Posted: Thursday, September 9, 2021. 11:58 pm CST.
By Aaron Humes: The reworked deal between the Government of Belize and the parties in the Belize Maya Forest and Maya Forest Corridor arrangement not only brings fixed income for the former in taxes and costs, but also a new form of financing – carbon credit arrangement.
Simply, carbon credit or set-off is the value of each forest tree as a producer of carbon dioxide if it is cut down for logging or other purposes. Companies who emit significant carbon and other “greenhouse gases” agree to pay for stands of forests to remain untouched and preserved in an effort to reduce emissions and the monies may be used by governments for environmental protection and other arrangements. In the case of the BMF/MFC deal it also protects several valuable watersheds that flower communities in the interior.
The collection of land taxes is about $20 million over 50 years, up from zero in the original deal, according to Minister of State for Finance Christopher Coye, but more important is the vesting of carbon credit in the Government of Belize and for the people of Belize and the right of the Government to determine how those proceeds will be used.
“There is a lot of factors that play into pricing of carbon credits or carbon set-offs as it’s sometimes referred to. Selling in bulk, the price you tend to get is lower so if you retail it over time, you’ll get more money. If you sell in the market versus sell to bilaterals, other countries like Norway you’ll get more money per ton,” said Coye, quoting prices of as much as US$20 to 30 per ton.
That is the upside Belize hopes to take advantage of as it turns the page on a brave new world of conservation.