Suriname plans to become the first country to sell carbon credits under a system set up by the 2015 UN Paris Agreement to help mitigate climate change.
1. Carbon credits
The prospective sale is meant to attract investors with government-backed carbon credits that follow UN guidelines, as businesses become cautious of private initiatives in the voluntary carbon market, after studies found several projects failed to deliver promised climate contributions.
“This is the first signal of whether the Paris Agreement is actually working,” Kevin Conrad, executive director of the Coalition of Rainforest Nations, told Reuters in an interview. Suriname is a member of the coalition, and Conrad is advising on the sale.
The UN Carbon Offset Platform is an e-commerce platform where a company, an organization or a regular citizen can purchase units (carbon credits) to compensate greenhouse gas emissions or to simply support action on climate.
2. Divisive debate
The carbon credit sale sows discord among carbon market experts. While some say that selling credits from places like Suriname could bring needed financing to developing countries, others have expressed concern that the credits might not represent legitimate actions to limit global warming.
Suriname’s Amazon forest covers more than 15 millions hectares and absorbs millions of tonnes of CO2 each year, giving the country the status of “carbon-negative”. It is home to rich biodiversity and plays a crucial historical and cultural role in local communities. The country’s forest credits are generated using a baseline it registers with the UN stating how much carbon stock its forest contains. If the country protects its forest so the carbon stock rises, it can package those gains as carbon credits.
The UN appoints independent experts to review each countries’ emissions reductions. These experts can suggest revisions, but do not have the power to reject national submissions. “The review process at the UN-level is like many UN processes, it basically has no teeth,” said Gilles Dufrasne, lead policy analyst at nonprofit Carbon Market Watch. “Ultimately it’s the seller that decides how much it is able to sell.”
3. ITMOs and REDD+
The Paris Agreement determined that countries can sell emission reductions in the form of credits known as “internationally transferable mitigation outcomes” (ITMOs) to other countries or companies to use towards their own targets. Within weeks, Suriname could issue ITMO credits backed by emissions reductions in its forests, said Conrad, adding that the first credits would be backed by Suriname’s 2021 emissions reductions registered with a UN program aimed at suppressing deforestation and increasing carbon stored in forests, the REDD+.
According to the REDD+ website, Suriname has registered a reduction under the program of 4.8 million metric tons of carbon dioxide equivalent for 2021. That would allow for the country to sell up to 4.8 million credits, as each ton equates to one credit.
In November 2022, the South American forest nation reported its progress on REDD+ and on meeting climate goals to the UN, stating that those reported emissions savings would support its sale of carbon credits. Back then, Suriname’s President Chan Santokhi said the approval of carbon credits was integral to the implementation of his country’s economic and environmental policies: “It will mark the beginning of the long-awaited access to climate finance.”
Dufrasne said that a company may want to buy ITMOs as their association with the UN could bring extra legitimacy. However, he cautioned that the REDD+ emissions reductions backing the credits were not subject to robust verification standards to prove a real contribution to curbing climate change.
