Suriname First to Sell Carbon Credits Under Paris Agreement
Mt. Voltzburg in Suriname (Flickr)
Suriname is the first country ready to sell internationally transferred mitigation outcomes (ITMOs)—also known as carbon credits—under the Paris Agreement of 2015, announced Kevin Conrad, executive director of the Coalition of Rainforest Nations, in a September 14 interview with Reuters. The outcome of this carbon credit system will provide the first signal as to whether the Paris Agreement can be deemed a success in combating climate change and ensuring global temperatures do not rise more than 1.5°C.
The Paris Agreement is a “legally binding international treaty on climate change” adopted by 196 countries at the United Nations Climate Change Conference in 2015. Unlike previous climate treaties, such as the Kyoto Protocol, where decisions were made through a top-down approach and agreements “managed by a strong multilateral institution and based on legally binding commitments,” the Paris Agreement uses a bottom-up procedure where each country submits nationally determined contributions (NDCs) subject to revision every five years.
Suriname intends to utilize the program under Article 6.2 of the Paris Agreement, which “allows countries to trade emission reductions and removals with one another through bilateral or multilateral agreements.” According to the Carbon Herald, Suriname is an ideal candidate to sell carbon credits, as the country has been carbon negative since 2014, meaning that “any global warming gasses it does produce, are offset by natural resources which absorb those gasses.” Suriname’s success is largely due to the fact that 93% of the nation is covered in dense forest and is known as a high forest cover and low deforestation, or HFLD, country.
The UN claims that the ITMOs are a “cost-effective pathway to decarbonization of sustainable economic development.” Marciano Dasai, Suriname’s Minister of Spatial Planning and Environment, has an ambitious goal of raising $144 million through the carbon credit system by selling each credit for a relatively high price of $30, in comparison to the voluntary carbon market, where credits tend to be cheaper since they are unable to be used in compliance markets.
Carbon credits are determined by each additional metric ton of CO2 absorbed. According to the UN REDD+ program, “Suriname has registered an emission reduction of 4.8 million metric tons of CO2 for 2021,” which gives the country 4.8 million carbon credits, as each ton is equivalent to one credit.
With the $144 million dollar revenue, Dasai hopes to finance programs that go toward sustainable development and climate change initiatives, such as employing local workers to patrol the forests as a secure alternative to illegal logging or gold mining. The proceeds from the sale would also fund flood-resistant infrastructure to help adapt agricultural activity to the onset of extreme rainfall.
Critics of the carbon credit system argue that the UN-issued credits may not reflect “authentic efforts to lessen gas emissions,” as the credits do not undergo the same level of scrutiny as those issued by independent, voluntary carbon markets. Additionally, once a country submits their emissions reductions, they can only be reviewed, not rejected, by independent experts, lowering the credibility and effectiveness of the ITMOs.
Proponents of this system state, however, that although technicalities are yet to be resolved, trade regulations are laid out for the sale of carbon credits.
If Suriname is successful in its sale, Honduras and Belize are set to sell 10 million credits each in 2024. Suriname’s sale indicates that the Paris Agreement is a step in the right direction toward mitigating climate change effects and rising global warming temperatures at an international level.
At COP28 this December, all countries, including Suriname, will meet to restate their climate goals and provide updates to their NDCs. Suriname’s proactive lead in the carbon credit system will hopefully be fruitful and yield a successful sale during the conference. To read Suriname’s 2021 revised NCD, click here.