Gov’t drafting carbon credit exchange law

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Government is developing legislation to establish a carbon credit exchange in The Bahamas to further boost its ambitions to make this nation “a global centre” for the emerging industry.

Ryan Pinder, the attorney general, told the Senate during his Budget debate contribution that his office is working on the Carbon Exchange Bill 2022. He added: “To advance the monetisation of carbon credits, we will be bringing to Parliament specially-drafted legislation to establish a carbon credit exchange in The Bahamas.

“The desire is to create a regulated framework that will establish The Bahamas as the regional, and hopefully the global, centre for the trade in carbon credits. We will participate in the vertically integrated carbon credit marketplace. The Bahamas a leader in the world on this issue.

As for the “monetisation” itself, Mr Pinder added: “We are also working to ensure that our efforts in blue carbon credits can start to be monetised this 2022-2023 fiscal year. We are on track to start our scientific verification exercises and monetisation of our blue carbon credits.”

These credits will be entered into a databan until they are ready to be monetised. The Government has already identified $300m in coastal assets it is seeking to offer on the carbon market. The Climate Change and Carbon Market Incentives Bill tabled in April was the first step in securing a carbon credit payment system for the country.

Mr Pinder said: “The development of a leadership position in carbon credits is not merely to provide a framework for revenues to the Government, but it creates a new industry that will be vertically integrated and will present opportunities for Bahamians to participate in every element of the new frontier.

“Bahamian scientists will be trained in the technical components identifying blue carbon sequestration, Bahamian financial services professionals will have opportunities in the new capital markets created. The leadership position of The Bahamas in this area will positively contribute to economic diversification.”

The global carbon credit market focuses primarily on “green” carbon credits that are tied to forests and grasslands. The Bahamas aims to be one of the first countries to begin selling ocean “blue” based credits.

Elsewhere, Mr Pinder said The Bahamas plans to overhaul its aggregate mining regulatory framework given the extensive fill that is generated by marina excavation and other activities. “A long overdue piece of regulatory reform has to do with mining of natural resources in The Bahamas. The approach now is an industry-led approach without a modern regulatory envelope to ensure best international standards are being followed in natural resources mining,” he added.

“We are a country where there is foreign direct investment in real estate development projects; many of these require mining. We also have commercial aggregate mining. We will be presenting an international best practice benchmarked legislation to oversee mining in The Bahamas, another fulfillment of” the Davis administration’s election manifesto.

As for efforts to bring The Bahamas into full 100 percent compliance with global anti-money laundering standards, Mr Pinder said: “Over years spanning multiple administrations, The Bahamas has fought to be compliant in international financial regulation, so much so that there has been concern raised across multiple quarters about over-regulation and resulting challenges of doing business.

“It’s a difficult balance. The fact is The Bahamas always must punch above its weight in this new era of international regulation. Recognising this, when we debated in April, I updated the Senate that The Bahamas now is compliant or largely compliant in 38 of the 40 recommendations [set by the Financial Task Force] and removed from the EU grey list a couple months prior.

“Since that time, I am pleased to advise the timely submission of our re-rating of the final two of the 40 recommendations - recommendation eight, addressing not-for-profits, and recommendation 15, addressing the effective regulation and supervision/monitoring of virtual asset services providers.

“This required some legislative amendments on financial services’ not-for-profit and digital asset legislation... We hope that come the plenary in the fall that our submissions will be favourably considered and we will be compliant or largely compliant in 40 of the 40 FATF recommendations.”