buy credits from us, compensating us for the role our country can play as a carbon sink and reducing the overall total amount of carbon being emitted.”

Suggesting that The Bahamas has a 28-year window in which to benefit from carbon credit trading, given that all nations have committed to become net zero emitters by 2050, Mr Davis said a sizeable voluntary carbon credit market already exists among eco-conscious companies.

With 20 percent of the world’s largest 2,000 publicly-traded companies having pledged themselves to achieve a net zero emissions target, the Prime Minister added: “The provision of Bahamian carbon credits would prove of mutual benefit for our country and these private sector entities. The first step is to map out, scientifically, the mangroves, seagrasses and forests that we have that are functioning or could function as a carbon sink....

“While this mapping and verification process is taking place, we need to set up the legal and financial frameworks that can ensure that any resulting carbon credits are managed in the best interests of the Bahamian people. That is the goal of the legislation we lay before the House today.”

He continued: “By participating in and benefiting from the trade of carbon credits, The Bahamas will not be standing idly by, hoping that the rest of the world does right by us. This Bill will encourage us to positively engage with high carbon emitting countries and companies. This Bill will ensure that the financial benefits arising from the trade in carbon credits will be well-regulated, well-run and well-managed.

“And, in aligning with best practices established by the international agreements of which we are a part, this Bill will even further enhance the standing and reputation of The Bahamas as a good place to do business.”

Before The Bahamas can participate in the carbon market, it must first undergo a multi-year process to establish the necessary framework for accurately valuing the nation’s carbon credit potential, then have this verified and internationally certified so trading can occur.

This is what Mr Davis alluded to with his reference to “mapping”. The Bill tabled yesterday gives the Prime Minister “overall general oversight” of how it will be administered, with the minister of finance responsible for the financial elements. it permits the Government to hire an independent, private sector company with the necessary environmental and management expertise to manage The Bahamas’ carbon credit trading.

An Advisory Council on the trading and management of carbon assets will also be created, with The Bahamas having three trading options - transactions with another country via a bilateral or multi-country mechanism; transactions directly with a private sector entity; or transactions in the “voluntary carbon market”. The latter two mechanisms require Cabinet approval.

A National Emissions Registry is also to be created, and the Bill features provisions that prevent so-called “double counting” - where countries and companies count the same emission reductions twice. “This Act prohibits the trade of carbon offsets without a reliable and independent auditor undertaking a validation of each project before it starts and to verify each result,” the legislation adds.

Mr Carey, who acknowledged he had not read the Bill but watched its House of Assembly tabling, described the move as “very positive” and “very proactive” for The Bahamas. He added that Senator Ryan Pinder, the attorney general, had promised him “a couple of months ago” that the legislation would be tabled in Parliament shortly, adding that this had been achieved ahead of schedule.

“There is a lot of work to be done,” the BNT chief told Tribune Business. “This is really the beginning, but the Government is certainly signalling that this is a pretty strong start. This is also, I think, important and strategic from a regional perspective. 

“I think this puts The Bahamas ahead of many other countries in the Caribbean with respect to the legal and policy framework put in place. We have the ability to lead from the front, be first out of the gate and, if we verify our stocks, we will be ahead of other countries still trying to verify their strategy and legislation.”

Mr Carey said it would likely take the BNT some two to three years to “get everything verified properly” from a carbon credit perspective in the areas it manages, namely the national parks and Marine Protected Areas (MPAs). “We’re still looking to work with partners, both locally and internationally, to make sure we have the resources and expertise to guide us towards making sure we can take advantage of the window still open to The Bahamas for carbon trading,” he added.

“Anyone who looks at what we do as a country, we definitely have a favourable advantage because we’re not a net emitter. Across our archipelago we have a small carbon footprint. Many of the southern islands, and islands like Andros, do not have a large carbon footprint and when we’re able to verify the carbon we have for trading we’re in a very favourable position because of the net positive position The Bahamas is in.”

Mr Carey said estimates of how much The Bahamas can potentially earn from carbon credit trading are all “speculative” until the mapping, verification (valuation) and certification of this nation’s carbon stocks is completed. “People have been speculating in the hundreds of millions, and some people have speculated more than $1bn,” he added. “That is still all very speculative, and won’t be determined until we finalise the mapping.”